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Prologis pays $3.1B for Blackstone industrial portfolio

All-cash deal for nearly 14M sf expected to close this month

From left: Prologis chair Hamid Moghadam and Blackstone chair Stephen Schwarzman (Getty, Prologis, Blackstone)
From left: Prologis chair Hamid Moghadam and Blackstone chair Stephen Schwarzman (Getty, Prologis, Blackstone)

The world’s largest industrial property company is set to grow again after striking a multi-billion dollar deal with the Blackstone Group.

Prologis agreed to buy a portfolio of nearly 14 million square feet of industrial space from Stephen Schwarzman’s firm for $3.1 billion, the Wall Street Journal reported. The deal is expected to close by the end of the month. 

The industrial portfolio consists of approximately 70 properties across the country. It touches upon major markets, including Dallas, South Florida and the New York City metro area.

The industrial market has been able to withstand the year of rising interest rates better than other commercial sectors. In the first quarter, industrial property owned by companies specializing in the sector experienced “solid market rent growth,” according to Green Street.

The times aren’t nearly as good as the sector’s spectacular rise at the start of the pandemic, however.

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Amazon, one of the largest leaseholders of industrial property, has pulled back from its rampant growth in the category. CommercialEdge data show that while rent and demand rose last year, industrial sales fell 30 percent. 

San Francisco-based Prologis owns more than 1.2 billion square feet of industrial space across the globe. Last year, it made one of the most significant industrial acquisitions in recent memory, acquiring Duke Realty in a deal ultimately valued at $23 billion, making it the largest commercial property deal since the pandemic began.

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While Blackstone determined this was the right time to sell the industrial portfolio, it is still focused in the sector, holding a global portfolio valued at $175 billion. There are no plans for the firm to stop buying warehouses or distribution centers either, particularly through its opportunistic funds, which are responsible for the portfolio being sold to Prologis.

A Blackstone subsidiary last year paid nearly $150 million for an industrial and office portfolio in Waukegan and Zion, one of the largest industrial property sales of the year in Chicago.

— Holden Walter-Warner

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Blackstone GroupIndustrial MarketIndustrial Real EstatePrologis