First Citizens Provides $66M for 3 Self Storage Purchases

Affiliates of Morningstar Properties acquired these Houston and Las Vegas properties.

Image courtesy of Paul Brennan via pixabay

Affiliates of Morningstar Properties have received $65.8 million in senior secured financing from First Citizens Bank’s Middle Market Banking business for the acquisition of three new self storage properties that will be operating under the brand name Morningstar Storage.

Two of the properties are in the Houston market–a 141,000-square-foot self storage facility off Eldridge Parkway and a 151,000-square-foot self storage facility off South Voss Road. The financing was also used for the purchase of a 103,000-square-foot self storage facility in Henderson, Nev., that serves the Greater Las Vegas market. Morningstar Properties acquired the HPI Henderson Storage, a 1,263-unit asset at 1650 W. Horizon Ridge Parkway, from HPI Real Estate last month. The property traded for $19.5 million, according to Yardi Matrix data, which also recorded the acquisition loan provided by First Citizens. That property came online in 2022 and comprises three two-story buildings on 4 acres.

Wesley Carter, CFO of Morningstar Storage, said in a prepared statement the company continues adding to its portfolio as demand from both consumers and businesses seeking convenient and secure self storage with top-notch management remains strong.

Brendan Chambers, First Citizens’ lead executive for Middle Market Banking, said in prepared remarks the bank was pleased to partner with Morningstar Properties again as they make additional investments in the self storage market. Last May, First Citizens provided a Morningstar Properties affiliate with a senior secured line of credit for up to $50 million for acquisition and development opportunities as well as general working capital purposes.

Growing Portfolio

Since 1981, Morningstar Properties has developed, acquired and operated more than 250 self storage facilities across the country, totaling more than 15 million square feet. At the beginning of 2022, the company formed a joint venture with Starwood Real Estate Income Trust Inc., managed by a subsidiary of Starwood Capital Group. The partnership marked the REIT’s entry into the self storage market, which included the recapitalization of 25 properties totaling1.8 million square feet owned by Morningstar, as well as the acquisition of storage assets under the Morningstar Storage brand.

The seed portfolio included assets throughout the Sun Belt region, which continues to see population and employment growth.

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