InStorage Real Estate Investment Trust

InStorage Real Estate Investment Trust

October 11, 2007 08:04 ET

InStorage REIT Announces Recent Growth Initiatives

TORONTO, ONTARIO—-(Marketwire – Oct. 11, 2007) -

Attention Business Editors:

InStorage Real Estate Investment Trust ("InStorage" or the "REIT")(TSX VENTURE:IS.UN) announced today the acquisition of self-storage facilities in Airdrie Alberta, Milton Ontario and Vaughan Ontario totaling $16.4 million and representing approximately 95,254 square feet of net leaseable area together with excess lands for future expansion. In addition, the REIT extended $6.7 million of mezzanine financing to two new projects owned by InScotia Developments LP and a joint venture partner to be developed into approximately 131,725 square feet of net leaseable area.

The Airdrie Storage Centre is well-located just outside the town of Airdrie, Alberta, just west of Calgary. Consisting of 53,200 square feet of net leaseable area, the acquired property includes 620 outdoor stalls for storing recreational vehicles. The facility is 100% occupied with a waiting list. The property included excess land on which a further 62,400 square feet of new storage facilities will be developed. The self storage market in Airdrie is very strong with high demand and restricted supply, benefiting from its close proximity to the booming Calgary property market. InStorage acquired 100% of the property for $8.0 million. The transaction closed on August 15, 2007.

InStorage acquired Storage Spot located on Highway 25 just south of the 401 highway in Milton Ontario. The property consists of 27,775 square feet of net leaseable area with excellent visibility in a fast growing commercial and residential area. Opened in late 2006, occupancy is strong at 85% and growing. The acquisition includes land on which an additional 47,650 square feet will be developed with an estimated completion in January 2008. InStorage acquired 50% of the property, including the land for expansion, for approximately $3.7 million. The transaction closed on August 31, 2007. The REIT has an option to acquire the remaining 50% interest in the property once the expansion is completed and achieves a stabilized occupancy of 85%.

The REIT also acquired the remaining 50% interest in its Mini Warehousing facility situated on Weston Road in the fast-growing region of Vaughan, Ontario north of Toronto. The property consists of 56,335 square feet of net leaseable area as well as land for the development of an additional 22,100 square feet. Occupancy is currently at 80%. The expansion project, scheduled for completion in June 2008, will feature new climate controlled units that command higher rental prices in a market with few competitors. InStorage paid $5.0 million to purchase the remaining 50% interest in the property on October 5, 2007.

With the completion of these acquisitions, InStorage's total portfolio now stands at approximately 2.95 million square feet of net leaseable area in 52 facilities well located in most major markets in Canada.

"We are continuing to build on our presence as the largest owner and operator of self-storage facilities in Canada," commented T. James Tadeson, Chief Executive Officer. "Each of these three properties represents solid operating performance coupled with significant short term expansion opportunity. Our acquisition and mezzanine lending programs are on target, the roll-out of our branding, identification, and operating infrastructure programs are progressing well, and we look forward to continuing our growth."

In addition, InStorage also announced today that it has committed mezzanine loans totaling approximately $6.7 million to InScotia Developments LP and its joint venture partners for the construction and lease-up of two new self-storage facilities. The REIT will receive interest on these loans at an annual rate of 9%:

- The first project will see the development of approximately

50,150 square feet of net leaseable area along Highway 26 at

MacDonald Road, the main access to the popular and fast-growing city

of Collingwood, Ontario. This new, state-of-the-art facility will

compete favourably with older existing facilities in the area.

Construction is estimated to be completed in July 2008. InStorage has

the option to acquire 100% of the property twelve months after

stabilization at 95% of appraised market value.

- The second project will be the development of 81,575 square feet of

net leaseable area on East Kent Avenue North in Vancouver, British

Columbia near the high traffic Knight Street bridge. The facility

will be situated in an established industrial area and close to

significant residential and commercial development. Construction is

scheduled to be completed in July 2008. InStorage has the option to

acquire 100% of the property twelve months after stabilization at 95%

of appraised market value.

"Our mezzanine loan program with InScotia Developments provides a "growth pipeline" of brand new state of the art facilities for InStorage. In the interim, we receive interest on our loans, and the option to acquire these new facilities at a discount to market value when they are fully stabilized. InScotia has grown quickly and now owns nine self storage properties that are in various stages of development. InStorage REIT has options to acquire all of these facilities. The program is working very well." Mr. Tadeson concluded.

InStorage Real Estate Investment Trust

The REIT is an unincorporated open-ended real estate investment trust that invests primarily in self-storage properties throughout Canada. The REIT is the largest owner operator of self-storage facilities in Canada and is the country's leading self-storage industry consolidator, with a current portfolio of 52 self-storage properties located in Alberta, Saskatchewan, Ontario and Quebec.

Additional information concerning the REIT may be obtained on the REIT's website,, and on the SEDAR website at, under the REIT's profile.

Forward-Looking Information

This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of such statements include: the intention to continue to build the REIT's presence as the leading consolidator in the Canadian self-storage business; the intention to roll out the InStorage brand across the REIT's properties during the year; anticipated demand for the REIT's services; expectations regarding average rental and occupancy rates; and the REIT's intention to focus on integrating recent acquisitions. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the availability of acquisition opportunities; interest rate levels and the impact therof on the REIT's debt servicing obligations; the ability of the REIT to successfully integrate newly acquired properties or portfolios into its operations and realise the anticipated benefits of same; the level of activity in the underlying self-storage business of InStorage, the self-storage industry and in the economy generally; consumer interest in the services and products of InStorage's subsidiaries; competition; and anticipated and unanticipated costs. While the REIT anticipates that subsequent events and developments may cause its views to change, it specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this press release. Although the REIT has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

The factors identified above are not intended to represent a complete list of the factors that could affect the REIT. Additional factors are noted under "Risk and Uncertainties" in the REIT's Management's Discussion and for the period from January 12, 2006 to December 31, 2006, a copy of which may be obtained on the SEDAR website at

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • InStorage Real Estate Investment Trust T. James Tadeson Chief Executive Officer (416) 867-9705
    InStorage Real Estate Investment Trust Alay Shah Chief Financial Officer (416) 867-9740 Website: