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Industrial Portfolios Are Becoming Harder to Find For Investors As Warehouse Market Conditions Improve
The portfolio was sold in separate transactions to two buyers, with affiliates of Blackstone Real Estate Partners VII acquiring the Reno assets, which will be managed by IndCor Properties, Blackstone’s national industrial portfolio company. Prologis Inc., an existing partner with Lehman, acquired the Pennsylvania, Las Vegas and New Jersey properties.
Industrial is surging and many owners have opted to hold rather than sell. Those few warehouse portfolios that investors haven’t scooped up yet are drawing intense interest, and M&A activity in the space is strong and getting stronger. This week, Brookfield Property Partners agreed to buy Atlanta-based Industrial Developments International Inc. (IDI) for $1.1 billion.
Lehman and Prologis had reinvested in the their portfolio to stabilize both the properties and their capital structure since acquiring it jointly in 2007. The decision to monetize the portfolio today enables Lehman “to capitalize on strong demand for high-quality industrial product and deliver significant value to its stakeholders,” the company said in a statement.