Brookfield asset management real estate investment trust is buying Peakstone Realty Trust in an all-cash deal valued at approximately $1.2 billion.

The definitive agreement means Brookfield — one of the world’s largest real estate owners — will take on Peakstone’s full portfolio that includes 76 properties nationally, 60 of which are industrial outdoor storage (IOS) with the rest being traditional warehouses. Brookfield will also be buying all of Peakstone’s outstanding shares for $21 each, marking a 34% premium to the last closing price from last month.

Furthermore, agreements between Brookfield and Peakstone will include a 30-day “go-shop” period during which Peakstone can actively solicit and consider alternative proposals. At the same time, the deal with Brookfield has been universally approved by Peakstone’s board and is expected to close by the end of this quarter.

Recently, Peakstone completed the disposition of all of its office properties, leaving it with a portfolio of industrial space alone. Concurrently, Brookfield offloaded some of its high-vacancy office properties as it rearranged its portfolio.

“This acquisition is an exciting opportunity to expand Brookfield’s industrial real estate platform with Peakstone’s high-quality and well-diversified portfolio, which will benefit from strong, long- term fundamentals for the warehouse and IOS sectors” said Lowell Baron, CEO of Brookfield’s real estate business.

Signs for IOS have been bullish. Once niche, the industrial subtype has seen significant growth. While warehousing has had to contend with supply chain issues and trade policy, the flexibility and lower costs of outdoor storage have made for an efficient option for occupiers. As such, rent growth has climbed 123% since 2020, according to Yardi research data. From infill locations to bulk material space, IOS facilities can be used in many ways, making them desirable to tenants and investors.

However, demand and zoning constraints mean that IOS space has been difficult to acquire, especially at any kind of scale. For Brookfield, the deal with Peakstone allows it to take on a sizeable haul of the in-demand industrial segment in one fell swoop.

It’s worth noting that Peakstone acquired a 51-property IOS portfolio (45 operating assets and six redevelopment sites) for $490 million fairly recently in November 2024.