Prologis Reports2nd Quarter 2019 Earnings Results and Announces the Signing of a Definitive Agreement to Acquire IPT.
SAN FRANCISCO: Prologis, Inc. (NYSE: PLD), the global leader in logistics real estate, reported results for the second quarter of 2019 and announced that, subsequent to quarter end, it has signed a definitive merger agreement to acquire Industrial Property Trust Inc. (IPT).
Net earnings per diluted share was $0.60 for the quarter compared with $0.62 for the second quarter of 2018. Core funds from operations (Core FFO)* per diluted share was $0.77 for the quarter compared with $0.71 for the same period in 2018.
"We had a terrific quarter--our results reflect strong execution and the quality of our global portfolio," said Hamid R. Moghadam, chairman and CEO, Prologis. "We are off to an excellent start to the second half of the year as we've just entered into an agreement to acquire IPT. The acquisition of this high-quality portfolio will deliver additional shareholder value immediately upon close."
OPERATING PERFORMANCE
Owned & Managed
2Q19
2Q18
Notes
Period End Occupancy
96.8%
97.4%
Flat versus first quarter 2019
Leases Commenced
37MSF
39MSF
Prologis Share
2Q19
2Q18
Notes
Net Effective Rent Change
25.6%
20.6%
Led by U.S. at 30.1%
Cash Rent Change
12.3%
9.7%
Led by U.S. at 16.3%
Cash Same Store NOI* Change
4.6%
7.0%
Led by Europe at 5.3%
DEPLOYMENT ACTIVITY
Prologis Share
2Q19
Building Acquisitions
$214M
Weighted avg stabilized cap rate
4.5%
Development Stabilizations
$493M
Estimated weighted avg yield
6.8%
Estimated weighted avg margin
45.1%
Estimated value creation
$223M
Development Starts
$324M
Estimated weighted avg margin
22.0%
Estimated value creation
$71M
% Build-to-suit
27.1%
Total Dispositions and Contributions
$607M
Weighted avg stabilized cap rate (excluding land and other real estate)
4.4%
ACQUISITION OF INDUSTRIAL PROPERTY TRUST INC.
Prologis will acquire IPT's wholly owned real estate assets for approximately $3.99 billion in a cash transaction, including the assumption and repayment of debt. The transaction, currently expected to close in the fourth quarter of 2019/first quarter of 2020, is subject to the approval of IPT stockholders and other customary closing conditions.
"This is a compelling opportunity to acquire a portfolio of excellent asset quality and submarket composition consistent with our U.S. investment strategy and footprint," said Eugene F. Reilly, chief investment officer, Prologis. "We expect to capture significant cost and revenue synergies, in addition to enhancing customer relationships and insights."
The...
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