Centerbridge, Reframe Holdings Enter Self Storage Partnership

Centerbridge Partners and Reframe Holdings have entered a self storage joint venture, with plans to acquire Class A and B facilities across U.S metropolitan areas. The partnership targets more than $500 million in assets, including leverage.

Walker & Dunlop’s Equity and Structured Finance team oversaw the joint venture formation. Burr & Forman LLP and Simpson Thacher & Bartlett LLP served as legal advisors to Reframe, respectively Centerbridge.

In the last eight years, Centerbridge has purchased $3 billion worth of self storage real estate nationwide, amounting to more than 22 million square feet across 375 properties. The company has also invested in the sector in Europe, specifically in the Northern countries and Spain.

Real estate and investment firm Reframe Holdings launched last year, co-founded by Matt Dicker and Zack Widmann. The company specializes in self storage acquisitions, with a focus on data fundamentals and pattern recognition. Currently, Reframe owns 14 self storage properties located across Texas, in markets such as Austin, Houston, Dallas and McAllen, according to Yardi Matrix.

A focus on joint ventures

September saw the overall advertised street rate climb 0.9 percent year-over-year to $16.80 per square foot, according to the latest Yardi Matrix report, aligning with the ongoing challenges and trends in the self storage market. On a monthly basis, the rates per square foot for the 10×10 non-climate and climate-controlled units combined dropped 0.7 percent.

Earlier this month, Morningstar and Harrison Street formed a joint venture for the ownership of 21 self storage assets located across seven states. Morningstar was also part of the previous ownership structure, prior to the current shuffle of the capital stack, and continued to operate the properties, with Harrison Street buying out the former partner and becoming majority stakeholder.