WAYNE, PA. — CubeSmart (NYSE: CUBE) has closed on its acquisition of a 22-property self-storage portfolio from Storage Deluxe for $560 million. The assets total 1.6 million square feet and are located in New York, Pennsylvania and Connecticut.
The acquisition makes Wayne, Pa.-headquartered CubeSmart the largest owner and operator of self-storage properties in the greater New York City region.
Under the terms of the contract, the deal closed in two phases. Phase one included the sale of 16 assets, which closed for $357 million last November. According to CubeSmart, the $202.7 million second phase includes the assumption of $88 million in secured debt.
The conclusion of the deal, first announced in October 2011, leaves Storage Deluxe with seven operating self-storage facilities in the boroughs of New York City and six additional facilities under construction.
Aaron Swerdlin, who led the HFF team that represented Storage Deluxe in the transaction, says the sale presented a unique opportunity for both parties. “Storage Deluxe spent 13 years developing a portfolio unequalled in scale to anything I've ever seen in the self-storage industry.”
“To have an assemblage of this many first-class assets in the boroughs, and in surrounding areas, presented CubeSmart an opportunity to acquire scale and quality that I'm not sure is available anywhere else in the country,” says Swerdlin. “Other high-quality portfolios exist, but not to the tune of in excess of a half-billion dollars.”
CubeSmart is a self-storage real estate investment trust and one of the top owners of self-storage facilities in the nation. Today, the company owns or manages 520 self-storage facilities across the U.S.
Last October, Christopher Marr, CubeSmart's president and chief investment officer noted, “This transaction accelerates the portfolio transition that management began in 2008, further improving our demographics, margins and rent per square foot.”
“Going forward, more than 60 percent of our portfolio net operating income will be derived from our core markets, a 43 percent improvement from January 2008,” Marr added. “The New York, Miami, Washington, D.C., Chicago and Dallas metro areas will be our top five markets upon completion of this acquisition.”
Cubesmart's stock price closed at $12.59 per share on Thursday, up from $10.03 per share a year earlier.
— Liz Burlingame