Typically known for leveraged buyouts, large private equity groups have been increasingly interested in sale-leaseback deals in industrial real estate. In a recent Pitchbook article, Adam Lewis details how private equity groups like Blackstone and KKR have been buying up warehouses in order to better capitalize on the growth and trends in ecommerce and logistics.
The sale-leaseback provides these investment groups a predictable stream of cash flow through rent payments from the tenants leasing the building. As companies continue to shift their mix of sales from traditional retail to more online sales, the demand for industrial real estate, specifically warehouse space, should see a significant appreciation in value, adding to the overall performance from these private equity firms. Zane Carmean of Pitchbook said "This is not just COVID. Industrial real estate has been the best performing core real estate type in the last decade, driven particularly by shifting consumer behavior toward the convenience of ecommerce."
Find the Full Article Here: https://pitchbook.com/news/articles/why-blackstone-and-other-private-equity-giants-are-gobbling-up-warehouses
