Prologis, Norges Close on KTR Portfolio

SAN FRANCISCO—Prologis Inc. and joint venture partner Norges Bank Investment Management have completed their $5.9-billion acquisition of KTR Capital Partners and its affiliates. First announced in late April, the 55/45 JV adds about 70 million square feet to PLD's US industrial portfolio, including a land bank with a build-out potential of 6.7 million square feet.

“We're interested in acquiring assets in the US only when we see a close alignment with our own holdings,” says Hamid Moghadam, PLD's chairman and CEO. He adds that the KTR acquisition is “immediately accretive” to core funds from operations, “and will also deliver long-term value to our shareholders through incremental NOI from the lease-up of the operating and development portfolios.” The San Francisco-based industrial REIT is managing the portfolio on behalf of the JV, Prologis US Logistics Venture.

The portfolio consists of 322 operating properties located across 17 states. When the JV was first announced, PLD said the KTR portfolio was highly complementary to its existing holdings, enhancing in particular its footprint across Southern California, New Jersey, Chicago, South Florida, Seattle and Dallas.

NBIM said in April that it would acquire its 45% interest for $2.3 billion; PLD says its share is valued at approximately $3.2 billion. The portfolio is encumbered with $700 million in mortgage debt.

Subsequent to announcing the KTR partnership, NBIM further boosted its US industrial presence via a smaller-scale JV with Prologis on two logistics properties at 4101-4601 6th Avenue So. in Seattle. That JV is valued at $63.3 million. Manager of the Norwegian Government Pension Fund Global, NBIM says about 35% of its investments globally are in real estate.