Under the terms, the New York private-equity giant will pay C$16.79 (US$12.68) a unit for Dream Global. The Canadian figure is 19% higher than the Friday closing price on the Toronto Stock Exchange.
The Dream Global U.S. shares were trading on Monday up more than 17% at $12.49.
Dream Global's portfolio includes more than 200 properties in more than 100 Western European cities, the companies said in a news release. The deal expands Blackstone's office and logistics portfolios in the region.
"Western Europe's real estate environment is extremely competitive, with exceptionally low interest rates and property valuations at record-setting levels," the companies said.
"The public REIT structure has resulted in a cost of capital for Dream Global that remains higher than some of its peers and impacts the REIT's ability to continue on its growth trajectory."
The deal is subject to conditions including regulatory clearances and a vote Dream Global's unitholders. The acquisition terms enable the Dream Global board to accept a superior proposal in certain circumstances.
The acquisition is expected to close in December.