NEW YORK CITY — Affiliates of private equity giant Blackstone (NYSE: BX) have agreed to acquire PS Business Parks (NYSE: PSB), a Glendale, Calif.-based commercial owner-operator primarily focused on industrial assets, for $7.6 billion. The deal is scheduled to close in the third quarter.
Under the terms of the agreement, New York City-based Blackstone will purchase all outstanding shares of PSB’s common stock for $187.50 per share, which represents a premium of approximately 15 percent over the weighted average share price over the last 60 days. Blackstone plans to take the company private as part of the acquisition.
Public Storage (NYSE: PSA), which is also based in Glendale, currently owns about 26 percent of PSB’s common stock, and the self-storage REIT’s executives and shareholders have voted in favor of the sale to Blackstone. The transaction will also include the acquisition of Public Storage’s limited partner equity interests in PSB’s operating partnership at the same per-share price of $187.50.
As of March 30, 2022, PSB owned and operated 96 commercial properties across the country, primarily in California, South Florida, Texas and Northern Virginia. Those assets span approximately 27 million square feet and are occupied by nearly 5,000 tenants. Though mainly comprised of multi-tenant industrial and flex properties, PSB’s portfolio also includes some low-rise suburban office buildings and 800 residential units.
“This transaction is an exceptional outcome for our stockholders and a testament to the incredible company and portfolio of high-quality assets our team has built, acquired and enhanced over the years,” says Stephen Wilson, president and CEO of PSB Business Parks.
Simpson Thacher & Bartlett LLP is serving as Blackstone’s legal counsel. J.P. Morgan Securities LLC and Eastdil Secured are acting as co-financial advisor to PSB, with the latter also providing real estate advisory services. Wachtell, Lipton, Rosen & Katz is serving as PSB’s legal advisor.
Following the announcement, the stock price of PSB Business Parks opened at $188.50 per share on Monday, April 25, up more than 10 percent from the closing price of $171.11 per share on Friday, April 22. Overall, the company’s stock price has risen about 14 percent relative to this time last year, when it traded at $164.88 per share.
Blackstone’s stock price opened at $109.50 per share to begin the week, up from $87.39 per share one year ago.
— Taylor Williams