Brookfield Asset Management and Canada Pension Plan Investment Board completed a $5.2B deal to take logistics operator LXP Industrial Trust off the New York Stock Exchange.
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The two Canadian giants — BAM is the New York-based investment management arm of Toronto-based Brookfield Corp. — completed an all-cash deal to buy and delist the South Florida-based REIT and its 107-property portfolio across the Midwest and Sun Belt.
Brookfield Real Estate CEO Lowell Baron said the deal for the 52M SF portfolio fit within the firm’s conviction in the long-term fundamentals of the U.S. industrial sector. The joint venture between Brookfield and CPP Investments paid $61.20 per share to delist LXP and take the company private, a 12.3% premium on LXP’s 30-day weighted average share price at the time of the offer.
The deal, first announced in July, included a 40-day window in which LXP management could have sought a better buyout price. In June, management valued the then-108-property portfolio at $4.7B in a presentation to investors.
The portfolio was 96.6% leased at the time with average in-place rents of $5.28 per SF. Nearly all of the portfolio was new, bulk distribution real estate.
The REIT reported $49.5M in funds from operations in the second quarter, up $2.2M from the prior quarter and 5% year-over-year.
It sold one property in the second quarter for $51M and acquired a 37-acre infill covered land investment in Phoenix for $103.2M. LXP also began development on two speculative projects in Columbus, Ohio.
The REIT has a diversified tenant base. Its largest tenant is Amazon, which occupies 6.7% of its portfolio, and its top 10 tenants account for roughly a third of its occupancy. Its properties are spread across Arizona, Texas, Indiana, Ohio, Tennessee, South Carolina, Georgia and Florida.
“With strong occupancy and exposure to key distribution markets, we believe LXP is well positioned to capture further value as logistics markets evolve, supporting attractive long-term returns for the CPP Fund,” Sophie van Oosterom, head of real estate at CPP Investments, said in a statement Monday.
The U.S. industrial market has proven resilient even as developers created a glut of new construction during the pandemic. Absorption in the third quarter was at its highest rates since the start of 2023, and demand surpassed 70M for the second time in as many quarters, according to Cushman & Wakefield’s third-quarter market report. National vacancy is at 6.8%, its lowest level since the end of 2024.
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