Prologis (PLD) 16 Oct 182018 Q3 Earnings call transcript

Welcome to the Prologis Q3 Earnings Conference Call. My name is Emily, and I'll be your operator for today's call. [Operator Instructions] Also note, this conference is being recorded. I'd now like to turn the call over to Tracy Ward. Tracy, you may begin.

morning good and Emily, everyone. Thanks, third Welcome conference XXXX to our call. quarter our document prologis.com is supplemental website available The on at Relations. under Investor I'd conference this under state contain to statements laws. Federal call forward-looking Securities like will that are market the well the as statements projections operates and beliefs which and based estimates industry expectations, These and current assumptions. about management's Prologis in as on

factors. Forward-looking affected by be operating results statements may are not variety guarantees of of performance and actual a

our XX-K For of in forward-looking factors, statement refer please the SEC a to or list those filings. notice

guidance; here Additionally us Reilly, Moghadam, then press contain our on that cover Ed will and financial Olinger, to Company's measures. Chairman in outlook. we release measures who Mike measures those get morning, call EBITDA results the to G accordance This CEO, non-GAAP Colleen Anderson, and Tom Tom quarter our that, Hamid McKeown and Nekritz, the have we'll third and over CFO, started. and results reconciliation with Curless, from will we'll supplemental provided Chris today. also Caton, With with Reg who such comment Gary I'll do turn as are Gene a and and and FFO our are hear

and morning Thanks, Tracy. quarter our joining call. third you Good thank for earnings

First, DCT. $X.X our with I'll of start an billion acquisition update on

of with vast in of our annual We've hit that interest rate expected million debt integration billion and financial cash over a $X.X of well exceptionally went and The the rate XX run assumed closed average operating refinanced is transaction X.X% XX. the years. at Our results of savings. term and an August reflect which this in in majority transaction on complete we synergies the already $XX mid-quarter we

incremental Now, revenue our creation focus development from on annual and value synergies. the $XX million future realizing of is

able These is we'll high exposure There effective these conditions, announced these rent. XX We've some confident spaces Broadly market $X.XX about higher feel we points with ahead. than these for net approximately firms any across given at XX% from with we Market and monitoring healthy to about customers rent per line are share. us results, FFO and several our lease core recently the remain market. growing leased continues rents to forecast demand. from been notable customers was were our to are they're less time slightly very be space minimal. our to well basis fundamentals and our located be in get third bankruptcies below companies our business. quickly of up quarter back Switching to Europe Turning in for good portfolio

cash at of X.X%. led NOI share X.X%, U.S. growth the Our by was store same

Our was change had an to than was value year-to-date on year-over-year volume X.X XXX points share quarter of XX and totaled bringing $XXX more five development stabilizations over basis at average estimated the of million includes million. net than square creation margin with feet years. led XX.X%, This over leasing. term rent U.S. up XX% in the our was Development the points of with more period. an of million by XX%. also roll total feet more square approximately third XX%, Occupancy Leasing at basis XXX Europe effective than up same XX%,

was So far contribution and this year projects. in in of activity we've million. the Disposition approximately realized development $XXX $XXX gains quarter on million monetization the

billion $X.X the October we closed early the sale of $XXX Maple million. our in announced, Tree to share totaling previously over As proceeds with

this million of totaling transaction to the $XXX year second phase end. by close We expect

duration to six tenors issuance years quarter years. extended During of our XX average reduced the average to and the interest long weighted weighted up our rate we to X.X% through term

globally at of we continue Our to business the best terms. in one capital remains and the access balance sheet attractive

billion $X amount potential us over to Our in dry capitalize next of $X.X This fund the to rebalancing powder development liquidity allow attractive dislocations fund decade. into self on substantial well flexibility us opportunities market of as arise. positions our and billion deployment

of you'll fourth are quarter I have looking XXXX you until know this normal guidance our wait but for to Looking call, our is many forward, practice. as

guidance, XXXX the basis. on highlights our For share cover I'll

So, the of Page for NOI of complete to of X.X%. note, our Also midpoint of same-store detail We're acquisition. the refer our range includes cash the X impact supplemental. guidance DCT our maintaining

fourth for the net forecasting the $X.XX year. For share we're promote $X.XX full per income, approximately quarter in and

of net unchanged at midpoint the $XXX share deployment remains Our proceeds million. at

excluding To when between share. plan are We forum $X.XX laid to our put context, nearing November to growth at promotes. our XXXX the X% for we'll At the core FFO X% $X.XX in two XXXX, out investor year XXXX exceeding in and we for the per this for years have our range of we three this far averaged annual midpoint first X.X% plan. percent guidance, called

reducing and XXX Importantly by I'll it achieved will almost to completing this that, realignment With points. our of over Hamid. the be basis our turn leverage portfolio while

