CBRE to buy $4.9B global industrial portfolio

Hillwood Investment Properties selling properties spanning 28M sf, two continents

CBRE Investment Management CEO Chuck Leitner (iStock, CBRE)
CBRE Investment Management CEO Chuck Leitner (iStock, CBRE)

It may be a new year, but one of the largest-ever industrial purchases indicates the sector’s hot streak isn’t fading just yet.

CBRE Investment Management recently agreed to buy a portfolio of logistics properties from Ross Perot Jr.’s Hillwood Investment Properties, according to the Wall Street Journal. The properties involved in the deal are valued at $4.9 billion.

The portfolio spans more than 28 million square feet and includes warehouses and distribution centers, as well as other logistics facilities. The portfolio has properties in the United States, in addition to facilities in the United Kingdom, Germany and Poland.

Approximately two-thirds of the portfolio is already built and leased. The rest of it is either in search of tenants or still being developed.

The portfolio was appealing to CBRE because it was centered in markets with large labor forces, has advanced transportation systems and is close to a large number of consumers, the Journal reported.

“It’s a portfolio that was built and designed to be very responsive,” CBRE Investment Management CEO Chuck Leitner told the publication.

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CBRE Investment has more than $133 billion in assets, including $35 billion in industrial property across the world. According to the Journal, part of the portfolio sale is expected to close later this year, though part of it could also stretch into 2023.

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This is not the first time Perot Jr.’s development company has made an industrial property deal stretching into the billions.

In late 2020, the company sold a portfolio of 23 facilities to Stockbridge Capital Group and the National Pension Service of Korea. The transaction was valued at $2 billion, the largest of its kind since the beginning of the pandemic at the time.

Industrial real estate’s performance in the fourth quarter is not yet clear, but the sector is likely poised for another big year after the pandemic accelerated e-commerce led to a surge across the industry.

In the third quarter, there was 159 million square feet of net absorption, the highest quarterly total in 13 years, according to a report by Transwestern. Vacancy dropped to 4.7 percent while asking rents hit a quarterly high of $7.11 per square foot.

[WSJ] — Holden Walter-Warner