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Blackstone Strikes Again, Snapping Up 60M SF Industrial Portfolio For $5.9B

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Investment powerhouse Blackstone has inked a deal with Colony Capital to acquire Colony Industrial, the industrial real estate arm of Colony Capital, for $5.9B. Colony Industrial holds about 60M SF of industrial assets.

Blackstone Strikes Again, Snapping Up 60M SF Industrial Portfolio For $5.9B

The portfolio mostly features last-mile light industrial properties, including 465 such buildings in 26 U.S. markets. Significant property concentrations are in metro Dallas and Atlanta, Florida, northern New Jersey and California. Last-mile warehouses are a crucial component of the modern supply chain for both e-commerce and brick-and-mortar retailers. 

The transaction also includes Colony’s 51% ownership interest in a 4M SF portfolio of bulk distribution assets and the operating platform that manages all of Colony Industrial's properties. Blackstone Real Estate Partners IX, an affiliate of Blackstone Group, is the entity making the acquisition.

All together, Colony Capital will realize proceeds of more than $1.2B from the deal. Colony formed Colony Industrial in late 2014 through its acquisition of Cobalt Capital Partners. Since then, the company has roughly doubled its industrial portfolio, including a deal in March that added an 11.9M SF portfolio of West Coast properties for $1.2B.

“As retailers continue to shorten delivery times and expand their last-mile footprints, we believe warehouses in dense population centers will continue to experience outsized demand growth,” Blackstone Head of Real Estate Americas Nadeem Meghji said in a statement.

The deal is merely the latest multibillion-dollar play by the giant investor. Earlier this month, affiliates of the company bought Toronto-based Dream Global REIT for about $4.7B, ramping up Blackstone's office and industrial presence in Europe.

At $1.24B, Blackstone Group’s purchase of a 38-property industrial portfolio from Space Center RE was, until the Colony Industrial deal, the second-largest industrial portfolio sale in 2019. But both are dwarfed by the largest such transaction this year, in which Blackstone was also the buyer.

Blackstone's June purchase of Singapore-based GLP's U.S. portfolio, the second-largest in the country after Prologis' holdings, came with a price tag of $18.7B for 179M SF of distribution centers.