July 24 (Portal) – Self-storage operator Public Storage (PSA.N) announced on Monday that it has struck a deal to buy Simply Self Storage from Blackstone Real Estate Income Trust (BREIT) for US$2.2 billion to expand its market presence.
Demand for storage space has declined since the peak of the pandemic as people return to offices, and some analysts are expecting further consolidation in the industry.
Public Storage, which owns more than 2,800 properties, will continue to expand through Simply’s portfolio of 127 wholly owned properties in 18 states and densely populated markets.
“Approximately 65% of the (127) properties are in high-growth sunbelt markets,” the companies said in a joint statement.
The sale will generate more than $600 million in profit, Blackstone said. The transaction is expected to close in the third quarter of 2023.
Earlier this year, California-based Public Storage made a hostile bid to acquire smaller competitor Life Storage. But in April, real estate investment trust Extra Space Storage announced a $12.7 billion deal with Life Storage.
The sale of Simply comes as Blackstone faces a spate of redemption requests from its Real Estate Income Trust.
The private equity firm has exercised its right to block investor withdrawals from BREIT since November last year after requests exceeded a set amount of 5% of the fund’s net asset value.
Eastdil Secured acted as financial advisor to Public Storage while Wells Fargo and Newmark Group acted as lead financial advisors to BREIT.
Reporting by Aishwarya Nair in Bengaluru; Edited by Krishna Chandra Eluri
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