Private equity firm Blackstone Group is on a warehouse spending spree, according to Bloomberg. On Monday, the firm’s real estate fund agreed to buy Gramercy Property Trust, a warehouse company, for $7.6 billion. In March, it snapped up Canyon Industrial Portfolio for $1.8 billion, and in January it bought a Canadian warehouse operator for C$2.48 billion ($1.9 billion).
Overall, the industrial real estate market is booming, with acquisitions hitting $20.9 billion in Q1, an increase of 34%.
The rationale for Blackstone’s purchases, as it so often is these days, is Amazon. The e-commerce giant is changing shopper expectations and reshaping the retail industry, forcing retailers of all shapes and sizes to sell online and adjust their supply chains. Inventory is shifting out of brick-and-mortar stores and into vast warehouses, where retailers lease space. A bet on warehouse owners and operators is a bet on e-commerce’s growing dominance.
Meanwhile, malls are disappearing. Last year, in the U.S., the equivalent of the Mall of America (2.8 million square feet) closed each week. By 2022, Credit Suisse analysts expect 275 malls to have shut down, or roughly 1 in 4.