Prologis, one of the world's dominant owners and builders of industrial real estate, has agreed to buy a real estate investment trust that will bring another 37.5M SF across 236 industrial properties under its control.

Prologis plans to acquire Industrial Property Trust, a REIT controlled by Denver-based real estate private equity and development firm Black Creek Group, for $3.99B in an all-cash transaction, the companies announced Monday. Prologis would also acquire IPT's debt in the deal, which has already been approved unanimously by IPT's board of directors, according to Black Creek.

Through the deal, Prologis — which has a roughly $50B market capitalization and controls nearly 800M SF of warehouses worldwide, according to the Wall Street Journal — will add significant portfolios in Atlanta, Southern California, New Jersey, the Baltimore-Washington corridor, Dallas and Chicago.

Black Creek said in the sale announcement that IPT's portfolio is 97% leased. It spent the first half of 2019 selling lower-performing assets to gear up for the merger — as of December, its portfolio was 49.6M SF and 90% leased, according to IPT's website.

"This is a compelling opportunity to acquire a portfolio of excellent asset quality and submarket composition consistent with our U.S. investment strategy and footprint,” Prologis Chief Investment Officer Eugene Reilly said in a statement. “We expect to capture significant cost and revenue synergies, in addition to enhancing customer relationships and insights.”

Prologis recently lost out to Blackstone when the New York private equity giant acquired GLP's entire U.S. portfolio — it was the second-biggest owner of U.S. industrial real estate, after Prologis — for $18.7B. Prologis has won its fair share of bidding wars; it bought DCT Industrial for $8.5B last year, adding 71M SF to its arsenal of warehouses.

Industrial rents have nearly doubled in the last five years, driven by e-commerce's rapid rise. Warehouses are in high demand, especially those close to major cities and highway corridors, as retailers fight to deliver goods faster and faster.

Prologis is spending to meet that market demand, and it is becoming increasingly costly. It is building multistory warehouses in New York, the Bay Area and Seattle, some of the first in the nation, and a CBRE report pegged the cost to construct one of the facilities as up to $350/SF.