Prologis, main Amazon warehouse landlord, to shop for Duke Realty for $26 billion

Signage outdoor a Prologis warehouse occupied by way of Kuehne + Nagel in Redlands, California, U.S., on Sunday, Nov. 7, 2021. Fallout from the worldwide supply-chain disaster is clogging U.S. ports, pushing warehouses to capability and forcing logistics managers to scramble for area.

Roger Kisby | Bloomberg | Getty Pictures

Warehouse large Prologis stated Monday that it’s going to achieve its smaller rival Duke Realty in an all-stock deal valued at about $26 billion, together with debt, in a vote of self assurance for the red-hot commercial actual property sector.

The announcement comes after Duke Realty in Might rejected a just about $24 billion buyout be offering from Prologis, calling it inadequate.

Duke Realty had a marketplace capitalization of about $19.1 billion, as of Friday’s marketplace shut. Its stocks have dropped 24% up to now this yr, whilst Prologis’ inventory is down a bit of greater than 30%.

Commercial actual property homeowners have come below drive with fears mounting that call for for warehouse area might be cooling as outlets’ e-commerce task drops off from a Covid pandemic top. Remaining month, The Wall Side road Magazine reported that Amazon used to be having a look to sublease a minimum of 10 million sq. ft of its warehouse area and to doubtlessly finish or renegotiate a few of its rentals. This information spooked buyers within the sector that were on a tear in recent times.

Firms from Walmart and Goal to Dick’s Carrying Items have additionally been making an investment in techniques to make use of their retail outlets as mini achievement facilities which might be nearer to consumers’ houses.

Prologis, which has a marketplace price of just about $87 billion, watched its stocks fall greater than 6% in afternoon buying and selling Monday following the scoop. Duke Realty stocks rose over 2%.

Prologis controls kind of 1 billion sq. ft of warehouses and distribution facilities utilized by firms together with Amazon, House Depot and FedEx. Duke Realty owns and operates about 160 million sq. ft of commercial actual property in 19 main U.S. logistics markets.

Each firms’ forums of administrators have unanimously licensed the transaction, a press liberate stated.

Beneath the phrases of the settlement, Duke Realty shareholders will obtain 0.475 of a Prologis proportion for each and every Duke Realty proportion they personal. The transaction is anticipated to near within the fourth quarter.

Prologis stated the transaction will permit for it to achieve homes in key geographic areas and towns together with Southern California, New Jersey, South Florida, Chicago, Dallas and Atlanta.

It stated it plans to carry 94% of the Duke Realty property and go out one marketplace.

Lately, Prologis has bulked up its actual property footprint via acquisitions. It purchased Liberty Belongings Consider in 2020 and DCT Commercial Consider in 2018.

It’s not the one participant that has been having a look to scoop up extra logistics amenities, both. Previous this yr, Commercial Logistics Homes Consider purchased Monmouth Actual Property Funding Corp. in a deal valued at about $4 billion.