Prologis to Buy Duke for $26B

Hamid Moghadam, CEO, Prologis. Image courtesy of Prologis

Prologis will acquire Duke Realty in an all-stock deal valued at $26 billion, the companies announced on Monday morning. The agreement caps a months-long courtship that became public last month.

Expected to close during the fourth quarter, the acquisition would add significantly to Prologis’ 1 billion-square-foot global portfolio of properties and development projects. Prologis will gain a 153 million-square-foot nationwide portfolio in 19 major markets, including such key locations as Atlanta, Southern California, Chicago, Dallas, South Florida and New Jersey.

Prologis would also acquire Duke’s development pipeline, which comprises 11 million square feet valued at $1.6 billion. Also in the mix is a additional development potential. Duke currently controls or has under option 1,228 acres, with a potential build-out of 21 million square feet.

In a statement, Prologis Chairman & CEO Hamid Moghadam cited the quality of Duke’s portfolio and decade-long repositioning strategy as key reasons for its interest. The companies estimate that the deal has the potential to create $375 million to $400 million in earnings and value through synergies of the two companies. The vast majority–$300 million—would stem from additional development value, the companies said.

The announced value of the deal indicates that Prologis has sweetened its offer since its most recent proposal emerged. Today’s announcement comes one month after the Prologis went public in its pursuit, saying that multiple offers had been rejected. Before today’s definitive agreement, Prologis’ largest publicly known offer was a deal revealed on May 10 and estimated by the Wall Street Journal to be worth $24 billion.

If the acquisition closes as planned, it will be by far the largest in a series of recent enterprise-level deals completed by Prologis over the past four years. In February 2020, the REIT completed a $13 billion acquisition of Liberty Property Trust, a deal which expanded its portfolio by 108 million square feet and added a 4.9 million-square-foot development pipeline. That followed Prologis’ 2018 purchase of DCT Industrial Trust for $8.5 billion.

Stay tuned to CPE for more on this developing story.