Blackstone places $1.5B bet on logistics amid e-comm boom

Fund manager buys 12M sf portfolio from Irvine Realty

TRD New York /
Sep.September 21, 2016 10:10 AM

The Blackstone Group agreed to pay $1.5 billion for a logistic center portfolio, betting on the continued strength of e-commerce.

The properties, totaling 12 million square feet, are primarily on the West Coast. California-based investment firm Irvine Realty is the seller.

Investors have doubled down on logistic centers in recent years amid the rise of e-commerce, which needs these centers to store goods and bring them to consumers.

“Distribution used to be just another part of the supply chain,” said Charles Sullivan, president of U.S. operations for logistic-center owner Global Logistic Properties, told the Journal. “Now logistics has moved up in its importance in corporate strategy.”

Logistic-centered real estate investment trusts saw their average returns grow 4.8 percent over the past year – the third-highest growth rate among all REIT categories, according to Green Street Advisors.

The deal marks Blackstone’s first big bet on the sector since it sold IndCor Properties for $8.1 billion last year. The fund manager also owns 150 million square feet of logistics properties in Europe.

The deal carries risk. Analysts told the Journal that a wave of new supply could push down logistic centers’ returns, while e-commerce remains largely unprofitable. [WSJ] — Konrad Putzier  


Related Articles

arrow_forward_ios
Blackstone COO Jonathan Gray and Club Quarters Chicago at 111 W Adams Street (Getty, Google)

Blackstone misses payment on $274M hotel loan

Blackstone misses payment on $274M hotel loan
Blackstone’s Jonathan Gray

TRD Insights: Here’s how much tenants pay for space at Blackstone’s massive industrial portfolio

TRD Insights: Here’s how much tenants pay for space at Blackstone’s massive industrial portfolio
Blackstone’s Jonathan Gray, Starwood Capital Group’s Barry Sternlicht, and Oaktree Capital co-chairman Howard Marks (Getty)

“Phenomenal returns” for some distressed real estate investors in stocks

“Phenomenal returns” for some distressed real estate investors in stocks
Hudson Commons and 444 N. Michigan Ave. 

TRD Insights: Can CLOs recover from the pandemic?

TRD Insights: Can CLOs recover from the pandemic?
Blackstone's president Jonathan Gray and CEO Stephen Schwarzman (Credit: Gray via Drew Angerer/Getty Images; Schwarzman via Himanshu Bhatt/NurPhoto via Getty Images)

Blackstone: “We don’t need financing to get things done”

Blackstone: “We don’t need financing to get things done”
Blackstone’s Jonathan Gray and Starwood Capital Group’s Barry Sternlicht (Credit: Gray by  Drew Angerer/Getty Images; Sternlicht by Cindy Ord/Getty Images for 1 Hotels)

Blackstone, Starwood pick up stakes in Extended Stay America

Blackstone, Starwood pick up stakes in Extended Stay America
Clockwise from bottom left: 62-60 99th Street in Rego Park, 850-870 Third Avenue in Sunset Park and Square Mile Capital’s Craig Solomon with renderings of 550 Clinton Avenue in Brooklyn (Credit: Google Maps; Getty Images; Morris Adjmi Architects)

These were the top outer borough loans last month

These were the top outer borough loans last month
Blackstone's Jonathan Gray, Gaedeke Group's Sabine Gaedeke Stener and 44 Wall Street (Credit: Stener by Gaedeke Group; Gray by Drew Angerer/Getty Images, 44 Wall Street via Google Maps)

Blackstone sells office tower at 44 Wall Street for $200M

Blackstone sells office tower at 44 Wall Street for $200M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...