Home News Prologis Reaches $26B Deal To Buy Duke Realty

Prologis Reaches $26B Deal To Buy Duke Realty

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The world’s largest industrial owners are poised to achieve the largest expansion ever.

Prologis Agreed to acquire Dew Cleary Corporation.. Two listed REITs were announced on Monday in an all-equity transaction valuing the latter at $ 25.6 billion, including debt. Duke shareholders will receive 0.475 shares of Prologis per Duke owned, perhaps in the fourth quarter, when the transaction is completed.

The deal, which the boards of directors of both companies unanimously agreed to, but still awaiting shareholder approval, is the culmination of several months of Duke’s courtship by Prologis. Recently offered 0.466 shares per Duke in May, for a total of $ 24 billion. When Prologis’ latest offer was formalized on Friday, it represents a 31% premium on Duke’s public value, according to a presentation to investor Prologis released on Monday.

According to the presentation, when the transaction is completed, Prologis will add 165 million science fiction assets, all in the United States, to its global portfolio, which has just broken 1BSF this year. Prologis plans to withdraw from one of Duke’s markets, but owns 94% of Duke’s portfolio.

In addition to Duke’s completed warehouse portfolio, which occupied more than 98% at the time of the announcement, Prologis plans to acquire a distribution center worth 11 million science fiction under construction, which could be worth a total of $ 1.1 billion. Said in the announcement that there is. Duke also owns land with a potential $ 3.5 billion worth of additional 21 million SF warehouse development rights.

This acquisition could be important in keeping Prologis at the top of the list of the world’s largest owners of industrial real estate. Blackstone has accumulated 950 million science fiction since it entered the asset class just 10 years ago. Quartz report..

Mergers and acquisitions have become the most effective way to expand our warehouse asset portfolio in recent years as Prologis expands its acquisition goals.Prologis Paid over $ 8 billion get DCT Industrial Trust In 2018. In 2019, it’s Paid over $ 12 billion buy Liberty Property Trust.. Both purchases were all-stock transactions. According to an investor presentation, Prologis paid a premium of 15.6% and 21.3% on the public stock prices of the DCT and Liberty at the time.


Prologis-owned warehouse in Hayward, California

Prologis expects to achieve a value increase of $ 310 million to $ 370 million within a year of completing the acquisition of Duke, 300 million from the expected rent increase for Duke tenants. Dollars will be generated.Tenants whose leases expired last five years in Southern California, New Jersey, and Pennsylvania, three of the fastest growing markets for the Prologis portfolio from this transaction. Faced with a rent increase of over 60%.. Renewals are even more expensive for tenants whose 10-year lease expires.

The soundness of the world economy Significant deterioration In the last few months, Prologis still expects 2022 to be different Years of major rent growth For in-place tenants, corporate leadership is stated in the first quarter earnings announcement. According to Prologis researchers, the pandemic-induced supply chain renewal by businesses of all sizes has not caught up with even the significant increase in construction, setting a precedent for new warehouse space pipelines to be thinner than ever. There was no demand. Said at the May webinar..

This all happens in the context of Amazon. Amazon has been the largest driver of industrial demand for many years, Plan to put at least 10 MSF We are planning to sublease the leased warehouse portfolio as we admit that we are a little enthusiastic about expanding the pandemic.Prologis owns more than Amazon leased industrial real estate Other Companies..

As an Amazon executive who led the expansion ResignedAnd as a company Delay the scheduled opening Of the several modern distribution centers, the number of potential tenants Amazon has overpriced during extended drives Deep pool of potential sub-tenants And the opportunity to backfill, the heads of both Prologis and Duke said in Thursday trade event..

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