Brookfield to Acquire U.S. Warehouse Business for $1B

Brookfield Property Partners has agreed to purchase Industrial Developments International (IDI) from Kajima of Japan for $1.1 billion, in a deal a company spokesperson said will close in the fourth quarter.
John Morris

John Morris, of Cushman & Wakefield

Brookfield Property Partners has agreed to purchase Industrial Developments International (IDI) from Kajima of Japan for $1.1 billion, in a deal a company spokesperson said will close in the fourth quarter.

“This is a significant investment partnership in our business. It represents another indicator of the positive expectations from investors, owners and operators for the future of industrial real estate,” John Morris, Cushman & Wakefield’s industrial services lead, Americas, told Commercial Property Executive. “Two excellent companies with operating expertise and investment acumen are now we are sure even more excited about industrial. We share their expectations and enthusiasm.”

Industrial Developments portfolio includes 75 industrial distribution facilities in 12 states that serve consumer product, retail and industrial companies. In total, it includes more than 27 million square feet of operating assets and 49 million square feet of future development potential.

Brookfield Property Partners will own approximately a 25 percent interest in IDI with the balance owned by Brookfield’s institutional partners.

“Brookfield will be an exceptional parent organization and we are enthusiastic about starting a positive new chapter for IDI as we approach our 25th year in business,” Timothy Gunter, IDI’s president & CEO, said in a statement. “With Brookfield’s backing, we have an exciting opportunity ahead of us to strengthen IDI’s presence in the current markets we serve and potentially in uncharted territory.”

The deal will make the Bermuda-based Brookfield one of the world’s largest owners of industrial and logistics facilities. Combined with its current holdings, when the deal is completed, Brookfield will have 62 million square feet with 79 million square feet of future development potential with operations in North America, Europe, the Middle East and China.

“The addition of IDI to Brookfield’s existing industrial operations will create a leading global industrial real estate company able to deliver high-quality distribution facilities to clients around the world,” Ric Clark, the company’s CEO, said in a company statement. “The combined business will own irreplaceable assets and development sites near major markets and transport routes, with a 25 year track record of delivering superior service, and is now positioned for significant long term growth.”

Brookfield Property Partners is coming off a busy second quarter of 2013, as it acquired seven real estate assets totaling approximately $1 billion and disposed of eight real estate assets totaling approximately $890 million, directly or through affiliates,

“We are excited by the opportunities we are seeing in all sectors as we believe there are unmatched prospects for organic growth and acquisitions at attractive valuations,” Clark said. “With the U.S. economic recovery gaining strength and Europe still in flux, we are poised to invest in best-in-class diversified property assets, utilizing our global reach, platforms and capabilities to grow Brookfield Property Partners into the world’s leading commercial real estate company.”