A general view of the main entrance of Prologis logistics complex in Cajamar, Brazil February 2, 2018.
A general view of the main entrance of Prologis logistics complex in Cajamar, Brazil February 2, 2018. Reuters / Gabriela Mello

Prologis Inc, a warehouse-focused real estate income trust (REIT), said on Monday it would acquire peer Duke Realty Corp for about $26 billion, including debt, in an all-stock deal, making it one of the largest transactions in the booming REIT sector.

The deal follows two earlier rejected offers by San Francisco-based Prologis, whose customers include online retail giant Amazon.com Inc and parcel delivery firm FedEx Corp.

As part of the deal, Duke Realty shareholders will receive 0.475 of a Prologis share for each share held, with the transaction expected to close later this year subject to regulatory approvals.

Duke Realty shares were up 2.1% at $50.83 in early afternoon, up 1.3% % after jumping 4.4% in premarket trading, while those of Prologis were down 6.7% at $109.37%.

Deals involving REITs reached a record high of $140 billion in 2021, driven by a robust U.S. housing market, availability of cheap capital from low interest rates, and strong economic recovery from the pandemic. REIT deals totaled just $17 billion in 2020, according to real estate services provider JLL.

More REIT deals have followed this year. Blackstone Inc, the world's largest real estate investor, has already agreed to buy three REITs, while Medical office REITs Healthcare Realty Trust Inc and Healthcare Trust of America Inc agreed to merge in February in a $17 billion transaction.

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.

In May, Duke Realty rejected as "insufficient" a $23.7 billion all-stock offer from Prologis, which said at the time it had previously made a private offer.

Prologis, which controls properties and development projects with about 1 billion square feet, said it planned to retain about 94% of Duke Realty assets and will exit only one market.