ILPT blasts off

Prologis acquisition of Blackstone portfolio suggests huge upside potential, ILPT's non-recourse financing is undervalued, DHC quick note

Note - my original ILPT article (4/21/2023) can be found here.

Prologis-Blackstone industrial transaction

This morning, Prologis announced a deal to acquire a 14 million square foot industrial portfolio from Blackstone for $3.1 Billion. The going-in cap rate on the deal was 4%, with a “5.75% cap rate when adjusting to today's market rents.”

It is hard to know what to make of the “adjusted to today’s market rents” comment, as we don’t know the pace at which these rent resets will occur.

If we use 5% as a mid-point value and apply it to 100% of ILPT’s core assets (Hawaii, Mainland, and 61% interest in the mountain JV) it comes to around $29/share of Net Asset Value.

If we deduct an estimate of the current value of RMR’s management contract ($250 million), the NAV would be ~$26/share: