Blackstone Group agreed to acquire Gramercy Property Trust, which owns industrial real estate in the United States and Europe, in a cash deal valued at $7.6 billion.
Affiliates of Blackstone Real Estate Partners VIII will pay $27.50 for each Gramercy share, according to a statement May 7. That’s a 15% premium over the closing price May 4. Gramercy, based in New York, has about $2.8 billion in debt, according to data compiled by Bloomberg.
A shift toward online shopping has boosted demand for warehouse space from retailers seeking to expand their digital operations and cut delivery times. That has lured investors into logistics real estate as they bet on the long-term prospects of the industry.
Blackstone, the world’s biggest private equity owner of real estate, is making a big bet on industrial real estate. In March, the New York-based company added 22 million square feet for about $1.8 billion when it bought the Canyon Industrial Portfolio. That transaction followed its January agreement to acquire Canada’s Pure Industrial Real Estate Trust in a C$2.48 billion ($1.9 billion) deal.
Blackstone has been buying properties that offer predictable income streams since it got into the so-called core-plus real estate business in late 2013.
Blackstone also has sold industrial real estate. In 2017, the company agreed to sell its European logistics business Logicor for 12.25 billion euros ($14.6 billion) to China Investment Corp. in the region’s largest-ever deal.
The Gramercy deal is expected to be completed in the second half of the year. Gramercy shareholders will be entitled to receive the previously announced second-quarter dividend of 37.5 cents a share payable July 16.
It’s the second big industrial deal in as many weeks. Last week, Prologis Inc., the world’s largest warehouse owner, agreed to acquire DCT Industrial Trust Inc. for $8.4 billion in stock and assumed debt. Real estate investment trusts that lease out space at warehouses and logistics centers have been outperforming those that focus on malls, rental apartments or office buildings.
Gramercy was advised by Morgan Stanley, Eastdil Secured and Wachtell, Lipton, Rosen & Katz. Blackstone was advised by Citigroup Inc., Bank of America Corp. and Simpson Thacher & Bartlett.
With assistance by Brandon Kochkodin.