Prologis May Sell About $800 Million of U.S. Properties

Prologis Inc. (PLD), the world’s largest warehouse owner, may sell about $800 million of U.S. properties by the end of 2012 amid growing investor demand for industrial buildings, Co-Chief Executive Officer Hamid Moghadam said.

“It’s more of a seller’s market than a buyer’s market in the U.S.,” Moghadam said in a telephone interview. “We’re just pushing the timetable.”

Prologis this year has already disposed of about $470 million of property in the Americas that it either owns or is in funds it manages, the San Francisco-based company said yesterday when it reported second-quarter results. The $800 million in planned sales would be in addition to those transactions, Moghadam said. Prologis is selling properties in smaller markets and areas less important to global trade.

Investment funds have been active buyers of industrial real estate this year. Blackstone Group LP (BX), based in New York, last month reached an agreement for control of Walton Street Capital LLC assets valued at about $2.1 billion, one day before $2.45 billion of debt on the industrial properties was due.

“The stuff that we’re selling is clearly not in the best markets, and within the better markets it’s certainly not the best assets,” Moghadam said. “We’re not selling anything that we weren’t going to sell anyway.”

Prologis reported that second-quarter core funds from operations rose to $201.3 million, or 43 cents a share, from $109.7 million, or 35 cents, a year earlier. The metric excludes items including gains and losses on real estate transactions. Prologis and AMB Property Corp. combined a year ago in the biggest merger of U.S. real estate investment trusts.

Prologis rose 1.8 percent to $32.25 yesterday in New York trading. The shares have gained almost 13 percent this year, matching the increase in the Bloomberg REIT Index. (BBREIT)

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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