CubeSmart announced Nov. 15 that it struck a deal to acquire 59 self-storage properties from LAACO Ltd., which operates facilities under the Storage West brand. The total purchase price is $1.69 billion.
The Malvern, PA-based REIT also announced that it has commenced a public offering of 13.5 million common shares that will be used to fund the deal. CubeSmart said it will also seek new long-term debt financing for the portfolio purchase.
“The Storage West portfolio represents a very strategic transaction that will enhance our portfolio and further diversify our geographic exposure,” said Christopher P. Marr, president and CEO of CubeSmart.
Marr said the Storage West portfolio is located in growth markets throughout the Southwest and will complement the company’s existing portfolio. The portfolio includes 22 facilities in Southern California, 17 in Phoenix, 13 in Las Vegas, and seven in Houston. Two of the facilities are joint ventures, owned fifty percent by LAACO. As part of the deal, CubeSmart will pay off $40.9 million in existing debt held by LAACO.
Karen Hathaway, president and managing partner of LAACO, said the company is pleased that the transaction will benefit LAACO investors as well as CubeSmart shareholders.
“We are also gratified that our operations will continue in the good hands of a skilled management team whose values so closely align with ours, and whose success includes solid growth, commitment to their employees, and dedication to customer satisfaction, sustainability, and diversity,” Hathaway said.
Kieran O’Shea of Eastdil Secured represented LAACO in its disposition of the portfolio. The deal is expected to close in the fourth quarter of 2021.