Blackstone expands last-mile logistics portfolio with $5.9bn acquisition

Blackstone has acquired Colony Capital’s US industrial assets for $5.9bn (€5.4bn), in a deal which expands the private equity firm’s portfolio to meet the growing e-commerce demand for last-mile logistics properties.

In a joint statement, the companies said Blackstone Real Estate Partners IX will acquire the industrial real estate assets and affiliated industrial operating platform of Colony Capital.

The Colony Industrial last-mile light industrial portfolio represents the substantial majority of the total transaction and comprises approximately 60m sqft of infill, logistics assets across 465 light industrial buildings in 26 US markets, with significant concentration in Dallas, Atlanta, Florida, northern New Jersey, and California.

The transaction also includes Colony’s 51% ownership interest in a 4m sqft portfolio of bulk distribution assets and the affiliated operating platform which manages the properties of both portfolios.

Colony said it expects to receive net sales proceeds in excess of $1.2bn.

Blackstone – which has been expanding its portfolio to meet the growing e-commerce demand – earlier this month acquired a portfolio of 68 US logistics properties from TA Realty. 

A more significant acquisition was announced in June this year when it doubled its existing US industrial real estate footprint with a deal to buy $18.7bn worth of assets from GLP.

Last year, it bought US industrial platform Gramercy Property Trust for $7.6bn.

Nadeem Meghji, head of real estate Americas at Blackstone, said: “This [Colony Industrial] acquisition of high-quality warehouses demonstrates our continued strong conviction in logistics and positive e-commerce trends.

“As retailers continue to shorten delivery times and expand their last-mile footprints, we believe warehouses in dense population centres will continue to experience outsized demand growth.”

Darren Tangen, president of Colony Capital, said this sale allows Colony to both “achieve compelling returns for our investors and generate significant liquidity, which among other uses, will help accelerate our ongoing transition into digital real estate and infrastructure.”

Lew Friedland, managing director, head of Colony Industrial, said: “Last-mile logistics real estate continues to become an increasingly critical component of the global supply chain.

“We are pleased to have generated strong returns for our investors implementing this strategy and the portfolio and platform are extremely well-positioned for the positive market environment and continued growing demand for last-mile logistics space.”