Prologis to acquire 14M sq. ft. Blackstone industrial portfolio in $3.1B deal

Prologis on Monday said it will acquire nearly 14 million square feet of industrial properties from Blackstone‘s opportunistic real estate funds for $3.1 billion, funded by cash. The acquisition price represents an approximately 4% cap rate in the first year and a 5.75% cap rate when adjusting to today’s market rents.

Prologis is the industry giant when it comes to warehouses; it owns 1.2 billion square feet of warehouse space across four continents. Prologis and Blackstone have completed more than a dozen transactions together in the past 11 years.

“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,” Dan Letter, president, Prologis, said. “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, said: “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.”

Prologis currently owns 1.2 billion square feet of logistics real estate in 19 countries. This acquisition expands the company’s presence in key markets, including New Jersey/New York, Atlanta, Baltimore/Washington, D.C., California (Southern California, Central Valley, San Francisco Bay Area), Dallas, Las Vegas, Phoenix and South Florida. The company plans to hold all of the properties acquired. This deal expands Prologis’ relationship with 50 existing customers and adds 77 new customers.

The transaction is currently expected to close by the end of the second quarter.

Eastdil Secured, Barclays, BofA Securities, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, PJT Partners and Wells Fargo acted as financial advisers to Blackstone, and Simpson Thacher & Bartlett LLP acted as legal adviser.