CubeSmart, a self-storage real estate investment trust (REIT) and third-party management company, has entered an agreement to acquire an eight-property New York City portfolio from Storage Deluxe for $540 million. Currently managed by and branded as CubeSmart, the facilities comprise 780,425 rentable square feet in the Bronx, Brooklyn and Queens, N.Y.

“This exciting transaction represents the culmination of our 10-year strategic plan to establish our leading market position in New York City,” said CubeSmart CEO and President Christopher P. Marr. “The acquisition of this portfolio expands our presence in attractive submarkets within each outer borough that have positive demographic trends and a strong growth outlook. The timing of this opportunity allows us to take advantage of strong fundamental trends for self-storage in the boroughs.”

Consideration for the acquisition will consist of approximately $201.7 million payable in cash, $183.7 million payable in Class B Operating Partnership Units, and the assumption of approximately $154.6 million of existing fixed-rate secured debt, according to the source. CubeSmart expects to finance the cash portion of the purchase price at closing through cash on hand and borrowings under the unsecured revolving credit facility.

“When I began investing in self-storage in 1998, I identified New York City as the best market in the country; and over 20 years later, I still believe that,” said Steven J. Guttman, founder and chairman of Storage Deluxe. “Over the last 10 years, we have been a seller, customer and partner of CubeSmart, and with this transaction, we will add investor. CubeSmart has established a strong position in the New York City market, which has been further solidified due to recent zoning restrictions. CubeSmart’s impressive operating platform, coupled with their position as a market leader in New York, makes us highly optimistic about the future performance of our investment.”

The transaction is expected to close in two tranches in the fourth quarter. It’s subject to customary closing conditions, including lender consent with respect to the debt that’ll be assumed.

Based in Malvern, Pa., CubeSmart owns or manages 1,256 self-storage facilities across the United States. Its operating portfolio comprises 85 million square feet.