Dive Brief:
- Blackstone has agreed to purchase 179 million square feet of urban logistics assets from investment manager GLP for $18.7 billion, according to a company press release.
- "Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand," Ken Caplan, global co-head of Blackstone Real Estate, said in a statement.
- GLP controls more than 1,300 properties with Amazon one of its largest tenants, according to The Wall Street Journal. GLP and Blackstone are leading owners of logistics properties in the U.S. GLP entered the U.S. market in 2015 and became the second largest owner of logistics assets through a series of acquisitions, according to Blackstone's announcement.
Dive Insight:
E-commerce retail sales continue to see growth with each passing quarter. Sales rose 12.4% in the last year, according to the Census Bureau. This continual growth in e-commerce has also led to the growth in logistics and warehousing assets as promises of two-day and now one-day shipping require more warehouse locations.
The availability rate for U.S. industrial real estate was at 7% for the first quarter of 2019, which is the lowest it's been since 2000. Vacancy rates are also low at 4.3%, according to a CBRE report emailed to Supply Chain Dive.
And the limited available space continues to get more expensive — rent in industrial real estate has gone up 8.1% year-over-year, according to CBRE.
This deal with GLP is not Blackstone's first investment in the warehousing market. In March 2018, the real estate investor announced a $1.8 billion deal with Canyon Industrial Portfolio to purchase 22 million square feet in industrial assets. Those locations included tenants such as Amazon, FedEx, DHL, Coca Cola, Fiat Chrysler and the U.S. Government, according to a 2018 press release. Blackstone also acquired Gramercy Property Trust last year for $7.6 billion, according to a press release.
