Prologis Closes $5.9 Bln KTR Acquisition - Quick Facts

(RTTNews) - Prologis, Inc. (PLD) said that it has completed its acquisition of the real estate assets and operating platform of KTR Capital Partners and its affiliates for a total purchase price of $5.9 billion.

The properties were acquired by Prologis U.S. Logistics Venture or USLV, a 55-45 consolidated joint venture with Norges Bank Investment Management or 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.

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 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 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.