“One of two things is going to happen. You boys are going to buy the REIT, or the REIT is going to buy you. But there’s no other outcome,” said a business partner to O’Leary at the time.
To win the “battle,” O’Leary said that meant having to buy out In Storage REIT and acquiring all of its locations, which would entrap StorageNow in considerable debt. Losing to the competition, however, meant selling the company but “[making]ten-times on our money.”
Further negotiation with their competitor was unsuccessful and led to an ultimatum for StorageNow: either they acquiesced and sold to In Storage, or they declined and quickly lost to the competition brought by a much larger company.
In March 2007, In Storage REIT acquired Storage Now for $110 million, which O’Leary considers a victory in the long-run. “You can’t win every battle, but you can the war. When you cash out and make ten times on your money, you get to redeploy that capital into new business, which is exactly what I did.”
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