September 30, 2019 / 12:15 PM / 16 days ago

Blackstone to buy U.S. warehouses from Colony Capital in $5.9 billion deal

FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid

(Reuters) - Blackstone Group Inc (BX.N) said on Monday it would buy U.S. industrial warehouses from real estate and investment management firm Colony Capital Inc (CLNY.N) in a $5.9 billion deal, to capitalize on the e-commerce boom.

Shares of Colony Capital jumped 14% to $6.72 before the bell.

The deal by one of the world’s biggest property investors comes at a time when companies are spending billions of dollars to snap up logistics assets as a surge in e-commerce activity spurs demand for delivery and warehouse services.

Blackstone said in June it would buy U.S. industrial warehouse properties from Singapore-based logistics provider GLP for $18.7 billion, in what the companies billed as the largest private real estate transaction globally.

The Colony Capital deal consists of 60 million square feet across 465 warehouses in 26 U.S. markets, with particular concentrations in Dallas, Atlanta, Florida, northern New Jersey and California, the company said.

The deal, which is expected to close in the fourth quarter, is expected to garner net proceeds in excess of $1.2 billion to Colony.

Morgan Stanley and Eastdil Secured were the financial advisers and Willkie Farr & Gallagher was the legal counsel to Colony Capital. Simpson Thacher & Bartlett was the legal adviser to Blackstone.

Reporting by Akanksha Rana in Bengaluru; Editing by Sriraj Kalluvila

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