Blackstone Pays $358M for 13-Property Industrial Portfolio: Updated
The seller, an information management company, will remain in the facilities under 10-year lease. They're located in Southern California, Northern New Jersey and the Lehigh Valley.
The industrial market is showing off to end 2020, with private equity giant Blackstone (BX) tapping into the pandemic-driven momentum behind e-commerce and storage revenue growth.
Blackstone REIT agreed to a $358 million sale-leaseback of a 13-property industrial portfolio with Iron Mountain Incorporated, a storage and information management company. The properties combine for 2.1 million square feet across 122 acres, located primarily in California, Northern New Jersey, and the Lehigh Valley in Pennsylvania and New Jersey.
Neither party identified specific locations of the properties. However, a source familiar with the deal told Commercial Observer one property is located in Irwindale in Los Angeles County, and another is located in Fontana in the Inland Empire. Other locations are in San Diego and the San Francisco Bay Area.
Iron Mountain will remain in the facilities under an initial 10-year lease term, with options to renew up to an additional 20 years.
The deal further demonstrates the rising demand caused by the increasing rate of online shopping this year. It comes days after the Los Angeles Times reported that San Francisco-based Stockbridge and National Pension Service of Korea in Seoul acquired 23 shipping centers for Amazon (AMZN), Walmart and Target — two of which are located in Southern California’s Inland Empire — for $2 billion. It was the largest industrial transaction by value since the onset of the pandemic, according to the buyers.
“The industrial sector continues to benefit from strong demand driven by e-commerce tailwinds, and we believe these well-located assets are a great addition to our portfolio, which is heavily weighted toward faster-growing sectors like logistics,” Blackstone REIT’s David Levine said in a press release.
Iron Mountain has also produced steady storage revenue growth driven by 98 percent customer retention since 2016, a source said. The company manages more than 90 million square feet across approximately 1,450 facilities around the world. The Blackstone transaction is part of Iron Mountain’s ongoing capital recycling program.
Meanwhile, Blackstone REIT has acquired more than 1 billion square feet of logistics space globally since 2010. Currently, the REIT owns more than 850 million square feet, including about 450 million square feet in the Americas. Blackstone Real Estate Partners made one of the definitive deals of 2019 when it acquired the industrial assets of Colony Capital for $5.9 billion.
Iron Mountain was represented by the JLL (JLL) Capital Markets team, including Jason DeWitt, Robert Dmytryk, John Huguenard, Brian Shanfeld, Mark Dettmer, John Plower, Bruce Strasburg, Jordan Avanzato, Anthony Walters and Brian Longee.
UPDATE: This article has been updated since publication to include additional details about the assets involved in the transaction.