SAN FRANCISCO (AP) — Shares in Liberty Property Trust jumped 17% after the company announced it was being acquired by Prologis in a deal the commercial real estate companies are valuing at $12.6 billion including debt assumption.
The companies expect immediate cost synergies of $120 million and another $60 million annually.
As online retailers seek to shorten delivery times, demand for warehouse space in major U.S. cities is increasing. Last month, private equity firm Blackstone bought $5.9 billion in real estate assets from Colony Capital.
Prologis, based in San Francisco, plans to sell off some assets including office properties.
Shareholders of Wayne, Pennsylvania-based Liberty will receive about two-thirds of a share of Prologis for each Liberty share held. The deal, announced Sunday, is expected to close in the first quarter of 2020.