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NEW YORK CITY-Morgan Stanley Real Estate’s Prime Property Fund and Safeguard Storage Properties have formed a joint venture with Safeguard’s management team. The venture has acquired one additional property to bring its total capitalization to more than $400 million. New Orleans-headquartered Safeguard owns 56 self-storage stores totaling approximately 3.2 million sf, comprised of both operating properties and stores under development.

Dave Hardman, managing director and US head of real estate investing at locally based Morgan Stanley, tells GlobeSt.com that Prime was attracted to Safeguard’s “strong development pipeline and urban infill location strategy.” Among the key market cities for Safeguard are New York City, New Orleans, Houston, Chicago and Philadelphia. “Positive self-storage fundamentals include an increasingly mobile population and strong population and renter-household growth,” he notes, comparing the fundamentals to the multifamily marketplace, but believes the self-storage arena will deliver better yields in the near term.

The properties are newly constructed with features such as climate control, video surveillance and alarms, single point of entry and enhanced receiving capabilities. Additionally, a vertical orientation of the properties enables them to fit efficiently on small infill urban land parcels. Bruce C. Roch Jr., chairman, chief executive officer and founder of Safeguard, says the partnership will “be integral to our ability to create value by expanding our presence in existing key markets and opening facilities in new markets.”

Prime is a $3 billion core, discretionary and diversified real estate fund managed by Morgan Stanley Real Estate. Its assets include office, industrial, retail and hotel properties and are located in major real estate markets throughout the US. It has acquired $58.4 billion of real estate assets worldwide and currently manages $32.5 billion in real estate assets on behalf of its clients. Senior professionals from both Prime and Safeguard will comprise the company’s management committee; Safeguard will continue to manage day-to-day activities.

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