On Monday, private equity colossus Blackstone, whose real estate business manages $167 billion in client assets, announced that its subsidiary Blackstone Real Estate Income Trust (BREIT) has agreed to buy U.S. self storage giant Simply Self Storage from a Brookfield Asset Management real estate fund for approximately $1.2 billion.
Simply Self Storage is one of the top five private owners of storage sheds and operates a high-quality portfolio totaling eight million square feet across the U.S.
BREIT already owns portfolio of self-storage facilities valued at $300 million. The acquisition will make BREIT the third largest non-listed owner of storage in the United States.
Frank Cohen, Chairman and CEO of BREIT, said, “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. Simply Self Storage is a best-in-class company with significant potential for growth through future acquisitions in a highly fragmented sector, and similar to logistics, self-storage is a resilient sector through economic cycles because of low tenant turnover, minimal maintenance costs and stable cash flows. We look forward to continuing to acquire high quality assets on behalf of our BREIT investors.”
Brookfield acquired Simply Self Storage in 2016 in one of its opportunistic real estate funds. Since that time, Brookfield more than doubled the size of the company and helped transform the business into a fully-integrated institutional platform.
Blackstone Real Estate Income Trust is a perpetual-life, institutional quality real estate investment platform that invests in stabilized, income-generating U.S. commercial real estate across key property types and in some real estate-related securities. More than 90% of BREIT’s real estate investments are in multifamily, industrial, and net leased assets. BREIT has approximately $3.6 billion of immediate liquidity to execute on acquisitions of high-quality assets. The fund is externally managed by a subsidiary of Blackstone Group.
The Gates trade
BREIT’s acquisition marks the latest high-profile deal in the American self-storage space. Earlier this month, the world’s largest private owned self-storage company, StorageMart, announced that it had received new partnership investment from entities including Singapore sovereign wealth fund GIC and Cascade Management, the family office that manages the personal wealth of Microsoft founder Bill Gates.
The investment round ascribed StorageMart, a vertically integrated self-storage firm that is headquartered in Missouri, but operates more than 240 properties in Canada, the U.K. and U.S., an enterprise value of $2.7 billion.