VANCOUVER, B.C.—Less than a month after forging one 10-figure deal for industrial properties, the Blackstone Group has signed up for a second one. Blackstone Property Partners has agreed to acquire Pure Industrial Real Estate Trust (PIRET) in an all-cash transaction valued at approximately US$3 billion including the assumption of debt. Nearly one-third of the Canadian REIT's 22.7-million-square-foot portfolio is spread across key US logistics markets.
The agreement calls for Blackstone to acquire all of the outstanding trust units of PIRET for approximately US$6.50 per unit. It represents a 21% premium to the closing price of PIRET units on the Toronto Stock Exchange on Monday, the last trading day prior to the announcement of the deal; and a 22% premium to PIRET's volume-weighted average unit price on the TSX for the 30-day period ending Monday.
“We are excited to be acquiring PIRET, one of the premier Canadian industrial REITs, as a continuation of our global strategy to acquire high-quality logistics assets in key urban markets,” says Tyler Henritze, Blackstone Real Estate's head of North America acquisitions. “The management team has done an excellent job building the portfolio and we look forward to working together going forward.”
Rick Turner, chairman of PIRET's board as well as a special committee of independent trustees, says the REIT has accomplished “tremendous growth in the ten years since the initial public offering in August 2007. Since inception, we have generated a total return in excess of 345% and we have built a platform that has made us a leader in the Canadian industrial REIT space.”
The agreement gives PIRET the right to accept a superior offer from another would-be buyer, and for Blackstone to try matching that offer. The REIT would be obligated to pay Blackstone a C$77-nillion breakup fee should it opt for the competing offer, and Blackstone would be obligated to pay PIRET a C$220-million breakup fee if it chose to cancel the agreement.
The PIRET deal is larger by both dollar amount and square footage than the agreement which Blackstone announced last month to buy a 21.7-million-square-foot industrial portfolio from a Cabot Properties fund for approximately $1.8 billion. The deal through the asset management giant's non-traded Blackstone Real Estate Income Trust will still represent Blackstone's biggest deal for strictly US industrial since closing on the $8-billion sale of the IndCor platform in early 2015.
In September of 2016, Blackstone agreed to pay $1.5 billion to acquire a portfolio of 46 West Coast logistics centers from LBA Realty. Earlier in 2017, BREIT bought six million square feet of mainly infill industrial properties from High Street Realty, paying $402 million.
In connection with the deal announced Tuesday, BMO Capital Markets is acting as financial advisor to PIRET and has provided the special committee and the board of trustees with a fairness opinion. Goodmans LLP is acting as legal counsel to PIRET in connection with the sale; Greenhill & Co. has provided the special committee and the board of trustees with a fairness opinion.
RBC Capital Markets and Citigroup are acting as financial advisors to Blackstone. Osler, Hoskin & Harcourt LLP and Simpson Thacher & Bartlett LLP are acting as Blackstone's legal counsel.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
