How To Invest Like Blackstone: Four Industrial REITs Riding The Amazon Wave

Blackstone Group’s record-breaking $18.7 billion bet on 179 million square feet of U.S. warehouse space is a bet on the future of online shopping. As more and more Americans turn to internet retailers—e-commerce accounts for roughly 10% of total retail sales in the United States, up from 6% at the beginning of the decade—companies like Amazon, Walmart, and Home Depot are vying for the increasingly valuable real estate where they store and distribute their growing inventories. And most importantly, they’re willing to outspend each other.

In what is now the largest private equity deal in history, Blackstone announced on Sunday that it will acquire the U.S. logistics assets of Singapore-based GLP, which has one of the largest real estate fund platforms in the world and $64 billion in assets. Blackstone’s own real estate arm was already robust, with a $140 billion portfolio and hundreds of millions of square feet of hotel, retail, residential and office space under its control across the globe. According to Bloomberg, the deal will roughly double the firm’s U.S. industrial footprint.

BTIG REIT analyst Thomas Catherwood cites the enormous uptick in consumer demand for e-commerce as the catalyst for the industrial real estate boom. “Delivery has to happen sooner than it has ever happened before,” he says, thanks to the popularity of quick-shipping services like Amazon Prime, and retailers need more robust warehouse space, closer to major cities and distribution centers, to service their online businesses than they do to service their brick-and-mortar stores.


Blackstone isn’t the only private equity firm to take notice of the trend. Brookfield Asset Management also put in a bid for GLP’s assets, and in March, mega-investment firm (and competitor) KKR added two major industrial distribution buildings totaling nearly one million square feet to its growing industrial real estate portfolio.

So what makes industrial warehouses such good investments? Ron She, managing director and associate portfolio manager at Duff & Phelps Investment Management Co., chalks it up to supply and demand. Warehouse space is limited, especially near dense urban areas, and financing new industrial real estate is not as easy as it was before the financial crisis. Add this to the booming e-commerce industry, and you’re left with a recipe for the rising rents and record-low vacancy rates that lead to burgeoning profits for investors like Blackstone.

Of course, blockbuster private equity deals aren’t the only way to cash in on the booming logistics business. In case you don’t have a few billion dollars sitting around for a Blackstone-level bid, here are four publicly traded REITs that analysts expect to rise with the tide of e-commerce.

The best-known, largest U.S. logistics real estate manager, Prologis has $97 billion in assets under management, a market cap of roughly $50 billion, and the distinction of Amazon’s top landlord. Shares are currently trading at $75.10 and are up 32% YTD with a yield of 2.82%.


Read our 2017 feature on the company here.

With 156 million square feet of U.S. logistics real estate under its belt and a market cap of $11 billion, Duke Realty is another major player in the industry. Shares are currently trading at $30.49 and are up 22% YTD with a yield of 2.82%.


Terreno differs from giants Prologis and Duke because of its narrow strategy. Rather than be “everything to everyone,” Catherwood says, Terreno operates in just six markets, focusing its efforts as close to dense urban areas as possible.

Shares are currently trading at $46.08 and are up 35% YTD with a yield of 2.08%.


Atlanta-based Americold, the world’s largest owner of refrigerated warehouses, had its IPO at the beginning of 2018 and offered 52 million shares at $16 apiece. The company operates 160 warehouses in the U.S., Canada, Australia, New Zealand and Argentina. According to She, cold storage is an especially promising segment of the industrial logistics market because it is still relatively fragmented, leaving lots of room for companies like Americold to consolidate.

Shares are currently trading at $31.25 and are up 25% YTD with a yield of 2.56%.


For more in-depth analysis on REITs, try Forbes Real Estate Investor.

*Share prices as of 9:00 a.m. ET on June 4, 2019

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