Charming, roomy, 1-floor, multi-bathroom warehouse... for $18.7B. In the biggest private real estate deal ever, private equity firm Blackstone acquired GLP. That's the Singapore-based owner (and leaser) of a ton of American warehouses. Blackstone knows a thing or two about landlord-ing already (it owns Chicago's Willis Tower, NYC's StuyTown, and Vegas casinos). Here's how the deal was probably pitched to the CEO:
- What Blackstone gets: 180M square feet of modern, industrial US warehouses.
- Why that's valuable: The biggest tenant is Amazon — And the 1,300 warehouses are near cities (aka where all the ecommerce customers are).
- How Blackstone will make money: Rent. Lots of it. Paid by Amazon, Walmart, Target, and whoever else needs a warehouse to store and ship the stuff you need ASAP.
"Buy it, fix it, sell it."... That's the corporate slogan going on Blackstone coffee mugs. With the help of bank loans, Blackstone has made bucks flipping land:
This is really all about ecommerce... Here's how Blackstone announced the deal: "Logistics is our highest conviction global investment theme today." The reason Blackstone's dropping $19B on warehouses is that they're part of the "logistics" that powers ecommerce. Blackstone believes online shopping is the future, so it's expressing itself through real estate.