Logistics real estate company Prologis, Inc. (NYSE: PLD) continues to add to its real estate portfolio, this time with a rare find in the Los Angeles market.
As reported by the Los Angeles Business Journal, the nation’s largest logistics warehouse owner, operator and developer has purchased an 11-acre, 85,000 square foot facility in southeast Los Angeles. The property, located in the city of Commerce at 2420 Yates Avenue, was purchased from AT&T (NYSE: T) for $41.1 million. AT&T is reported to be leasing back the property that offers industrial and office space.
This is an increasingly uncommon find in the Los Angeles market.
In a recent market report, commercial real estate services firm Cushman & Wakefield (NYSE: CWK) reported that the vacancy rate for the Los Angeles market was 1.7 percent for the second quarter of 2019. This compares to nationwide vacancy rates that have been hovering between 4 to 5 percent. This vital market services the nation’s busiest ports of Los Angeles and Long Beach.
Prologis continues to benefit from a strong consumer channel and a growing e-commerce channel. In its second quarter 2019 earnings report, the company raised its full-year 2019 financial outlook and announced the $4 billion purchase of Industrial Property Trust. The acquisition includes 236 properties and 37.5 million square feet of industrial real estate, the majority of which is located in Prologis’ existing footprint. At the time of that deal announcement management made specific reference to the strength of its balance sheet as a means to continue to gain asset scale in the logistics real estate market.
Earlier this year, AT&T placed a $150 million, 33-property portfolio up for sale in key real estate markets, including Los Angeles.
San Francisco-based Prologis owns nearly 800 million square feet in industrial real estate across 19 countries. Many of its warehouses in the U.S. service ports on both coasts, regional distribution hubs and rail and intermodal facilities.
Prologis Ventures is an investor in FreightWaves.