Oct 26, 2020
Blackstone to boost property portfolio with the acquisition of Simply Storage
A resilient property investment sector, self-storage looks particularly attractive during a global pandemic
As people are on the move, working from home and vacating their homes in the city to live with relatives or find a quieter place outside of the City, Self-storage demand has seen an increase in demand.
This is not only for individuals, as businesses are considering using a more remote workforce, downscaling their office space and finding themselves in the need for storage units.
Self-storage as mentioned is a very strong and resilient sector. A “defensive” property investment sector if you will. And during the current global pandemic, it has proved again that it is still strong with demand increasing for units. These facilities are very attractive as they require little in capital expenditure, they have relatively low customer turnover rates and due to the small size of their tenant's monthly expenses, it is easy to raise rent annually.
This has attracted many to the industry that is mainly dominated by publicly traded companies like Public Storage. However, Blackstone has seen an opportunity to increase their market share.
Through the acquisition of Simply Storage.
Simply Storage is one of the largest private self-storage property companies, with properties across 120 locations, 23 states and boasting an impressive 8 million square feet.
The deal that is expected to be announced later on Monday 26 October, will conclude that Blackstone will purchase Simply Storage from Brookfield Asset Management for around $1.2 Billion.
The deal is attractive to Blackstone, as they are provided with the opportunity to increase their own self-storage investments in their portfolio with an already known brand and a full team that already manages the properties.
Simply Storage will form part of Blackstones non-traded real estate investment trust called BREIT. Blackstone hopes that the boost in self-storage exposure within the REIT will attract more investors into the fund and more investors for Blackstone overall.
