As the 800-pound gorilla, Prologis (PLD) is a bellwether for industrial real estate. Here’s why they're bullish (starting on slide 22):
1. Supply slowdown:
New industrial supply deliveries are down 70% from their post-COVID peak.
2. Embedded rent upside:
Market rents are already 25% above current leases, and rising construction costs suggest replacement rents should be 50% higher than today's in-place rents.
3. Secular tailwinds:
Continued digital transformation = greater warehouse investment and higher margins.
4. Cost-of-capital advantage:
Read the full investor presentation here!
PLD historically trades at a 7x FFO premium over other REITs—cheaper capital provides a powerful edge. (But note: this premium has narrowed significantly in recent years.)
COMMENTS