Blackstone’s Warehouse REIT Deal Suggests a Market Disconnect

Friday, March 28, 2025

• Industrial strength: Blackstone’s latest bid for Warehouse REIT could signal just how out of sync public market valuations are with the true value of industrial real estate.

• Investment management: AI is no longer just assisting commercial real estate analysts—it may be gearing up to replace them.

Editor’s Pick

Blackstone’s Warehouse REIT Deal Suggests a Market Disconnect

Blackstone has been on the hunt for industrial property for some time. Their CEO has said they are looking for “interesting ways to deploy capital,” including niche assets like data centers, logistics warehouses, and rental housing. They are particularly bullish on the United Kingdom, where they’ve become one of the largest industrial landlords after acquiring around £1 billion worth of space in less than a year.

Now, Blackstone has proposed a $631 million bid to acquire Warehouse REIT, a publicly traded company with about 7 million square feet in its portfolio. While their previous offers have been rejected, prompting them to return with higher bids, this latest offer—though not yet formally submitted—has reportedly been well received. Executives at Warehouse REIT have indicated the board would likely accept it. The $631 million price tag represents nearly a 40 percent premium over the company’s current share price valuation. Considering industrial property prices in the UK, this might still prove to be a great deal.

If the current deal stands, Blackstone would be paying around $90 per square foot for the Warehouse REIT portfolio. Some estimates place the average price per square foot for industrial real estate in the UK between $115 and $205. That makes this a strong deal—even compared to some of Blackstone’s previous acquisitions. Earlier this year, Blackstone purchased 18 warehouses from PGIM for £200 million, which equates to about $121 per square foot at the current exchange rate.

If Blackstone is able to acquire Warehouse REIT at a 40 percent premium and still come away with a favorable price, it underscores how little the public market currently values real estate stocks. Industrial has remained a bright spot in the real estate sector, especially throughout the pandemic, so it’s surprising to see continued pessimism around warehouse REITs—particularly when compared to more troubled asset types like office.

This may be a case of a few struggling real estate verticals dragging down the perception of the entire sector. With so much attention on the potential collapse of real estate values due to higher interest rates, many investors seem to be avoiding the asset class altogether. That disconnect could prove valuable for Blackstone, which appears determined to stay greedy while others are fearful.

Overheard

Investment Management

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.