Blackstone Becomes a Big Player in the U.S. Warehousing Space

June 5, 2019


In a bid that was rumored to be between Prologis and Blackstone, Blackstone was the $18.7 billion winner, acquiring Singapore-based GLP’s U.S. warehouses, the largest private real-estate transaction ever. The portfolio includes about 1,300 properties across the country, many of them near population centers.

According to the WSJ, Amazon is GLP’s largest tenant. Melissa Runge, Spend Management Expert’s Vice President of Analytical Solutions, noted on LinkedIn that the move not only gets Amazon closer to one-day deliver but is helping to end its reliance on the US Postal Service, UPS and FedEx.

“Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand,” Ken Caplan, co-head of Blackstone’s real estate business, said in a statement. Indeed, e-commerce growth continues at a rapid pace and demands for faster delivery depends on closer proximity of warehouses to larger population areas.

In buying GLP’s U.S. business, Blackstone picked up about 179 million square feet of urban, in-fill logistics assets nationwide, doubling the size of its existing footprint. However, with control of so much space, will rates for warehousing increase even more? According to JLL’s first quarter industrial market report, the U.S. industrial rents averaged $5.79 per square foot. Vacancy averaged 5.0% despite a 4.0% increase in square footage added from fourth quarter 2018.

In a separate note, real-estate services firm CBRE reported availability rates for U.S. industrial real estate came in flat during the first quarter as warehouse and distribution center demand matched the delivery of newly built supply. Availability of U.S. industrial real estate registered 7.0% in the first quarter, its lowest level since 2000.

As Blackstone looks to benefit further in the U.S. warehousing space, GLP, which, prior to the acquisition, was the second-largest logistics player after Prologis Inc. Now, GLP will now focus on Asia, where it has at least 212 million square foot of space in China and another 56 million square feet in Japan.

Will Prologis respond with an acquisition of its own? Regardless, the U.S. warehouse market remains hot thanks to e-commerce and the demand for faster last mile delivery services. For retailers and other shippers in need of warehouse space, consider your options and don’t forget choices such as warehousing-on-demand from such startups as STORD and Flexe.

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Blackstone Becomes a Big Player in the U.S. Warehousing Space

June 5, 2019


In a bid that was rumored to be between Prologis and Blackstone, Blackstone was the $18.7 billion winner, acquiring Singapore-based GLP’s U.S. warehouses, the largest private real-estate transaction ever. The portfolio includes about 1,300 properties across the country, many of them near population centers.

According to the WSJ, Amazon is GLP’s largest tenant. Melissa Runge, Spend Management Expert’s Vice President of Analytical Solutions, noted on LinkedIn that the move not only gets Amazon closer to one-day deliver but is helping to end its reliance on the US Postal Service, UPS and FedEx.

“Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand,” Ken Caplan, co-head of Blackstone’s real estate business, said in a statement. Indeed, e-commerce growth continues at a rapid pace and demands for faster delivery depends on closer proximity of warehouses to larger population areas.

In buying GLP’s U.S. business, Blackstone picked up about 179 million square feet of urban, in-fill logistics assets nationwide, doubling the size of its existing footprint. However, with control of so much space, will rates for warehousing increase even more? According to JLL’s first quarter industrial market report, the U.S. industrial rents averaged $5.79 per square foot. Vacancy averaged 5.0% despite a 4.0% increase in square footage added from fourth quarter 2018.

In a separate note, real-estate services firm CBRE reported availability rates for U.S. industrial real estate came in flat during the first quarter as warehouse and distribution center demand matched the delivery of newly built supply. Availability of U.S. industrial real estate registered 7.0% in the first quarter, its lowest level since 2000.

As Blackstone looks to benefit further in the U.S. warehousing space, GLP, which, prior to the acquisition, was the second-largest logistics player after Prologis Inc. Now, GLP will now focus on Asia, where it has at least 212 million square foot of space in China and another 56 million square feet in Japan.

Will Prologis respond with an acquisition of its own? Regardless, the U.S. warehouse market remains hot thanks to e-commerce and the demand for faster last mile delivery services. For retailers and other shippers in need of warehouse space, consider your options and don’t forget choices such as warehousing-on-demand from such startups as STORD and Flexe.

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