Prologis will expand its footprint via its acquisition of Duke Realty.
The world’s largest warehouse operator is getting bigger.
Prologis will acquire smaller rival Duke Realty in an all-stock deal valued at about $26 billion, including debt. Both companies are major Amazon warehouse landlords. The deal comes even as e-commerce demand appears to be slowing and as Amazon is reportedlylooking to shed some warehouse space.
The Prologis portfolio includes some 1 billion square feet of warehouses and distribution centers in 19 countries. With the transaction, the company said it is gaining high-quality properties for its portfolio in key geographies, including Southern California, New Jersey, South Florida, Chicago, Dallas and Atlanta.
Duke Realty owns and operates 153 million square feet of industrial real estate in 19 major U.S. logistics markets. It also has 11 million square feet of development in progress.
“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade," said Prologis co-founder, CEO and chairman Hamid R. Moghadam. "They have built an exceptional portfolio in the U.S. located in geographies we believe will outperform in the future. That will be fueled by Prologis' proven track record as a value creator in the logistics space. We have a diverse model that allows us to deliver even more value to customers."
Prologis said it plans to hold about 94% of Duke Realty's assets and exit one market.
"In addition to generating significant synergies, the combination of these portfolios will help us deliver more services to our customers and drive incremental long-term earnings growth," said Prologis CFO Tim Arndt.