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Blackstone Is Buying Warehouses From Harvard's Endowment

The private equity firm agreed to pay about $950 million for more than 100 properties.

(Bloomberg)—Blackstone Group LP agreed to buy a portfolio of warehouses from Harvard University’s endowment for about $950 million, according to people familiar with the matter.

The portfolio consists of more than 100 properties totaling 14 million square feet, located mostly in urban areas in southeastern states including North Carolina, Georgia and Florida, the people said. Much of the portfolio is made up of so-called last-mile warehouses, which have grown in value as e-commerce companies expand and seek faster deliveries.

The properties were acquired by Harvard Management Co., the Boston-based arm of the university overseeing the endowment, through a partnership with Atlanta-based real-estate investment company MDH Partners LLC. The deal was reported yesterday by Real Estate Alert.

The sale comes amid record fundraising for private equity real estate funds and a flurry of warehouse deals, including Blackstone’s acquisition of Canyon Industrial Portfolio’s last-mile properties in March for $1.8 billion.

It’s unclear how much Harvard will profit. MDH Partners spent an estimated $560 million acquiring 80 properties in the southeast and Mid-Atlantic since 2014, according to Real Capital Analytics. MDH Partners didn’t return calls seeking comment on the estimate.

Real estate has been Harvard’s best-performing investment, though the portfolio is being restructured along with the rest of the endowment, which has lagged peers. Harvard Management last year reached a deal with private equity firm Bain Capital to manage its direct property investments, including the warehouses. Boston-based Bain also agreed to hire the Harvard team of more than 20 people that oversaw the portfolio.

Bain, Harvard and Blackstone declined to comment on the warehouse transaction.

--With assistance from Gillian Tan.To contact the reporter on this story: Michael McDonald in Boston at [email protected] To contact the editors responsible for this story: Margaret Collins at [email protected] Mary Romano, Josh Friedman

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