Blackstone Group Inc. BX -0.24% has reached a deal to buy Simply Self Storage from Brookfield Asset Management Inc., with BAM 0.06% betting on a sector that has remained strong throughout the coronavirus pandemic.
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The private equity firm’s non-traded real estate fund, known as BREIT, is buying the 8 million square foot portfolio of self-storage facilities for around $ 1.2 billion, said both companies. The deal is expected to be announced on Monday.
In an industry dominated by publicly traded giants such as public storage, PSA 0.26% Simply has more than 120 locations in 23 states making it one of the largest private players.
BREIT, which already has 2.6 million square feet of self-storage facilities, plans to continue to acquire smaller assets in the fragmented industry and manage them under the Simply brand, according to Tyler Henritze, head of acquisitions in the Americas for Blackstone real estate. group.
“The opportunity to acquire a more than $ 1 billion storage portfolio, comprising a brand and a team, is extremely rare,” said Mr. Henritze.
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He said Blackstone decided to close the deal in part on the performance of its own self-storage assets. These facilities are attractive businesses because they require little capital expenditure, have a relatively low turnover rate, and offer the possibility of increasing rents since they usually do not represent a significant portion of their tenants’ monthly expenses.
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