Key Takeaways
- • Prologis acquired nearly 14 million square feet of industrial properties from Blackstone-affiliated opportunistic real estate funds for $3.1 billion in cash, representing the year's largest industrial property deal as of the announcement date.
- • The South Florida component of the transaction included two warehouses totaling approximately 341,376 square feet for $92 million ($50.9 million for a 187,880-square-foot Miami-Dade property and $41.1 million for a 153,496-square-foot Pompano Beach facility).
- • The acquisition price represents a 4% cap rate in year one and 5.75% when adjusted to current market rents, structured across approximately 70 properties spanning key logistics markets including Atlanta, Washington DC, California, Dallas, Las Vegas, New York/New Jersey, Phoenix, and South Florida.
- • The deal expands Prologis' total portfolio to 1.2 billion square feet across 19 countries and reflects strong conviction in logistics despite industrial market cooling, with the REIT maintaining approximately 99% occupancy across its existing portfolio.
- • Prologis and Blackstone have completed more than a dozen transactions over 11 years, underscoring an established institutional relationship for executing real estate strategies across market cycles.
Summary
Prologis announced a definitive agreement to acquire nearly 14 million square feet of industrial properties from opportunistic real estate funds affiliated with Blackstone for $3.1 billion in an all-cash transaction. The deal, announced on June 26, 2023, represented the largest industrial property transaction of that year and demonstrated continued appetite for high-quality logistics assets despite broader market cooling.
The portfolio comprises approximately 70 properties distributed across major U.S. logistics hubs, with geographic exposure spanning Atlanta, Baltimore/Washington DC, Southern California, San Francisco Bay Area, Dallas, Las Vegas, New York/New Jersey, Phoenix, and South Florida. The acquisition price reflected an approximately 4% cap rate in the first year and 5.75% cap rate when adjusted to current market rents. Prologis committed to holding 100% of the acquired properties, integrating them into its long-term strategic growth plan.
Within the broader portfolio, Prologis acquired two South Florida warehouses for $92 million. The larger transaction involved a 187,880-square-foot industrial property in Miami-Dade County at 10763 NW 123rd Street for $50.9 million ($271 per square foot), which Blackstone had originally acquired in 2011 for $3.3 million and completed in 2013. The second transaction secured a 153,496-square-foot warehouse in Pompano Beach at 1800 SW 13th Court for $41.1 million ($268 per square foot)—the Cypress Pointe Distribution Center, which Blackstone purchased in 2019 for $9.6 million and completed in 2021. The Pompano facility was fully leased to JFC International, a Kikkoman subsidiary, and Reload Floating Energy.
Dan Letter, president of Prologis, characterized the properties as "complementary to our portfolio" and demonstrating "our unique ability to add significant scale." Nadeem Meghji, head of Blackstone Real Estate Americas, emphasized the strategic alignment, noting that Blackstone maintains approximately $100 billion in warehouse holdings across North America and $175 billion globally. The transaction underscored persistent tightness in logistics markets, with near-record low vacancy rates offsetting broader industrial market softness—demand for industrial space had declined 40% in the first quarter of 2023, yet Prologis' existing portfolio maintained approximately 99% occupancy.
The transaction reflected an 11-year institutional relationship between the companies, with more than a dozen prior transactions completed across various market conditions. The acquisition was expected to close in the latter part of the quarter in which it was announced.
The portfolio comprises approximately 70 properties distributed across major U.S. logistics hubs, with geographic exposure spanning Atlanta, Baltimore/Washington DC, Southern California, San Francisco Bay Area, Dallas, Las Vegas, New York/New Jersey, Phoenix, and South Florida. The acquisition price reflected an approximately 4% cap rate in the first year and 5.75% cap rate when adjusted to current market rents. Prologis committed to holding 100% of the acquired properties, integrating them into its long-term strategic growth plan.
Within the broader portfolio, Prologis acquired two South Florida warehouses for $92 million. The larger transaction involved a 187,880-square-foot industrial property in Miami-Dade County at 10763 NW 123rd Street for $50.9 million ($271 per square foot), which Blackstone had originally acquired in 2011 for $3.3 million and completed in 2013. The second transaction secured a 153,496-square-foot warehouse in Pompano Beach at 1800 SW 13th Court for $41.1 million ($268 per square foot)—the Cypress Pointe Distribution Center, which Blackstone purchased in 2019 for $9.6 million and completed in 2021. The Pompano facility was fully leased to JFC International, a Kikkoman subsidiary, and Reload Floating Energy.
Dan Letter, president of Prologis, characterized the properties as "complementary to our portfolio" and demonstrating "our unique ability to add significant scale." Nadeem Meghji, head of Blackstone Real Estate Americas, emphasized the strategic alignment, noting that Blackstone maintains approximately $100 billion in warehouse holdings across North America and $175 billion globally. The transaction underscored persistent tightness in logistics markets, with near-record low vacancy rates offsetting broader industrial market softness—demand for industrial space had declined 40% in the first quarter of 2023, yet Prologis' existing portfolio maintained approximately 99% occupancy.
The transaction reflected an 11-year institutional relationship between the companies, with more than a dozen prior transactions completed across various market conditions. The acquisition was expected to close in the latter part of the quarter in which it was announced.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.