Blackstone to Buy Dream Global for $4.7B

The global investment giant will buy the Toronto-based REIT in an all-cash deal, adding 19.4 million square feet of Western European office and logistics assets to its portfolio.
Image via Pixabay

Blackstone will soon enhance its European office and logistics footprint by roughly 19.4 million square feet. Affiliates of Blackstone-managed real estate funds have entered into an agreement calling for the investment giant to acquire all subsidiaries and assets of Dream Global REIT, the first Canadian REIT to invest exclusively outside of Canada, in a transaction valued at C$6.2 billion, or approximately $4.7 billion.

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Toronto-based Dream Global has had quite the evolution since its 2011 IPO. The real estate owner and operator started out with a $1 billion portfolio of mostly German Post offices. The vast majority of the group of 292 postal properties have since been sold and what’s left in its place is a collection of high-quality office and light industrial assets in key Western European markets, predominantly in Germany and the Netherlands.

At the close of the second quarter of 2019, the REIT’s portfolio encompassed 215 properties, including the recently acquired Wahlzmuhldstrasse 65-65a, a 114,100-square-foot office building in Ludwigshafen, Germany, and the 116,300-square-foot office building at Transformatorweg 38-72 in Amsterdam. The portfolio also comprises assets in Austria and Belgium.

Transformatorweg 38-72, Amsterdam, Netherlands. Image courtesy of Dream Global REIT

Per terms of the acquisition agreement, Dream Global unitholders will receive $16.79 per unit. Pending unitholders’ approval and the satisfaction of other customary conditions, the all-cash transaction is on track to close in December 2019.

Expanding by multi-billion-dollar leaps and bounds

It’s been high-profile few months in real estate for Blackstone. The Dream Global agreement comes just day days after the investment firm closed Blackstone Real Estate Partners IX with $20.5 billion in total capital commitments, marking the largest real estate fund ever raised.

And in June, Blackstone announced it had entered into an agreement to purchase a 179 million-square-foot group of urban, infill logistics facilities in the U.S. from three U.S. funds of global investment manager GLP for $18.7 billion. Outside of its real estate-related activities, Blackstone also recently completed its previously announced conversion to a corporation from a publicly traded partnership.