The Real Deal New York

Prologis to buy rival warehouse REIT with NY, NJ and Cali presence for $8.4B

DCT Industrial Trust has a 71M sf portfolio
April 30, 2018 09:15AM

Prologis CEO Hamid Moghadam

Warehouse landlord Prologis is buying rival logistics owner DCT Industrial Trust for $8.4 billion in stock, giving the company more exposure to key markets like New York, southern California and south Florida.

The deal, which is expected to close in the third quarter, gives Prologis an additional 71 million square feet in key areas where online shopping is driving demand for warehouse space, Bloomberg reported.

“Land is hard to come by in high-rent markets where warehouse demand is especially high,” said Lindsay Dutch, an analyst at Bloomberg Intelligence. “An acquisition of DCT increases Prologis’s exposure to several key, high-rent markets like Southern California and northern New Jersey.”

DCT’s portfolio includes 7.1 million square feet of development, redevelopment and value-add projects, with 195 acres in the predevelopment stage mostly in south Florida and southern California, as well as in Seattle and Atlanta. That would represent a little more than 2.9 million square feet once built-out.

There are another 215 acres – or 3.3 million square feet built-out – under contract or option. Most of that is in the New York and New Jersey area, along with Chicago and California.

Prologis will assume DCT’s debt, and the offer represents a premium of about 16 percent over DCT’s closing price of $58.75 on Friday. Prologis recently backed out of a deal to buy a massive FedEx warehouse in Maspeth, Queens for $265 million[Bloomberg]Rich Bockmann