Blackstone has agreed a $5.9bn buyout of Colony Capital’s industrial real estate assets and affiliated operating platform Colony Industrial.
The firm has tapped its mammoth Blackstone Real Estate Partners IX fund for the buyout, two weeks after revealing a $20.5bn final close for the vehicle.
Colony Industrial’s last-mile light industrial portfolio represents the substantial majority of the total transaction, and comprises about 60 million sq ft of infill logistics assets across 465 light industrial buildings in 26 US markets.
The transaction also includes Colony’s 51 per cent ownership interest in a four million sq ft 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 $1.2bn.
Colony Industrial was formed in December 2014 through Colony Capital’s acquisition of Cobalt Capital Partners.
Since then the portfolio has doubled in size and produced strong and consistent operating results, Colony said.
Nadeem Meghji, head of real estate Americas at Blackstone said, “This 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 centers will continue to experience outsized demand growth.”
Lew Friedland, managing director and head of Colony Industrial, added, “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.”
The buyout is expected to close in the fourth quarter of 2019.
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