Brookfield Asset Management is selling its portfolio of Simply Self Storage properties in the U.S. to Blackstone REIT. (Courtesy Simply Self Storage)

Brookfield Asset Management is selling U.S.-based Simply Self Storage to Blackstone Real Estate Income Trust (BREIT) in a deal valued at just under $1.6 billion (all figures Cdn).

Simply Self Storage owns and operates a network of more than 12o facilities in 23 states. The company, founded in 2004, now has a portfolio spanning eight million square feet.

BREIT already owns a $402 million portfolio of self-storage facilities. With the addition of Simply Self Storage, it will become the third-largest private owner of storage facilities in the U.S.

The divestment is one of two major transactions announced today by Brookfield (BAM-A-T). In a separate deal, Brookfield Business Partners announced it and a group of partners will acquire all remaining shares in Genworth / Sagen MI which Brookfield does not already own. That acquisition is valued at about $1.6 billion.

“This transaction is a complementary addition to BREIT’s high-quality portfolio of income-generating real estate, which is heavily weighted towards logistics and multifamily primarily in growth markets,” said Frank Cohen, chairman and CEO of BREIT, in the announcement Monday morning.

“Simply Self Storage is a best-in-class company with significant potential for growth through future acquisitions in a highly fragmented sector, and similar to logistics, self-storage is a resilient sector through economic cycles because of low tenant turnover, minimal maintenance costs and stable cash flows.

“We look forward to continuing to acquire high-quality assets on behalf of our BREIT investors.”

More than 90 per cent of BREIT’s real estate investments are in multifamily, industrial and net leased assets.

BREIT management says it has approximately $3.6 billion of immediate liquidity to “execute on acquisitions of high-quality assets.”

Brookfield and Simply Self Storage

Toronto-based Brookfield acquired Simply Self Storage in 2016 in one of its opportunistic real estate funds, when the company possessed about 90 properties.

Since that time, Brookfield has more than doubled the size of the company and worked to transform the business into a fully-integrated, institutional platform.

In 2018, Brookfield sold 112 Simply Self Storage facilities to JV partners National Storage Affiliates Trust REIT and a Heitman Capital Management affiliate, for $1.7 billion. That portfolio comprised about 8.7 million square feet.

This most recent sale has been rumoured for the past couple of months, since a Bloomberg report early in September.

The transaction is expected to close prior to the end of 2020, subject to customary closing conditions.

Simpson Thacher & Bartlett LLP is serving as legal advisor to BREIT, and BofA Securities and Deutsche Bank Securities Inc. are serving as financial advisors to BREIT.

RBC Capital Markets LLC, Newmark Group Inc., and Fried, Frank, Harris, Shriver & Jacobson LLP advised Brookfield.

About Blackstone REIT

Blackstone Real Estate Income Trust, Inc. (BREIT) is an institutional-quality real estate platform investing in stabilized, income-generating U.S. commercial real estate across key property types and, to a lesser extent, in real estate-related securities.

BREIT is externally managed by a subsidiary of Blackstone (BX-N), a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $167 billion in investor capital under management.