Deals

Blackstone buys 13.5m sq ft of warehouse space

The New York-based private equity and real estate giant now owns 100 million square feet of industrial space in the US, thanks to two recent deals.

-


The Blackstone Group continues to buy US industrial property at a rapid clip. Through two separate deals, the New York-based private equity and real estate giant is buying 13.5 million square feet of US industrial space, bringing its ownership of the property type to more than 100 million square feet across the country. 

Blackstone and San Francisco-based global logistics firm Prologis have each agreed to buy a portion of a 17 million-square-foot US logistics portfolio for a total of approximately $960 million. According to sources, Blackstone will take over approximately 9.5 million square feet of the portfolio from an 80-20 joint venture between Lehman Brothers Holdings and Prologis, and Prologis will take over the remaining 7.5 million square feet. 

The warehouses and distribution centers that Blackstone is acquiring are located in Reno, Nevada, while the properties that Prologis is buying are located predominantly in Pennsylvania and Las Vegas. The transaction is not a joint venture between Blackstone and Prologis.

Lehman first became involved in the portfolio, known as the Dermody industrial portfolio, in 2007, when it agreed to provide Prologis with a $1.5 billion loan to acquire the properties. At the time, the Dermody portfolio consisted of roughly 22 million square feet. However, when the global financial crisis hit, Lehman was stuck owning 80 percent of the portfolio. 

News of this deal follows that of Blackstone buying a 4 million-square-foot warehouse portfolio for $241.5 million. Blackstone bought those warehouse properties, which are located in Virginia or Maryland, from Bethesda, Maryland-based REIT First Potomac Realty.

With these two deals, Blackstone will own more than 100 million square feet of US industrial space on behalf of its Chicago-based IndCor Properties warehouse arm. The firm also owns roughly 26 million square feet of logistics properties in Europe through its London-based LogiCor unit. Prior to 2010, Blackstone owned no industrial space.