Blackstone to Make $1.2B Acquisition
Blackstone’s purchase of Simply Self Storage would add facilities across the United States.
Blackstone Real Estate Income Trust agreed to buy Simply Self Storage from Canada’s Brookfield Asset Management for about $1.2 billion, a move that’s expected to create the third-largest nonlisted owner of storage facilities in the United States.
Simply Self Storage is one of the top five private owners of self-storage, operating a portfolio totaling 8 million square feet across the United States. Blackstone Real Estate Income Trust, the nontraded real estate investment trust known as BREIT that’s sponsored by New York-based investment firm Blackstone Group, said it already owns a $300 million portfolio of self-storage facilities.
Demand for self-storage space has held up in the pandemic, aided by physical distancing at restaurants and businesses that may need less equipment on site, according to research.
While more households consolidate and change residences because of high unemployment and dislocation as a result of the coronavirus, demand could rise for storage properties in popular relocation destinations such as the Sun Belt.
“Similar to logistics, self-storage is a resilient sector through economic cycles because of low tenant turnover, minimal maintenance costs and stable cash flows,” Frank Cohen, chairman and CEO of BREIT, said in a statement.
Bloomberg reported earlier this month that Toronto-based Brookfield was exploring a sale of Simply Self Storage. Brookfield acquired the real estate company for $830 million in 2016 and has since more than doubled its size.
Simply Self Storage primarily operates east of the Mississippi River. Its largest concentration of properties are in Michigan and Florida, followed by Indiana and New Jersey, according to research data.
The deal would greatly expand the holdings for BREIT, which owned 3.7 million square feet of self-storage space as of June 30.
“This transaction is a complementary addition to BREIT’s high-quality portfolio of income-generating real estate, which is heavily weighted towards logistics and multifamily primarily in growth markets,” Cohen said.
More than 90% of BREIT’s real estate investments are in multifamily, industrial and net-leased assets. The company has $3.6 billion of immediate liquidity to execute on acquisitions of high-quality assets.
The transaction is expected to close before the end of 2020, subject to certain customary closing conditions.