DENVER AND NEW YORK CITY — Denver-based ProLogis has entered into a definitive agreement to sell several assets to New York City-based Blackstone Real Estate Advisors for $1.02 billion. The assets include an industrial portfolio, its interest in a hotel property and its interests in three property funds.
The portfolio includes approximately 180 industrial properties totaling approximately 23 million square feet. The properties are located across the nation in such major markets as Atlanta, Baltimore, Chicago, Cincinnati, Dallas, Denver, Houston, Las Vegas, Los Angeles, Orlando, Phoenix and San Francisco. The portfolio is 95 percent leased with an average lease term of 34 months. The weighted average age of the properties is 23 years. ProLogis will retain a preferred equity interest of approximately $190 million in the Blackstone entity acquiring the portfolio.
The hotel, which is being acquired by Blackstone affiliate Hilton Worldwide, is the Hilton New Orleans Riverside. ProLogis is selling its 25 percent interest in the hotel and an indirect interest in an adjacent land parcel for approximately $100 million. Following the closing, Hilton Worldwide will wholly own the property.
Finally, Blackstone is acquiring a 20 percent interest in ProLogis North American Property Funds VI through VIII. The three funds own a total of 75 properties in 11 statees.
The transactions are expected to close in mid-November. ProLogis had initially projected to earn proceeds of $1.3 to $1.5 billion got 2010. With the closing of the Blackstone deal and the company's $600 million in previously announced dispositions, ProLogis will generate $1.6 billion in gross proceeds this year.
— Coleman Wood