Prologis is buying 14m sqft of industrial properties from opportunistic real estate funds affiliated with Blackstone for $3.1bn (€1.2bn), funded by cash.
The deal will generate an annual return of around 4% in the first year for the logistics real estate specialist, or 5.75% when adjusted to today’s market rents.
Prologis president Dan Letter said: “We’re pleased to be working with Blackstone on this deal. These high-quality properties are complementary to our portfolio and fit perfectly into our long-term strategic plan for growth.
“The acquisition demonstrates our unique ability to add significant scale to our portfolio – expanding customer relationships and increasing opportunities for our growing Essentials platform.”
Nadeem Meghji, head of Blackstone Real Estate Americas, added: “Where you invest matters, and this transaction demonstrates the exceptional demand for high-quality warehouses. With near-record low vacancy, logistics remains a high conviction theme for us; we are proud owners of $100bn worth of warehouses in North America and $175bn around the world. And, of course, Prologis is a world-class company that knows this space as well as anyone.”
Prologis and Blackstone have completed more than a dozen transactions together in the past 11 years. The management teams at each company said they valued the relationship and the opportunities it creates to execute on their respective strategies across markets and cycles.
Prologis owns 1.2bn sqft of logistics real estate in 19 countries. This latest acquisition expands the company’s presence in key markets, including Atlanta, Baltimore/Washington DC, California (Southern California, Central Valley, SF Bay Area), Dallas, Las Vegas, New York/New Jersey, Phoenix and South Florida. The company plans to hold all of the properties acquired.
The transaction is expected to close by the end of the second quarter.
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