Company Reports

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by high population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.3 billion-square-foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $42 billion of new industrial projects in the coming years.

Prologis announced that it has reached an agreement with the board of Segro, a UK REIT that manages a 117 million-square-foot portfolio of UK industrial and data center properties, to acquire the company for $18.8 billion.

Prologis reported core funds from operations of $1.63 per share and cash same-store net operating income growth of 8.5% in the second quarter.

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by high population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.3 billion-square-foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $42 billion of new industrial projects in the coming years.

Prologis reported core funds from operations of $1.50 per share and cash same-store net operating income growth of 8.8% in the first quarter.

Prologis reported core funds from operations of $1.44 per share and cash same-store net operating income growth of 5.7% in the fourth quarter.

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by high population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.3 billion-square-foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $43 billion of new industrial projects in the coming years.

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by high population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.3 billion-square-foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $42 billion of new industrial projects in the coming years.

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by large population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.3 billion square foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $42 billion of new industrial projects in the upcoming years.

Prologis reported solid third-quarter results as the leasing pipeline remains strong, and management painted an optimistic picture of recovery within the industry. The company reported core funds from operations of $1.50 per share, which was 3.5% higher on a year-over-year basis.

Prologis reported strong second-quarter results, with management providing commentary on a robust leasing pipeline and signs of recovery in the sector. The company reported core funds from operations of $1.47 per share, excluding net promote income, 8.0% higher on a year-over-year basis.

Prologis reported decent first-quarter results as management talked about the financial strength of the firm and the impact of tariffs on warehouses. The company reported core FFO of $1.43 per share, excluding net promote income, in the first quarter, 9.2% higher on a year-over-year basis.

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by large population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.3 billion square foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $37 billion of new industrial projects in upcoming years.

Prologis ended the year with lackluster 2025 guidance, but management expects the slowdown in the industrial sector to be nearing an inflection point. The company reported a core FFO of $1.42 per share excluding net promote income in the fourth quarter, 10% higher on a year-over-year basis.

Over the past few years, we have observed an inverse relationship between share prices in the REIT sector and interest-rate movements. We believe a major reason is that all commercial real estate valuations are connected to interest rates. Capitalization rates directly indicate the return expectations for a real estate investment and expectations for risk and growth. Historically, we have observed that commercial real trades at cap rates consistently spread above the 10-year US Treasury. If interest rates rise, investors will require a higher return, and thus a higher cap rate, to accept the risk associated with an investment in a real estate asset. Since return expectations have held relatively steady for most real estate sectors over the past few years, higher cap rates translate to falling prices for real estate.

No-moat-rated Prologis reported a middling set of numbers in the third quarter as industrial fundamentals remain under pressure, but the moderating supply pipeline augurs well for the sector. The firm reported a core funds from operation of $1.43 per share, 10% higher than the $1.30 in FFO during the third quarter of 2023. Excluding net promotion income, which tends to be lumpy, the firm reported a core FFO of $1.45 per share, up 9% on a year-over-year basis. We are slightly increasing our fair value estimate for Prologis to $125 per share from $120 per share after incorporating third-quarter results.

Prologis acquires, develops, owns, and operates industrial properties that are strategically located in markets characterized by large population densities, growing consumption, and high barriers to entry, typically near large labor pools and extensive transportation infrastructure. The company's strategy is to leverage the organizational scale of its 1.2 billion square foot portfolio to provide a single point of contact to address the logistical needs of its multimarket clientele. The firm's strategically located global land bank has the potential to support the lucrative development of approximately $37 billion of new industrial projects in upcoming years.

The REIT sector in the US offers many companies that should see relatively stable cashflow growth over the next several years. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years with many reaching historical levels of net operating income growth, the REIT sector underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that is due to the sector’s negative correlation with interest rates, as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. Still, we still view many of companies in the US REIT sector as being undervalued as the companies should continue to produce solid long-term growth.

Despite a rally over the past two months, we still view the US REIT sector as being undervalued. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors led combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years, with many reaching historical levels of net operating income growth, the REIT sector has underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that the cause has been due to the sector's negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. We believe that US REITs will continue to see share price movements that are inverse of interest rate movements.

No-moat-rated Prologis reported a decent set of numbers in the second quarter as there were increasing signs of demand stabilization coupled with a moderating supply pipeline. Management said that the sector is near peak vacancy, and a dearth of new-supply additions as visible in declining construction starts will be the basis for more-favorable conditions in 2025. The firm reported core funds from operations of $1.34 per share, 27% lower than the $1.83 in FFO during the second quarter of 2023. Excluding net promote income, which tends to be lumpy, the firm reported core funds from operations of $1.36 per share, up 9% on a year-over-year basis. We do not plan on materially changing our $120 per share fair value estimate for Prologis as we incorporate second-quarter results.