SAN FRANCISCO AND NEW YORK CITY — Prologis Inc. (NYSE: PLD) has agreed to acquire a 14 million-square-foot industrial portfolio from Blackstone (NYSE: BX) for $3.1 billion. The all-cash deal is expected to close in the coming days.
The names and locations of the properties were not disclosed, but The Wall Street Journal reports that the portfolio encompasses about 70 assets in gateway markets such as Atlanta, Dallas and Washington, D.C., as well as in areas of New York, California and South Florida.
The portfolio is collectively leased to 127 different tenants. Of those, 50 have preexisting relationships with Prologis, and 77 are effectively new customers. San Francisco-based Prologis now owns about 1.2 billion square feet of industrial assets across 19 countries.
Over the past 11 years, Prologis and New York-based Blackstone have collaborated on more than a dozen transactions. With this deal, the price translates to a capitalization rate of approximately 4 percent based on net operating income in the first year and a 5.75 percent cap rate when adjusting to today’s market rents.
“Where you invest matters, and this transaction demonstrates the exceptional demand for high-quality warehouses,” says Nadeem Meghji, head of Blackstone Real Estate Americas.
Blackstone retained a battery of financial advisors to assist with this deal, including Eastdil Secured, Barclays, Bank of America, Citigroup, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, PJT Partners and Wells Fargo. Simpson Thacher & Bartlett LLP served as Blackstone’s legal advisor.
— Taylor Williams