Blackstone is selling Simply Self Storage to another self-storage operator as its real estate firm looks to continue an upward trajectory from turbulent recent months.
Public Storage agreed to buy the self-storage company from Blackstone Real Estate Income Trust for $2.2 billion, Bloomberg reported. The deal is expected to close in the third quarter and result in a $600 million profit for BREIT.
Blackstone purchased the company from Brookfield Asset Management in 2020 for $1.2 billion, only four years after Brookfield came into possession of the company.
Simply’s portfolio includes 127 owned properties and 9 million net rentable square feet across 18 states, according to a press release. Nearly two-thirds of the properties are located in the Sun Belt market.
Nadeem Meghji, Head of Blackstone Real Estate Americas, said the deal would allow BREIT to further concentrate in its highest growth sectors.
Self-storage was one of the hottest real estate sectors around during the early months of the pandemic as homeowners looked to clear space for family returns and office use, but activity has since cooled.
So has Blackstone’s REIT, although it is starting to get back into shape. The $68 billion net asset value fund posted its strongest results in nearly a year last month, notching a 0.96 percent return for June. The fund has been dealing with a swamp of redemption requests, which forced the fund to spend months limiting withdrawals.
Industrial real estate in the Sun Belt is one of the property types that has been fueling BREIT in recent months, as well as the multifamily market and data centers.
Since 2019, Public Storage has grown by 55 million net rentable square feet and has committed $10.6 billion to acquisitions, development and redevelopment. Its purchase of Simply, however, comes months after another self-storage company in its crosshairs got away.
In April, Extra Space Storage agreed to combine with Life Storage in a $12.7 billion stock deal. The agreement came months after Public Storage — the largest storage operator in the country — made an unsolicited bid for Life Storage, which was rebuffed.
— Holden Walter-Warner
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