Warehouse party

Breaking down real estate’s big e-commerce bets and what’s at stake for major players like Blackstone and Prologis

Mar.March 02, 2020 11:00 AM

Prologis CEO Hamid Moghadam and Blackstone’s Jonathan Gray

In industrial real estate, it’s a close race to the top.

Blackstone and Prologis are going head to head to be crowned the firm that holds the most industrial space on the planet.

But the logistics real estate investment trust has bested the private equity giant, at least for now. Prologis has ownership stakes in 964 million square feet of industrial space, while Blackstone has about 800 million square feet of logistics and last-mile warehouse space on its books, the two companies confirmed to The Real Deal.

Competition in the sector has been heating up as the e-commerce market continues to grow — such purchases shot up 14.9 percent year-over-year in 2019 — with more retailers looking to ship goods to customers within just a few hours.

In 2019, the average quarterly asking rent for industrial properties in the U.S. jumped 5.1 percent from the year before. Rents in the fourth quarter were $7.63 per square foot, marking the 33rd straight quarter of rent growth, according to CBRE. And new warehouse and logistics space in densely populated cities can fetch significantly higher dollar amounts.

Rising demand has bolstered deal volume, which has led to prices escalating in the sector. Industrial deals made up 18.7 percent of all commercial real estate transactions last year, a share that almost doubled from 2014, per Cushman & Wakefield.

But for just how long can the good times last?

While industrial space has been one of the best-performing asset classes for REITs, it’s not immune to challenges: Some industry players say developers may be building more than the market can absorb in the long run, and landlords may have to start thinking about ways to retrofit older and less efficient properties.

Here’s a closer look at some of the key numbers behind the e-commerce industrial boom.


The price Blackstone paid Singapore-based GLP for its logistics portfolio in 2019. The transaction was the largest industrial deal ever — not to mention one of the priciest private real estate deals in history. GLP entered the U.S. market just four years earlier.

510M sq. ft..

The total amount of new industrial space expected to hit the U.S. market in 2019 and 2020 — amounting to about 64 million additional square feet per quarter, according to Deloitte. But analysts expect just 421 million square feet of additional demand over the same period.


The return on investment that U.S. industrial REITs Prologis, Duke Realty and Terreno Realty saw in 2019. Industrial space is a top performer among REITs, with manufactured housing following close behind, according to S&P Global Market Intelligence.

$30+ per ft.

What some rents for new last-mile warehousing space can cost in prime markets like New York City, akin to what office landlords in the outer boroughs were asking just a few years ago, brokers told TRD last year. Asking rents for industrial space throughout the country have been steadily increasing since 2011, industry studies show.


A conventional warehouse property

Total 2019 sales of warehouse properties, the strongest-performing industrial subsector by deal volume, according to Cushman & Wakefield. Transaction activity rose 13 percent year-over-year for warehouse space, and large to medium-sized buildings made up the bulk of those sales.


The national vacancy rate for industrial and logistics space as of last year’s fourth quarter, per CBRE. That rate held flat from the previous quarter, but bumped up 20 basis points year-over-year. The figure could creep up this year due to new properties hitting the market.

34 years

The average age of a U.S. industrial property. More than 30 percent of warehouses across the country were built 50-plus years ago to accommodate very different kinds of tenants than today, according to Deloitte.

1.24M sq.ft.

The size of the Bronx Logistics Center, which Turnbridge Equities plans to build on 14.2 acres in a South Bronx Opportunity Zone, making it the largest last-mile distribution center in the city to date. The four-story, Class-A warehouse facility will be the only one in New York City offering freight rail access. Turnbridge already has a 3.5-million-square-foot portfolio of last-mile warehouse space in the metro area.

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