Brookfield Asset Management Inc. (BAM), a Toronto-based global asset manager with large investments in commercial real estate, has agreed to acquire Simply Self Storage (SSS) for $830M. The intended purchase is for the company’s Brookfield Strategic Real Estate Partners II fund, a vehicle for acquisitions and investment in real estate companies, distressed loans and securities, according to “IPE Real Estate,” a media outlet that covers institutional investment and the real estate industry.
The structure of the deal includes an initial investment in SSS of $300 million followed by another $200 million, which the self-storage operator will use to fund growth opportunities, the source reported. SSS intends to acquire individual storage facilities and small to mid-sized portfolios in secondary markets, while considering new developments in major and small markets. The self-storage company is expected to retain its current leadership.
Neither BAM nor SSS officials have commented publicly on the acquisition, although the asset manager alluded to the transaction in its interim third-quarter 2015 financial report. The company “committed or deployed” about $5 billion in various investments during the quarter. “We also agreed to acquire a North American self-storage company with 90 locations and an enterprise value of $800 million, and hope this can be a cornerstone investment for growth of a larger national business,” BAM officials said in the report.
The IPE article attributes the 90 U.S. self-storage facilities to SSS, although the operator reported a total portfolio of 175 owned and managed facilities last fall during the collection of data for the 2015 Inside Self-Storage Top-Operators List, an annual ranking of the Top 100 operators in the industry by square footage. SSS is No. 7 in the latest ranking, with a footprint of nearly 13.5 million square feet. Headquartered in Orlando, Fla., SSS operates a portfolio spanning 18 states and Puerto Rico. The company was founded in 2003 by Kurt O’Brien, who serves as president.
The deal was initially reported by the Orange County Employees Retirement System, which has been considering an investment into the Partners II fund. BAM has raised about $5 billion for the fund, with a goal of $7 billion, according to the source. The fund is targeting opportunities in Australia, Brazil, Europe and North America. The SSS acquisition is part of $2.8 billion in deals BAM has committed to the fund, the source reported.
BAM currently has $225 billion in assets under management, according to its website. It owns and operates assets with a focus on infrastructure, private equity, property and renewable energy. The company offers a range of public and private investment products and services, and is co-listed on the New York, Toronto and Euronext stock exchanges.