The deal brings 60 million square feet of warehouse space to Blackstone Group

Colony Industrial, the massive warehouse division of Colony Capital, now has a new owner.

According to reports, Blackstone Group has purchased the warehouse group for $5.9 billion. The deal is part of Blackstone Group’s ongoing dive into logistics space. Blackstone has placed a big bet that the growth of e-commerce will require real estate tied to the last mile of logistics.

Anatomy of the Colony Industrial Deal

The deal for Colony Capital delivers roughly 60 million square feet of warehouse units in 26 markets. The company’s portfolio includes 465 industrial buildings, according to a press release from Blackstone.

Earlier this year, Blackstone purchased $18.7 billion in warehouse space from Singapore’s GLP Pte.

“We’ve been the big buyer of warehouses around the world, probably bought $70 billion, on the simple premise that goods are moving from physical retail to online retail,” said Blackstone President Jonathan Gray in a recent Bloomberg interview. With industrial rents rising in recent years, the Blackstone expects to be a major player in the global e-commerce space. However, the firm is susceptible to weak trade between the U.S. and its partners and stagnating economic growth.

Meanwhile, Colony Capital shifted its investment strategy away from commercial real estate and more into cell towers and data centers. During a recent industry conference, Colony Capital leaders suggested a goal of having roughly 90% of its assets tied to the digital space.

This wasn’t the only deal of the day for Colony.