A week after announcing its intentions to launch an €8 bn last mile logistics platform in Europe, Mileway, private equity giant Blackstone has confirmed it is acquiring Colony Capital's US-focused industrial arm for $5.9 bn (€5.4 bn).
Colony Industrial's last-mile light industrial portfolio represents the 'substantial majority of the total transaction', Blackstone said. Its portfolio comprises approximately 60 million ft2 (5.6 million m2) of infill logistics assets across 465 light industrial buildings in 26 US markets.
Most of the assets are concentrated in Dallas, Atlanta, Florida, northern New Jersey, and California. The transaction also includes Colony’s 51% ownership interest in a 4 million ft2 portfolio of bulk distribution assets and the affiliated operating platform which manages the properties of both portfolios. The aggregate net sales proceeds to Colony are expected to be in excess of $1.2 bn.
'This acquisition of high quality warehouses demonstrates our continued strong conviction in logistics and positive e-commerce trends,' said Nadeem Meghji, head of real estate Americas at Blackstone.
'As retailers continue to shorten delivery times and expand their last mile footprints, we believe warehouses in dense population centers will continue to experience outsized demand growth,' Meghji added.
The deal is expected to expand Blackstone's US industrial footprint to more than $40 bn.
Colony Industrial was formed in December 2014 through Colony Capital’s acquisition of Cobalt Capital Partners. Since then, the portfolio has doubled in size, according to Colony figures.
Darren Tangen, president of Colony Capital, said: 'We appreciate Blackstone has recognised the value that we’ve created at Colony Industrial and they are the ideal steward to lead this business during the next phase of its growth.
'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.'
Each of the agreements is subject to customary closing conditions, including third party consent for the sale of the 51% interest in the bulk industrial portfolio, and is expected to close in the fourth quarter of 2019.
Willkie Farr & Gallagher served as legal counsel, while Morgan Stanley and Eastdil Secured served as financial advisors and CBRE National Partners served as real estate advisor to Colony Capital.
Simpson Thacher & Bartlett served as legal counsel to Blackstone.
