RCA in the commercial property press:

Blackstone Maneuvers to Commandeer CalWest Portfolio with $600M Debt Grab

BusinessWeek reports: New York-based Blackstone Group, in its quest for world domination, has recently acquired approximately $600 million of debt that currently backs 23 million-square-feet of industrial properties, commonly referred to as the CalWest portfolio. The move positions the world’s largest private equity group to take control of the properties, which are concentrated in major centers of trade, for relatively cheap prices, to build a portfolio of industrial space that would rival the size of some US public industrial REITs.

With the decline in values that has occurred for industrial space since 2007, analysts believe the CalWest portfolio’s senior debt may be difficult to refinance. According to Real Capital Analytics’ data, current owner Walton Street made the second-largest industrial sector purchase of the last decade when it acquired the CalWest portfolio in April 2007, at the very height of market valuations. Should Blackstone be able to leverage their position to take control of CalWest, they would be able to add the properties to the 180 industrial sites it recently acquired from ProLogis for $1.02 billion in a deal that also included interests in three real estate funds.

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Posted by: Nina Turner

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