Brookfield Property Partners L.P. has reached an agreement to acquire Industrial Developments International Inc. (IDI) from the U.S. subsidiary of Kajima Corporation in a $1.1 billion transaction that will create one of North America’s largest industrial property companies.
Brookfield Property Partners will own an approximate 25% interest in IDI with the balance owned by Brookfield’s institutional partners.
Founded in 1989 and based in Atlanta, IDI owns and operates 75 high quality industrial distribution facilities totalling 27 million square feet in 12 states, and serves major North American consumer product, retail and industrial companies. In addition, IDI has 49 million square feet of future development projects and a significant third party property management business.
Just last month, IDI began construction of 400,000 square feet in Miramar.
The transaction is expected to close in the fourth quarter of 2013.
With the acquisition of IDI, Brookfield’s industrial portfolio will comprise over 62 million square feet of operating assets and more than 79 million square feet of future development potential with operations in North America, Europe, the Middle East and China, making it one of the largest global owners of industrial and logistics facilities.
“The addition of IDI to Brookfield’s existing industrial operations will create a leading global industrial real estate company able to deliver high quality distribution facilities to clients around the world,” said Ric Clark, Chief Executive Officer of Brookfield Property Group. “The combined business will own irreplaceable assets and development sites near major markets and transport routes, with a 25 year track record of delivering superior service, and is now positioned for significant long term growth.”
“Brookfield will be an exceptional parent organization and we are enthusiastic about starting a positive new chapter for IDI as we approach our 25th year in business,” said Timothy J. Gunter, President and Chief Executive Officer of IDI. “With Brookfield’s backing, we have an exciting opportunity ahead of us to strengthen IDI’s presence in the current markets we serve and potentially in uncharted territory.”
Marty Busekrus a Director with HFF, who covers industrial for the Southeastern US, commented, “It wouldn’t surprise me if there are more Wall Street type deals that occur that further consolidate the industrial sector nationally. The fact is, there is so much capital chasing so few deals that investors have two options. Acquire a lot of small, one-off deals which some groups have been successful doing (Bristol/Seagis, etc) or if you have enough capital, you can go after entire operating companies or portfolios, which is what Liberty and Brookfield have done. There are very few deals in the $25 million and up space. IDI owns roughly 7.5 million SF in the Southeast which makes them the 15th largest owner in the region. The Liberty purchase of Cabot Fund III adds approximately 3.5 million SF in the Southeast to their already enormous portfolio of 10 million SF of industrial product. Once the deal closes they’ll become the third largest industrial owner in the Southeastern US behind Duke and ProLogis.” Busekrus was not involved in the Brookfield/IDI transaction.
Just 2 weeks ago, Brookfield announced it closed a $14 billion global real estate fund. CLICK ON THE FOLLOWING LINK TO READ THE ANNOUNCEMENT: Brookfield Closes $14 Billion of Recent Fund Commitments
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