The Florida State Board of Administration (SBA), along with joint venture partner National Storage Affiliates Trust (NSA), has acquired a majority stake in a 4.5-million-square-foot US self-storage portfolio for a total of $630 million.
SBA has a 75 percent stake in the joint venture, with the remainder held by NSA. The Florida pension invested a total of $472 million, including $227 million in equity, in the acquisition, according to materials from its Monday board meeting.
NSA originally announced in September that it had formed a joint venture with an unnamed “major state pension fund” to acquire the portfolio. SBA did not disclose its involvement in the deal until this week.
The transaction, which closed in October, represents SBA’s first major investment in self-storage real estate and its first in the sector since the early 2000s, when it executed a number of small deals in the property type.
The portfolio represented the entire property holdings of iStorage, a Winter Garden, Florida-based self-storage operator. Separately, NSA also agreed to acquire iStorage’s property management platform.
The deal, which was advised by Heitman Capital Management, was funded with 50 percent equity and 50 percent debt. The parties also agreed to commit up to an additional $100 million in equity to fund jointly approved future acquisitions.
The portfolio consists of 66 properties comprising more than 36,000 storage units and is located across 12 states, with concentrations in the Philadelphia metro area, the Florida gulf coast, northern Alabama and California.
The properties, all of which are branded with the iStorage name, have a weighted average age of 20 years, but approximately 70 percent of the portfolio has been renovated since 2013.
SBA currently has 12.5 percent of its $13.36 billion real estate portfolio allocated to “other” property types, including agriculture, student housing, senior housing, medical office, hotels and land. By contrast, the NFI-ODCE index, its benchmark target, has a 4 percent allocation.
SBA is the investment manager for Florida’s public pension plan, Florida Retirement System, which had $153.94 billion in assets as of September 30. SBA managed a total of $180.53 billion as of the same period. Its senior investment officer in real estate is Steve Spook.
NSA is a Greenwood Village, Colorado-based publicly-traded self-storage real estate investment trust. The REIT currently has 145,000 units in 315 self-storage properties across 18 states.