Dallas, Texas 01/30/2014 (FINANCIALSTRENDS) – The $17 billion market capped Blackstone Group L.P. (NYSE:BX) announced today that it has agreed to purchase the “warehouses and development land” assets from the industrial conglomerate General Electric for a purported $550 million. The bought out assets are said to be spread across 9 different states of U.S and are currently on the books of General Electric’s Real Estate division. The deal is said to cover a total of 9.6 million square feet of assets which are currently owned by GE Capital Real Estate with a major portion of it located in the state of Texas.
It is appropriate to note here that the deal comes on the back of stated intention of GE to exit out of its non core business and monetize the same, as it concentrates on concentrating on its traditional strengths of industrial manufacturing and new technology development. GE had invested millions in the run up to the 2008 market meltdown, accumulating millions of squares of real estate over the years. In the past few quarters, GE has managed to hive off or sell off its interests in retail finance and other non core business and the latest divesture seems to be an execution of the same strategy.
This deal which is yet to be publicly commented upon by either of the concerned parties is a Win-Win deal for both, since Blackstone Group L.P. (NYSE:BX) had put together its real estate portfolio by establishing IndCor Properties which went after acquiring properties which were struggling through weak valuations, thanks to the depressed property markets in U.S prevailing post the mortgage crisis in 2008. Through the last few years, the New York based firm has steadily increased its acreage to a huge 100 million square feet, leading to market speculation that IndCor Properties is being primed by the investment firm for a public offering in due course.