SAN FRANCISCO, June 1, 2015 /PRNewswire/ -- Prologis, Inc.
(NYSE: PLD), the global leader in industrial real estate, today
announced it has completed its acquisition of the real estate
assets and operating platform of KTR Capital Partners (KTR) and its
affiliates for a total purchase price of $5.9 billion.
The properties were acquired by Prologis U.S. Logistics Venture
(USLV), a 55-45 consolidated joint venture with Norges Bank
Investment Management (NBIM), manager of the Norwegian Government
Pension Fund Global. The real estate assets include an
approximately 60 million square foot operating portfolio, 3.6
million square feet of development-in-progress and a land bank with
a build-out potential of 6.7 million square feet.
"We're interested in acquiring assets in the U.S. only when we
see a close alignment with our own holdings," said Hamid Moghadam, chairman and CEO, Prologis. "We
bring a significant competitive advantage to the table with the
attractiveness of our currency through our OP unit structure, and
our ability to execute reliably and expeditiously gives us an
important edge."
Moghadam added, "The transaction is immediately accretive and
will also deliver long-term value to our shareholders through
incremental NOI from the lease-up of the operating and development
portfolios."
Prologis' share of the completed acquisition was valued at
approximately $3.2 billion,
consisting of the assumption of approximately $400 million in secured mortgage debt, the
issuance of $202 million in common
limited partnership units in Prologis, L.P. and $2.6 billion in cash. The cash portion was funded
through the company's previously announced financing transactions,
with the remainder from its global line of credit and the
monetization of hedges.
Prologis expects to repay its two-year term loan and line of
credit through the combination of asset and joint venture sales.
The two-year term loan replaced the commitments to fund the
previously announced bridge loan.
The transaction is expected to be accretive to 2015 core funds
from operations (Core FFO) by approximately $0.09 per share. As a result, Prologis increased
its full-year 2015 Core FFO guidance range to $2.16 to $2.22 per diluted share from
$2.07 to $2.13 per diluted share. This represents
year-over-year growth of more than 16 percent at the midpoint. On
an annual stabilized basis, the forecasted Core FFO accretion is
expected to be approximately $0.15
per share. Additionally, the transaction is expected to reduce
general and administrative expenses as a percentage of assets under
management by approximately 10 percent and increase U.S. dollar
equity exposure to 95 percent.
"We have worked extremely hard to position our balance sheet for
opportunities such as this," said Tom
Olinger, chief financial officer, Prologis. "Looking
forward, we can fund our future deployment activity through capital
recycling. We believe this ability to self-fund, in combination
with the organic earnings growth from same-store NOI and
development stabilizations, will reduce debt-to-EBITDA by roughly
half of a turn on an annual basis."
ABOUT PROLOGIS
Prologis, Inc. is the global leader in
industrial real estate. As of March 31,
2015, Prologis owned or had investments in, on a wholly
owned basis or through co-investment ventures, properties and
development projects expected to total approximately 594 million
square feet (55 million square meters) in 21 countries. The company
leases modern distribution facilities to more than 4,700 customers,
including third-party logistics providers, transportation
companies, retailers and manufacturers.
FORWARD-LOOKING STATEMENTS
The statements in this
document that are not historical facts are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements are based on
current expectations, estimates and projections about the industry
and markets in which Prologis operates, management's beliefs and
assumptions made by management. Such statements involve
uncertainties that could significantly impact Prologis' financial
results. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," variations of such words
and similar expressions are intended to identify such
forward-looking statements, which generally are not historical in
nature. All statements that address operating performance,
events or developments that we expect or anticipate will occur in
the future — including statements relating to rent and occupancy
growth, development activity and changes in sales or contribution
volume of properties, disposition activity, general conditions in
the geographic areas where we operate, our debt and financial
position, our ability to form new co-investment ventures and the
availability of capital in existing or new co-investment ventures —
are forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Although we believe the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, we can give no assurance that our
expectations will be attained and therefore, actual outcomes and
results may differ materially from what is expressed or forecasted
in such forward-looking statements. Some of the factors that may
affect outcomes and results include, but are not limited to: (i)
national, international, regional and local economic climates, (ii)
changes in financial markets, interest rates and foreign currency
exchange rates, (iii) increased or unanticipated competition for
our properties, (iv) risks associated with acquisitions,
dispositions and development of properties, (v) maintenance of real
estate investment trust ("REIT") status and tax structuring, (vi)
availability of financing and capital, the levels of debt that we
maintain and our credit ratings, (vii) risks related to our
investments in our co-investment ventures and funds, including our
ability to establish new co-investment ventures and funds, (viii)
risks of doing business internationally, including currency risks,
(ix) environmental uncertainties, including risks of natural
disasters, and (x) those additional factors discussed in reports
filed with the Securities and Exchange Commission by Prologis under
the heading "Risk Factors." Prologis undertakes no duty to update
any forward-looking statements appearing in this document.
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SOURCE Prologis, Inc.