Public Storage Buying 30 Facilities for $189M

GLENDALE, CA-Public Storage, a publicly held REIT that owns and operates public storage facilities worldwide, has agreed to acquire 30 self-storage facilities for $189 million, including debt assumption of up to $126 million. The properties, which include 28 facilities totaling 1.8 million square feet in the Los Angeles area and surrounding communities, will expand the Glendale-based company’s market presence by approximately 20%. The other two facilities, totaling 107,000 square feet, are located in the Chicago area. The properties averaged just over 80% occupancy at Jan. 31.

David F. Doll, a Public Storage senior vice president, says that the company will immediately begin to rebrand the facilities as Public Storage properties upon completion of the transaction, which is expected to close in stages during the next several months. The first closing of one property in Los Angeles occurred on April 1. A Public Storage spokesman tells GlobeSt.com that the sale was a direct deal between buyer and seller. The seller of the facilities, a California-based private company, was not disclosed.

The acquisition comes at a time when Public Storage, like all companies in the commercial real estate world, is adjusting to the new realities of the recession. The REIT said in its annual report for 2009, for example, that “We have shut down our development activities, both in the US and Europe due to the current level of risk inherent in development, uncertain consumer demand for when such facilities open for operation, and to preserve capital. Public Storage also noted in the 10K filing that, “We believe that existing self-storage properties may be marketed, at attractive prices, due to financial or operating stress of their owners which may create acquisition opportunities for us.”