Prologis Reports2nd Quarter 2019 Earnings Results and Announces the Signing of a Definitive Agreement to Acquire IPT.

 
FREE EXCERPT

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...

To continue reading

REQUEST YOUR TRIAL