ProLogis Announces $1.02B Deal With Blackstone Affiliates

Posted by Orb Staff on October 19, 2010 No Comments
Categories : Commercial Mortgage

ProLogis, a provider of distribution facilities, has entered into a definitive agreement with affiliates of Blackstone Real Estate Advisors to sell a North American industrial portfolio, its minority interest in a hotel property and ProLogis' interests in three of its property funds for a total purchase price of $1.02 billion.

The assets being sold to Blackstone include approximately 180 North American industrial properties, ProLogis' minority interest in the Hilton New Orleans Riverside and related entities, and ProLogis' 20% interest in ProLogis North American Property Funds VI-VIII.

The portfolio of industrial properties is 95.6% leased, with an average lease term of 34 months and a weighted average age of 23 years, ProLogis says. The hotel property is being acquired separately by Blackstone affiliate Hilton Worldwide Inc. Following the closing, Hilton Worldwide will own 100% of the hotel property.

ProLogis says the sales are expected to close in mid-November 2010, subject to customary closing conditions.

In a related story, The Wall Street Journal reports that Blackstone is looking to turn its Hilton debt into the next major issuance of commercial mortgage-backed securities.

‘The Hilton deal stems from Blackstone Group LP's $26 billion purchase of the hotel chain in October 2007,’ writes WSJ reporter Lingling Wei. ‘Banks, including Goldman Sachs Group Inc. and Bank of America Corp., provided $20 billion in financing but were stuck holding the loans when debt markets froze. The sale, expected in the next two weeks, will allow the two banks to sell the $3 billion in senior debt they still hold.’

SOURCES: ProLogis, Wall Street Journal

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