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Nuveen Real Estate Buys $3 Billion US Industrial Portfolio From Blackstone

FreightWaves

Nuveen Real Estate announced October 7 that it acquired 100 U.S. logistics properties from Blackstone Group's real estate arm (NYSE: BX) valued at $3 billion, a move that significantly expands Nuveen Real Estate's U.S. logistics real estate portfolio.

Nuveen Real Estate said it acquired 29 million square feet of property encompassing 12 markets, expanding its logistics real estate exposure to 80 million square feet nationwide. The properties are concentrated in southern California, Dallas, Chicago, northern New Jersey, Baltimore and Washington, D.C. 

The properties' composition is a blend of urban "infill" properties in densely populated areas designed to support last-mile delivery, as well as bulk logistics assets, the latter being industry lingo for traditional warehouses. Urban facilities of less than 75,000 square feet are in very strong demand as e-commerce continues to grow.

Nuveen Real Estate, which has been involved in the industrial sector since 1953, said it manages approximately $17.2 billion of logistics properties globally. Its U.S. industrial exposure is relatively small. ProLogis, Inc., (NYSE: PLD) the world leader by size, has 461 million square feet of U.S. logistics property under management.

Nuveen Real Estate becomes the latest real estate concern to expand its geographic coverage to capitalize on the rapid growth of the infill property segment. Firms making the bet believe that continued demand for e-commerce fulfillment and delivery, combined with constrained demand in major markets, will generate higher asking rents and capital appreciation over the long-term.

Over the past four months, Blackstone has spent nearly $25 billion to acquire the U.S. industrial assets of GLP and, most recently, Colony Industrial, the industrial property division of Colony Capital (NYSE: CLNY).

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