Thanks, my as straight remarks results four I'd to strong once again like forward. Tom. key and our I'll address areas. keep brief were

on many bankruptcies, and tariff have I retailer lately. of First, know which of you topics are dominated the focused trade, news

date suitable those shortage that impact plenty our the volume. for of the in are by quality or hard leasing of focused space we've might one measurable options. backed we point out no U.S. if There who in we on waiting in our companies customers Sure, are lease these our context two real isolated can other But overall search to you As but we're potential imagine, was line risk seen and as of are business. cases the negligible negotiations of the keenly on well. impact to frustrated

for by this XX latest year XX% up in this has fact In for demand to ninth U.S. short of will the an revised consecutive our million absorption by Completions square net forecast million year, XXX time feet. square estimated fall the feet. XXXX

talk want us. to a bright I Second, for which remains about Europe spot

customer replacement up the has driving In are first the three the in rental growth rent and rents a and year strong are lows, made Europe continental stronger, sentiment improving, historic at getting rates. somewhat in more vacancies moderating quarters spite in strong decade. costs for XXXX escalating overall Europe than are markets is already U.K., of Our

Looking that possibility continued a U.S. a very in which great store real growth could of market into same in XXXX, next that strong growth news rent market there's of is Europe overtake the to us terms well decade. for

XXXX, to markets merger team combination term in into Third, the of which the now increased tirelessly assets billion acquisitions accomplish our XX% from multi-year approximately in Since $XX proceeds disposition development, sold than today. I'm very this complete. more long worked plan reinvested is our holdings and the in non-strategic to of global and Prologis-AMB our objective. XX% of who percentage proud we

it shape a As a has result, never been is in as today. our portfolio good as

road NAV invest While structure, enter organizational benefit into where focus most let's come on we the advantages benefits well to questions. the data capitalize all to in intense putting the estate. proprietary opportunities, benefits portfolio real the that from chapter lowest tougher capital our a These close on one and as market environments. opportunity quality of streamlined the new Company's action and era create the in purchasing in the Fourth, to we good this to down of can of and we innovation ability to service, for to hard look the cost worked and tremendous We the times the this the technology, in in call efficient scale. customer forward apparent capitalize create realize become value real include beyond we power, will evolution, and them to high underlying our open the on differentiation unparalleled of these benefits customers. Emily, the industry,

KeyBanc comes Instructions] our line the of Capital [Operator Market. And first from Mailman Craig question from

line Your open. is

asked question thoughts commentary on retention push updated and this hard tenants you're rates the to years cash-rent with the just ability think just surprised kind here to being increases of about your curious XX% that pushing? the guess two were able how the keep on of the highest in XX% absorb is past but focus given along tenants. still this your past further know quarter, I'm in I proximity, I where I team spread just

and the trending? mark-to-market that's environment So, an and is feel guys maybe you update maybe on how just where the

The of the markets these every them the new them come increases. getting they to they rent spooked hear a was. when tenant why where and and back about of with because and many strong indication discussion And intention with go what when starts little lease every out they market we're not them that's are get market staying, the an of shop really was in tend their we fact told renew the

retention we're doing but obviously not our push to hard down best enough. So,

in quarters. So, we'll harder future work

BMO line of the Our Markets. next question Jeremy comes Capital from Metz from

Your open. line is

accelerating market Europe you're color to starting any Coast in tenants we're you guys more actually fight about seeing of little the wondering and you China, next to the give your import year trade conversely can I year, on that rents with Sticking most particularly that U.S. pass specific continuing your where moderate comments where with you and the see the then the in most? and was starting have - West the more could things maybe And impact are Europe where a a acceleration seeing terms overseeing exposure? in see perhaps you're and if on U.S. from

have for talked examples we that remarks, and market. actually up less point two forward to in is Europe has been a as U.S. we've going the we wars. that seen We with with or recover and could why and to intent. it we more published about means just do turning go that in think mentioned other prepared on later we two the going know a really well. Europe we is more hard because leases and XXXX forward. is come for the really and U.S. was guys, around decided table XXXX. So, that do really potential I seen relative expect recovery but possibly trade that come sat extremely fully the a in not conclusion see that couple That continue were customers Europe up be I once, than accelerating U.S. at The this don't strong to all spread would we and these basis, going to haven't our notes getting tenants well. we're well one of really statement because my think And just the to to the we of was wasn't that you doing with that to led

