Public Storage Buys Competitor ezStorage for $1.8B

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Self-storage real estate investment trust (REIT) Public Storage bought competitor ezStorage for $1.8 billion, Public Storage announced on Tuesday.

The deal includes a portfolio of 48 self-storage facilities in Virginia, Maryland and Washington, D.C., that boosts Public Storage’s size by 4.2 million square feet, according to the company. Public Storage will also take over one under-construction property and expand eight others, which will increase the portfolio’s square footage by 10 percent in 2023.

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Self-storage — which thrives on death, divorce, disaster and displacement — started to consolidate in recent years, as REITs like Public Storage and CubeSmart began to dominate the industry. And the market has been winning during the coronavirus pandemic, as college students were forced to move out of dorms, rental evictions increased, and people stuck working remotely cleared out space for home offices.

The United States is expected to add another 43.6 million square feet of self-storage space in 2021, with the New York area at the top of the pack with some 4.4 million square feet of new facilities, a report from Yardi Matrix found.

Public Storage itself said it had expanded its portfolio by about 21 million square feet since 2019 through acquisitions and development. It plans to fund the ezStorage purchase with unsecured debt, and the deal is set to close next month.

“The acquisition is a direct reflection of Public Storage’s unique positioning for growth through acquisitions, development, redevelopment, and third-party management,” Joe Russell, CEO of Public Storage, said in a statement.