Logistics real estate operator Prologis announced Monday it entered into an all-cash agreement to accumulate a $3.1 billion industrial real estate portfolio from Blackstone.
The acquisition includes nearly 14 million square feet of space from various real estate funds held by Blackstone (NYSE: BX). The deal allows Prologis (NYSE: PLD) to expand its presence in key markets like Atlanta, Dallas, Las Vegas, Recent York/Recent Jersey and Phoenix. Sites in Southern California, the San Francisco Bay Area and South Florida are also included. Prologis will add 77 latest customers and expand its relationships with 50 existing clients through the transaction.
The corporate plans to retain the entire properties acquired.
“These high-quality properties are complementary to our portfolio and fit perfectly into our long-term strategic plan for growth,” said Dan Letter, Prologis’ president. “The acquisition demonstrates our unique ability so as to add significant scale to our portfolio — expanding customer relationships and increasing opportunities for our growing Essentials platform.”
The deal price represents a 4% cap rate (net operating income divided by market value of property) in 12 months one and a 5.75% cap rate when adjusting the leases within the portfolio to current market rents.
The transaction is predicted to shut by the top of the week.
Acquisition price | $3.1 billion |
Prologis annual revenue (2022) | $6 billion (1.2 billion square feet of space) |
Acquisitions by Prologis | Duke Realty, Industrial Property Trust, Liberty Property Trust, DCT Industrial Trust and KTR Capital Partners |
Financing | money |
Prologis and Blackstone have engaged in greater than a dozen transactions with one another during the last 11 years, a news release stated.
“Where you invest matters, and this transaction demonstrates the exceptional demand for high-quality warehouses,” said Nadeem Meghji, head of Blackstone Real Estate Americas. “With near record low emptiness, logistics stays a high conviction theme for us; we’re proud owners of $100 billion of warehouses in North America and $175 billion in total world wide.”
Prior to this transaction, Prologis owned 1.2 billion square feet of logistics space across 19 countries.
Last 12 months it acquired competitor Duke Realty in a $26 billion all-stock transaction.
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