World’s largest owner of warehouse space is acquiring Duke Realty Corp.

Prologis, the world’s largest owner of warehouse space, said Monday it is acquiring Duke Realty Corp. , in a $26 billion deal that will add 160 million square feet of industrial capacity to Prologis’s world-wide portfolio of 1 billion square feet.

Duke Realty, headquartered in Indianapolis, Indiana, controls more than 150 million square feet (13.93 million square meters)of commercial real estate across 548 properties in major U.S. markets such as Atlanta, Dallas, Chicago, Southern California and Columbus.

The outlook marks a sharp change from the growth that has fueled big demand for industrial real estate, from sprawling 1-million-square-foot warehouses on city outskirts to smaller e-commerce fulfillment centers close to population centers, over recent years.

Chicago-based real-estate services firm JLL says the national average vacancy rate for warehouses fell to a record low of 3.4% in the first quarter, down from 3.8% the year before. The average leasing rate across the country jumped 7% from the fourth quarter of 2021 to the first quarter of this year, to $7.62 a square foot, the highest level JLL has recorded.

Prologis plans to hold about 94% of Duke Realty’s assets and exit one market

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