Warehouse REIT Prologis To Buy Duke Realty Corp in Record-Setting Deal

Prologis, a real estate investment trust (REIT), has announced that it will acquire Duke Realty Corp for about $26 billion, including debt. The all-stock deal would be one of the largest in the REIT industry.

Duke shareholders will receive 0.475 of a Prologis share for each share held, as part of the transaction.

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Previously, Duke rejected two offers made by Prologis, one valued at $23.7 billion and the other in which the terms were not disclosed.

In 2021, deals involving REITs broke records at $140 billion, spurred by the post-pandemic recovery, a strong housing market, and availability of cheap capital due to low interest rates. A year earlier, REIT deals amounted to just $17 billion, real estate services provider JLL told Reuters.

Indianapolis-based Duke Realty controls more than 150 million square feet of commercial real estate in 548 properties in U.S. markets, including Atlanta, Dallas, Chicago, Southern California, and Columbus. Prologis controls about 1 billion square feet of warehouse properties, development projects, and distribution centers used by companies including Amazon, Home Depot, and FedEx.

Both companies’ boards have unanimously approved the transaction, according to a press release.

Recently, Prologis has bolstered its real estate footprint primarily through acquisitions. It purchased Liberty Property Trust in 2020 and DCT Industrial Trust in 2018.

Prologis isn’t the only player that has been looking to acquire more logistics facilities lately. Earlier in 2022, Industrial Logistics Properties Trust bought Monmouth Real Estate Investment Corp. for about $4 billion.

As of June 10, Duke Realty had a market capitalization of about $19.1 billion, but its shares have dropped 24% so far this year, while Prologis’ stock is down roughly 30%. Both companies are hoping the acquisition can turn this trend around.