JV To Buy Brookfield Self-Storage Portfolio For $1.3B
National Storage Affiliates Trust and Heitman Capital Management have secured two institutional lenders to provide approximately $643 million in 10-year secured debt to fund part of the acquisition.
GREENWOOD, COLO–National Storage Affiliates Trust and an affiliate of Heitman Capital Management have formed a 25%-75% joint venture in order to acquire a portfolio company of a private real estate fund managed by Brookfield Asset Management for approximately $1.325 billion.
The company, called Simply Self Storage is based in Orlando, Fla., and its portfolio consists of 112 self storage properties configured into 68,000 storage units and located across 17 states and Puerto Rico.
Following the closing of the acquisition, the JV expects to rebrand nearly all of the portfolio under National Storage Affiliates iStorage brand. This brand, incidentally, was formed in 2016 when National Storage and Heitman Capital Management acquired the iStorage portfolio of properties for $630 million and National Storage acquired its property management platform separately. The iStorage platform will be used to operate the Simply Self Storage platform.
Financing The Deal
The funding of this acquisition is a multi-part process. National Storage has launched a public offering of its shares, the proceeds of which it will use partly to pay for its 25% stake, for $160.8 million, in the JV. The JV signed a non-binding term sheet with two institutional lenders for $643 million in 10-year debt to partly fund this deal — financing that may or may not go through for the deal.
National Storage also expects to pay $64 million to the JV for six self storage properties in the portfolio that are located in Puerto Rico and a single self storage property in the portfolio located in Ohio.
The balance of the equity capital needed to complete the acquisition will be provided by Heitman Capital, which has committed approximately $482.3 million to the JV in exchange for its 75% ownership interest.
Competitive With Larger Self-Storage REITs
Similar to the CatchMark JV’s purchase of a 1.1 million acre timberland portfolio for $1.39 billion earlier this week, this transaction propels a smaller REIT into the same leagues as its larger counterparts. As of February 2018 National Storage had 551 locations across the US.
The four major self-storage REITs are CubeSmart, Life Storage, Extra Space Storage and Public Storage.