Blackstone Bets on E-Commerce With $18.7 Billion Logistics Deal
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Deal is world’s biggest private real estate deal, firm says
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Blackstone will almost double its U.S. industrial footprint
Blackstone Group LP is doubling down on the future of online shopping, agreeing to buy $18.7 billion of U.S. logistics assets from Singapore’s GLP Pte in what it says is the world’s biggest private-equity real estate deal.
Blackstone will gain 179 million square feet of warehouse assets, greatly expanding the size of its U.S. industrial footprint, the New York-based company said in a statement late Sunday.
As online shopping grows in popularity, the need for warehouse space by retailers seeking to expand their digital operations and cut delivery times has ballooned. That’s lured investors into logistics real estate at a time when other types of commercial-property transactions have slowed amid concern over rising interest rates and a pullback by foreign investors.....MORE
The sale comes amid record fundraising for private-equity real estate funds and a flurry of warehouse deals. Blackstone acquired Canyon Industrial Portfolio’s last-mile properties for $1.8 billion in March last year, adding to a string of similar purchases it’s made in the logistics arena.
The world’s biggest alternative asset manager also agreed to purchase Canada’s Pure Industrial Real Estate Trust in a C$2.5 billion ($1.9 billion) deal in January last year, plus more than 100 warehouse assets from Harvard University’s endowment for $950 million in September. Much of that portfolio is also made up of so-called last-mile warehouses, which have grown in value as e-commerce companies expand and seek faster deliveries....
This next bit brings back some memories. My second stock to double was a cold storage company, actually a dairy with a cold storage operation that was valued at about one-quarter of comparables. I started chipping away at the float and before I got anywhere near enough stock, the management, who knew full well the value of the operation, did an LBO and took it private at 2x market and ended up generating cash-on-cash returns (for themselves) of around 40% per annum for a decade or so.
Bastards.
From The Street, May 29:
To Skirt the U.S.-China Cold War, Consider Investing in Cold Storage
....One of my current favorites is Americold Realty Trust (COLD) , the world's largest operator of temperature-controlled warehouses.
The company operates 156 facilities in the U.S., Canada, Australia, New Zealand and Argentina, and also holds a minority interest in a Chinese joint venture.
This is a mission-critical business. In a global supply chain, sped up by e-commerce and rising consumer expectations, it is absolutely essential for food manufacturers and grocers to have access to these facilities. And they have been lining up to give Americold a steady stream of rising rents.
The company has 2,400 different food companies under contract. Facilities are at full capacity.
Americold shares are up 25.3% in 2019, and the market capitalization has risen to $4.7 billion. The dividend yield is 2.5%. Management is experienced and appears first rate. However, the growth story has only begun.Pre-market $31.30.
Go figure. Cold storage might be the perfect way to beat the Sino-American cold war....
Cold is very important.
If interested see January's "Logistics of Cold"
That essay mentions an apple farmer, Barbara Pratt. She's also Maersk's director of refrigerated technical services.
Maersk thinks pretty highly of her, giving her a page on the website: T
Unfortunately, when the cybercrooks attacked Maersk it was lost—you now get a "subdomain takeover" notice so, if interested here she is saved at the Internet Archive page.
