KKR Nabs Industrial Properties Portfolio For $835M; Stock Up 36% YTD

Global buyout firm, KKR & Co. has agreed to buy a large portfolio of industrial properties from High Street Logistics Properties in a deal valued at about $835 million. KKR’s acquisition of the portfolio of approximately 9.7 million square feet expands the company’s industrial real estate footprint to 30 million square feet.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

KKR (KKR) said that the newly acquired portfolio “is complementary to KKR’s existing footprint in the major markets of Atlanta, Baltimore, Chicago, Central Florida and Dallas. The acquisition also expands KKR’s industrial real estate portfolio to new markets in Central Pennsylvania and South Florida.”

Roger Morales, KKR’s head of commercial real estate acquisitions in the Americas said, “This acquisition is an important milestone for our business as we continue to invest behind the strong demand fundamentals for warehouses that we see across the country.”

Meanwhile, last month, KKR reported strong 3Q results, as revenues of $1.9 billion surged about 140% year-over-year. The company’s 3Q after-tax distributable earnings of $0.48 per share increased 4% and also came ahead of the Street consensus of $0.40. (See KKR stock analysis on TipRanks).

On Nov. 11, Deutsche Bank analyst Brian Bedell raised the stock’s price target to $40 (0.96% upside potential) from $38, citing a “more bullish view” on equity markets and long-term interest rates. Further, Bedell is also optimistic and hopeful about an effective Covid-19 vaccine in 2021. However, with shares up almost 36% year-to-date, the analyst maintained a Hold rating on the stock.

Meanwhile, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 5 Buys and 3 Holds. The average price target stands at $43.56 and implies upside potential of about 9.9% to current levels.