A Prologis holding. Photo by Prologis.

DENVER–And it's done. Prologis closed on its $8.4 billion acquisition of its smaller rival DCT Industrial Trust this morning, following a vote by DCT Industrial Trust's shareholders this week to approve the deal.

As part of the transaction each share of DCT common stock was converted into 1.02 shares of Prologis common stock.

The acquisition expands Prologis' presence in Southern California, the San Francisco Bay Area, Seattle and South Florida. The DCT portfolio includes a 71-million square foot of properties, 7.5 million square feet of development, redevelopment and value-added projects and 305 acres of land in pre-development with an estimated build-out potential of over 4.5 million square feet. There are 131 acres of land under contract, or option, with a build-out potential of over 1.6 million square feet. “We have tremendous respect and admiration for what the DCT team has accomplished in transforming their organization into a premier logistics company,” Hamid R. Moghadam, chairman and CEO of Prologis said in a prepared statement.

$1.8B of Debt Refinanced

Prologis will refinance $1.8 billion of DCT's debt, of which approximately $850 million was paid off at closing with the remainder to be retired in the third quarter of 2018. The company expects the blended interest rate for the refinancings to be approximately 2.5%, generating an estimated $38 million in annual interest savings, which will more than offset the estimated $58 million of one-time debt extinguishment costs related to the refinancing activity. The total transaction costs are expected to be approximately $80 million, with the majority of the costs incurred by Prologis being capitalized.