Prologis offers $24B for Duke Realty in industrial megadeal

SF-based logistics specialist would add more than 160M sf with acquisition

Prologis CEO Hamid Moghadam and Duke Realty CEO James Connor (Prologis, Duke)
Prologis CEO Hamid Moghadam and Duke Realty CEO James Connor (Prologis, Duke)

Prologis has proposed to buy Duke Realty for $24 billion in an all-stock deal that would add about 160 million square feet to its industrial real estate portfolio.

The San Francisco-based logistics specialist offered to buy the REIT for $61.68 per Duke Realty share, Prologis announced on Tuesday. Yesterday, Duke Realty’s share price closed at $47.71. Shares of Duke Realty have jumped about 12 percent since then.

With the deal, Prologis would acquire more than 160 million square feet of industrial real estate across the U.S. Prologis currently owns about 1 billion square feet of logistics space.

Prologis said it sent a letter to Duke Realty, which is based in Indianapolis, offering a buyout in November. Since then, the company has repeatedly sent out higher offers to Duke Realty, though the REIT has “not substantively engaged,” Prologis said in an announcement. Duke most recently rejected an offer from Prologis on May 3.

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With Prologis’ most recent stock offer, Duke Realty shareholders would own about 19 percent of the combined company, Prologis CEO Hamid Moghadam said in a letter to Duke Realty.

“We are confident that the proposed combination will be a win-win for our respective shareholders,” the CEO said in a statement.

If the Duke Realty buy goes through, it would be one of Prologis’ most expensive acquisitions. In 2020, the company bought Liberty Property Trust for about $13 billion. That deal included about 108 million square feet of existing logistics space, as well as 1,750 acres of land for future development and 5 million square feet of developments in progress.

In 2018, Prologis purchased DCT Industrial Trust for $8.5 billion, a deal that added 71 million square feet of industrial space to Prologis’ portfolio.

Prologis would also assume a substantial portfolio along the West Coast. In Southern California’s Inland Empire, Duke Realty is building a 1.2 million-square-foot development that was recently pre-leased to third-party logistics firm Lecangs.

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