Blackstone Group Inc. BX -0.24% has struck a deal to buy Simply Self Storage from Brookfield Asset Management Inc., BAM 0.06% making a bet on a sector that has remained strong throughout the coronavirus pandemic.
The private-equity firm’s nontraded real-estate investment trust, known as BREIT, is buying the 8 million square-foot portfolio of self-storage facilities for about $1.2 billion, the two firms said. The deal is expected to be announced Monday.
BREIT, which already owns 2.6 million square feet of self-storage facilities, plans to continue to acquire smaller assets in the fragmented industry and run them under the Simply brand, according to Tyler Henritze, head of acquisitions in the Americas for Blackstone’s real-estate group.
“The opportunity to acquire a $1 billion-plus storage portfolio, including a brand and a team, is incredibly rare,” Mr. Henritze said.
He said Blackstone decided to do the deal based in part on the performance of its own self-storage assets. Such facilities are attractive businesses because they require little in the way of capital expenditures, have relatively low turnover and offer the ability to raise rents since they typically don’t represent a major portion of their tenants’ monthly expenditures.
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