Big Week For Industrial Real Estate

It was just announced by Mark Heschmeyer at CoStar News that Blackstone, DRA Advisors and AEW Capital invested in large industrial portfolios valued at a total of $1.5 billion.  That’s over one third of all industrial sales completed this year.

The industrial segment has been healing nicely this year with vacancy falling almost a full point during 2011.  Given the forecast for soft, but steady GDP growth coupled with virtually no new supply coming out of the ground makes 2012 a solid year for this segment.

The recovery is in primary and larger secondary markets favoring newer and larger properties.  “Bigger assets cater more to global trade and retail sales, both bright spots of the recovery since 2009,” PPR’s Nordby added. “Also, corporate profits are high and rents are low right now, so many tenants are inclined to trade up to newer space. On the other hand, smaller assets are often driven by the housing market – Joe the Plumber needs small bay space and definitely doesn’t need 32-ft. clear heights – and the local manufacturing environment.”

The  Blackstone sale  at $770 million is about twice the size of the other two,  DRA Advisors and AEW.

Blackstone Group’s Blackstone Real Estate Partners VII bought  65 industrial properties totaling 16.6 million square feet from Dexus Property Group of Sydney, Australia. The price comes to about $46/square foot with an average property size of about 250,000 square feet.

Dexus strategy was to exit non-core US markets. The properties are scattered across secondary markets located for the most part in central and southeastern United States:

State, Total SqFt

Ohio, 4,338,000
Texas, 3,525,000
Florida, 1,894,000
Georgia, 1,626,000
Arizona, 1,586,000
Maryland, 1,420,000
Minnesota, 945,000
North Carolina, 691,000
Virginia, 595,000

Now, Dexus portfolio will be focused on core Western States markets.

Blackstone has been on a tear during the recession with $19 billion in acquisitions since the recession began.

For more detail see

CoStar News – Article – The Week That Industrial Took Center Stage

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