Logistics real estate operator Prologis announced Monday it entered into an all-cash agreement to acquire 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, New York/New Jersey and Phoenix. Sites in Southern California, the San Francisco Bay Area and South Florida are also included. Prologis will add 77 new customers and expand its relationships with 50 existing clients through the transaction.
The company plans to retain all of the 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 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 year one and a 5.75% cap rate when adjusting the leases in the portfolio to current market rents.
The transaction is expected to close by the end 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 | cash |
Prologis and Blackstone have engaged in more than a dozen transactions with each other over 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 vacancy, logistics remains a high conviction theme for us; we are proud owners of $100 billion of warehouses in North America and $175 billion in total around the world.”
Prior to this transaction, Prologis owned 1.2 billion square feet of logistics space across 19 countries.
Last year it acquired competitor Duke Realty in a $26 billion all-stock transaction.
Prologis Ventures is an investor in FreightWaves.
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