Prologis to Acquire 14 Million Square Feet of Blackstone Industrial Properties for $3.1 Billion.
June 26, 2023: Logistics real estate leader Prologis has announced a definitive agreement to acquire nearly 14 million square feet of industrial properties from Blackstone-affiliated real estate funds. The Deal, valued at $3.1 billion, will be funded by cash. The acquisition price represents an approximate 4% cap rate in the first year, adjusting to a 5.75% cap rate based on today’s market rents.
Dan Letter, President of Prologis, expressed satisfaction with the Deal, highlighting the properties’ high quality and alignment with the company’s long-term growth plan. He emphasized the potential for expanding customer relationships and opportunities for their growing Essentials platform.
Blackstone’s Head of Real Estate Americas, Nadeem Meghji, acknowledged the importance of strategic investments in high-quality warehouses. With significant ownership of warehouses in North America and globally, he highlighted logistics as a high-conviction theme. Meghji praised Prologis as a world-class company with deep expertise in the sector.
The transaction builds on the longstanding partnership between Prologis and Blackstone, which have completed multiple deals over the past 11 years. The leadership of both companies values the relationship and the opportunities it provides to execute their respective strategies across different markets and cycles.
Prologis owns 1.2 billion square feet of logistics real estate in 19 countries. This acquisition will enhance their 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. Prologis intends to retain all the acquired properties, strengthening relationships with 50 existing customers and adding 77 new customers.
The transaction is expected to be completed by the end of the second quarter.
Financial advisors for Blackstone include 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. Legal advisory services were provided by Simpson Thacher & Bartlett LLP.
About Prologis: Prologis, Inc. is a global leader in logistics real estate, focusing on high-barrier, high-growth markets. With approximately 1.2 billion square feet (113 million square meters) of properties and development projects across 19 countries, Prologis leases modern logistics facilities to around 6,600 customers in the business-to-business and retail/online fulfillment sectors.
About Blackstone Real Estate: Blackstone is a renowned global investor with a business established in 1991. The company manages investor capital amounting to $332 billion. As the largest commercial real estate owner worldwide, Blackstone operates assets across various geographies and sectors, including logistics, residential, office, hospitality, and retail.
Their opportunistic funds seek undermanaged, well-located assets globally. Blackstone’s Core+ business focuses on stable real estate assets through institutional and income-focused strategies, including Blackstone Real Estate Income Trust, Inc. (BREIT), a U.S. non-listed REIT, and a European yield-oriented strategy. Additionally, Blackstone Real Estate manages one of the leading global real estate debt businesses, providing comprehensive financing solutions through Blackstone Mortgage Trust (NYSE: BXMT).