Blackstone Real Estate Income Trust Inc., a publicly registered non-traded REIT sponsored by private equity giant The Blackstone Group (NYSE: BX), is planning to purchase a 22 million-square-foot industrial portfolio for approximately $1.8 billion, excluding closing costs. The seller is Cabot Industrial Value Fund IV LP, a closed private equity fund managed by Cabot Properties.
The portfolio consists of 146 industrial properties primarily concentrated in Chicago (18 percent), Dallas (12 percent), Baltimore/Washington, D.C. (12 percent), Los Angeles/Inland Empire (7 percent), South/Central Florida (7 percent), New Jersey (7 percent), and Denver (6 percent).
The properties are leased to 377 tenants including e-commerce and logistics companies such as Amazon, FedEx, and DHL, as well as Coca-Cola, Fiat Chrysler, and the U.S. Government.
As of November 30, 2017, the portfolio had a 4-year weighted average lease life with no more than 16 percent of square footage expiring in a single-year, and no single tenant occupying 5 percent or more of the total square footage.
The REIT said that it believes that the portfolio’s markets benefit from attractive fundamentals due to industrial vacancy across the portfolio’s markets has continued to decline over the past seven years and is currently 4.6 percent, while rents across the portfolio’s markets have increased 5.7 percent, year-over-year.
The continued market rent growth resulted in rents on new leases exceeding rents on expiring leases by 9 percent in the portfolio during the third quarter of 2017. The portfolio is currently 90 percent leased compared to average occupancy in the portfolio’s markets of 95 percent.
The closing of the acquisition is expected to occur in March or April 2018.