Blackstone Group Inc BX has agreed to buy self-storage company Simply Self Storage from Brookfield Asset Management Inc BAM for a $1.2 billion consideration, according to the Wall Street Journal. The deal reportedly involves Simply’s 8 million square-foot portfolio across 120 locations and could be announced as soon as Monday.
What Happened: The deal will be routed through Blackstone’s real estate group, which currently manages a portfolio of 2.6 million square-foot self-storage facilities.
Brookfield acquired Simply Storage’s 90 locations for $830 million in 2016. After growing the brand’s presence in over 200 locations over the next two years, Brookfield sold off almost half of Simply’s portfolio in 2018 for $1.3 billion, the Journal noted.
Blackstone Real Estate Investment Trust Inc. Head of Acquisitions Tyle Henritze purportedly plans to operate all newly acquired small self-storage facilities under the Simply brand.
Why Does It Matter: Unlike many other businesses, the self-storage business has proven to be much more resilient, especially with a significant number of the workforce shifting from office locations to their residence during the pandemic.
Talking about the agreement, Henritze told WSJ that, “the opportunity to acquire a $1 billion-plus storage portfolio, including a brand and a team, is incredibly rare.”
Public Storage PSA, Global Self Storage Inc SELF, and Life Storage Inc LSI are some of the publicly-traded real estate investment trusts in the self-storage business.
Price Action: Blackstone shares closed Friday’s trading session 0.24% lower at $54.64.
Photo by Scott Meyers on Flickr
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