Public Storage Completes Acquisition of Simply Self Storage for $2.2B

Update 9/15/23 – Public Storage has completed its acquisition of Simply Self Storage. “We are pleased to welcome Simply’s team, customers and third-party management partners to Public Storage’s industry-leading brand and platform,” Russell said. “We thank the Simply and Blackstone teams for their partnership through this process. The expeditious execution and integration further demonstrate our position as an acquirer of choice in the self-storage industry.”

7/24/23 – Public Storage Inc., a self-storage real estate investment trust (REIT) and management company, has agreed to acquire Simply Self Storage for $2.2 billion from Blackstone Real Estate Income Trust Inc. (BREIT), a non-traded real estate investment platform affiliated with the Blackstone Inc. portfolio of companies. The deal, which includes 127 owned properties comprising 9 million rentable square feet, is expected to close by Sept. 30, according to a press release.

BREIT acquired Simply in December 2020 for $1.2 billion. The portfolio is spread across 18 states, with 65% of facilities in “high-growth” Sunbelt markets. Public Storage will also integrate 25 of the Simply properties into its third-party management platform, the release stated.

“This acquisition reflects Public Storage’s continued execution of its opportunistic growth strategy,” Public Storage officials said. “Since 2019, Public Storage has expanded its portfolio by approximately 55 million net rentable square feet, or 34%, through $10.6 billion of acquisitions, development and redevelopment.”

The announcement comes four days after rival industry REIT Extra Space Storage Inc. closed its acquisition of Life Storage Inc. for $12.7 billion. The combined entity is now the largest operator in the industry, with more than 3,500 locations comprising about 270 million rentable square feet, overtaking Public Storage’s longtime hold as No. 1. In February, Public Storage made an unsolicited $11 billion bid to purchase Life Storage, which was rejected.

“We are pleased to welcome Simply’s team, customers and third-party-management partners to Public Storage’s industry-leading brand and platform,” said Joe Russell, CEO of Public Storage. “This acquisition reflects the continued execution of our multi-factor external growth platform. 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.”

“Where you invest matters, and this transaction demonstrates the strong investor demand for the high-quality assets and platforms we have assembled within BREIT,” said Nadeem Meghji, head of Blackstone Real Estate Americas. “This sale is a terrific outcome for BREIT stockholders and enables us to further concentrate BREIT’s portfolio in its highest growth sectors. Public Storage is a leader in its space and will be a terrific steward of this portfolio.”

The sale also comes while Blackstone has received a “flurry of redemption requests” from its REIT, according to a report from Reuters. A redemption is the “repayment of a fixed-income security—such as a Treasury note, certificate of deposit, or bond—on or before its maturity date,” according to Investopedia. “Mutual fund investors can request redemptions for all or part of their shares from their fund manager.”

Public Storage was advised during the transaction by Eastdil Secured, a New York-based global real estate investment bank. Wells Fargo and Newmark Group Inc. served as lead financial advisers to BREIT and were assisted by BMO Capital Markets and Sumitomo Mitsui Banking Corp., according to the release.

Based in Glendale, California, Public Storage has interests in 2,877 self-storage facilities in 40 states, with approximately 205 million net rentable square feet. It holds a 35 percent interest in Shurgard Self Storage SA, which has 266 facilities in seven European countries, with approximately 15 million net rentable square feet.

BREIT invests in stabilized, income-generating commercial real estate in the U.S. as well as real estate-related securities. It’s managed externally by a subsidiary of private-equity firm Blackstone, whose real estate business was founded in 1991. Blackstone has approximately $333 billion in investor capital under management.

Sources:
Business Wire, Public Storage Announces Closing of Simply Self Storage Acquisition
Public Storage, Public Storage Accelerates Growth with Simply Self Storage Acquisition
Yahoo, Public Storage to Acquire Simply Self Storage for $2.2 billion