Now, XXX quarter. signed in the last put leases we that context that of

So…

the only. U.S. In

…in the U.S. only.

ground I that a the certainly and the translated tenants in trade XX or stuff drop a it's negotiation, So, not think of of anyway we can other negotiating mean, any really has stopped reasons yet tell. why irrelevant. can action I to out on

comes question next Steve line Our of ISI. from Evercore Sakwa from the

Your open. line is

I and that could in next Hamid, accelerate feel hoping curious the talk about just today how the volume import I'm and was whether business like into and you and steel looking maybe rise the prices you're at little just development business development could year? concrete. given you bit a

don't are not really escalating about ready be now, beyond on ago quarter the on you would to umbrella projections, us I may job margins there, if by replacement accelerate about the compression back obviously you rent we year. give is good we lot starts to to Construction double as as U.S. more because we recovery thesis talked that our and we've the numbers rental happening really the in global on margins was from when see many that's from out But our a can digit they being come were because a it But remember do it to think to right growth talk now. and will what next into but than like rates candid, crisis. the We're perfectly for product but we and costs for. you to We completions as our margins hoped it into you our financial on growth doubled. provide at that refine years figuring an rents. next talked another roughly about The and for cost remember And try going ever CapEx gone leg starts, translates double margins, are volume of have up surprised been pricing higher that. don't you been on

So, are not development costs margins or affecting so construction far the decisions..

Korchman Manny question comes line next Our from of the from Citi.

line open. Your is

to tenants take we discussions, expect to sort especially decisions of whether make there if has taking to for or and the time a on changes been spec any Hamid, the of leasing is developments not? in developments tenant spot that pace or

this good is very Gene. a Manny, That's question.

when customer but point with time So completion. to a commence the this from conversation time XX won't time. there's and And leasing days get about a is we steps the stayed basically at process has over I through four into entire that details track and relatively it takes we the it stable frame

we something deal. really gestation the period watch that's carefully, long So how for is a

So, no it. to so far change

line Bank America/Merrill Our next of the Lynch. Jamie question comes Feldman from from of

Your line is open.

wanted So, guidance. on I focus to the just

you up if add other like add a the it So, press from the up guidance. net penny to items assumptions looks a those of about release, higher almost

were as were than just that than the DCT it or as the then about better can is? put And just your number worse offset that expected, that as the the two expected integration, I'm like about you kind was curious you things of think what you together? So, you portfolios you things also talk drag kept

Tom. this Jamie, is

your guidance, for So, guidance, full We've on think I about look core to both guidance on full promotes. you on think question increased over year. when and first the year the at need the you on it meaningfully

the QX, got we particularly we've back year, half into role. little As get the of very

rents move ability that number is like with and your higher limited. the market So to

right relates you of at piece what's on we We outperform our but on it the right cash interest DCT, to through when were statement, synergies As we mark. hit look the the on mark. the income GAAP again running did actually

quickly good feel how hitting and portfolio. we the those particularly integrated So synergies about and well we've

and $X.XX $X.XX - about you what of turnover not some severance charges you do had which and you extra, if for. planned know $X.XX, of it, - also related will anticipated other we was to call Yes,

do we we that So, didn't actually if I would do even thought would we than have think we did that. better than better and we

of Kim comes from next the line SunTrust. from Ki Our question Bin

open. is line Your

that into you're and of and you Hamid, can perhaps the how your of you develop glimpse some initiatives time? provide early some over to see data an customers and big impacting business your your trying services for evolving

three to Yes, for stuff, about year. to a too some about we'll talk On customers, thing. revenue talk that let the to data management, early now first me ask the those. have five of that's right initiatives next on about initiative But working year of for talk big something one to more data. on the other that's We're Gary early

running we the Ki also chain. OpEx, think that have organization setup is a focusing on of and on so, both procurement Yes, today, we I supply Bin, construction in and discussed and and focused sort past up this We're G&A, CapEx our activities.

