Self-storage operator Public Storage said it has entered a deal to buy Simply Self Storage from Blackstone Real Estate Income Trust (BREIT) for $2.2 billion, as it looks to expand its market presence.
Demand for storage space has waned from the heights of the pandemic, as people return to offices, and some analysts expect more consolidation in the sector.
Public Storage, which owns more than 2,800 properties, will expand further through Simply’s portfolio, which comprises 127 wholly-owned properties spread across 18 states and in highly populated markets.
“Approximately 65% of the (127) properties are located in high-growth Sunbelt markets,” the companies said in a joint statement.
The sale will generate over $600 million in profit, Blackstone said. The deal is expected to close in the third quarter of 2023.
Earlier this year, California-based Public Storage made a hostile bid to acquire smaller rival Life Storage. But in April, real estate investment trust Extra Space Storage announced a $12.7 billion deal with Life Storage.
Simply’s sale comes as Blackstone is facing a flurry of redemption requests from its real estate income trust.
The private equity firm has been exercising its right to block investor withdrawals from BREIT since November last year after requests exceeded a preset 5% of the net asset value of the fund.
Eastdil Secured served as financial adviser to Public Storage, whereas Wells Fargo and Newmark Group acted as lead financial advisers to BREIT.
