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Blackstone Ups OC Portfolio With PS Business Parks Buy

1.2M SF of South OC, Buena Park Assets Trade

Private equity giant Blackstone has added more than 1.2 million square feet of office, industrial and retail space to its Orange County portfolio, as part of its $7.6 billion acquisition last month of the nationwide portfolio of Glendale-based PS Business Parks Inc. (NYSE: PSB)

The deal includes more than 750,000 square feet of business parks in Lake Forest and Laguna Hills, including The Row, a collection of retail and industrial spaces located within the 513,000-square-foot Laguna Hills Commerce Center.

Other South Orange County assets that were part of the deal includes the Canada Business Center, a 297,000-square-foot business park in Lake Forest.

Another 317,000 square feet of industrial space in Buena Park, at the Buena Park Industrial Center, also changed hands as part of the deal.

PS Business Parks placed a roughly $120 million gross carrying price on its OC holdings, according to its last annual report. The local assets likely traded for over twice that amount, on an allocated basis, based on a reading of documents pertaining to the portfolio sale.

Individual property values for the local assets trading hands were not immediately disclosed.

 

The Row

The Row sits within a lifestyle center with furniture, lighting and family entertainment retailers. Anchor tenants include Sit ‘n Sleep, Lamps Plus, Lakeshore Learning and Big Air Trampoline. PS Business Parks had owned the site since 1997.

The center is about a mile north from the former Laguna Hills Mall, which is prepping for a major redevelopment under the Village at Laguna Hills name.

The largest building in The Row is 23401 Avenida de la Carlota, a 33,792-square-foot building on a 1.6-acre lot occupied by Jerome’s Furniture.

Link Logistics

Blackstone’s $7.6 billion acquisition of PS Business Parks, first announced in April and completed in late July, adds 27 million square feet to the New York investor’s portfolio.

Much of the Orange County assets will be operated by Link Logistics Real Estate, which Blackstone established in 2019 to manage the company’s fast-growing logistics portfolio.

Link Logistics in 2020 paid nearly $43 million for a last-mile e-commerce facility in La Habra.

The 11-acre property, at 555 S. Harbor Blvd., is fully leased to FedEx, which uses the site as a transloading and office facility.

 

Acquisition

PS Business Parks operated a portfolio of industrial, retail, office and multifamily properties across California, Florida, Texas and northern Virginia.

Blackstone acquired the firm for $187.50 per share in an all-cash transaction that takes PS Business Parks private.

Simpson Thacher & Bartlett LLP,­­ BofA Securities, Citigroup Global Markets Inc., Barclays, Morgan Stanley & Co. and Societe Generale represented Blackstone in the deal.

J.P. Morgan Securities LLC acted as lead financial adviser to PSB while Eastdil Secured served as real estate adviser.

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