SYDNEY-Dexus Property Group has confirmed that it is selling most of its US portfolio, 65 warehouse properties, to a New York City-based Blackstone fund for $770 million. The locally based company said the sale, which should settle by mid-June, is part of a plan to only keep West Coast properties in its US portfolio.
The properties, about 16.6 million square feet, are about 90% leased, Dexus said in a statement this morning. The properties are located in the markets of Atlanta, Baltimore, Charlotte, Cincinnati, Columbus, Dallas, Minneapolis, northern Virginia, Orlando, Phoenix and San Antonio. Three of the sites are leased to Whirlpool.
The largest properties include the 1.5-million-square-foot 195 King Mill Rd. in McDonough, GA; the 1.6-million-square-foot 6241 Shook Rd. in Lockbourne, OH and 1.3 million square feet of properties in Orlando Central Park in Orlando. These properties alone are being sold for $184 million. The firm is holding on to three land parcels not on the West Coast.
Darren Steinberg, Dexus CEO, said in a statement that the company’s portfolio will now include only 24 US properties on the West Coast, or about 8% of the company’s assets. He said the company’s US team was able to boost leasing on these sites by almost 13% since June in preparation for a sale.
“This sale is consistent with (our) current strategy to exit non-core US markets,” Steinberg said. “The ongoing US West Coast strategy will be determined as part of the overall group strategy review, but in the meantime, US operating costs will be reviewed to reflect the revised scale of operations.” A market up date will follow at the group’s full-year results presentation in August, he said.
Dexus will use a portion of the proceeds to repay debt, with the costs of a debt restructure expected to be about 12% of the gross take. The firm will also use part of the surplus capital arising from the transaction to commence a securities buy-back of up to $200 million.
Blackstone could not be reached for comment for this story on the purchase by the Blackstone Real Estate Partners VII. The company already owns about 45 million square feet of industrial through its subsidiary IndCor Properties Inc.
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