Blackstone is paying about $400 million for a portfolio of 27 warehouses in the northern Chicago suburbs and southeast Wisconsin, one of the biggest local industrial real estate deals in years.
The New York-based private-equity giant is buying the 5.9 million-square-foot portfolio from CenterPoint Properties, an Oak Brook-based industrial landlord, according to people familiar with the transaction. The deal includes 16 properties in Illinois and 11 in Racine and Milwaukee, according to Real Estate Alert, a trade publication that first reported news of the sale.
Warehouses have been one of the hottest real estate sectors amid the strong economy and growth of e-commerce, which has boosted demand for big industrial buildings among logistics firms and retailers. Developers have been cranking out new buildings and investors have been willing to buy them up at high prices.
“Investors have responded to the secular changes in commercial estate with a robust appetite for industrial properties,” Green Street Advisors, a Newport Beach, Calif.-based research firm, writes in a recent report. “Industrial sales volume through the first three quarters of ’19 was the highest on record and partially driven by a slew of multi-billion portfolio sales.”
Blackstone, the second-largest industrial landlord in the country, has placed a huge bet on the sector, paying $18.7 billion last year for a 179 million-square-foot U.S. industrial portfolio owned by Singapore-based GLP. The firm also paid $5.7 billion last year for Colony Industrial, the warehouse unit of Los Angeles-based Colony Capital.
Blackstone already owns about 80 industrial properties in the Chicago area, according to Real Capital Analytics, a New York-based research firm. It’s unclear which buildings the firm is buying from CenterPoint, though they are concentrated along Interstate 94, according to Real Estate Alert.
A Blackstone spokeswoman declined to discuss the CenterPoint acquisition, and a CenterPoint spokeswoman did not return a call.
CenterPoint is one of the biggest industrial landlords in the Chicago area. It has expanded nationally since it was acquired by the California Public Employees Retirement System in 2006. The company owns 326 buildings totaling 61 million square feet across the country, with a presence in Los Angeles, Seattle, Houston, New Jersey and Miami. Locally, CenterPoint’s biggest development is the CenterPoint Intermodal Center, the nation’s largest inland port, at 6,400 acres.
At $400 million, the Blackstone acquisition would rank among the largest industrial deals in the Chicago area in a long time. Though sales of some big national portfolios have included higher combined amounts for Chicago-area properties—Blackstone paid $445 million for GLP’s buildings here last year—it is the biggest industrial transaction involving only properties here over the past five years, according to Real Capital.
Eastdil Secured and Colliers International are brokering the sale for CenterPoint.
