What's Happening Next in Industrial? Explore 3Q 2021 earnings sound bites from Prologis (PLD).

“During 3Q, we signed 56 MSF of leases and issued proposals on 84 MSF. Spaces over 100k SF are effectively fully leased.”

“Given rising demand, we’re raising our 2021 US net absorption forecast by 14% to a record 375 MSF vs. deliveries of 285 MSF, resulting in year-end vacancy of 4%.”

“In 3Q, US rents grew 7.1% yoy far exceeding expectations. We’re increasing our 2021 US rent forecast to an all-time high of 19% (up approx. 700 bps).”

“Average occupancy was 96.6%, up 60 bps sequentially, and hit 98% leased at quarter-end.”

“Development starts were $1.4B consisting of 31 projects across 21 markets with estimated value creation of $520M.”

“In the last 90 days, supply chain dislocations have become even more pronounced with customers acting with a sense of urgency to secure the space they need.”

“In the top industrial markets there is no land and entitlements are getting harder every day. Even markets like Dallas are becoming more land constrained.”

“Land prices and construction costs in most markets are going up faster than rents. So actually, the rent required for that marginal SF of supply is higher than 22%.”

“We're running but sort of standing still or going backwards with respect to keeping pace with replacement costs.”

“Rent escalators are moving up. We're pushing them everywhere as you can imagine. But importantly, the markets are accepting it.”

“Last touch segment continued to gain momentum with new lease signings up 44% yoy.”

“Owned and managed land portfolio now supports 180 MSF or $21B of future build out potential providing a clear runway for significant value creation the next several years.”

“We're increasing the midpoint for acquisitions by $500M driven by our focus on covered land plays and urban last touch opportunities.”

“The tremendous growth in rents has exceeded the drag from slightly higher interest rates.” “Spread between primary and secondary markets hasn’t tightened much. It’s tightened a little bit.”

“60% of development activity in 3Q was BTS, which will normalize by year end to mid-40s.”

“We’ve seen equipment delays with forklifts and racking. OEM’s are struggling. Lead times are longer.”

“The yield on our covered land portfolio is about 5%. You’re getting paid to wait.”


The contents presented here are excerpts on micro/macro trends from recent conference calls held by large US REITs. The information contained herein has been compiled from third party sources believed to be reliable; however, no representation or warranty is given as to the truth and accuracy of the information contained herein.