Blackstone just announced an $18.7 billion real-estate bet on e-commerce

  • Blackstone announced it is buying $US18.7 billion worth of US warehouse assets from the Singapore-based GLP.
  • The deal is a bet on the future of e-commerce and logistics growth.
  • Watch Blackstone trade live.

Blackstone just announced an $US18.7 billion deal to purchase 179 million square feet of logistics assets, primarily warehouses, from Singapore-based GLP. Measured by square feet, the deal is the largest private real-estate transaction globally, according to the private-equity giant.

Blackstone Real Estate’s global opportunistic strategy, Blackstone Real Estate Partners, will acquire 115 million square feet for $US13.4 billion and its non-listed REIT, Blackstone Real Estate Income Trust, will acquire 64 million square feet for $US5.3 billion.

The deal signifies the demand for logistics-related real estate amid a slowdown in commercial real estate. Both trends appear to be driven, at least in part, by the rapid growth of online shopping and the increasing demand for “last mile” delivery assets.

In 2007, Blackstone took private Equity Office properties for $US39 billion in one of the largest real estate deals of all time. Blackstone, an early entrant to the private equity sector, is by far and away the leader in alternatives real estate with assets under management at $US140 billion.

“Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand,” said Ken Caplan, global cohead of Blackstone Real Estate.

“Our global scale and ability to leverage differentiated investment strategies allowed us to provide a one-stop solution for GLP’s high quality portfolio.”

After the transaction closes, Blackstone will have acquired nearly 1 billion square feet of logistics globally since 2010. GLP will also remain an industry heavyweight, controlling over 500 million square feet of real estate globally.

The transaction’s advisors are also expected to receive a handsome payday. The mega-deal will include up to $US8 billion of debt and is expected to include fees of up to $US100 million or more.

Eastdil, Citigroup, and Goldman Sachs advised GLP. Band of America Merrill Lynch, Barclays, Deutsche Bank, JPMorgan, and Morgan Stanley served as financial advisors to Blackstone.

Blackstone is up 27% this year.

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