Deals Totaling $905 Million to Make Amazon ILPT’s Largest Tenant

(Bloomberg) -- U.S. warehouse owner Industrial Logistics Properties Trust is buying two real estate portfolios for $905.3 million, acquisitions that will make Amazon.com Inc. its largest tenant.

ILPT agreed to purchase 18 properties in 12 states from affiliates of Cole Office & Industrial REIT (CCIT II) Inc. for $625.3 million, according to a statement Friday. The facilities are fully leased to 13 tenants. The company also agreed to buy eight properties in Indiana and Ohio from a seller it didn’t name for $280 million.

When the deals are completed, Amazon and FedEx Corp. will be ILPT’s biggest tenants, accounting for 13.8 percent and 3.6 percent, respectively, of annualized rental revenue, the landlord said. The rise in e-commerce has created a lucrative market for the owners of last-mile warehouse facilities, which store goods to be delivered to online shoppers.

“Over time, we may see fewer and fewer malls,” John Murray, who became chief executive officer of ILPT in December, said in a phone interview. “A lot of shopping is going to take place online, and it’s going to be shipped from regional and last-mile distribution facilities.”

ILPT on Thursday completed the purchase of seven of the eight properties it’s buying from the unnamed seller, and said it expects to acquire the last one and close the Cole transaction within 60 days. It’s paying for the properties with cash from its recent $650 million mortgage financing and by drawing on a credit facility.

When the deals are completed, ILPT will have 42.4 million square feet (3.94 million square meters) across 296 properties, up from 29.5 million square feet at the end of last year. The Newton, Massachusetts-based company, managed by RMR Group Inc., has announced more than $1 billion of acquisitions since its January 2018 initial public offering, and has a market value of $1.4 billion.

To contact the reporter on this story: Lily Katz in New York at lkatz31@bloomberg.net

To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Daniel Taub, Christine Maurus

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