Blackstone to Double US Industrial Footprint in Record $18.7B Deal

The company agreed to purchase assets from three GLP funds, building on growing e-commerce demand. The deal is being called the largest-ever private equity real estate transaction.
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Blackstone is set to pay $18.7 billion for urban, infill logistics assets in the U.S., nearly doubling its industrial portfolio. The investment management giant, which recently announced it will convert into a corporation starting this month, has entered into an agreement with Global Logistic Properties to acquire assets from three GLP funds. Believed to be the world’s largest private equity transaction ever, the deal encompasses roughly 179 million square feet.

Blackstone Real Estate’s global opportunistic BREP strategy is slated to add 115 million square feet to its portfolio for $13.4 billion, while the company’s income-oriented non-listed REIT—Blackstone Real Estate Income Trust—will acquire 64 million square feet for $5.3 billion.

GLP worked with Eastdil Secured, Citigroup Global Markets Inc. and Goldman Sachs & Co. as financial advisors. Blackstone chose BofA Merrill Lynch, Barclays, Deutsche Bank, J.P. Morgan and Morgan Stanley & Co. as financial advisors, with Simpson Thacher & Bartlett serving as the company’s legal counsel. 

Stimulated by e-commerce

Retailers’ need for warehouse space has ballooned as online shopping continues to grow in popularity. This has lured investors’ interest in industrial assets, including Blackstone’s. The deal comes right after the company announced it is raising $5 billion for its latest real estate debt fund, Blackstone Real Estate Debt Strategies IV. Earlier in January, Blackstone Group LP was in the final stages of raising the largest CRE fund ever, a whopping $20 billion.

Singapore-based GLP entered the U.S. real estate market in 2015, when it paid $4.6 billion for Industrial Income Trust’s 58 million-square-foot portfolio. Through a series of major acquisitions, the company rapidly became the second-largest owner of logistics real estate assets in the country.