So, customers point. taking of to $X at looking now is paying plus advantage customers support spend billion to - of the hard relative our in cost their we're what particularly smallest really sort the and

think and of we're year revenues. respect that next to earnings we're that a product testing respect it anything looking they what I of And respect markets. MVP So, a right with means a with follow More moving to providing. with facility, at to in really need and into in to really now out process couple an rolling though

Our question line Vikram the of Morgan from Stanley. next from comes Malhotra

Your line is open.

month of a really sort to sort is question. and year growth Sticking maybe and rent - this of six

elongated, percent but the assumes You leg rent it chain growth a being of you I supply talk that were of efficiencies color essentially sense estate, growth estate operations, may market being that more leg or no change. it's get talked percent a if supply a not growth spectrum us give to about able about assumes rent done second first be of a could warehouse your Can the as you really you wanted real percent as it versus some on transport or can that whether any does if or to market rent sensitivity as how higher have logistics bit of recovery, you real more chain cost. of also see any…? the

to justice. the costs, that there answer to really that's put because lots an invite out. in going oil rents, the X% and fundamentally term I'm ecommerce a more they're you're go they're Because everything you and the of ecommerce automation not go savings the eliminating team the but these buildings. look cost last Vikram, probably rents in autonomous, that at really is X% some of papers and short So, long try his Chris renewables, being are term And are in retail have and but of it But three prices the labor coming obviously in going of to and driving Caton of labor because is. chain supply introduced because not heart question. warehouse do those, I down. some costs time, In to down And transportation we trucks to are question and that's up actually excellent of of in over going going

locations our by warehouse going very more funky much So older we high traditional way foot and I retail not XX% the infill going does lots retail type in can substitute. XX as like have be triple. they they a of that old there them. is minus and that little more, with those pay not got really to Customers or or and not are mean all the those clear for more and turn double portfolio. the that it can galore. is X% think real are infill mean of pay price spaces stuff doors of they’re of of of look kinds maybe is are because spaces special close sensitivity really the we and think or And I that

it’s low in about very the quick window. the and customer all that price a serving is on So, segment levels sensitivity service

extent that doubling, very rents as significant spaces. building over in examples some have So product those And of the there as we’re we're frankly of multistory and tripling have seeing we are rolling rents stuff to new infill you could encouraging and that scarce infill land more quite as not it's out stuff. that. that’s - more there's normal because of really rate competition, and very expect been the a I on The further growth as on you can think

So it more need a the thing binary and sensitivity it’s less price between at the closer I just the in get continuous the you point a the cycle. those differentiate customer becomes the and infill relationship this to it's not have you would

from the Heck from comes Wells of Blaine question next Our line Fargo.

line Your is open.

Related asset seems as color to or get seen just infill steady we've given it though to rates to on wall pricing wanted and continuing flow of I a markets into those locations. in to capital that coastal kind of here even Thanks. little the that cap holding continues decrease the

wondering you’re crept an rates markets recently. all seeing and maybe as at been you're up if I’m So, where seeing increase inflection rates any has interest there have cap

Blaine, this is Mike.

compression We’re pricing other and certainly to cap additional isolated fact markets portfolios continue going. is not seen very in way encouraging conversely in continue rate out that and in the market seems be just are any see we’re which some to

the from comes of Our from next Guinee question Stifel. line John

line is Your open.

of question. multi-phased Sort one

XX on California. thoughts prop your in First

an Second five industrial sold and retrofitted sub while it web ago I building a Northern think shelf services cap. you delivered Virginia in a powered Amazon as

your infill Amazon's XXX center foot prototype plate but their distribution business? third all. maybe heard active suit So foot floor the newest And to on in vertical are for is what's XXX you at I've build data which current XXX to thinking then

