Self-Storage REIT CubeSmart Completes $560M, 22-Property Acquisition from Storage Deluxe
|Copyright 2014 by Virgo Publishing.|
|Posted on: 08/24/2012|
Self-storage real estate investment trust (REIT) CubeSmart has completed the second phase of its $560 million purchase of a 22-property portfolio from Storage Deluxe. The properties comprise approximately 1.6 million square feet, with facilities in Connecticut, New York and Pennsylvania, though most of the sites are within New York’s five boroughs. The completed acquisition means CubeSmart is now the leading self-storage operator in New York City with 27 facilities.
The $202.7 million second phase of the acquisition involved six encumbered assets, including the assumption of $88 million in existing secured debt. The first phase of the purchase was completed last fall and included 16 unencumbered assets for $357.3 million.
In total, 19 of the 22 properties are in New York state. Nine, including one site under development, are in the Bronx. In addition, five facilities are in Brooklyn, two in Queens and three in Westchester County. Outside of New York, two properties are in Connecticut and one in Pennsylvania.
"This transaction accelerates the portfolio transition that management began in 2008, further improving our demographics, margins and rent per square foot,” CubeSmart President Christopher Marr said last October when announcing the deal. “Going forward, more than 60 percent of our portfolio net operating income will be derived from our core markets, a 43 percent improvement from January 2008.”
The company’s top five markets are now Chicago, Dallas, Miami, New York and Washington, D.C.
An investment sales team from HFF (Holliday Fenoglio Fowler LP) represented Storage Deluxe in the transaction. The team was led by Aaron Swerdlin, senior managing partner.
Based in Manhattan, N.Y., Storage Deluxe retains seven operating self-storage facilities in New York City, with six additional sites under development.
CubeSmart owns or manages more than 500 self-storage facilities nationwide and operates the CubeSmart Network, which consists of approximately 850 additional facilities.
HFF, a provider of commercial real estate and capital-markets services, operates out of 21 offices nationwide. The company and its affiliate, HFF Securities LP, are owned by HFF Inc. Together they offer debt placement, investment sales, advisory services, structured finance, private equity, loan sales, and commercial loan servicing.