Logistics One Of Blackstone’s “Highest Conviction” Ideas After GLP Deal
The Blackstone Group had recently completed an $18.7 billion deal with GLP, adding it to their impressive roster of assets under management. There are very few properties that are out of their reach, according to Forbes. With their recent deal involving logistics warehouses, the idea of logistics as a viable asset to invest in sounds like a good one, if Blackstone is willing to invest in it.
Blackstone's logistics gamble is more than just a gamble, it's a risk. The logistics space are where US giants Amazon and other companies like it thrive. However, the real estate firm is confident enough with its own study and abilities to enter a deal for the assets of the Singaporean GLP. It is also what defined their "conviction global investment" strategy.
The deal the company made on Sunday was just a great "doubling down" on the US logistics market. The company's $140 billion-worth real estate investment arm formed a subsidiary called Indcor, which it then sold to GLP in 2015 for $8.1 billion. Blackstone is forming up familiar territory once more by acquiring the GLP assets.
But Blackstone couldn't have made it this far without the help of capable partners in decision making. According to Law.com, its acquisition of the $18.7 billion 179 million square feet space from GLP was helped along with advice from a Simpson Thacher and Bartlett team led by NY-based Brian Stadler (M&A) and Sasan Mehrara (real estate).
GLP, meanwhile, had help in accepting the offer from Kirkland & Ellis. This team was then led by Michael Brueck and Londoner Michael Steele. Kirkland has been handling a collection of GLP transactions ever since they represented the consortium that made the Singapore-listed company private through a buyout. Blackstone, meanwhile, has been partners with Simpson Thacher for a long time.
GLP has upped its US business ever since they entered the nation's market in 2015. In doing so, they became the second largest player in a logistics market lorded over by Prologis, who had also been in the running for the GLP deal. The deal was meant to unload the assets as a private seller and to create a potential IPO as well.
Blackstone has slowly established itself as a credible player in the global real estate market with a collection of assets in office, hotel and single and multi-family properties in the US and globally. With this purchase, logistics just assumed an important position among Blackstone's global properties.