Giant industrial real estate investment trust Prologis will acquire competitor DCT Industrial Trust for $8.4 billion in stock and assumed debt, giving it significantly increased scale in key U.S. markets and the ability to better service the growing needs of its ecommerce clients.
“For some time, we have considered DCT’s realigned portfolio to be the most complementary to our own in terms of product quality, market position and growth potential,” said Prologis chairman and CEO Hamid Moghadam in a release. “This high level of strategic fit will allow us to capture significant scale economies immediately.”
Through the acquisition, Prologis will gain 71 million square feet of developed space that deepens its presence in high-growth markets where ecommerce fulfillment center space is limited and demand high, including Southern California, San Francisco Bay, New York/New Jersey, Seattle and South Florida.
The acquisition also includes 195 acres of land in pre-development, mostly in Seattle, Atlanta, South Florida and Southern California, with build-out potential of more than 2.9 million square feet, and 215 acres of land under contract or option, mostly in New York/New Jersey, Southern California, Northern California and Chicago, with a build-out potential of more than 3.3 million square feet.
“DCT markets are 100% aligned with our markets,” Moghadam told Bloomberg. “There’s perfect alignment between the portfolios. Think of DCT as a smaller, U.S.-focused version of Prologis. In the U.S. we’re very similar — the same kinds of customers; the same customers, in many cases.”
The companies don’t expect antitrust issues as their combined share in most domestic markets is less than 20%, DCT CEO Phil Hawkins told Bloomberg.