Blackstone Real Estate has an agreement to acquire six Greater Toronto Area industrial properties comprising 1.5 million square feet of space for over $400 million.
The properties will complement its already significant holdings under Blackstone’s subsidiary Pure Industrial, which it acquired and privatized in 2018 in a $3.8 billion transaction. A source with knowledge of the transaction details told RENX the new properties will become part of the Pure portfolio.
The scale of the transaction also makes it one of the larger private trades in the GTA since the acquisition of the former Pure Industrial Real Estate Trust.
News of another major industrial acquisition by Blackstone (BX-N) should come as no surprise – the U.S.-based global real estate investor and manager has made industrial assets a priority as it has grown its Canadian holdings to over $15 billion across 450 properties.
Logistics "highest conviction": Blackstone head
“Global logistics is one of our highest conviction investment themes, and high-quality, last-mile industrial properties like these continue to benefit from some of the strongest real estate fundamentals in Canada,” said Janice Lin, Blackstone’s head of Canada real estate, in a statement emailed to RENX.
“We look forward to continuing to grow our logistics portfolio, while supporting the supply chain in Toronto and providing best-in-class real estate to our tenants.”
Blackstone did not identify the vendor in the transaction, but a Bloomberg News article identifies the current owner as TD bank’s real estate management subsidiary.
A source with knowledge of the transaction did not disclose specific information about the properties, but said they are all in infill submarkets in the Toronto area. All are “high-quality” class-A properties and are 100 per cent occupied.
They are of newer vintage, with good clear heights and in core infill locations, the person said.
“This acquisition is a tremendous opportunity for Pure Industrial and adds to our already 15.7 million square feet of industrial space in the Greater Toronto Area," said David Owen, chief operating officer, Pure Industrial, in an emailed statement to RENX. "We look forward to taking on these excellent assets and providing customers with best-in-class industrial real estate to support all of their supply chain requirements.”
Blackstone has had a focus on the Toronto industrial market in recent years due to its continuing strong metrics. Vacancy remains at less than one per cent and that is leading to strong growth in leasing rates.
With its large existing Canadian industrial portfolio, Blackstone also has detailed and first-hand knowledge of the market, current and pending activity, the source explained. It was also able to offer certainty of execution on the transaction.
The source said Canada’s e-commerce sector continues to lag compared to other developed countries and Toronto is experiencing very rapid population growth, which is at 0.9 per cent compared to 0.4 per cent across the U.S.
Blackstone in Canada
Blackstone’s Canadian portfolio is comprised mainly of light industrial and logistics properties, but it also owns multiresidential and office properties. It has invested in the Toronto, Montreal and Vancouver markets to date.
Among its other holdings are the Bentall Centre in Vancouver, through a joint venture with Hudson Pacific Properties, and The Atlantic Complex in Toronto.
To oversee its growing portfolio, Blackstone hired Lin in May as its Canadian head.