Blackstone builds its warehouse arm cheaply

[CHICAGO] Blackstone Group LP is in the spotlight as it prepares a record stock offering for the Hilton hotels chain. Its success building one of the nation's biggest warehouse landlords has garnered far less attention.

IndCor Properties Inc, the Chicago-based industrial real estate company that Blackstone formed in 2010, has more than doubled in size since its inception and continues to make acquisitions. Demand for US warehouse space is outpacing construction, leading to higher lease rates and declining vacancies as spending by consumers and businesses recovers.

"It's an essential part of the economy as we move goods around the country," Frank Cohen, Blackstone's senior managing director overseeing industrial investments, said in a telephone interview. "You don't ju…