The largest self-storage deal so far this year is set to close July 1. Self-storage REIT Public Storage has struck a deal to buy the entire 25-facility portfolio of Veritage Management for $240 million, The SpareFoot Storage Beat has learned.
The portfolio encompasses more than 1.9 million square feet and 17,000 storage units. Nineteen of the facilities are in Florida (including the facility pictured above in Summerfield, FL). Three facilities are in Maryland, and the remaining three are in New Jersey, North Carolina and Virginia.
The portfolio, which was marketed by Kieran O’Shea of Eastdil Secured, attracted plenty of interest from prospective buyers, according to Allen McElhaney, director of operations at Veritage. O’Shea said demand for the portfolio was “very high.” The occupancy rate for the portfolio is about 90 percent, according to O’Shea.
“All the REITs looked at it and a couple of smaller operators as well,” McElhaney told The SpareFoot Storage Beat.
Veritage assembled the portfolio from 1999 to 2013, according to property records. Veritage is based in Columbia, MD, with satellite offices in the Florida cities of Tampa and Melbourne. The company did not operate its facilities under a unified brand, often retaining the original names of the properties it bought.
McElhaney said Veritage, which employs about 100 people, will be dissolved once the deal is done.
“The owner passed away, and the second generation decided they didn’t want to continue,” McElhaney said.
Prominent Maryland businessman Stewart Bainum Sr., who died in February at age 94, founded Veritage. He also founded two better-known businesses: Choice Hotels International and HCR Manor Care.
Bainum opened his first hotel in Silver Spring, MD, in 1957 and opened his first nursing home three years later. The hotel business became Quality Inn, which eventually would grow into Choice Hotels, a publicly traded company that owns such brands as Comfort Suites, Econo Lodge and Rodeway Inn. HCR ManorCare, which was sold to a private equity firm in 2007, is one of the country’s largest operators of nursing homes.
The son of a Ford factory worker in Detroit, Bainum left boarding school after he longer could afford tuition and hitchhiked to Washington, DC, in 1936, according to a profile on Gazette.net. In the DC area, he earned enough money as a plumber’s assistant to return to school and earn a high school diploma.