Prologis acquires Blackstone industrial portfolio in $3.1bn deal

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

Prologis acquires Blackstone industrial portfolio in $3.1bn deal
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Prologis and Blackstone announced a definitive agreement for Prologis to acquire nearly 14 million square feet of industrial properties from opportunistic real estate funds affiliated with Blackstone 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.

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

"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," said Dan Letter, President, Prologis. "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 and Blackstone have completed more than a dozen transactions together in the past 11 years. Leadership at each company values the relationship and the opportunities it creates to execute on their respective strategies across markets and cycles.

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 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. This deal expands Prologis' relationship with 50 existing customers and adds 77 new customers.

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 advisors to Blackstone, and Simpson Thacher & Bartlett LLP acted as legal advisor.

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