CHICAGO — Harrison Street Real Estate Capital has completed the sale of a large portfolio of self-storage assets to Public Storage (NYSE: PSA), a publicly traded REIT. Industry sources report the total purchase price was approximately $315 million. The sale represents the largest portfolio transaction to date, surpassing a $300 million sale earlier this year.
The portfolio consists of 43 properties in five states and was assembled over time by the firm from 2007-2012. The properties are located in Texas, North Carolina, South Carolina, Virginia and Georgia.
At the time of the disposition, the 22,500-unit portfolio was more than 82 percent occupied. The assets were owned in a joint venture with Morningstar Properties and managed under the Morningstar Mini-Storage brand. Public Storage, which is headquartered in Glendale, Calif., is expected to rebrand the properties.
“We are extremely pleased with the outcome of this portfolio sale,” says Christopher Merrill, co-founder, president and CEO of Harrison Street, a Chicago-based real estate private equity firm. “The strategy of rolling up our sleeves and working to build a portfolio over time proved to be quite successful for our limited partnerships.”
Harrison Street, which was the majority owner, acquired or developed these assets across three of its closed-end opportunity funds, Harrison Street Real Estate Property Funds I, II and III. Those funds were launched in 2006, 2008 and 2010, respectively. Recently, Harrison Street closed on the capital raise for Fund IV in the amount of $750 million within five months of launch.
Founded in 2005, Harrison Street remains quite active on the buying and selling front. In 2013, the firm expects to sell more than $1 billion in real estate, including this portfolio of assets.
Harrison Street is also actively acquiring and developing property in the student housing, seniors housing and medical office segments with more than $2 billion in new investments completed so far this year. Additionally, the firm has more than $5.5 billion in assets under management and has raised over $4 billion in discretionary equity for all of its investment offerings.
Public Storage primarily acquires, develops, owns and operates facilities. As of June 30, Public Storage had interests in 2,081 facilities spanning approximately 133 million net rentable square feet in 38 states. Additionally, the REIT had interests in 188 storage facilities with approximately 10 million net rentable square feet operating under the Shurgard brand in seven Western European nations.
Public Storage’s stock price closed at $161.99 per share on Thursday, Oct. 3, up from $139.69 a year ago.
— Matt Valley