Bill Gates, Singapore Fund Manager Cleared To Take Stake in Self-Storage Giant
Microsoft founder Bill Gates is set to own a stake in StorageMart along with Singapore-based GIC.
Billionaire Bill Gates’ investment company and GIC, a Singapore sovereign wealth fund manager, are set to move ahead in acquiring a major stake in StorageMart, one of the world’s largest providers of self-storage facilities.
The pair are expected to join owners Enos Stanley Kroenke, the billionaire owner of the Los Angeles Rams and other professional sports franchises, and the StorageMart management team that consists of the Burnam family that founded the company.
During the pandemic, the self-storage sector has seen an influx of big money betting on a greater demand for space from companies and people relocating and downsizing.
The combination of investors at StorageMart is designed to put the company in a stronger position to grow in both current and new markets.
StorageMart owns about 244 facilities across the United States, Canada and the United Kingdom totaling nearly 134,000 units with more than 15 million square feet of space, according to 2020 rankings from Inside Self Storage, a trade publication.
The European Commission approved the Gates and GIC acquisition of joint control last week.
In addition, last week Kroll Bond Rating Agency issued a confirmation of its rating on a commercial mortgage-backed securities deal involving about half of StorageMart’s portfolio based on the pending change of ownership.
StorageMart officials did not immediately respond to requests for comment.
StorageMart said in October that Gates’ Cascade Investment, along with GIC, sought to join the ownership group. The transaction was to value StorageMart at about $2.7 billion.
That announcement was followed by Blackstone Group agreeing to acquire Simply Self Storage from a Brookfield Asset Management real estate fund for $1.2 billion.
Self-storage comes with significant potential for growth through future acquisitions in a highly fragmented sector, Blackstone said of its reasoning for the acquisition. In addition, the New York private equity firm believes that similar to logistics, self-storage is resilient through economic cycles because of low tenant turnover, minimal maintenance costs and stable cash flows.
StorageMart’s day-to-day management will continue to be led by Cris Burnam serving as CEO, Mike Burnam as president and chief investment officer, and Ryan McKenzie as chief financial officer.
“The self-storage sector is rapidly evolving, and companies that can deploy technology, enhanced operations, and a truly memorable customer experience are going to outperform,” Cris Burnam said in a statement last year. “To do this, scale is a fundamental requirement.”
In January, KBRA released a new surveillance report on the CMBS deal, CGCMT 2019-SMRT, affirming that the change of control would not result in a change of rating.
The CGCMT 2019-SMRT collateral is a $644.1 million loan secured by the borrowers’ interests in 101 StorageMart-branded self-storage properties with roughly 62,000 self-storage units and 7.5 million square feet.
As of September, the portfolio had a weighted average occupancy rate of 85.9%, down slightly from 88.3% in June 2019 and down from 88.2% at securitization, KBRA said.