Blackstone recently revealed that it is purchasing $18.7 billion worth of US warehouse assets owned by the Singapore-based GLP. This deal, according to Business Insider, is the largest private real-estate transaction globally. It is also a deal with a look at the future of e-commerce as well as the growth of logistics.
Blackstone Real Estate is letting Blackstone Real Estate Partners, its global strategic arm, do the job for them. The acquisition will give them a property with 115 million square feet and will also be purchased for $13.4 billion. Another arm, Blackstone Real Estate Income Trust, will be given 64 million square feet for a $5.3 billion fee.
The deal shows just how important logistics-related real estate remains. It also sets a precedent for companies looking for real estate logistics amid a slowdown in commercial real estate. These trends have been, according to analysts, driven by more demand for online shopping as well as the preference of people for "last mile" deliveries.
The deal has also been hailed as a bright spot in the current lull for international real estate trading. This isn't Blackstone's only deals; it was recently involved in the $7.6 billion purchase of Gramercy Property Trust, as well as the take over of the Canyon Industrial Portfolio--completed last year--for $1.8 billion, according to Bloomberg.
It remained one of the few bright spots in a year threatened by US president Donald Trump's "war-mongering" trade war against the government of Xi Jin Ping. Then there's the problem of Amazon.com; the rise of the retailer's business model had its rival shops scrambling to adapt its business model to be able to stand shoulder to shoulder with the sudden upstart.
The shift to e-commerce also appears to be the trend that commercial purchases, in general, is going. The Department of Commerce data that had been released showed that, in the US, e-commerce sales had an increase of 3.6% in the first quarter compared to the final three months of last year. Despite the rise of Amazon's e-commerce shift, sales online still only showed for 10% of all US retail sales.
Ken Caplan, the global co-head of Blackstone Real Estate, said that logistics remained the "highest conviction" of the company's global investment theme. With the way the trend has been going, e-commerce should become one of the company's priorities, especially with data playing a bigger role today than at any point in commercial history.
