(Reuters) -Prologis Inc will acquire Duke Realty Corp in a nearly $26 billion all-stock deal, including debt, the companies said on Monday, as the world’s largest warehouse owner seeks to bolster its portfolio amid concerns over cooling demand.

The deal comes after a nearly monthslong pursuit of Duke by San Francisco-based Prologis, whose customers include online retail giant Amazon.com Inc and parcel delivery firm FedEx Corp.

Demand for warehouse space surged from the pandemic-driven switch to online shopping as companies sought to meet the need for urgent delivery.

Dealmaking activity in the real estate investment trust sector soared to $140 billion in 2021, one of the strongest years on record, according to real estate management company JLL.

The rush, however, seems to be cooling.

Bloomberg reported in May that Amazon was looking to sublet at least 10 million square feet of space and could renegotiate lease terminations with landlords such as Prologis.

“While demand remains well above supply at the moment, over the next few years the two will balance out as many customers slow their expansions to match slowing e-commerce growth,” Morningstar analyst Kevin Brown said.

Duke Realty shareholders will receive 0.475 of a Prologis stock for each share held, or $55.68, according to Reuters calculations.

Shares of Indianapolis-based Duke Realty rose 0.8% to $50.18 in a weak broader market, while those of Prologis fell 7%.

Prologis – which owns or has investments in properties totaling about one billion square feet – will add 164.9 million rentable square feet of assets in 19 markets through the deal, valued at about $21 billion on an equity basis.

Prologis will hold about 94% of Duke’s assets and exit one market. The warehouse giant expects the deal to ultimately lead to hundreds of millions of dollars in savings.

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