Blackstone adds warehouses, boosting industrial bet
New York
BLACKSTONE Group Inc is acquiring a majority stake in dozens of warehouses, boosting its bet on industrial properties as investors increasingly target a corner of commercial real estate that has fared well in the pandemic.
The firm's non-traded real estate investment trust, BREIT, is taking a 60 per cent stake in 71 warehouses owned by LBA Logistics with a gross value of US$1.6 billion, according to a statement on Friday.
The properties, mostly in California and Seattle, are primarily in "last mile" locations close to consumers, Blackstone said. The rise of online shopping, which has accelerated during the pandemic, has fuelled investor interest in warehouse and logistics properties. That's driven up prices, even as other commercial real estate sectors have struggled.
Blackstone spent billions of dollars before the pandemic in a long-term bet on warehouses. The asset manager has focused its acquisitions on heavily populated areas where it's tougher to build, said Nadeem Meghji, Blackstone's head of real estate in the Americas. "It's difficult to accumulate scale in these dense, West Coast geographies," he said. "That's what makes this opportunity so unique."
Industrial properties made up about 35 per cent of BREIT's portfolio at the end of 2020, Blackstone said in a letter to investors last week. That helped propel a 6.1 per cent return for the vehicle last year, compared with a 5.5 per cent fall for a Bloomberg index of US Reit stocks. BLOOMBERG
A NEWSLETTER FOR YOU
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
DBS puts 46 retail units, HDB shops on market for S$210 million
US mortgage rates jump above 7% for the first time this year
Far East Shopping Centre back on market at unchanged S$928 million asking price
London mansions sold at 30% discount spell gloom for luxury market
Delfi Orchard up for collective sale at S$438 million guide price
US existing home sales drop in March; median price increases