Starwood Real Estate Income Trust, Morningstar form self-storage JV

Starwood Real Estate Income Trust, Morningstar form self-storage JV

Starwood Real Estate Income Trust (SREIT) and Morningstar Properties, an owner and operator of self-storage facilities under the Morningstar Storage brand, have formed a joint venture to own and operate high-quality stabilized assets in the self-storage sector.

The joint venture includes the recapitalization of 25 assets owned by Morningstar owned and managed funds, as well as a commitment of capital to continue acquiring assets in the sector under the Morningstar brand.

Ethan Bing, Managing Director at Starwood Capital, said, “We look forward to partnering with Morningstar and adding self-storage into SREIT’s portfolio of assets. The sector’s stable cash flows fit well with SREIT’s yield and long-term hold objectives. Morningstar is a best-in-class branded operator and this partnership provides immediate scale in a fragmented sector in addition to creating a platform for substantial growth.”

The seed portfolio for the newly formed venture includes 1.8 million square feet of storage space located throughout the Sun Belt region, which is experiencing significant population, employment and income growth.

The storage sector has been resilient throughout the COVID-19 pandemic and continues to exhibit attractive fundamentals.

The joint venture will seek to capitalize on favorable sector and regional trends through acquisition of high-quality portfolios and one-off assets.

David Benson, Morningstar’s CEO, commented, “This is an exciting day for Morningstar and a testament to our success over the past 40 years in the storage sector. Combining our recognized brand and acquisition and operations expertise with Starwood’s investment capabilities and financial backing creates a powerful partnership that we expect will grow considerably in the coming years.” 

As of November 30, 2021, the SREIT, a non-listed REIT managed by a subsidiary of Starwood Capital, portfolio had a total asset value of $18.2 billion across 334 properties.

Morningstar was advised by Eastdil Secured on the recapitalization of the seed portfolio and formation of this venture.