Site developers merge, form $6.4 billion giant

By Staff -- Logistics Management, 3/1/1999

Two of the largest U.S. developers of specialized distribution facilities plan to merge by the end of this month, forming a $6.4 billion giant that will control 163 million square feet of space in 94 markets worldwide. The merged company will be the largest operator of distribution sites in the Atlanta, Dallas/Fort Worth, and San Francisco markets, and will hold the number two position in Chicago, Los Angeles, and the Cincinnati/Columbus/Indianapolis triangle.

Denver, Colo.-based ProLogis, formerly known as Security Capital Industrial Trust, focuses on developing master-planned distribution parks and custom-built corporate distribution centers. The company manages distribution-center acquisition, design, development, site selection, and operations for more than 1,200 facilities in the United States, Mexico, and Europe.

Meridian Industrial Trust, headquartered in San Francisco, acquires, develops, leases, and manages 224 light industrial and distribution facilities throughout the United States. Both companies serve a Who's Who of prominent clients, including some of the biggest names in the grocery, food-processing, consumer-goods, third-party logistics, retail, chemical, paper, and automotive industries.

K. Dane Brooksher, ProLogis' co-chairman and chief operating officer, characterized the merger as "an exceptional strategic asset fit" in a statement announcing the plan. Some 98 percent of Meridian's assets are located in ProLogis's target markets of Los Angeles, Dallas, and Chicago, he reported. "Integrating Meridian's assets [with our own] allows us to more effectively--and immediately--meet the substantial volume of distribution requirements in these important markets, where we have identified unmet demand for our distribution services and facilities," he said.

ProLogis also has been actively expanding its portfolio overseas. In mid-1997, the company entered the European market, where it operates in 12 countries. Last summer, the company purchased Kingspark Group Holdings Ltd., a major developer of distribution sites in the United Kingdom. In December, ProLogis acquired France's Garonor S.A., which controls more than 5 million square feet of distribution space in Paris and Marseilles.