Oxford Joins Caisse Unit in $3.5 Billion Deal for Brookfield's IDI
Oxford Joins Caisse Unit in $3.5 Billion Deal for Brookfield's IDI
(Bloomberg) -- Two of Canada’s biggest pension funds will jointly own Atlanta-based warehouse developer IDI Logistics after Ivanhoe Cambridge Inc. sold half of its stake in the company to Oxford Properties Group.
Ivanhoe, which bought IDI in November from a unit of Canada’s Brookfield Asset Management Inc., for about $3.5 billion, sold 50 percent of it to Oxford for about $1.7 billion in December, according to people with knowledge of the transactions who asked not to be named.
IDI has more than 70 employees across six offices in the U.S. and a portfolio of 111 assets, 35 development projects and 33 land parcels, the companies said in a statement Wednesday. Together, the new owners say they can more effectively develop IDI’s business.
“It would take us years to piece together a portfolio this size and quality on an asset-by-asset basis, so IDI was an opportunity to own, together with Ivanhoe Cambridge, a 47 million square feet portfolio plus a very large development pipeline,” said Kevin Egan, head of New York and U.S. investments at Oxford, the property unit of pension fund OMERS.
Industrial real estate deals are attracting institutional capital in North America as the rise of e-commerce continues to drive up rents and lower vacancy rates for warehouses and distribution centers. Blackstone Group LP closed its $7.6 billion purchase of Gramercy Property Trust in October and bought Canada’s Pure Industrial REIT last January in a joint venture with Ivanhoe, which has also singled out warehouses as a target for its growing global business.
In just over two years, Ivanhoe has increased its overall committed investments in the industrial sector from more than C$2 billion ($1.5 billion) to more than C$9 billion, Mario Morroni, executive vice president of industrial in North America for Ivanhoe, a unit of Caisse de Depot et Placement du Quebec, said in a statement.
The IDI acquisition will help Montreal-based Ivanhoe “to accelerate deployment probably by about 3 or 4 years and given where we were at market pricing right now, we felt that it was important for us to be able to keep on developing the support of the development of this team,” Morroni said in an interview.
‘Perfect Partner’
Oxford “was for us the perfect partner to know that going over the next couple of years, where there may be a slowdown, we’re going to have two sources of capital with people who understand the risk of development and make IDI even better than it has been for the past 30 years,” Morroni said.
The investment is part of Oxford’s continued expansion of its global industrial portfolio: the Toronto-based firm has a C$1.9 billion portfolio in Canada and made its first foray last year into Europe’s logistics sector with a 200 million pound ($261 million) investment in GLP’s development fund, Egan said. In the U.S., Oxford has been expanding its presence with plans to spend about $2 billion to develop New York’s Hudson Square. It already has about $15.1 billion of assets under management in the U.S.
To contact the reporter on this story: Natalie Wong in Toronto at nwong133@bloomberg.net
To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Rob Urban, David Scanlan
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