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Blackstone buys $6B Colony Industrial portfolio

Blackstone is buying a 60 million square feet portfolio of last mile industrial assets for $5.9 billion.

The asset management giant will announced it will purchase the logistics assets from Colony Capital through its Blackstone Real Estate Partners IX affiliate.

NADEEM MEGHJI

The two companies announced they had struck a deal for Blackstone to acquire Colony Industrial, the industrial real estate assets and affiliated industrial operating platform of Colony Capital, for an aggregate purchase price of $5.9 billion.

The Colony Industrial last-mile light industrial portfolio represents the substantial majority of the total transaction and 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 percent ownership interest in a four million square foot 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 $1.2 billion.

Colony Industrial was formed in December 2014 through Colony Capital’s acquisition of Cobalt Capital Partners, founded and led by Lewis D. Friedland. Since then, the portfolio has doubled in size and produced strong and consistent operating results.

The portfolio is considered among the highest quality last-mile logistics assets in the U.S.

DARREN TANGEN

Darren Tangen, president of Colony Capital, stated, “We appreciate Blackstone has recognized the value that we’ve created at Colony Industrial and they are the ideal steward to lead this business during the next phase of its growth. “

“This sale allows Colony to both achieve compelling returns for our investors and generate significant liquidity, which among other uses, will help accelerate our ongoing transition into digital real estate and infrastructure.”

Nadeem Meghji, Head of Real Estate Americas at Blackstone, stated, “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.”

Willkie Farr & Gallagher served as legal counsel, and Morgan Stanley and Eastdil Secured served as financial advisors, and CBRE National Partners served as real estate advisor to Colony Capital. Simpson Thacher & Bartlett served as legal counsel to Blackstone.

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