Two of Orlando's largest owner-operators of industrial real estate are coming together in a national merger, with local portfolios that should compliment one another and new buildings in the pipeline.
Both are publicly traded real estate investment trusts (REITs), and Prologis is the world's largest warehouse owner with 700 million square feet. DCT has 71 million square feet of industrial real estate overall, equivalent to a 10 percent addition to Prologis' holdings.
In Greater Orlando, Prologis is the market's largest owner-operator of industrial property with 35 buildings and about 4.5 million square feet, while DCT owns roughly 2.56 million square feet and approximately 20 buildings.
Together at 7 million square feet, Prologis-DCT has double the footprint of its nearest competitor in south Orlando, the market's industrial hub. That is Liberty Property Trust at 3.5 million square feet.
"When you combine them and have that amount of square footage, you have a lot of advantages in being able to accommodate, relocate and help tenants grow if they've outgrown a space mid-lease," said William "Bo" Bradford, principal for Lee & Associates in Orlando.
"I think it's a positive overall for the market, their local portfolios mesh well," said Lee Morris, managing director of industrial for Colliers International Central Florida. "DCT product tends to have a bit smaller bay and multi-tenant facilities which are almost all brand new, which will help the average age of Prologis' Orlando portfolio."
Local market managers with Prologis and DCT did not respond to requests for comment.
DCT also brings 7.1 million square feet nationally of development, redevelopment and value-add projects, and 195 acres in pre-development with the potential for more than 2.9 million square feet of warehouse space once built out, Bloomberg reported on Sunday.
Locally, DCT has three more building pads that lie ahead for development at its Airport Distribution Center North warehouse park on S. Conway Road.
And this past February, Prologis updated plans for more than 550,000 square feet of new distribution center space to expand its self-branded industrial park near Orlando International Airport.
About 7 percent of the combined portfolio, or roughly $550 million in planned dispositions, is planned for the next two years, said Eugene Reilly, CEO of the Americas for Prologis, on a conference call Monday.
Boards of both companies have approved the purchase, which has been forecast for completion in the third quarter.