Prologis to Acquire Liberty Property Trust for $12.6B

Hamid Moghadam, Chairman & CEO, Prologis. Image courtesy of Prologis

One of the world’s most powerful real estate owner-operators is about to get much bigger. Industrial giant Prologis Inc. has struck a deal to acquire Liberty Property Trust in an all-stock transaction valued at $12.6 billion, marking one of the largest-ever logistics deals. On an owned and managed basis, the acquisition involves a 107 million-square-foot logistics operating portfolio, along with 5.1 million square feet of projects under development, expanding Prologis’s platform in target markets including Chicago, Houston, Southern California, New Jersey and central Pennsylvania.

The transaction, expected to close in the first quarter of 2020, includes 1,684 acres of logistics sites with 19.7 million square feet of build-out potential, as well as a 4.9 million-square-foot portfolio of office buildings in operation and under development. In a statement released Sunday, Prologis said that it will also dispose of roughly $3.5 billion of assets on a pro-rata share basis, including $2.8 billion of logistics properties deemed non-strategic and $700 million of office properties.

Prologis had an estimated portfolio of around 797 million square feet in 19 countries as of Sept. 30. Liberty Property Trust, which like Prologis is a New York Stock Exchange-listed REIT, has a total operating portfolio of 112 million square feet that serves 1,200 tenants. According to the joint announcement by the firms, the portfolio being acquired has an 87 percent overlap with key markets.

The transaction follows a flurry of large-scale logistics deals this year, most notably Blackstone’s $18.7 billion acquisition of a U.S. industrial portfolio in June. Other major transactions have included Toronto Stock Exchange-listed WPT Industrial’s purchase of more than $368 billion of U.S. logistics assets in two separate deals in April and October, and Broadstone Net Lease’s acquisition of 23 properties for nearly $736 million in September.