Blackstone Group Inc. plans to buy Canada’s WPT Industrial REIT for US$3.1-billlion as the private equity giant aims to capitalize on the pandemic’s major shift to e-commerce by acquiring dozens of warehouses and distribution centres.
A Blackstone REIT will pay WPT unitholders US$22 per unit for WPT’s 110 industrial properties across 20 U.S. states. The deal, which includes WPT debt, will expand Blackstone’s industrial real estate holdings at a time when consumers are increasingly shopping online and expecting their purchases to be promptly delivered to their door.
WPT said its warehouses and distribution centres – known as logistics operations in the commercial real estate sector – are located in regions that allow for one- to two-day delivery to the majority of the U.S. population. WPT has the highest concentration of properties in Georgia, followed by Illinois, Texas, Minnesota, Wisconsin and Florida.
Blackstone said industrial real estate is one of their top investment picks “as the sector continues to benefit from strong tailwinds driven by e-commerce.”
E-commerce was already rapidly growing in the United States before the pandemic hit and forced more consumers to shop online for basic needs such as groceries. The trend is similar among Canadian consumers, who have had to contend with longer lockdowns and retail restrictions.
Industrial or logistics commercial real estate has become coveted among large real estate players. Blackstone said its offer price is nearly 20 per cent higher than WPT’s average unit price over the past month. As of midday Monday, WPT units were up 16 per cent to $21.79 on the Toronto Stock Exchange.
WPT’s board is urging its unitholders to accept the offer. The deal requires approval of at least 66.6 per cent of WPT unitholders. If the vote succeeds, the acquisition is expected to close in the last three months of the year.
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