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Blackstone Buys GLP’s US Logistics Assets for $18.7B to Meet E-Commerce Demand

Making a major investment to meet demand for e-commerce warehouse space in the U.S., Blackstone Real Estate reached a deal to acquire assets from three of GLP’s U.S. funds for $18.7 billion.

The transaction comprises 179 million square feet of urban, infill logistics assets, nearly doubling the size of Blackstone’s existing U.S. industrial footprint. The portfolio consists of 316 industrial properties with locations that include Dallas/Fort Worth, Chicago, Central Pennsylvania, Atlanta and Central Florida, according to the company’s filing with the Securities and Exchange Commission.

“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.

Blackstone Real Estate Partners’ (BREP) global fund will acquire 115 million square feet for $13.4 billion, and its income-oriented non-listed REIT, Blackstone Real Estate Income Trust (BREIT), will acquire 64 million square feet for $5.3 billion.

“These properties are a complementary addition to our stabilized commercial real estate portfolio, which is oriented toward our highest conviction themes, such as logistics,” Frank Cohen, chairman and CEO of BREIT, said.

In a new survey from DHL, 65 percent of respondents identified the exponential growth of e-commerce and its implications on service as having a significant impact on supply chains.

The availability rate for U.S. industrial real estate declined by less than half of a basis point–essentially a flat result–in the first quarter, as demand for warehouses roughly matched the delivery of newly constructed supply, according to a new report from CBRE.

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The modest dip marks 35 consecutive quarters of declining availability, the longest since CBRE started tracking the data in 1988. Availability of U.S. industrial real estate registered 7 percent in the first quarter, the lowest point since 2000. Over the past year, the availability rate is down 30 bps.

Richard Barkham, CBRE global chief economist, said the industrial-and-logistics real estate sector continues to benefit from the ongoing structural shift to e-commerce and healthy levels of consumer spending.

GLP is a global investment manager with $64 billion assets under management in real estate and private equity funds. GLP entered the U.S. real estate market in 2015, and through a series of major acquisitions, became the second-largest owner of logistics real estate assets in the country by aggregating high-quality, modern logistics assets across 36 major markets. GLP will remain invested in the U.S. across real estate, technology and credit, and is committed long-term to the U.S. market.

Blackstone’s real estate business has approximately $140 billion in investor capital under management. It operates around the globe with investments and people in North America, Europe, Asia and Latin America. Blackstone is one of the leading owners of logistics properties today with assets in North America, Europe and Asia.