Prologis (PLD) Completes 16 Build-to-Suit Projects In 1H

Prologis Inc. (NYSE:PLD) build-to-suit activity remains solid this year with the company completing 16 such development projects in the first half. These projects encompassed over 6.8 million square feet and are located both within the U.S. and abroad.

Further, this industrial real estate investment trust (REIT) was awarded 14 build-to-suit development projects during the same period denoting over 5.4 million square feet of space.

Notably, this high number of build-to-suit development projects reflects the advantageous location of the company’s land bank and demand from current customers. This is because nearly 75% of its build-to-suits are with the company’s existing customers.

The industrial real estate market has been experiencing solid growth, thanks to rising Internet retailing and supply-chain consolidation. This, in turn, is generating greater demand for logistics infrastructure and efficient distribution networks. While there is increasing demand for modern logistics facilities with vacancy rates tightening, new construction starts continue to experience a still-gradual pickup that is pushing rents up significantly in many of its markets.

Amid this, Prologis is well poised to benefit from its capacity to offer modern distribution facilities in strategic infill locations. The company has a solid development expertise. Last year, the company’s build-to-suit starts denoted over 40% of total development starts. This year, the company expects to achieve similar or higher levels, which is encouraging.

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Prologis currently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry can consider better-ranked stocks like Boston Properties Inc. (NYSE:BXP) , Mack-Cali Realty Corp. (NYSE:CLI) and PS Business Parks Inc. (NYSE:PSB) . Each of these stocks carries a Zacks Rank #2 (Buy).