Nuveen Real Estate Buys Majority Stake in 21 Morningstar Self-Storage Facilities

Investment-management firm Nuveen Real Estate has acquired 90 percent interest in 21 self-storage properties owned by Morningstar Properties LLC, which operates facilities under the Morningstar Mini-Storage brand. Morningstar will retain a 10 percent stake in the joint venture and act as operating partner. The portfolio comprises about 14 million square feet in nine markets, including Atlanta; Charlotte, N.C.; Houston; and Tallahassee, Fla., according to a press release.

Nuveen chose the portfolio because it views southern cities has having favorable demographic trends and projected population growth, the release stated. The facilities average 11 years in age and 85 percent occupancy. About 65 percent of the portfolio’s 11,130 units are climate-controlled.

“These properties provide Nuveen Real Estate immediate scale and exposure to one of the fastest growing alternative sectors of real estate, in some of the most sought-after submarkets in the U.S.,” said William Harrison, managing director of housing, Americas, for Nuveen.

Nuveen’s parent company is financial-services firm TIAA, which has been active in the self-storage sector. In November 2017, it acquired a 90 percent stake in 36 facilities owned by real estate investment trust Extra Space Storage Inc. for $295 million. As of September 2018, TIAA held 571,497 Extra Space shares, valued at $49.5 million, according to “EN Digest,” a financial analytics company.

“Nuveen Real Estate sees the self-storage sector as a defensive asset class with relatively low capital requirements, making it a strong complement to our core holdings in the housing, retail, office and industrial sectors,” Harrison said.

Nuveen is a global investment manager, with $125 billion of assets under its control. The company manages a suite of funds and mandates across public and private investments. Acquired by TIAA in 2014 for $6.25 billion, it has more than 80 years of real estate investing experience and has offices in Asia, Europe and the United States.

Founded in North Carolina in 1981, Morningstar is a vertically integrated developer, operator and owner of real estate with a focus on self-storage and marinas in the Southeast. The company has acquired, developed and operated more than 170 self-storage projects nationwide, totaling more than 11.5 million square feet. It owns and operates 63 self-storage facilities in 11 states.

Sources:
EN Digest, TIAA Cref Investment Management Has Boosted Extra Space Storage (EXR) Stake
SpareFoot Storage Beat, Real Estate Unit of TIAA Buys Majority Stake in Morningstar Portfolio