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Blackstone's $18.7B E-Commerce Investment Is Largest Private Real Estate Transaction Ever

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Blackstone's $18.7B E-Commerce Investment Is Largest Private Real Estate Transaction Ever

Real estate investment firm Blackstone Group LP (NYSE: BX) said Sunday evening it reached an agreement to buy assets from Singapore-based GLP for $18.7 billion.

What Happened

Blackstone reached an agreement to acquire certain assets from three of GLP's U.S. funds which consist of 179 million square feet of urban and infill logistics assets, the companies said in a press release. The deal will nearly double Blackstone's U.S industrial footprint, which is consistent with a focus on logistics.

Blackstone's acquisition represents the largest private real estate transaction in history, according to the Wall Street Journal. The deal includes around 1,300 properties across the U.S., most of which are not far removed from major population centers.

Blackstone Real Estate global co-head Ken Caplan said in the press release logistics is the firm's "highest conviction global investment theme" as it addresses growing e-commerce demand. Blackstone's global scale and ability to leverage investment strategies give the company a "one-stop solution" for GLP's high-quality assets it bought.

Why It's Important

E-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) is GLP's largest tenant and the surge in e-commerce resulted in valuations of public warehouse owners to soar by up to 30 percent this year alone, according to WSJ. The "prized" assets are those near big cities which are required to fulfill the "last-mile" delivery step and will be counted on to fulfill one-day delivery pledges.

As part of the deal, Blackstone Real Estate's global opportunistic BREP strategy will assume control of 115 million square feet of acquired property for $13.4 billion. The income-oriented non-listed REIT, the Blackstone Real Estate Income Trust (BREIT) will assume control of 64 million square feet of assets for $5.3 billion.

Blackstone's stock traded $37.58 per share Monday morning.

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