Black Creek Group, a Denver-based real estate investment manager and development firm, has agreed to sell its sponsored investment platform, Industrial Property Trust Inc. (IPT), to an affiliate of Prologis Inc. (NYSE: PLD) in an all cash transaction valued at approximately $3.99 billion.
IPT is a publicly registered non-traded REIT that raised $1.8 billion in investor equity from its launch in 2014 until closing in 2017.
The transaction includes 236 industrial properties totaling 37.5 million square feet that are currently 97 percent leased. The properties are located in 24 markets across the US with a concentration in high-barrier-to-entry industrial markets that are within close proximity to large population centers and have easy access to major transportation arteries, the company said.
The transaction will not include IPT’s minority ownership interests in its two unconsolidated joint venture partnerships. IPT’s board of directors unanimously approved the transaction. IPT is currently exploring alternatives for its ownership share in the joint ventures, which were valued at approximately $295 million in November 2018.
“We believe this transaction makes sense for our investors as we want to deliver shareholder returns that maximize the current economic environment,” said Raj Dhanda, chief executive officer, Black Creek Group.
“The industrial sector continues to be one of the strongest in commercial real estate with record low vacancies and demand outpacing supply. Given the strength of the sector, not only do we plan to continue to develop and acquire assets for other portfolios but create products that make sense for investor needs and the market cycle,” he added.
Prologis will acquire IPT’s portfolio through a merger. IPT currently estimates, based on the per share cash consideration to be paid in the merger, that stockholders may receive a net adjusted amount of approximately $12.18 per share as total consideration for their shares.
The transaction is expected to close in the fourth quarter of 2019 but has an outside close date of March 31, 2020.
Bloomberg reported back in February that Industrial Property Trust was exploring strategic options, including a recapitalization or sale that could top $3.5 billion including debt, citing an unnamed source close to the matter.
Over Black Creek Group’s history, the firm has sponsored 24 investment platforms and has taken six of those full cycle through either a liquidity event or an IPO on the New York Stock Exchange. The company has bought or built more than $19 billion of investments over its more than 25-year history.