CubeSmart closes $1.7B deal for western expansion

Self-storage firm CubeSmart has closed on a $1.7 billion acquisition of West Coast-centric Storage West.

Storage West operated 59 locations in the western U.S., according to Real Estate Weekly. That included 22 locations across Southern California, 17 in Phoenix, 13 in Las Vegas and 7 in Houston.

CubeSmart announced a purchase agreement with Storage West’s owner LAACO, Ltd. in November. The deal included the acquisition of $40.9 million in LAACO debt, which CubeSmart said in November would be paid off at or shortly after closing.

Malvern, Pennsylvania-based CubeSmart is one of the country’s largest owners and operators of self-storage facilities. As of late 2020, the public company owned at least 1,200 properties nationwide.

A year ago, the company acquired an eight-property New York City portfolio from Storage Deluxe for $540 million.

Self-storage has been one of the better performing sectors since the pandemic and investors are paying big money to get in on the action.

Last October, Blackstone Group bought Simply Self Storage from Brookfield Asset Management for around $1.2 billion. The acquisition made Blackstone the third largest private owner of self-storage properties in the country.

Not long after that deal closed, NexPoint Advisors acquired self-storage specialists Jernigan Capital in a $900 million all-cash deal. Jernigan is both an owner of and a capital provider for self-storage facilities.

April saw Public Storage acquire the 48-property portfolio of ezStorage for $1.8 billion. That brought Public Storage’s footprint up to 163 properties with 11.3 million net rentable square feet of storage space.

In November, Edison Properties sold the Manhattan Mini Storage brand and its 18 locations in the New York City borough to StorageMart for about $3 billion.

Southern California-focused MiniStorage recently tapped Jones Lang LaSalle to explore a potential sale. The company has a dozen locations, all but one of them are in Los Angeles or Orange counties. A sale could value the company at $400 million.

[Real Estate Weekly] — Dennis Lynch