Self-Storage REIT Public Storage Buys Stor-All Storage Portfolio for $430M

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Self-storage real estate investment trust (REIT) Public Storage Inc. has acquired the national portfolio of Stor-All Storage for $430 million, according to a report by industry blog “The Storage Facilitator.” The 44-property portfolio includes facilities in five states and encompasses 2.7 million square feet in more than 26,300 units.

“It was a big decision, but we think the timing was right as far as the interest-rate environment and what is going to happen with cap rates and tax rates going forward,” Stor-All CEO Jeff Anderson told the blog.

Public Storage has not publicly acknowledged the deal, but the source reported that the REIT has erected temporary signage at each of the locations and lists the facilities on its website.

The deal is believed to be the second largest in self-storage history. The portfolio includes 26 facilities in Florida, seven in Georgia, six in Virginia, four in Colorado and one in North Carolina.

Public Storage has been actively pursuing acquisitions, including the October purchase of 43 facilities from investment management firm Harrison Street Real Estate Capital LLC and operator Morningstar Properties LLC for $315 million. Those facilities comprise more than 2.9 million square feet in 22,500 units across five states: Georgia, North Carolina, South Carolina, Texas and Virginia.

During the third quarter that ended Sept. 30, Public Storage also acquired 29 facilities comprising approximately 2.2 million net rentable square feet for $371 million. Those properties are in California, Florida, Massachusetts, Rhode Island and Texas.

The October deal and the Stor-All transaction appear to comprise the bulk of the purchase strategy Public Storage divulged in its third-quarter financial report, in which the company said it intended to purchase 88 facilities for a total of $754 million before the end of this year.

Two weeks ago, Public Storage secured a one-year, $700 million loan from Wells Fargo Bank that company officials said would be used to fund acquisitions and development projects in addition to general-corporate expenses.

Founded in 1967, Stor-All ranked No. 26 on the Inside Self-Storage 2013 Top-Operators List. In addition to operating its branded facilities, the Deerfield Beach, Fla.-based company provides real estate brokerage, asset selection, underwriting, construction, development, property management and investor-relations services to its individual investment partnerships. The company will now focus on rebuilding its self-storage portfolio primarily by developing new facilities rather than through acquisitions, Anderson told the source. It currently has one storage facility under development in Vinings, Ga., and another property under contract. The Vinings facility is expected to open next summer.

“[Public Storage] bought our properties, but they didn’t pay for our knowledge,” Anderson said. “We are keeping our core staff together and looking forward to the future.”

Based in Glendale, Calif., Public Storage has interests in more than 2,110 self-storage facilities in 38 states with approximately 135 million net rentable square feet. Operating under the Shurgard brand name, the company also has 188 facilities in seven European countries, with approximately 10 million net rentable square feet.

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