Prologis, a San Francisco-based real estate investment trust, has made a significant acquisition by purchasing a 311,400-square-foot warehouse in the Inland Empire. This transaction, involving a FedEx-leased distribution center, is part of a larger deal with Blackstone, where Prologis acquired a substantial portfolio of industrial properties across the United States.
Prologis – A Premium Acquisition
Prologis paid a premium price of $96.6 million for the Bloomington warehouse, located at 3255 and 11600 Cactus Avenue. This amounts to approximately $310 per square foot, marking a notable premium compared to the average sales price for industrial space in the Inland Empire during the first half of the year, which stood at $259 per square foot.
A Brief Background of the Property
The property, built in 2014 on 36 acres, was previously owned by Gramercy Property Trust, a New York-based company that Blackstone acquired in 2018. It lies within an industrial corridor housing distribution centers for major retailers, including Amazon.com and Walmart.
Prologis’s acquisition of the Bloomington warehouse was part of a larger transaction involving a $3.1 billion deal with Blackstone, covering 14 million square feet of industrial buildings across the U.S. This acquisition included properties in various key regions, making it a significant addition to Prologis’s portfolio.
Prologis intends to retain all the newly acquired industrial real estate, emphasizing that these high-quality properties align perfectly with its long-term strategic growth plan. The acquisition also extended to a 246,000-square-foot industrial and research building in Fremont, acquired for $86.6 million, or $352 per square foot.
Robust Industrial Property Market and its Industry Leaders
The Inland Empire has seen remarkable activity in the industrial property market, with over $2.44 billion in property sales during the year’s first half. Additionally, Southern California continues to experience the highest industrial rent gains in the nation, with a 17.4 percent increase in the Inland Empire over the past year.
Nadeem Meghji, the head of Blackstone Real Estate Americas, highlighted the exceptional demand for high-quality warehouses, underscoring Blackstone’s significant presence in the industrial real estate sector. Blackstone currently owns $100 billion worth of warehouses in North America and $175 billion globally.
Prologis, on the other hand, boasts ownership of an impressive 1.2 billion square feet of logistics real estate across 19 countries. The company recently reported record profits in the second quarter, with revenue nearly doubling from the previous year, reaching $2.45 billion.
Prologis’s acquisition of the FedEx-leased warehouse from Blackstone for $97 million underscores the robust demand for prime industrial real estate. This strategic investment aligns with Prologis’s growth plan and showcases the strength of the industrial property market in the Inland Empire. With Blackstone’s extensive portfolio and Prologis’s significant presence in the sector, this transaction marks a notable milestone in the real estate industry.