What the largest private CRE transaction in history means for logistics

Global investor Blackstone Group LP bought a portfolio of U.S. industrial assets from Singapore-based logistics provider GLP for US$18.7 billion, the largest private real estate deal in history and a clear indication of the impact e-commerce has had on the warehouse sector.

Logistics real estate markets have boomed in recent years as warehouses became critical hubs for growing e-commerce companies racing to deliver products to consumers. Global demand for new industrial space is expected to exceed 3 billion square feet over the next decade, according to Craig Meyer, President of Industrial for JLL.

In a statement abou the deal, one of the co-heads of Blackstone’s real estate business called logistics Blackstone’s “highest conviction global investment theme today.” 

 “This deal is monumental because Blackstone is a self-described conviction investor,” Meyer says. “For them to call logistics their 'highest conviction' speaks to the power in the world's shift in how consumers buy goods, namely through e-commerce, which has driven the need for huge fulfillment centers to meet this direct to customer need.”

The portfolio acquired by Blackstone includes around 1,300 properties across the U.S., many of them close to major population centers. Consumer demand for increasingly shorter delivery times, and continued global urbanization is creating enormous demand for “last mile” facilities in dense urban areas, Meyer says.

“The deal highlights the need for modern, sophisticated logistics facilities deeper into the urban core of every major city in the world,” Meyer says. “This transaction has validated that trend in a big way, with two global influences placing the logistics asset class at the forefront of real estate investment.”