Blackstone Provides $185M Refi for KKR’s National Self-Storage Portfolio – Commercial Observer

We’re a mere week into 2025, and KKR has already locked in a $185 million refinancing package for a national self-storage portfolio, Commercial Observer has learned. 

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Blackstone Real Estate Debt Strategies provided the five-year bridge loan to KKR’s self-storage investment platform Alpha Storage Properties, sources said. 

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CBRE’s Tom Traynor, Tom Rugg, Mark Finan and Arman Samouk arranged the debt. 

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“The quality of these properties and strength of our Alpha Storage Properties operating platform enabled us to be proactive and take advantage of improving capital markets,” said Ben Brudney, a managing director in the real estate group at KKR. “This attractive financing package allows us to continue executing our business plan and provides us with excellent flexibility to optimize the value of this portfolio.”

The portfolio comprises 15 Class A self-storage properties that span a total of 1.2 million square feet in markets including Charlotte, N.C, Phoenix and Winter Park, Fla., according to Alpha’s website. The assets’ specific locations couldn’t be gleaned, but a source familiar with the deal described them as densely populated and high-income neighborhoods where storage demand exceeds national averages. 

Blackstone’s loan will be used to retire existing debt and also provide KKR with additional term to finalize its business plan for the portfolio. 

“We are thrilled to provide this financing solution for a high-quality and well-located portfolio, which is backed by a strong sponsor,” a Blackstone spokesperson told CO. 

KKR launched Alpha Storage Properties in 2021 to acquire and manage self-storage properties in high-growth markets as well as targeted infill locations across the U.S.

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Demand for self-storage skyrocketed during COVID-19 as the population hunkered down within confined locations or hit the open road, lifestyle adjustments that frequently required moving goods into storage. While self-storage demand is down from those dizzying peak levels, it’s still above pre-COVID levels. 

A November CBRE report estimated that 10.2 percent of U.S. households use self-storage today, compared with 9.3 percent in 2019,  and that the average U.S. household now uses 13.4 square feet of self-storage compared with 12.1 square feet pre-pandemic. 

“Our outlook anticipates that more and more households will use self-storage, and that in a decade the penetration rate will approach 16 percent of households,” the report stated. 

CBRE declined to comment. 

Cathy Cunningham can be reached at [email protected].