Glendale-based Public Storage plans to acquire Simply Self Storage from Blackstone Real Estate Income Trust for $2.2 billion.
Public Storage announced the transaction on July 24. The deal, which will add 152 properties with 11 million square feet of rentable storage space to the Public Storage portfolio, further bolsters the company’s status as the nation’s largest publicly traded self-storage company.
“This acquisition reflects the continued execution of our multifactor external growth platform, which includes acquisitions, development, redevelopment, expansion and third-party management,” said Public Storage chief executive Joseph Russell Jr.
“We are pleased to complete this important transaction with Blackstone, which further demonstrates our position as an acquirer of choice in the industry. Blackstone has done a tremendous job of growing and improving the quality and operations of the Simply portfolio over the past few years,” he added
The purchase represents a significant profit for Blackstone, which acquired Simply Self Storage in 2020, when it had around 8 million square feet of storage, for $1.2 billion. The transaction is expected to finalize by the end of the third quarter.
“This sale is a terrific outcome for BREIT stockholders and enables us to further concentrate BREIT’s portfolio in its highest growth sectors,” said Nadeem Meghji, head of Blackstone’s Americas operations. “Public Storage is a leader in its space and will be a terrific steward of this portfolio.”
The purchase has not substantially impacted Public Storage share price, which eked up from a $293-per-share open on July 24 to $295 by the end of the day. After climbing to $298 on July 26, prices closed at $288 on July 27.
This year Public Storage shares are up a little more than 5%.
In a presentation to shareholders, Public Storage noted that of the 152 properties acquired via Simply Self Storage, 127 are wholly owned while the remaining 25 are managed by third parties. Overall, the properties are at 91% occupancy and have a 69% net operating income.
Although the acquisition does not add new states to Public Storage’s market, it does complement several existing markets, most notably in the Sunbelt and Midwest regions. The Sunbelt states of Texas, Oklahoma, Louisiana, Tennessee, Kentucky, Georgia, South Carolina and Florida add 83 properties, while Kansas, Minnesota, Missouri, Illinois, Indiana, Ohio and Michigan add 28.
Once the transaction closes, Public Storage will boast a total of 3,004 owned properties nationwide with 214 million square feet of space.
Simply Self Storage’s properties will result in a 4% growth in each measure.
In its quarterly earnings report ending March 31, the company noted that it had acquired five self-storage facilities and was in the process of acquiring 12 more, while it had opened three brand-new facilities with others under construction.