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Morningstar, Starwood Form Joint Venture to Pursue Self-Storage Investments

Morningstar Properties LLC, which operates self-storage facilities under the Morningstar Storage brand, has formed a joint venture with Starwood Real Estate Income Trust Inc. (SREIT), a non-listed real estate investment trust (REIT) managed by a subsidiary of Starwood Capital Group. The partnership will pursue self-storage acquisitions, starting with a recapitalized seed portfolio of 25 properties that are owned by funds managed and owned by Morningstar. This initial purchase comprises 1.8 million square feet of rentable space in the Sun Belt, according to a press release.

The companies will pursue “high-quality, stabilized assets” and buy existing portfolios or single-site properties. New acquisitions will operate under the Morningstar brand, the release stated.

“We look forward to partnering with Morningstar and adding self-storage into SREIT’s portfolio of assets,” said Ethan Bing, managing director at Starwood Capital. “The sector’s stable cash flows fit well with SREIT’s yield and long-term hold objectives. Morningstar is a best-in-class branded operator, and this partnership provides immediate scale in a fragmented sector in addition to creating a platform for substantial growth.”

“This is an exciting day for Morningstar and a testament to our success over the past 40 years in the storage sector,” said David Benson, CEO of Morningstar. “Combining our recognized brand and acquisition and operations expertise with Starwood’s investment capabilities and financial backing creates a powerful partnership that we expect will grow considerably in the coming years.”

SREIT is a net-asset value REIT whose perpetual-life products are valued monthly. It specializes in income-producing real estate investments. As of Nov. 30, its portfolio of 334 properties had a total value of $18.2 billion, according to the release. It’s managed by Starwood REIT Advisors LLC. Parent company Starwood Capital is a private investment firm founded in 1991. It has raised more than $65 billion of capital in its history and has more than $105 billion of assets under management.

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 mid-Atlantic and South. The company has acquired, developed and operated more than 250 self-storage projects nationwide, totaling more than 15 million square feet. It operates 88 self-storage facilities in 12 states.

Source: PR Newswire, Starwood Real Estate Income Trust and Morningstar Properties Form Joint Venture Focused on the Self-Storage Sector

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