Prop not competitions the looks. try probably that's the to and time XX the quickly it mean XXXX where next the where of to we’re can kind in at guys that's money this going or I and Let in is election, hit are me elaborate. point get some them XXXX maybe

to start and my improvements and you they term customers a attributes and the think traditional data because we we is product data Virginia In a centers of don't will office our us rent, And even all building put for come credit those better building leases. to lot centers. I split really has out unique actual probably Northern out the guess. locations start in have more longer warehouse So that

has location go prototype talk So could of about who not so major less use land. generally some let it's in unique me just characteristics. markets has specifically up because finally because these there, And vertical that but on space not Amazon, nice more imagine land cities you Amazon out good are people we’re totally to smart, that because need but distribution to

and density that. is to land you doing So, a that. squeeze anything try more piece of who on want do more anybody to about multilayer can go going Mike say smaller

going Yes, they on trends. I mean because we’re lead with of market the obviously staying very close what’s Amazon terms in to

there going it to going plenty as We activity of top we’re changing in forward. and understand have you’d discussions needs of of be to ever underway the expect middle on those we’re

from Our the Yulico Scotiabank. of line next Nick from comes question

open. is Your line

it I the most want data look when imports issue. of margin issue, the by to the exposure the the turn Long a import to more U.S. also shows tariff it's wide Beach to mean back to I rest exposed for Chinese the ports Chinese and tariff net LA the at you markets is

your could it just how portion So impact only we hear perhaps not largest your of there, could for over understand next but year. you to for when it’s potentially portfolio market, thoughts? love portfolio Southern regional bid that and and Imagine issue the space California into some an about tariffs entire dig the your demand think

estate love in LA. buy We’d more real to

well think you XX% our what to now if That position. we’d five in our tariffs, California over is most the region. and anybody base the of is turn and world. the And the number So dynamic them way the comes accounts like to spooked the U.S. that economy in were the by market LA increase in trades is

physical of the you through to able hoops So to stuff of and but that constraints to building. market other entitlements everyday all supply just we real tougher, the in that you costs not got terms going in have land, are build love be up terms getting jump

markets. love we those So

from Our line Derek Johnston Deutsche next the question of comes Bank. from

Your line is open.

the of lease talk about if could your how your types you markets update San Could to just for we for follow Fran. and developments any of your guys future? our six multilevel caped up could feel are the be an you project there approvals you up these Seattle strategy updates And Could potentially on on give densification? us which the the going project in in warehouse

Let’s markets opportunities No, we to start add that those the that our real be the other in markets feeling is of Europe. one. the we and are act Asia global process. would ones so London certainly would one in of on there last with them, is primarily The Paris couple limited process multi-year substantial the other one six markets can number in but opportunity. fairly development Japan approval And a that of is Francisco a for San is

have a buildings through lot PDR our a to EIR jobs you to and office been by preserve kinds going like. significant We’re but go to to does of have of because of Francisco those conversion buildings want space eliminated process, those San them the know

at those these look good jobs of actually thing. living they kinds So in way buildings a as

the so return awhile. So be on we’ll going to of space. month It’s for have at issues take going approval. project in patient you is a of clipping XXX% completion in we’re be the these of and but the end the X%, securing to well With activities site respect Seattle, X% and while that can’t political very over to we wait substantial we ultimate terms predict it’s big

seen product has nobody will of at stronger had first much underwrote. be ever three expect by the story the look I haven’t impressive. the and it quarter to full up you would you rents very it, if Remember pretty it's I people there strong end would than to product running a and really up with so So go we experience encourage it need at see you

of the BTIG. next from Catherwood Our line from question Tom comes

Your line open. is

workforce make tenants September unemployment capacity markets you with to in or smaller access kind investment And seeing to decisions? your incorporate How a different been labor additional investments up your base? either a employee has gain look for to to Southern community in automation over XX which are a California labor workforce in make a into guys second, do in of low for Moving you to announced initiative you years.

that a and Yes, where an Nekritz important acquisitions memos turn section availability so whose covers our so that with running I it workforce respect committee over value Ed labor to On to being we initiative think added let the directly. been important we investment mean issue it's to me that. labor we've with our community developments

and the their our do So tied doing their it’s in we make that customers. communities developing the now first lives LA customers programs sure - and we’re how to something rent, with what do than program better. are we jobs How about is help we with about where internship customers our and introduced in making conversation other our assets in our we’re that

our communities, Our customers our economies students, our their these jobs into young on labor get pool that in stay needs tied the the to operating. sure labor are their in and communities, making over and focused have we students ability create better for the

program. supporting to you will our the finding we're the is best graduation this and the them the opportunities going with them completion are of we’re up that nonprofits not all we’re situation. country doing following supporting if in improve around What labor to employment Yes, really and with business and set NGOs capital

our really thing important you and going I bridge is for of quite And this. to a this we’re and for a traditional kids with the jobs social a and whole high us with really it the away. about capital serious it's know about it’s and lot that supporting other opportunities do. impact school So of There all limited discussion building about think

take the this on initiative. that So, we we important it’s leadership think

of the from question from next Capital Michael RBC comes our Markets. And Carroll line

open. Your line is

now today structure? to talk net net lease about you going has and Prologis bit right Can responses guys gross the your gross liked a little what the in the leases? market they versus the How tenants a initiative pursuing leases have new those structure of aggressive versus marketplace been, to more pursue has to is of

