CubeSmart, a self-storage real estate investment trust (REIT), is in the process of acquiring 26 storage facilities from investment management firm Harrison Street Real Estate Capital LLC (HSRE) for $223 million. The REIT has closed on 22 of the properties, including five in the Chicago area, according to the source. Closings on the remaining four properties are expected to be completed in March 2015, according to New York-based Newmark Grubb Knight Frank Capital Markets (NGKF), the commercial real estate advisory firm that is brokering the deal.
The first tranche of 22 assets comprises 1.7 million square feet, with properties in California, Florida, Illinois, Nevada, New York, Ohio and Rhode Island. Ten of the properties were managed by CubeSmart, 10 by operator Morningstar Properties LLC and two were owned through a joint venture with StorQuest Self Storage, the operating brand of the William Warren Group, according to a NGKF press release. At least three of the Chicago facilities previously operated as United Storage, according to Internet searches.
Aaron Swerdlin, executive managing director of NGKF Capital Markets in Houston, and Kenneth Cox, senior managing director in Memphis, Tenn., arranged the deal. The two men are in charge of NGKF’s Self Storage Group and have led more than $5 billion in storage transactions in their careers, company officials said.
Last year, HSRE and Morningstar sold 43 storage properties to Public Storage Inc. for $315 million.
Founded in 2005, HSRE is a real estate private-equity firm with more than $7.3 billion in assets under management through commingled funds and public securities products. The commingled funds focus exclusively on the education, health-care and self-storage segments of the U.S. real estate market. The firm owns approximately $5.4 billion in real estate assets, including more than 33,000 self-storage units. Affiliate Harrison Street Securities LLC manages more than $760 million in REIT investments.
CubeSmart owns or manages 562 self-storage facilities across the United States and operates the CubeSmart Network, which consists of more than 800 additional self-storage facilities.
- Chicago Real Estate Daily: Harrison Street Selling Self-Storage Facilities for $223 Million