Blackstone to Exit IndCor, Announces Sale to GIC for $8.1B

The Blackstone Group L.P. (BX) announced its plan to sell IndCor Properties Inc., an internally-managed Real Estate Investment Trust (REIT) with a current portfolio of around 117 million square feet of warehouse and distribution centers.

The sale will be made to affiliates of Singapore-based sovereign wealth fund GIC Private Limited for $8.1 billion. The deal is expected to be closed in the first quarter of 2015.

About IndCor

IndCor is a portfolio company of U.S. private equity giant Blackstone. It was formed in 2010 and upgraded over the years through 18 acquisitions to emerge as one of the major industrial real estate companies in the U.S.

Blackstone was preparing to sell IndCor in an initial public offering before the sale announcement to GIC. This private transaction will help Blackstone to capitalize on the rising demand in the market for commercial real estate properties. Moreover, this sale will mark the private equity firm’s exit from a major investment with an intention to diversify its portfolio by investing in new property funds.

Blackstone’s advisors for the deal were Eastdil Secured – a wholly-owned subsidiary of Wells Fargo & Company (WFC), Citigroup Inc. (C), Barclays PLC (BCS) and RBC Capital Markets.

GIC’s Benefits

The acquisition of IndCor will assist GIC in expanding its industrial real estate footprint in the U.S. markets. GIC has been investing globally and diversifying its real estate portfolio over the past few months. This latest deal will make it one of the biggest owners of warehouses and other industrial real estate in the U.S.

According to people familiar with the matter, Global Logistic Properties Ltd., a leading warehouses and other industrial property owner in Asia, will be GIC’s partner in the IndCor deal.

Our Take

The IndCor deal will result in one of the largest sales of industrial property ever at a time when demand for real estate properties is increasing among investors. The sale will be profitable for Blackstone since the firm acquired most of the industrial property during the economic slump.

Currently, Blackstone carries a Zacks Rank #3 (Hold).

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