Warehouse suppliers are racing to add scale as the expansion of e-commerce drives demand for industrial house close to key logistics hubs.
one of many world’s largest house owners of business actual property, mentioned Sunday it might purchase rival
Liberty Property Trust
and its 107 million sq. toes of logistics house in an all-stock transaction valued at about $12.6 billion, together with debt.
The deal for Wayne, Pa.-based Liberty is Prologis’s third acquisition previously 18 months, and can add to a Prologis portfolio that as of Sept. 30 counted about 797 million sq. toes of business actual property in 19 nations.
Prologis shares have been down four.9% to $86.44 in Monday afternoon buying and selling, whereas Liberty’s shares climbed 15% to $58.15.
The acquisition, which Prologis expects to shut within the first quarter of 2020, comes as private-equity big
Blackstone Group Inc.
’s real-estate funds have snapped up practically $25 billion of warehouse portfolios this yr.
“Both of them are in a race to create ultimately billion-square-foot platforms globally,” mentioned
industrial-division president for the Americas at real-estate companies agency
Jones Lang LaSalle Inc.
Neither Prologis nor Blackstone have the flexibility to nook the U.S. industrial real-estate market, which encompasses practically 14 billion sq. toes of stock, Mr. Meyer mentioned. But creating scale within the greatest logistics markets and gateways to main inhabitants facilities permits Prologis to supply “one-stop shopping in big key markets” to extra simply meet demand from shoppers that need to ramp up operations in locations resembling Southern California or Pennsylvania, he mentioned.
Liberty’s properties embrace websites in key distribution hubs resembling Pennsylvania’s Lehigh Valley, Houston, Chicago and Southern California.
“We’ve been trying to grow our presence in the Lehigh Valley for years,” Prologis Chief Investment Office
Eugene F. Reilly
mentioned on a Monday name with buyers. “The combined portfolio going forward in the Lehigh Valley totals 26 million square feet, with additional land to build 4 million square feet in the future.”
The deal would give Prologis 5.1 million sq. toes of developments in progress throughout the U.S., 1,684 acres of land for future logistics growth and practically 5 million sq. toes of workplace house.
The firm intends to unload about $three.5 billion in property, together with $2.eight billion of nonstrategic logistics properties and $700 million of workplace properties.
Changes in shopper procuring patterns have been reshaping logistics networks, driving up demand for warehouse house, particularly for websites close to main inhabitants facilities as companies push to ship items extra rapidly to shoppers.
The offers come amid indicators that the marketplace for warehousing and distribution house could also be leveling off. This yr, new constructing building is on monitor to outpace total demand by about 70 million sq. toes, in accordance to Cushman & Wakefield, though the real-estate companies firm mentioned the nationwide common emptiness price for industrial actual property remained at a historic low of four.eight%.
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