InStorage Real Estate Investment Trust

InStorage Real Estate Investment Trust

October 20, 2008 10:35 ET

InStorage REIT Provides Further Comments on Unsolicited Offer

TORONTO, ONTARIO--(Marketwire - Oct. 20, 2008) - InStorage Real Estate Investment Trust ("InStorage" or the "REIT") (TSX:IS.UN) today provided further comment in response to the unsolicited offer made by Canadian Storage Partners, ULC ("Partners ULC") to acquire all of the outstanding trust units of InStorage at a price of $3.75 per unit.

"InStorage's Special Committee has recently engaged the services of highly qualified financial, legal and real estate advisors to assess the offer of Partners ULC and to explore other strategic alternatives to enhance Unitholder value. We believe it is in the best interests of all Unitholders to wait for this process to conclude before taking any action on this unsolicited offer," commented Lou Maroun, Chairman of the Board of Trustees and the Special Committee.

The REIT's Special Committee noted that the offer was a significant discount to trading values for InStorage's trust units over the last year prior to the recent market turmoil. The offer represents a significant 28.9% discount to the one-year weighted average trading price for InStorage's trust units, and a 21.5% discount to the weighted average six-month average trading price. The Special Committee also noted that, as per its bid circular, Partners ULC has paid a considerably higher average price of approximately $5.50 per unit for InStorage units acquired between April 15, 2008 and October 8, 2008, which excludes the base price for units purchased from Sentry Select Capital Corp. under a private agreement on October 14, 2008.

In addition, the Special Committee believes the Partners ULC offer may not reflect the underlying value of InStorage's strong portfolio of modern, state-of-the-art and well-located self-storage facilities across the country. The InStorage portfolio is also the largest in Canada with an average age of only ten years. The offer of $3.75 per trust unit values the InStorage portfolio at just over $110 per square foot, well below the approximately $143 per square foot recognized on InStorage's balance sheet. In addition, the Special Committee believes the cost to develop comparable quality self-storage facilities in Canada is approximately $155 per square foot.

"Looking ahead, the Special Committee is confident that the REIT's strong portfolio and management's proven ability to increase occupancies and average rents over time will generate growing cash flow over the long term and could result in significantly higher unitholder value than is reflected in this unsolicited offer," Mr. Maroun 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 owned 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 anticipated increases in rental and occupancy rates and the impact thereof on cash flows and unitholder value. 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 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 "Risks and Uncertainties" in the REIT's Management's Discussion and Analysis included in the REIT's 2007 Annual Report and other regulatory filings available on the REIT's web site and at

Contact Information

  • InStorage Real Estate Investment Trust
    T. James Tadeson
    Chief Executive Officer
    (416) 867-9705