Funds affiliated with Blackstone Real Estate plan to acquire a 95% stake in a Texas industrial portfolio developed by Crow Holdings for $718 million, saying executives are undeterred by large stock swings and economic uncertainty.
The deal for about 6 million square feet of industrial space spanning 25 buildings primarily in the Dallas and Houston regions is expected to close by mid-2025. The addresses were not disclosed. Blackstone and Crow Holdings declined further comment beyond a Thursday statement.
This deal is another example of how New York-based Blackstone Real Estate is "deploying capital during this period of market volatility," said David Levine, co-head of Americas acquisitions for Blackstone Real Estate, in the statement. Blackstone touts itself as the largest owner of commercial real estate across the globe.
The portfolio is "located in some of the best performing U.S. industrial markets," Levine added. "With limited vacancy and new construction starts down over 80% from the 2022 peak, logistics remains a high conviction theme for us; we are proud owners of more than $90 billion of warehouses in North America and nearly $170 billion in total around the world.”
The affiliated Blackstone Real Estate funds tied to the deal are focused on investing in core properties.
The Dallas-Fort Worth region, the nation's fourth-largest metropolitan area with more than 8.3 million residents, is coming off a surge of new construction. The region added record supply of 145 million square feet of industrial space during the past three years, according to CoStar's latest market analytics report.
With vacancy surpassing 9% in Dallas-Fort Worth and construction prices increasing, developers have shifted away from building speculative industrial big-box space and are focusing on build-to-suit projects and smaller buildings, the report says. The slowdown of new construction and continued stable tenant demand has CoStar's market analytics team expecting supply and demand to further balance out this year.
Dallas-based Crow Holdings and its partners expect to retain the remaining 5% stake in the portfolio, according to the statement. Crow Holdings CEO Michael Levy said in the statement he was proud the team developed "such a high-quality portfolio" that attracted a global leader in the logistics industry.
Legendary developer Trammell Crow, who founded Crow Holdings, was a pioneer in developing industrial buildings. He built his first warehouse at 135 Cole St. in Dallas in the 1940s — and Crow Holdings still owns that building today, Levy said.
“We are excited about the opportunity to partner with Blackstone in this investment portfolio," Levy added.