Prologis Inc. (NYSE: PLD) is paying $3.1 billion to acquire nearly 14 million square feet of industrial properties from real estate funds affiliated with Blackstone (NYSE:BX).
The price on the all-cash transaction represents an approximately 4% cap rate in the first year and a 5.75% cap rate when adjusting to today’s market rents. Prologis currently owns 1.2 billion square feet of logistics real estate in 19 countries and the acquisition expands the company’s presence in several key U.S. markets including Atlanta, Baltimore/Washington DC, California, Dallas, Las Vegas, New York/New Jersey, Phoenix and South Florida.
“We’re pleased to be working with Blackstone on this deal,” said Prologis President Dan Letter. “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 $100 billion of warehouses in North America and $175 billion in total around the world. And, of course, Prologis is a world-class company that knows this space as well as anyone.”
