Blackstone Group LP: details of the deal
Blackstone Group LP, a U.S. investment firm, purchased 16.7 million square feet of industrial warehouse space. The purchase amounted to $18.7 billion, making it the largest deal in the private real estate segment.
Network of warehouses previously owned by GLP of Singapore, but because of the debt, the premises were put up for auction, where they were acquired by Blackstone. The property was also claimed by Prologis Inc.
Network of industrial warehouses includes 1.3 thousand premises, the largest tenant of which is Amazon Corporation.
Despite the amount of the deal, Blackstone considers it a huge success. Management is betting on growth in demand for warehouse real estate, as evidenced by an analysis of the U.S. market. Increased demand for facilities of this type due to the growth of online shopping and the appearance of a growing number of companies specializing in electronic commerce. Changes in the segment are also noticeable on stock exchanges. On average, capitalization of warehouse owners has increased by 30%. Real estate in megalopolises is in great demand. Placing such warehouses in large cities allows for faster delivery of goods from online stores.
Thanks to the deal Blackstone has become one of the largest companies that owns logistics real estate in the United States. The total area of premises owned by the company is 69.67 million square meters. In this case, Blackstone already refers to the giants of the real estate market, its assets are recorded at 140 billion dollars. The firm owns the famous skyscraper Willis Tower in Chicago, hotels and casinos in Las Vegas, and other expensive and valuable objects.
The Blackstone Group was founded in 1985 by two of the top managers of Lehman Brothers. Originally the activity of the company was consulting on themes of analysis of business, building its model. Such large corporations as Microsoft, Sony, Procter & Gamble. In due course Blackstone grew and began to develop a new line of business – investing in the real estate market. Now it also deals with credit and hedge funds, manages funds of various organizations, industrial corporations and individuals.
Blackstone Group acquires various companies with borrowed money, carries out business modernization, improves financial condition, and then resells at a higher cost.
The first offering of shares of the investment group took place in 2007. Then the market presented 12% of the securities, which were purchased by investors from China. With the large sums received, the company launched a number of successful projects, including the purchase of the Hilton hotel chain, the American IT provider Alliance Data.