Gramercy Property Trust to buy 9-property industrial portfolio for $331m
Real Estate - AUGUST 31, 2017

Gramercy Property Trust to buy 9-property industrial portfolio for $331m

by Andrea Waitrovich

Gramercy Property Trust has plans to purchase a nine-property, 2 million-square-foot portfolio of class A industrial buildings for $331 million.

The seller was a private real estate development and investment company.

The portfolio is 100 percent leased with a weighted average remaining lease term of 10.4 years. The properties are located across eight markets throughout the United States.

The closing of the deal is expected to occur by the end of the third quarter 2017.

The acquisition follows Gramercy Property Trust's launch of a new joint venture to acquire, own and manage class A distribution centers leased to leading e-commerce tenants on long-term leases across the United States.

The firm’s new portfolio consists of several key logistics facilities within some of the top industrial markets in the United States, with the majority of the facilities serving as critical pieces in the distribution footprint for a market-leading logistics and delivery company.

U.S. e-commerce sales grew 16 percent during the second quarter 2017 compared with the same time last year and now represent 9 percent of total retail sales, according Colliers International. E-commerce will continue to be a driving force for industrial real estate in 2017.

Demand from e-commerce and third-party logistics users is driving industrial absorption and keeping the overall vacancy rate at an all-time-record low. The U.S. industrial market posted its 29th consecutive quarter of positive absorption during the second quarter 2017.

Third-party logistics users contributed to 51.6 million square feet of net absorption in the second quarter, bringing the year-to-date total to 113.7 million square feet, causing the national industrial vacancy rate to remain at just 5.4 percent for the second consecutive quarter.

Investor demand for industrial properties is growing, making industrial the only major real estate sector to post year-over-year sales growth during the second quarter 2017. More than $30.1 billion in industrial assets were purchased in the first half of 2017, 10 percent higher than in the first half of 2016.



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