Signage outside the Prologis warehouse occupied by Kuene + Nagel on Sunday, November 7, 2021 in Redlands, California, US. The fallout from the global supply-chain crisis is closing US ports, pushing warehouses to capacity and forcing logistics managers to scramble. space.
Roger Kisby | Bloomberg | Getty Images
warehouse huge prologis said on Monday it would acquire its smaller rival Duke Realty In a vote of confidence for the red hot industrial real estate sector, in an all-stock deal worth nearly $26 billion, including debt.
The announcement came after Duke Realty in May rejected Prologis’s nearly $24 billion buyout offer, calling it insufficient.
Duke Realty had a market capitalization of around $19.1 billion as of Friday’s market close. Its shares are down 24% so far this year, while Prologis shares are down a little more than 30%.
Industrial real estate owners have come under pressure on fears that demand for warehouse space could cool as retailers’ e-commerce activity falls from a pandemic high. last month, The Wall Street Journal reports that Amazon was looking to sub-lease at least 10 million square feet To potentially liquidate or renegotiate some of its warehouse space and some of its leases. The news shook investors in the sector, which had been in a bad shape in recent years.
companies from walmart And target To dick sporting goods We are also investing in ways to use our stores as mini fulfillment centers closer to customers’ homes.
Prologis, which has a market cap of about $87 billion, saw its shares fall more than 7% in early trading Monday after the news. Shares of Duke Realty rose nearly 1%.
Prologis controls approximately 1 billion square feet of warehouse and distribution centers used by companies, including heroine, home depot And fedex, Duke Realty owns and operates approximately 160 million square feet of industrial real estate in 19 major US logistics markets.
The board of directors of both the companies have unanimously approved the deal. stated in a press release,
Under the terms of the agreement, Duke Realty shareholders will receive 0.475x of the Prologis share for each Duke Realty share they own. The transaction is expected to close in the fourth quarter.
Prologis said the transaction will allow it to acquire assets in key geographies, including Southern California, New Jersey, South Florida, Chicago, Dallas and Atlanta.
It said it plans to hold 94 per cent of Duke Realty’s assets and exit a market.
In recent years, Prologis has grown its real estate footprint through acquisitions. It bought Liberty Property Trust in 2020 and DCT Industrial Trust in 2018.
It is not the only player looking for more logistics facilities. earlier this year, Industrial Logistics Properties Trust Bought Monmouth Real Estate Investment Corp. in a deal valued at approximately $4 billion.
