Prologis had about 300 million reasons to smile after its 2015 deal with Facebook.
The tech giant bought a 21-building campus in Menlo Park from Prologis that year in a deal that made the industrial landlord about $300 million, according to Bloomberg. Prologis bought the site for $110 million about 10 years ago, and Facebook ended up doubling its first offer for the complex to roughly $400 million.
The site’s warehouses are now being torn down so Facebook can have more space for housing and offices.
Industrial landlords like Prologis are benefitting from tight markets in urban areas as demand for residential and office space overtakes manufacturing and warehouse facilities. The Menlo Park deal took about 1.1 million square feet of industrial space off of the San Francisco area’s market.
“The supply of space is going down, and that’s creating more pricing power,” Prologis CEO Hamid Moghadam told Bloomberg.
Prologis hopes to continue getting more out of its land. They are building the country’s first multistory warehouse in Seattle and plan to build one in San Francisco as well.
The company is also buying rival logistics owner DCT Industrial Trust for $8.4 billion in stock with an eye on boosting its presence in markets including New York, California and Florida. It backed out of a deal this winter to pay $265 million for a FedEx warehouse in Queens. [Bloomberg] – Eddie Small