Blackstone buying Brookfield self storage firm for $1.2B

Marco Green
October 27, 2020

Simply Self Storage, which owns 8 million square feet (740,000 square meters) of space across the USA, will be purchased by Blackstone Real Estate Income Trust Inc., according to a statement Monday. After growing the brand's presence in over 200 locations over the next two years, Brookfield sold off nearly half of Simply's portfolio in 2018 for $1.3 billion, the Journal noted.

Self-storage, which is typically viewed as a recession-resistant asset class, has seen its rates of absorption and leasing of new units rebound over the summer following a lull in move-in activity that normally occurs in the spring. BREIT now owns a $300 million portfolio of self-storage facilities. With the addition of Simply Self Storage, it will become the third-largest private owner of storage facilities in the U.S. That acquisition is valued at about $1.6 billion. The self-storage market has held up better than the broader REIT sector throughout the pandemic, with economic changes tending to create demand for self-storage.

BREIT, which was launched in 2017 and has a net asset value of $19 billion, plans to continue to buy smaller assets in the fragmented industry and run them under the Simply brand, Tyler Henritze, head of acquisitions in the Americas for Blackstone's real-estate group, was quoted as saying by the Journal earlier on Sunday.

Brookfield acquired Simply Storage's 90 locations for $830 million in 2016. Since that time, Brookfield more than doubled the size of the company and helped transform the business into a fully-integrated institutional platform.

BREIT management says it has approximately $3.6 billion of immediate liquidity to "execute on acquisitions of high-quality assets".

Simpson Thacher & Bartlett LLP is serving as legal advisor to BREIT, and BofA Securities and Deutsche Bank Securities Inc. are serving as financial advisors to BREIT.

Blackstone Real Estate Income Trust is a perpetual-life, institutional quality real estate investment platform that invests in stabilized, income-generating US commercial real estate across key property types and in some real estate-related securities. The fund is externally managed by a subsidiary of Blackstone Group.

Other reports by Click Lancashire

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