Prologis to Buy Industrial Property Trust for $4B

Black Creek Group is the seller of the 37.5-million square foot portfolio, which is 96% leased.

A Prologis holding. Photo by Prologis.

DENVER and SAN FRANCISCO—Prologis and Denver-based Black Creek Group have come to an agreement in which Prologis will buy Black Creek’s investment platform Industrial Property Trust in an all-cash transaction of $3.99 billion.

The deal includes 236 properties located across 24 geographic areas, or put another way, 37.5 million square feet of industrial holdings that are currently 96% leased. The deal does not include IPT’s minority ownership interests in its two unconsolidated joint venture partnerships. IPT’s board of directors have approved the transaction.

Prologis expects to capture significant cost and revenue synergies from the transaction, according to Eugene F. Reilly, chief investment officer. Specifically, it will expand the REIT’s position in Southern California, the San Francisco Bay Area, Chicago, Atlanta, Dallas, Seattle and New Jersey. Following the closing, Prologis intends to hold the portfolio through either one or both of its US co-investment ventures. In addition, Prologis says it does not expect to add any corporate overhead and, as a result, the transaction is expected to lower general and administrative expenses as a percentage of assets under management by approximately 4%.

“We have worked diligently to create a balance sheet that allows us to take advantage of opportunities such as this, and we remain committed to maintaining our financial strength,” said CFO Thomas S. Olinger, in prepared remarks. “This accretive transaction advances our strategy of using our scale to grow earnings with no incremental overhead.”

This transaction also represents the latest sale of a real estate platform by Black Creek Group. In the company’s 25-year history, it has sponsored 24 investment platforms and has exited six that were populated by real estate assets either through a liquidity event or an IPO on the New York Stock Exchange.

Morgan Stanley & Co. and Eastdil Secured are acting as financial advisors to Industrial Property Trust Inc. CBRE, Inc. is acting as real estate advisor to IPT. Hogan Lovells is acting as legal advisor to IPT.