PLD Prologis

By Liz Hoffman, Cara Lombardo and Miriam Gottfried 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 24, 2019).

Blackstone Group LP and Prologis Inc. are vying to buy the U.S. arm of Singapore's GLP in a deal that could be worth roughly $20 billion, including debt, and create an industrial-warehouse giant, according to people familiar with the matter.

GLP had been gearing up to take its U.S. business public later this year, The Wall Street Journal reported in April. It is now focused on selling the business outright and could reach a deal with Blackstone, Prologis or another party as soon as next week, the people said.

There is no guarantee a takeover deal will be reached and an IPO remains an option, some of the people said.

If struck, an acquisition of the GLP business would be one of the largest real-estate takeovers since the financial crisis.

Prologis is the biggest industrial real-estate investment trust, with a market capitalization of nearly $50 billion and a portfolio of 772 million square feet. The company has been an aggressive acquirer, most recently buying DCT Industrial Trust Inc. last year for about $8.5 billion including debt.

The GLP business up for sale is the second-largest owner of industrial warehouses in the U.S. It has almost 200 million square feet across some 1,350 properties, with Amazon.com Inc. as its largest tenant. The growth of e-commerce and same- or next-day shipping has generated demand for industrial real estate in logistics hubs near big cities around the country.

A deal with either Prologis or Blackstone would be a round trip of sorts for GLP.

GLP was born by a carve-out of Prologis' Asian assets in 2009 and then expanded internationally. One of its founders was Jeffrey Schwartz, Prologis' former chief executive who died in 2014.

That year, Blackstone sold most of its warehouses to GLP. Since then, the private-equity firm has been reassembling a large portfolio of industrial properties and last year spent $4.4 billion to buy Gramercy Property Trust. A deal for the GLP operation would increase by a third Blackstone's warehouse space in the U.S.

Blackstone's real-estate business, which has $140 billion in assets under management and more than 500 employees, is a major global player and one of the largest owners of property in the U.S. It owns Chicago's Willis Tower, the Cosmopolitan of Las Vegas resort and casino, and thousands of homes through a stake in Invitation Homes Inc. The private-equity firm had 561 million square feet of logistics properties as of the end of the first quarter.

Shares of industrial real-estate investment trusts, a type of tax-advantaged corporate setup that pays out most of its earnings to shareholders, have soared this year as investors seek bigger yields with interest rates at historic lows -- and that surely adds to the allure of GLP. Prologis shares were recently up 34% this year, while Terreno Realty Corp.'s had gained 34% and Duke Realty Corp.'s 23%.

Write to Liz Hoffman at liz.hoffman@wsj.com, Cara Lombardo at cara.lombardo@wsj.com and Miriam Gottfried at Miriam.Gottfried@wsj.com

(END) Dow Jones Newswires

May 24, 2019 02:47 ET (06:47 GMT)

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