GIC Boosts U.S. Assets with $8B IndCor Industrial Portfolio from Blackstone

Borja Sierra, Savills Studley

Gail Kalinoski, Contributing Editor

As demand for commercial real estate assets increased, particularly among foreign investors, Blackstone decided to skip a planned IPO for IndCor Properties Inc. and sell the U.S. industrial platform with 117 million square feet of high-quality properties to GIC, Singapore’s sovereign wealth fund, for $8.1 billion.

“With oil and commodities down, exposure to a well-managed and geographically diversified real estate portfolio of this nature is very appealing to large global investors like GIC,” Borja Sierra, head of U.S. Capital Markets for Savills Studley, said in a prepared statement.

The deal announced Tuesday is one of the largest industrial transactions to date. Since 2010, Blackstone has been aggressively growing IndCor, a wholly-owned portfolio company based in Chicago, into one of the largest owners and managers of industrial properties in the United States. IndCor owns and operates properties in more than 29 key logistics markets in 24 states. Its assets are located mainly in desirable in-fill industrial markets, which benefit from key domestic and global transportation hubs, major logistics and warehouse/distribution networks and large population centers. While its most recent purchase was a 1.1 million-square-foot portfolio in El Paso, Texas, announced in June, IndCor closed on two major acquisitions earlier in the year. In January, it bought a 7 million-square-foot portfolio with properties in Reno, Las Vegas, Chicago and Southern California. A month later, IndCor said it had acquired 9.6 million square feet of properties in the Texas cities of Austin, Dallas and San Antonio as well as in Portland, Los Angeles and Denver.

“We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States,” Tim Beaudin, IndCor CEO, said in a news release. “We are excited about the company’s future prospects under new long-term ownership with GIC.”

Sierra stated that, “Blackstone again manages to create massive value combining two apparently easy tricks of the trade.”

He said the New York-based global real estate investment firm bought low while assembling a portfolio of industrial properties during the economic downturn and was able to sell high by “having created a perfectly institutional product suited to the record high levels of overseas capital looking to find shelter on real estate.”

Analysts at Zacks.com noted that 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.”

Established in 1981, GIC is a leading global investment firm with more than $100 billion in assets under management.  It manages Singapore’s foreign reserves and has investments in a wide range of asset classes, including real estate, private equity, equities and fixed income in more than 40 counties, including emerging markets. Recent investments have included the office component of Pacific Century Place Marunouchi, a 32-story mixed-use development in Tokyo, and 50 percent interest in a shopping center in Rome, one of the largest in Italy. In September, GIC joined with PSP Investments and the Ontario Teachers’ Pension Plan to invest $700 million in XPO Logistics Inc., a logistics provider headquartered in Greenwich, Conn.