A $1.2B loan is in the works to partly finance Blackstone Group's acquisition of Gramercy Property Trust, a deal that was inked in May when the investment giant agreed to pay $7.6B for the New York-based REIT. The acquisition closed in October.
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Three banks, Bank of America, Barclays and Citigroup, are planning to syndicate the loan, in an effort led by Citigroup. It will be a five-year, floating-rate debt backed by 96 of the 355 properties, mostly single-tenant industrial, that made up Gramercy's holdings, Commercial Mortgage Alert reports.
Citi and BofA previously provided $3B of CMBS debt to facilitate the acquisition.
Including Gramercy's assets, Blackstone has acquired 580M SF of industrial space since it entered the sector in 2010. Though some of that has been sold off (as some of Gramercy's might be in the near future, CMA reports), Blackstone still holds about 450M SF of industrial assets worldwide, PERE reports.
In September, Blackstone agreed to buy more than 100 warehouses from Harvard University's endowment for about $950M. The deal shows that the investor is not merely interested in industrial, but in last-mile warehouses, since most of the Harvard properties are in that category, located in high-population areas and coveted by e-commerce firms.
"We closed on two large public transactions, the former Thomson Reuters business, Refinitiv and Gramercy Property Trust, representing $3B of fee-earning deployed capital," Blackstone President and Chief Operating Officer Jon Gray said during the company's most recent earnings call in October. "Scale continues to be our calling card. All of this investing plant seeds for future performance revenues."
Looking ahead in the real estate sector, Gray said that "we expect the majority of capital for our newest global opportunistic real estate fund will close in the current quarter. As these flagship funds come online along with the maturation of core-plus real estate, we expect a meaningful step up in fee-related earnings."
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