Private-equity giant Blackstone Group (BX) - Get Report is furthering its bet on the continued growth of e-commerce - and the need for warehouses to store goods consumer buy online - with the purchase on Monday of a portfolio of industrial warehouses from Colony Capital (CLNY) - Get Report for $5.9 billion.
Blackstone confirmed on Monday that its Blackstone Real Estate Partners IX affiliate will acquire Colony Industrial, the industrial real estate assets and affiliated industrial operating platform of Colony Capital, in cash-and-debt deal.
Colony Industrial's "last-mile light industrial portfolio" comprises approximately 60 million square feet of infill, logistics assets across 465 light industrial buildings in 26 U.S. markets, with significant concentration in Dallas, Atlanta, Florida, northern New Jersey, and California.
The transaction also includes Colony's 51% ownership interest in a 4 million-square-foot portfolio of so-called bulk distribution assets - fulfillment centers that ship out high-demand items in bulk - and the affiliated operating platform which manages the properties of both portfolios.
"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," Nadeem Meghji, Blackstone's head of real estate, Americas, said in a statement.
Investing in warehouses that help online retailers get goods from where they are stored to where they are going has been a dominant focus of Blackstone. The company last week announced the launch of a pan-European, last-mile logistics company called Mileway, which owns some 1,000 warehouse centers that Blackstone has acquired.
The Colony transaction also marks yet-another leap into global commercial real estate. Blackstone earlier this month clinched an all-cash deal to buy Canadian real estate investment trust Dream Global, valuing the owner of office properties across western Europe at $4.7 billion (C$6.2 billion).
Shares of Blackstone ended the trading day Friday down 4.6%, or $2.42 a share, at $50.22. Colony Capital rose 9.66% to $6.47 in premarket trading.
Save 57% During Our Fall Sale. Join Jim Cramer's Action Alerts PLUS investment club to become a smarter investor. Click here to sign up and save!