Key Takeaways
- • Public Storage completed a $2.2 billion acquisition of Simply Self Storage from Blackstone Real Estate Income Trust (BREIT), marking a significant capital deployment in the self-storage sector despite challenging capital markets conditions.
- • The portfolio comprises 127 wholly-owned properties spanning 9 million net rentable square feet across 18 states, with approximately 65% located in high-growth Sunbelt markets where population growth has averaged double the national rate since 2018.
- • Newmark Group served as Co-Lead Advisor to BREIT on the transaction, leveraging its Capital Markets National Self Storage practice under Vice Chairman Aaron A. Swerdlin's leadership.
- • Public Storage funded the acquisition through a $2.2 billion issuance of senior unsecured notes, demonstrating institutional appetite for self-storage assets and the company's confidence in accretive FFO per share growth through stabilization.
- • The transaction underscores self-storage's resilience as an asset class, continuing to attract disproportionate commercial real estate capital activity even amid broader market headwinds.
Summary
Public Storage closed its previously announced $2.2 billion acquisition of Simply Self Storage from Blackstone Real Estate Income Trust on September 13, 2023, with the transaction announced by Newmark Group on September 15, 2023. The deal represents a substantial capital deployment in the self-storage sector, one of the few real estate asset classes demonstrating relative stability in an otherwise constrained lending environment.
Simply Self Storage operates a geographically diversified portfolio of 127 wholly-owned properties totaling 9 million net rentable square feet across 18 states. The portfolio shows significant exposure to high-growth markets, with approximately 65% of properties located in Sunbelt markets where population growth has averaged roughly double the national average since 2018. This geographic positioning aligns with broader institutional capital flows favoring Sun Belt real estate amid demographic trends and migration patterns.
Newmark Group served as Co-Lead Advisor to BREIT throughout the transaction, with Vice Chairman Aaron A. Swerdlin leading the company's Capital Markets National Self Storage practice team. Public Storage financed the acquisition by issuing $2.2 billion of senior unsecured notes, reflecting the company's growth-oriented balance sheet strategy and institutional lenders' continued willingness to fund self-storage acquisitions. According to Public Storage's projections, the transaction is expected to be accretive to funds from operations (FFO) per share, with accretion accelerating as the portfolio moves through stabilization.
Aaron Swerdlin's commentary highlights the strategic environment: "Self-storage is an asset class that continues to perform, even amidst the current challenging capital markets environment." The statement underscores that despite broader real estate market stress, self-storage continues to garner a disproportionate share of overall commercial real estate transaction activity due to its demonstrated historical resilience across business cycles. This $2.2 billion transaction exemplifies the sector's continued ability to attract institutional capital and achieve efficient execution even when broader capital markets remain constrained.
Simply Self Storage operates a geographically diversified portfolio of 127 wholly-owned properties totaling 9 million net rentable square feet across 18 states. The portfolio shows significant exposure to high-growth markets, with approximately 65% of properties located in Sunbelt markets where population growth has averaged roughly double the national average since 2018. This geographic positioning aligns with broader institutional capital flows favoring Sun Belt real estate amid demographic trends and migration patterns.
Newmark Group served as Co-Lead Advisor to BREIT throughout the transaction, with Vice Chairman Aaron A. Swerdlin leading the company's Capital Markets National Self Storage practice team. Public Storage financed the acquisition by issuing $2.2 billion of senior unsecured notes, reflecting the company's growth-oriented balance sheet strategy and institutional lenders' continued willingness to fund self-storage acquisitions. According to Public Storage's projections, the transaction is expected to be accretive to funds from operations (FFO) per share, with accretion accelerating as the portfolio moves through stabilization.
Aaron Swerdlin's commentary highlights the strategic environment: "Self-storage is an asset class that continues to perform, even amidst the current challenging capital markets environment." The statement underscores that despite broader real estate market stress, self-storage continues to garner a disproportionate share of overall commercial real estate transaction activity due to its demonstrated historical resilience across business cycles. This $2.2 billion transaction exemplifies the sector's continued ability to attract institutional capital and achieve efficient execution even when broader capital markets remain constrained.
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