Key Takeaways
- • Brookfield Asset Management and Canada Pension Plan Investment Board (CPP Investments) completed a $5.2B all-cash joint-venture buyout of LXP Industrial Trust, taking the REIT private and delisting it from the New York Stock Exchange.
- • The joint venture paid $61.20 per share, a 12.3% premium to LXP's 30-day weighted average share price at the time of the offer.
- • The acquired portfolio comprises 107 industrial properties totaling about 52M square feet across the Midwest and Sun Belt, 96.6% leased, with average in-place rents of $5.28 per SF.
- • Amazon is the largest tenant at 6.7% of the portfolio, and the top 10 tenants account for roughly a third of occupancy.
- • The deal reflects continued institutional conviction in U.S. industrial real estate, which is supported by strong third-quarter absorption and national vacancy of 6.8% per Cushman & Wakefield.
Summary
Brookfield Asset Management and Canada Pension Plan Investment Board completed a $5.2B all-cash transaction to acquire and delist LXP Industrial Trust, according to Bisnow. The joint venture paid $61.20 per share, a 12.3% premium to LXP's 30-day weighted average share price at the time of the offer. The deal was first announced in July and included a 40-day window in which LXP management could have sought a higher bid. In June, management had valued the then-108-property portfolio at $4.7B in an investor presentation.
The acquired portfolio consists of 107 properties totaling roughly 52 million square feet across the Midwest and Sun Belt. The REIT was 96.6% leased at the time of the transaction, with average in-place rents of $5.28 per square foot. Nearly all of the assets are newer bulk distribution facilities. Properties are spread across Arizona, Texas, Indiana, Ohio, Tennessee, South Carolina, Georgia and Florida. Amazon is the largest tenant at 6.7% of the portfolio, and the top 10 tenants account for roughly one-third of occupancy.
Brookfield Real Estate CEO Lowell Baron said the transaction fit the firm's conviction in the long-term fundamentals of the U.S. industrial sector. Sophie van Oosterom, head of real estate at CPP Investments, said LXP was well positioned to capture further value as logistics markets evolve, supporting attractive long-term returns for the CPP Fund.
LXP reported $49.5M in funds from operations in the second quarter, up $2.2M from the prior quarter and 5% year-over-year. During the quarter it sold one property for $51M and acquired a 37-acre infill land investment in Phoenix for $103.2M, and it began development on two speculative projects in Columbus, Ohio.
The transaction comes against a resilient backdrop for U.S. industrial real estate. According to Cushman & Wakefield's third-quarter market report, absorption was at its highest rate since the start of 2023 and demand surpassed 70M square feet for the second consecutive quarter. National vacancy stood at 6.8%, its lowest level since the end of 2024, despite a glut of new construction developed during the pandemic.
The acquired portfolio consists of 107 properties totaling roughly 52 million square feet across the Midwest and Sun Belt. The REIT was 96.6% leased at the time of the transaction, with average in-place rents of $5.28 per square foot. Nearly all of the assets are newer bulk distribution facilities. Properties are spread across Arizona, Texas, Indiana, Ohio, Tennessee, South Carolina, Georgia and Florida. Amazon is the largest tenant at 6.7% of the portfolio, and the top 10 tenants account for roughly one-third of occupancy.
Brookfield Real Estate CEO Lowell Baron said the transaction fit the firm's conviction in the long-term fundamentals of the U.S. industrial sector. Sophie van Oosterom, head of real estate at CPP Investments, said LXP was well positioned to capture further value as logistics markets evolve, supporting attractive long-term returns for the CPP Fund.
LXP reported $49.5M in funds from operations in the second quarter, up $2.2M from the prior quarter and 5% year-over-year. During the quarter it sold one property for $51M and acquired a 37-acre infill land investment in Phoenix for $103.2M, and it began development on two speculative projects in Columbus, Ohio.
The transaction comes against a resilient backdrop for U.S. industrial real estate. According to Cushman & Wakefield's third-quarter market report, absorption was at its highest rate since the start of 2023 and demand surpassed 70M square feet for the second consecutive quarter. National vacancy stood at 6.8%, its lowest level since the end of 2024, despite a glut of new construction developed during the pandemic.
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