GLP purchases $1.1b U.S. logistics portfolio

Industrial logistics real estate developer Global Logistic Properties will acquire an initial $700 million portfolio with an additional $400 million portfolio to be acquired in phases upon completion and full lease-up, the company said in a statement.    Industrial logistics real estate developer Global Logistic Properties (GLP) will purchase a portfolio of warehousing and logistics properties in the United States valued at $1.1 billion, the company said in a statement.
   GLP will acquire an initial $700 million portfolio in December that is already 100 percent leased, and an additional $400 million portfolio in phases upon completion and full lease-up.
   The portfolio, purchased from Ross Perot, Jr.’s Hillwood Development Company, LLC, covers 15 million square feet with a strong concentration in locations GLP expects to benefit from the growth of e-commerce in the U.S. The deal increases GLP’s U.S. footprint to 187 million square feet, solidifying its position as the second largest logistics property owner and operator in the U.S. after San Francisco-based real estate investment trust Prologis Inc.
   The largest tenants in the portfolio are Amazon.com Inc., Starbucks Corp., NFI, Williams-Sonoma Inc. and Wayfair Inc.
   The company said it expects to sign with investment capital partners upon the initial closing, but remain the asset manager and retain a 10 percent stake post-syndication, which is subject to customary regulatory approvals in investors’ respective home countries and the U.S.
   “The US$1.1 billion transaction is expected to be funded by US$470 million of equity and US$635 million of debt,” the company said. “GLP’s target 10 percent equity stake of US$47 million is expected to generate a 13 percent return-on-equity (including fees) in the first year of investment.”
   The company said it expects to fund its equity commitment with a combination of cash on hand and existing credit facilities.
   “The portfolio being acquired from Hillwood is one of the highest quality logistics real estate portfolios in the U.S.,” Chuck Sullivan, president and chief operating officer of GLP U.S., said of the purchase. “This transaction, which will be immediately accretive to GLP, demonstrates our ability to leverage our existing platform to pursue enhanced network benefits in the strongest U.S. markets.”