Blackstone Real Estate Income Trust, a publicly registered non-traded REIT sponsored by private equity giant The Blackstone Group (NYSE: BX), has agreed to purchase a 316-property, 64 million-square-foot industrial portfolio from GLP for approximately $5.3 billion, excluding closing costs.
Established in Singapore, GLP is a global investment manager with $64 billion assets under management in real estate and private equity funds. Its real estate fund platform is one of the largest in the world, spanning 785 million square feet.
The proposed transaction is part of a larger $18.7 billion acquisition where Blackstone agreed to purchase assets from three of GLP’s U.S. funds. The entire transaction totals 179 million square feet of urban, infill logistics assets, nearly doubling the size of Blackstone’s existing U.S. industrial footprint. Blackstone said that the deal will be the largest-ever private real estate transaction globally.
Of the $18.7 billion acquisition, Blackstone REIT will acquire 64 million square feet for $5.3 billion, and Blackstone Real Estate’s global opportunistic BREP strategy will acquire the remaining 115 million square feet for $13.4 billion.
The portfolio that Blackstone REIT will purchase is 95 percent leased and consists of 316 industrial properties. Approximately 51 percent of the total square footage is located in Dallas/Fort Worth, Chicago, Central Pennsylvania, Atlanta and Central Florida. Four of the top five markets in the portfolio overlap with the company’s current industrial portfolio.
“These properties are a complementary addition to our stabilized commercial real estate portfolio, which is oriented toward our highest conviction themes, such as logistics,” said Frank Cohen, chairman and CEO of BREIT.
The portfolio is leased to 745 tenants including e-commerce and logistics companies such as Amazon, FedEx and DHL, as well as Starbucks, Wayfair and Whirlpool.
The acquisition is expected to be funded through a combination of cash on hand, which primarily consists of proceeds from the REIT’s ongoing public offering, the assumption of certain existing debt, and a $1.5 billion loan from Deutsche Bank.
Blackstone Real Estate Income Trust, a perpetual-life, monthly NAV REIT, seeks to invest in stabilized, income-generating U.S. commercial real estate across the key property types, including multifamily, industrial, retail and hotel assets, and to a lesser extent in real estate-related securities.
Blackstone REIT oversees a portfolio of 491 commercial real estate properties purchased for $11.9 billion as of March 31, 2019, and its investment portfolio also included 118 positions in real estate-related securities that totaled $2.4 billion. The REIT has sold 127.2 million shares of common stock, as of May 16, 2019.