CHICAGO—As reported yesterday in GlobeSt.com, less than six months after closing on its $8.1-billion acquisition of the Blackstone Group's IndCor industrial platform, Global Logistics Properties has decided to acquire yet another massive US portfolio. The Shanghai-based company said it had agreed to acquire 100 properties that have a total of 58 million square feet from Industrial Income Trust for $4.55 billion. And it won't be a surprise if similar multi-billion deals get announced in 2015.
“Industrial is one of the most favored asset classes across the globe,” Erik Foster, a Chicago-based principal with Avison Young, tells GlobeSt.com. But individual class A industrial properties are usually far less expensive class A office or multifamily properties, and aggregating these assets takes a lot of manpower and time. Therefore, “in order for investors to get significant amounts of money out the door, they need to do it with platform plays like this.”
And foreign buyers will lead much of this activity. Foster, who is also Avison Young's practice leader for its national industrial group, expects to see in 2015 a steady increase in the amount of foreign money poured into US industrial assets. And “there are currently large foreign investors that are looking to purchase companies and platforms, and hope to close these transactions later this year.”
GLP expects to close on this latest deal by mid-November, at which time it will own 100% of the IIT portfolio. Then, as it did with its IndCor stake, it will syndicate most of the ownership to institutional investors, with the goal of paring down its own interest to 10% by April 2016. The portfolio spans span 20 major markets with the greatest concentrations in Los Angeles, the Washington, DC metro area and Pennsylvania. As of June 30, it was 93% leased.
The tremendous expansion of e-commerce in the US has helped fuel investor interest. “Foreign investors can put a lot of money to work by buying one high-rise in Chicago or San Francisco,” Foster adds, “but industrial is meeting their return parameters better than most other asset classes.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
