Blackstone REIT Acquires Six Multifamily Properties and Industrial Portfolio
April 21, 2017 | by James Sprow | Blue Vault
On April 13, 2017, Blackstone Real Estate Income Trust, Inc. acquired fee simple interests in six high quality multifamily properties totaling 2,514 units. The portfolio was acquired from an affiliate of TA Realty, an unaffiliated third party, for approximately $430 million, excluding closing costs. The TA Multifamily Portfolio consists of a 32-floor high quality property in downtown Orlando and five garden style properties located in the suburbs of Palm Beach Gardens, Orlando, Chicago, Dallas and Kansas City.
The Company believes the TA Multifamily Portfolio’s markets benefit from attractive fundamentals. Employment and population growth in the portfolio’s markets in 2016 were each more than double the national average. Further, multifamily occupancy in the portfolio’s markets has been stable, remaining above 92% over the last 21 years.
On April 18, 2017, the Company acquired a fee simple interest in the HS Industrial Portfolio, a six million square foot collection of predominantly infill industrial assets. The portfolio was acquired from an affiliate of High Street Realty Company, an unaffiliated third party, for approximately $402 million, excluding closing costs. The HS Industrial Portfolio is 97% leased to over 90 tenants and consists of 38 industrial properties located in six submarkets, with the following concentration based on square footage: Atlanta (38%), Chicago (23%), Houston (17%), Harrisburg (10%), Dallas (10%) and Orlando (2%).
The Company believes the HS Industrial Portfolio’s markets benefit from attractive fundamentals. Over the last two years, market rents have increased by 5% annually while vacancy has declined by approximately 100 basis points to 5.2%. Infill industrial supply in these markets is expected to be constrained at 0.6% of stock throughout 2017 given limited land availability near these population centers. The positive fundamentals have resulted in weighted average releasing spreads of 12% over the last two years. “Releasing spreads” is a measurement of the change in rent per square foot between new and expiring leases at a property.
Blackstone Real Estate Income Trust, Inc., is a nontraded REIT externally managed by BX REIT Advisors, LLC, an affiliate of The Blackstone Group L.P. On March 31, 2017, the NAV per share was announced by the board of directors to be $10.02. The REIT offers four classes of common shares. The transaction price for Class S and Class I shares is $10.02 as of March 31, 2017. The transaction price for Class T and Class D shares is the NAV per share plus applicable upfront selling commissions and dealer manager fees. As of March 31, 2017, the REIT had raised over $650 million in its initial public offering which broke escrow on January 1, 2017.
