newsworthy
22 DC VELOCITY MAY 2015 www.dcvelocity.com
Prologis Inc., the world’s largest developer and manager of
industrial property, will spend $5.9 billion to acquire the
U.S. asset portfolio and operating platform of KTR Capital
Partners, a megadeal that coincides with one of the most
robust cycles in the history of the U.S. industrial real estate
market.
The deal, announced April 19, adds KTR’s 60 million
square feet of U.S. space and 322 properties to the 590
million square feet that are owned, managed, or under
development in Prologis’s global network, San Francisco-based Prologis said in a statement. KTR’s strengths are in
Southern California, New Jersey, Chicago, Dallas, Seattle,
and South Florida, markets where Prologis is already
strong. The companies’ respective U.S. portfolios have a
95-percent overlap, Prologis said.
“It is rare to have the opportunity to acquire a portfolio
of such high asset quality, customer profile, and market
composition that is so consistent with our own,” Prologis
chairman and CEO Hamid Moghadam said in the statement. KTR was unavailable to comment.
Prologis U.S. Logistics Venture, a joint venture with
Norges Bank Investment Management, which runs the
massive Norwegian sovereign wealth fund, will acquire
KTR’s assets, Prologis said in the statement. Moghadam
said the value of investments jointly held by Prologis and
the management firm now exceeds $11 billion. The fund,
officially known as the Norwegian Government Pension
Fund Global, is believed to be the world’s largest fund of its
kind, with about $900 billion under management.
The transaction is thought to be the second largest on
record in the industrial property space, surpassed only by
the Singapore sovereign wealth fund’s $8.1 billion purchase
late last year of IndCor Properties Inc. from investment
giant The Blackstone Group LP. IndCor had about 100
million square feet under management. The KTR acquisi-
tion affirms the appetite of overseas sovereign wealth firms
for U.S. industrial companies that control large-scale prop-
erties in prime markets occupied by established, well-fi-
nanced tenants.
Craig Meyer, president of the U.S. real estate business
for JLL Inc. (formerly Jones Lang LaSalle), a large Chicago-based real estate and logistics firm, said this might not
be the last transaction involving a sovereign wealth fund
buying or taking a large ownership stake in a U.S.-based
industrial developer. (Prologis is a client of JLL’s, though
JLL was not involved in the transaction.)
Jack Rosenberg, national director–logistics and transportation for Colliers International Inc., a Chicago-based real
estate advisory firm, called the Prologis-KTR transaction
a “huge deal” that reflects a continued seller’s market for
industrial real estate as vacancies hit 10-year lows and in
dozens of markets, approach all-time lows. The U.S. industrial market has experienced 20 consecutive quarters of positive net absorption, meaning more space is occupied than
is vacated. According to JLL data, the average industrial
vacancy rate is at 6. 8 percent, a 10-year low; in 15 of the top
The Prologis-KTR deal is unlikely to lead to
higher rents because the U.S. industrial market is so large and fragmented that no single
company exerts pricing control, Meyer said. A
continued rise in rents will be due to the basic
tenets of supply and demand, and will not be
triggered by market consolidation due to one
player, albeit large, exiting the market, Meyer
added.
—M.S.
Prologis scoops up KTR’s U.S. industrial assets
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manufacturers, warehouses, and distribution centers, has received
a Warehousing Innovation Award from Beverage World magazine.
… Danny Daniels, a truck driver for the Ryder Dedicated division
of Ryder System, has won the “Driver of the Year” award from
the Truck Renting and Leasing Association. … MHI has presented
its 2015 Innovation Award for an Existing Product to CubiScan for
the CubiScan 25 dimensioning and weighing system. The CubiScan
25 is designed to measure and weigh smaller, irregular-shaped
items for distribution, packaging, and warehousing applications.
… Southeastern Freight Lines, a provider of regional less-than-truckload transportation services, has received the 2015 Gold Level
Regional Carrier of the Year award from Cambro Manufacturing,
a manufacturer of equipment and supplies for the food-service
industry. … Volga-Dnepr Group has been honored with a special
award to mark its “contribution to the development of Russian air
transport” in the annual Wings of Russia awards.
accolades
