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This past spring, ProLogis' (NYSE: PLD) European Properties Fund purchased a 1.8 million sq. ft. portfolio of four distribution centers in France from FM Logistics for an undisclosed price. Such transactions are now almost commonplace at Aurora, Colo.-based ProLogis.

The company, which placed No. 1 in NREI's ranking of the largest industrial owners, entered Mexico in 1995 and Europe two years later. Today, by the estimation of Irving F. Lyons, vice chairman and chief investment officer of ProLogis, the REIT now owns approximately 29 million sq. ft. internationally, comprising 16% of its total portfolio. The vast majority of the company's international portfolio is located in Europe.

Precisely how rare ProLogis' international presence is among industrial owners is unclear. Leonard Sahling, a REIT analyst with Merrill Lynch in New York, believes that ProLogis is the only such REIT to own overseas properties.

Owning and operating international facilities is a logical consequence of the company's mission, Lyons says. "If you step back and think about what we're trying to accomplish as a company, which is really to service our customers on a global basis, you can't do that without an international presence," he says.

One of the benefits of having an international portfolio is that global diversification provides a hedge against a slumping economy in one nation.

"The U.S. economy has slowed considerably and our development activity in the U.S. has slowed, but it's picked up fairly dramatically in Europe," Lyons adds. "We can deploy our capital where the demand is, rather than tie up our fortunes and business activity strictly in the U.S. economy."

According to Lyons, the creation of the European Union has fueled much of his company's activity in Europe. With the opening up of the region's borders, distributors no longer have to place a warehouse in each country, he says. "Entities have had to reconfigure their distribution networks," he says.

The FM Logistics transaction is not the only major European transaction that ProLogis has completed recently. This winter, the company's European Properties Fund completed five separate transactions that netted a more than 2.2 million sq. ft. portfolio of 10 fully leased distribution centers. The total cost of the deals was $135.2 million. The buildings involved are located in France, Italy, The Netherlands and the United Kingdom.

ProLogis, which has a market capitalization of $4.3 billion, also will enter the Japanese market this fall, when the company will complete development of a 196,000 sq. ft. distribution center near Tokyo for DHL International, a package delivery service.

As of June 18, the company's stock price closed at $24.45, down slightly from a 52-week high of $24.52. The stock's 52-week low was $19.35.