With the announcement yesterday of a $1.02bn deal with affiliates of Blackstone Real Estate Advisors for the sale of a portfolio of 180 industrial properties in North America, ProLogis has exceeded its declared intention to generate gross proceeds of up to $1.5bn in 2010. Already, this figure stands at $1.6bn through contributions and deals already completed this year. All the company’s efforts through the crisis have been focused on reducing its debt levels and creating the resources to rekindle development. Details from the press release after the jump.
The assets being sold to Blackstone include a portfolio of approximately 180 North American industrial properties (the “PLD Industrial Portfolio”), ProLogis’ minority interest in the Hilton New Orleans Riverside and related entities (the “Hotel Property”) and ProLogis’ 20 percent interest in ProLogis North American Property Funds VI – VIII (the “NAPF Portfolio”). These sales are expected to close in mid-November 2010, subject to customary closing conditions. The PLD Industrial Portfolio is 95.6 percent leased with an average lease term of 34 months and a weighted average age of 23 years. The consideration for this portfolio represents a cap rate of approximately 8 percent. The portfolio comprises 23 million square feet, with properties located in: Atlanta, Austin, Baltimore, Central Valley, California; Charlotte, Chicago, Cincinnati, Columbus, Dallas, Denver, Eastern Pennsylvania, El Paso, Houston, Indianapolis, Kansas City, Las Vegas, Los Angeles, Memphis, Nashville, New Jersey, Orlando, Phoenix, Portland, Reno, San Antonio, San Francisco, Tampa and Virginia. ProLogis will retain a preferred equity interest in the Blackstone entity that is acquiring the PLD Industrial Portfolio of approximately $190 million, which will earn a preferred return at an annual rate of 7.0 percent for the first three years of the term, 8.0 percent for the fourth year of the term and 10.0 percent thereafter until redeemed. Partial or full redemption can occur at any time at Blackstone’s discretion or after the five year anniversary at ProLogis’ discretion. Approximately $910 million of the purchase price was allocated to the PLD Industrial Portfolio.