Strategic Storage Trust II Agrees to Buy 27-Property Mindful Self-Storage Portfolio for $371M

Update 6/6/16 – SST II has completed its purchase of the 10 Florida facilities and single Maryland facility from Mindful Storage. The acquisition comprises 985,500 rentable square feet of storage space in about 9,540 units. The Maryland facility is Fullerton Self Storage in Baltimore, which contains 100,600 square feet in 1,080 units. The Florida properties are:

• Abby Self Storage, 10451 N.W. 33rd St., Doral—71,500 square feet, 1,030 units
• Cypress Self Storage, 7755 Preserve Land, Naples—75,900 square feet, 800 units
• Mindful Storage, 189 Linton Blvd., Delray—121,500 square feet, 900 units
• Security Self Storage, 2581 Jupiter Park Drive, Jupiter—87,400 square feet, 820 units
• Security Self Storage, 8135 Lake Worth Road, Lake Worth—78,100 square feet, 830 units
• Security Self Storage, 10325 W. Broward Blvd., Plantation—89,800 square feet, 910 units
• Security Self Storage, 2320 N.E. 5th Ave., Pompano Beach—114,500 square feet, 870 units
• Security Self Storage, 501 N.W. Business Center Drive, Port St. Lucie—71,800 square feet, 720 units
• Security Self Storage, 10719 Southern Blvd., Royal Palm Beach—92,700 square feet, 850 units
• Security Self Storage, 1341 State Road 7, Wellington—81,700 square feet, 730 units

"The Mindful acquisition is accretive to our portfolio in many categories, including asking rents and occupancy," said H. Michael Schwartz, CEO and chairman of SST II. "At 96 percent occupancy, these 11 properties represent a proven income stream with imbedded operational upside."

"We like the diversity of these assets across the southern half of Florida," said Wayne Johnson, chief information officer for SST II. "There are 10 stores spread among five counties, each in dense and established markets. The Baltimore property is in a region that we know well from a historical perspective and fits within our future growth plans."

4/7/16 – Strategic Storage Trust II Inc. (SST II), a public, non-traded, self-storage real estate investment trust (REIT) sponsored by SmartStop Asset Management LLC, has agreed to acquire a 27-property portfolio from Mindful Storage for approximately $371 million, based on a March 25 filing with the Securities and Exchange Commission. The deal includes 22 self-storage facilities in three states, as well as land parcels adjacent to four of those properties and one redevelopment site in North Carolina. The active portfolio, which comprises more than 1.5 million square feet, includes 10 facilities in Florida, 11 in North Carolina and one in Maryland.

The deal will be executed through 12 purchase-and-sale agreements with unaffiliated third parties, according to the filing. SST II structured the deal through a subsidiary of Strategic Storage Operating Partnership II LP, the REIT’s operating partnership. The purchase price for the 22 self-storage facilities is about $367 million. The separate land deals will be acquired for approximately $3.65 million. SST II expects to close on the entire portfolio during the second or third quarter.

Mindful Storage is a division of the Mindful Group, a Florida-based real estate company focused on acquisitions, development and property management. The Mindful Storage portfolio operates under several brand names including Abby Self Storage, Cypress Self Storage, Fullerton Self Storage, George’s Stor-Mor, Security Self Storage, Storage Center and Stowaway, according to the company website. Mindful Management LLC serves as corporate headquarters for self-storage and other real estate properties. Its operating portfolio includes 1.8 million square feet of self-storage, commercial, medical office and residential assets.

Officials from Mindful, SmartStop Asset Management and SST II have not yet commented publicly on the deal.

The acquisitions will substantially increase the SST II footprint in Florida and North Carolina. The REIT currently has two facilities in Florida comprising 124,900 net rentable square feet and three in North Carolina comprising 159,600 square feet, according to its website. Eight of the 11 North Carolina facilities in the Mindful stable are in Asheville.

The SST II portfolio currently includes 23,880 self-storage units and approximately 2.6 million rentable square feet of storage space.

SmartStop Asset Management has a managed portfolio of 61 self-storage facilities comprising 4.2 million rentable square feet in Canada and the United States. The company also sponsors Strategic Storage Growth Trust Inc., a public, non-traded REIT also focused on self storage assets.