General Electric’s financial services unit, GE Commercial Finance is selling Storage USA for $2.3 billion in cash.

On the recieving end of the transaction is a joint venture between Extra Space Storage and Prudential Real Estate Investors.

“Until now, this sector has primarily been owned by REITs and private investors, but is becoming increasingly popular among institutional investors,” said Charles Lowrey, CEO of Prudential. “Through this transaction, we’re able to put a large amount of institutional money to work to provide investors with a geographically diverse exposure to this sector, which offers the potential for good returns through increases in rents and occupancy.”

Storage USA has over 450 properties in 30 states and the District of Columbia.

“As employment levels have been increasing during the current economic expansion, demand for self-storage has been recovering and strengthening. This higher demand, coupled with slowing supply growth, will likely result in moderate rent and income growth in the medium term,” said Prudential’s research managing director. “This positive outlook for the self-storage industry, attractive cap rates and high diversification benefits make self-storage an attractive consideration for institutional investors.”

“I’m proud of the work our team did to strengthen Storage USA’s position in the self storage industry. We’re selling Storage USA at the right time at an attractive price to a buyer that will build on our accomplishments and continue to serve customers well,” said GE Commercial Finance president and CEO, Michael Pralle.

The deal is expected to be complete in the third quarter, and is subject tocustomary closing conditions.

Chris is a staff writer for webproworld. Visit webproworld for the latest ebusiness news.