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Wednesday, February 8, 2023

Prologis to buy Duke Realty in $26 billion deal

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The Chicago area is Duke’s second-largest market, accounting for 13.9 million square feet of industrial space, 9.9% of the REIT’s portfolio, according to its annual report. Prologis and its partners own 55 million square feet in the Chicago area, also its second-largest market, representing 10% of its portfolio, according to the REIT’s annual report.

Prologis, which owns industrial warehouses across the US and other countries, went public with a $24 billion acquisition offer in early May after months of private pushback from Duke. That initial bid was rejected by Duke, which called the offer “insufficient.” Duke shares climbed as high as 7.5% in pre-market trading in New York Monday. Prologis stock was down as much as 4.1%. 

“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade,” Prologis Chief Executive Officer Hamid Moghadam said in the statement. “They have built an exceptional portfolio in the U.S. located in geographies we believe will outperform in the future.”

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Prologis will gain properties in areas including Southern California, New Jersey, South Florida, and Dallas. The deal will also give the company 11 million square feet of real estate that’s being currently developed. 

Duke investors will receive 0.475 Prologis shares for each Duke share they own. The companies expect to close the deal in the fourth quarter, according to the statement. 

“We have always respected Prologis, and after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses,” Duke CEO Jim Connor said. 

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