ProLogis, the world’s largest warehouse owner, agreed to sell about 180 industrial properties to Blackstone Group LP to help reduce debt.
The $1.02 billion sale also includes interests in three real-estate funds and a minority stake in the Hilton New Orleans Riverside hotel, ProLogis said in a statement Monday. The Denver-based company expects the deal to close in mid-November.
ProLogis had $8.2 billion of debt as of June 30, according to regulatory filings. The Blackstone transaction, combined with $600 million in other sales this year, pushes the company’s dispositions for 2010 above its forecast of $1.3 billion to $1.5 billion, according to the statement.
“This transaction with Blackstone supports our strategy of redeploying our investment in nonstrategic, direct-owned North American assets into further deleveraging and future development activity,” ProLogis chief executive Walter Rakowich said in the statement.
The sale reduces ProLogis’ potential income and the quality of its assets by disposing of properties with high occupancy rates at a time of weak demand, said Shubhomoy Muk herjee and Audra Stundziaite, Barclays credit analysts, in a note to investors Monday.
“We view this transaction as a negative,” they wrote.
For Blackstone, the acquisition provides a “critical mass” of 23 million square feet of industrial space in the 180 properties, said Heather Lucania, a spokeswoman for the New York-based company.
