If a commercial real estate market is hot, you can bet that Blackstone Group is trying to swing big deals in it.
The investment giant has agreed to purchase QTS Realty Trust, an owner and operator of data centers in North America and Europe, in a deal that would value QTS at $10B, including debt, and take it private, The Wall Street Journal reports. The deal, which is expected to close in the second half of this year, is still pending a 40-day "go shop" period where QTS can solicit competing offers, MarketWatch reports.
Finding someone to outbid Blackstone may be tough. The $6.7B price that Blackstone agreed to comes out to $78 per share, a 21% premium over where QTS was trading when markets closed on Friday and 7.5% more than its previous record price, reached in August, MarketWatch reports. The market seemed to believe in Blackstone's price assessment, driving QTS' public price past $78 per share as of 11 a.m. ET Monday.
Blackstone's takeover would be executed by a combination of two private subsidiaries: Blackstone Infrastructure Partners and BREIT, its nontraded REIT, the WSJ reports. The deal would add data centers to the list of commercial real estate sectors Blackstone has targeted with billions of dollars in spending, including:
Acquiring a $3.5B life sciences portfolio focused in Cambridge, Massachusetts, from Brookfield Asset Management in December.
With Starwood Capital Group, attempting to purchase specialized hospitality REIT Extended Stay America for $6B in March, setting up a fight with minority shareholders.
Closing an $8B fund, claimed to be the largest ever of its kind, to buy up commercial real estate debt in September.
Blackstone has also pumped billions into industrial real estate in the past few years, growing its investment there from 9% of its portfolio to 36% in three years.
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