Extra Space Storage Inc. announced Monday that it had reached a merger agreement with Life Storage Inc., a smaller real-estate investment trust. The all-stock deal will create an entity valued at approximately $47 billion.

The deal stipulates that Extra Space Storage , Salt Lake City, Utah, +2.58% , will pay 0.8950 per Life Storage share ILSI, +2.24% , approximately $145.82 per Share based on Friday’s closing stock price.

The REIT will hold approximately 65% of the combined business, while Buffalo-based Life Storage will own the remaining 35%. The deal is expected close in the second quarter and will increase Extra Space Storage’s portfolio to more than 50% depending on where it is located.

The transaction added more than 88 million square footage to the portfolio. “The combined portfolio is the country’s largest storage operation with more than 3,500 locations and over 264,000,000 square feet serving over 2 million customers,” the companies stated in a joint statement.

Life Storage declined an unsolicited offer by Public Storage PSA at +2.55% at $129 per share, according to the Wall Street Journal.

Extra Space Chief Executive Joseph Margolis said in an interview with the paper that “this is an industry where scale really does matter.”

It is expected that the deal will generate at least $100,000,000 in annual run-rate operational synergies through general, administrative and property-operating-expense savings. In the first year following closing, it is expected to increase core funds from operations (or FFO), which is a key metric in REITs.

The combination entity will trade on the New York Stock Exchange under ticker symbol EXR.

Kenneth Woolley will continue to be chairman. Margolis will serve as CEO and board member. From 10 members, the board will now have 12 members. Nine of these extra space board members will join.

Extra Space shares fell 6% premarket while Life Storage shares rose 1.9%