GLP Makes Second US Buy Worth Billions

CHICAGO—Less than six months after closing on its $8.1-billion acquisition of the Blackstone Group's IndCor industrial platform, Global Logistics Properties has made another US mega-deal. The Shanghai-based company said Tuesday afternoon it had agreed to acquire a 100-property portfolio from Industrial Income Trust for $4.55 billion.

Acquired in 100 separate transactions, the 58-million-square-foot portfolio spans 20 major markets across the US, with the greatest concentration in Los Angeles, the Washington, DC metro area and Pennsylvania. GLP expects to close on the 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.

As of June 30, the portfolio was 93% leased. GLP's immediate post-closing focus will be on getting the occupancy level up to 95%. After the deal closes, GLP will become the second-largest US industrial operator, with a portfolio totaling 173 million square feet.Globally, GLP will have a portfolio totaling approximately 500 million square feet, with US$33 billion in assets under management.

It's expected that IIT will transfer 11 of its properties that are under development or in the lease-up stage to a liquidating trust. The beneficial interests in the trust will be distributed to IIT shareholders, and the assets will be sold over time.

“This transaction complements our existing portfolio well, expanding GLP's size and scale in the US,” says Stephen Schutte, COO of GLP. “We feel particularly good about the quality and location of the facilities, which have an average building age of 15 years and a strong concentration in major distribution markets. We are excited about the synergies the combined portfolio is expected to generate and see upside potential from increasing occupancy and rents.”

A Morrison & Foerster team led by David Slotkin, Eric Piesner, Jeff Bell and Erik Knudsen advised GLP. Also participating in the transaction were MoFo's Michelle Jewett, Bernie Pistillo, Tom Fileti, Marc Young, Tom McGovern, Susannah Cupp, Guy McPherson, Nicholas Spiliotes, Aki Bayz, Bill Tarantino and Alejandro Bras. The Hogan Lovells Washington, DC-based team advising IIT on this matter was led by partners David Bonser, Bruce Gilchrist and Lauren Bellerjeau and included Warren Gorrell, Prentiss Feagles, Lee Berner, Jon Talotta, Mark Gately, Andy Zahn, Lydia Hwang, Inga Rubin and Dana Glenn.