Public Storage Expands With $528M Portfolio Acquisition

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Public Storage has acquired 24 properties with 2.3 million square feet of space from Beyond Self Storage in the first phase of a 36-property portfolio transaction totaling 3.6 million square feet and valued at $528 million.

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The first phase includes existing properties built since 2016, with an average occupancy of approximately 35 percent. The remaining 12 properties, totaling 1.3 million square feet, are in various stages of development. Public Storage, the leading owner, developer and operator of self storage properties in the U.S., will acquire those assets when they are completed in 2021.

Locations of the properties were not disclosed but Public Storage officials said the two-phase portfolio acquisition was part of the Glendale, Calif.,-based REIT’s continued opportunistic growth strategy. Capitalizing on its brand, operating scale and balance sheet, Public Storage has been actively expanding its portfolio through acquisitions for more than a year. Since the beginning of 2019, Public Storage has added approximately 13.9 million square feet through $1.9 billion in acquisitions, development and redevelopment, including properties currently under contract. The REIT has grown its holdings by 9 percent during that time.

Joe Russell, Public Storage CEO, said in a prepared statement the high-quality Beyond Self Storage assets will enhance the REIT’s strong and diversified portfolio. He said the company is committed to expanding its portfolio and brand through organic and external growth including acquisitions, development, redevelopment and third-party management.  

As of Sept. 30, Public Storage had interests in 2,504 self storage facilities located in 38 U.S. states and totaling approximately 171 million square feet. During the third quarter, Public Storage acquired four facilities—two in Minnesota and one each in Colorado and Utah—for $29.1 million. During the first nine months of 2020, the REIT acquired 19 self storage facilities totaling 1.4 million square feet for $282.4 million. Those assets are located in Ohio, California, Minnesota, New York, Tennessee, Colorado, Florida, Indiana, Massachusetts, Nebraska and Utah, according to the company’s third-quarter earnings report released in early November.

After the end of the third quarter on Sept. 30, Public Storage acquired or agreed to acquire 54 self storage facilities across 18 states—including the 36-property portfolio from Beyond Self Storage—totaling 4.9 million square feet for $686.9 million. The earnings report stated the 12 properties that are still to be constructed by Beyond Self Storage will be acquired for $193.9 million, and closings will occur as they are completed next year.

Earlier deals

In March, the REIT acquired a three-property self storage portfolio totaling 3,596 units in the New York and Boston markets from Banner Real Estate Group. One of the deals, a 139,300-square-foot building located on a 1-acre parcel at 5002 Second Ave. in Brooklyn, changed hands for $48.8 million and was the largest self storage transaction recorded in the New York metro area through October, according to CommercialEdge. A 125,388-square-foot asset located at 490 Eastern Ave. in Malden, Mass., outside Boston, sold for $26 million, and a three-story structure at 479 Fifth Ave. in New Rochelle, N.Y., near Interstate 95, changed hands for an undisclosed amount.