Blackstone Strikes $18.7 Billion Deal for U.S. Warehouse Network
June 02 2019 - 8:26PM
Dow Jones News
By Liz Hoffman, Miriam Gottfried and Cara Lombardo
Blackstone Group LP is buying a network of U.S. industrial
warehouses from Singapore-based GLP for $18.7 billion, including
debt, in the largest private real-estate transaction ever.
The deal, culminating an auction, could be announced as soon as
Sunday, people familiar with the matter said. Blackstone outbid
real-estate company Prologis Inc. for the roughly
180-million-square-foot portfolio, the people said.
The deal price includes about $8 billion of debt, one of the
people said, which Blackstone plans to refinance.
The Wall Street Journal reported last month that Blackstone and
Prologis were vying for the portfolio, which includes about 1,300
properties. GLP will keep a small footprint in the U.S. in addition
to its substantial holdings in China, plus newer inroads into
Europe and Latin America.
GLP had been gearing up to take its U.S. business public later
this year, the Journal reported in April, but drew buyout interest
and chose to take that route instead.
The rise of Amazon.com Inc. -- GLP's biggest tenant -- and other
e-commerce companies has spurred demand for industrial warehouses.
Valuations of publicly traded warehouse owners have surged in some
cases by 30% this year. Particularly prized are properties near big
cities, which help solve the "last-mile" puzzle posed by a move
toward next-day delivery.
The deal will make Blackstone one of the largest owners of U.S.
logistics properties, expanding its holdings by more than one-third
to about 750 million square feet. The firm is already a global
real-estate giant with about $140 billion of assets, including
trophy properties like Chicago's Willis Tower and the Cosmopolitan
of Las Vegas resort and casino, and thousands of single-family
homes.
Blackstone previously owned about half of the properties it is
buying as part of the deal, some of the people said. It sold IndCor
Properties Inc., a portfolio of industrial warehouses it assembled
in the wake of the financial crisis, to GLP in 2015.
GLP executives -- including several Blackstone alumni who helped
build IndCor -- subsequently sold about $1 billion worth of
properties and made two major acquisitions. Four years later, they
are striking the largest private real-estate deal in history,
eclipsing the 2012 sale of Archstone out of the bankrupt Lehman
Brothers estate.
Blackstone plans to divvy up the assets, putting about
two-thirds into its opportunistic real-estate strategy and the
remainder into its private real-estate investment trust, some of
the people said. The assets headed for the REIT, which is open to
retail investors, have longer-term leases and throw off a steadier
stream of cash.
Write to Liz Hoffman at liz.hoffman@wsj.com, Miriam Gottfried at
Miriam.Gottfried@wsj.com and Cara Lombardo at
cara.lombardo@wsj.com
(END) Dow Jones Newswires
June 02, 2019 20:11 ET (00:11 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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