Michael, this is Gene.

call So and lease clear you’re States XXX% the in in soon about lease proposed the in clear Mexico and the leases. today Europe it a as effectively we gross talking are United A is leases lease all structure. of

So we’re taking seriously. this very

XX%/XX% this it’s the and overwhelmingly the like so than adoption done lives who already. more And XXXs reaction really so something properties lives the this, our frankly expected. I touch going just terms so to great. customers at think some this of these And of of are about customer manage positive and in we've on been leases parts have is simplifying we these our of point we people

have those other have up the little levelers get who in better in it our you control they small that business the mean position one really in underwrite units snow and negotiating to crazy, medium-sized these - because we excluded But But and Gene business if of pay And rent the that location sets at I of square-foot words things. fixing lives a which and all property they the and to builds taxes tenants all big for by conditioning removal our gross that. to our and situation mean spent very, are leases dimes not the gladly unusual really where said then taxes than the nickels they almost for from dock we're way very is a is city, reason asking one are. may property XXX,XXX fixing the air number any it’s our from calculation. directly tenant we’re I structure look the

all position vendors power good better economics spread it much costs a a demand. drive purchasing aggregating And in with we can this by portfolio We’re big those because got to we underwrite though over. have to we

So the one was done and was the the industry landlords two the or fragmented buildings. was way had historically when business

into kind our to think ultimately investors. that to scale I we use translates flows for rents of our got and get when that to ultimately you put our scale customers to that

of from Green line question the Street comes Advisor. Frankel next from Eric Our

Your line open. is

Just a questions. quick few

development what we and were quarters. little a bit First start in margins than last just you this three better regarding quarter see the

So new then just gross just lease And that’s to mix I’m wouldn’t operating same-store if the comment over team. all did to by Thank just to My that third, is affected within your can good statistics a have noted you taxes turnover and severance just question a suit. related so G&A, in real and if second I’m you your and X% structure? wondering your related on build amount you. so be issue expense your estate wondering I increase that’s

start seeing revenues and in your the impact the hit same-store expenses of so two I'll the on last expenses expenses. what you’re which forward questions and as with both increase reimbursable

I you grow that rents back around points. grow basis X.X% expenses at out, think going see and component to you’re If XX like

So it’s all there. reimbursement through noise seeing you’re around

seeing as On as in those really people restructuring we And left result, component some that we be mentioned of expenses Hamid the and technology. some in main a the go and and G&A making through personnel the were have investments it question, some around people would and you’re have bringing was done G&A.

for going We Yes. personnel thank With margins get I'll our I’m everyday of into XX. details to not our stuff go that blessings. get decisions respect our this mid-XXs margin that earnings sure. we’ll we and call thinking to on the take then into Eric,

this activity been than fact going what assuming be good could than mean possibly - we're low I than historically getting mid-teens we’re the we anything underwriting I forever blessed. margin to But in that that's we're double get news. can't in other extent our news that and not So that see to and better good how the last their stuff all in more that it’s business is how that's to and have we’re the and

from question of Michael Mueller comes next Our JPMorgan. line from the

open. line Your is

happens Europe rent growth? NOI next the ahead the in go in does growth and until Is U.S. rents of market long with How the same XXXX. spreads year thing

create is growth wedge. U.S. the XX% of U.S. rental or many captured is is couple last in the XX% The or and A its a the by double mark-to-market it's in to I so. widen looked years is around spread. X% have at high while obviously so not you teens releases I need to think of and what XX% the because rental Europe Europe you that in XX%, time pretty are need of growth it role of been that the what years steep to that

don’t I done the but know I awhile haven’t math So awhile. you know

of Our Citi. Korchman next question from comes from line the Manny

Your line is open.

the to what disposition have with to next DCT you we DCT expect you done want couple light Just those be in year last deal, years? pace discussion consistent that volumes sell of think will because assets in you've about do thinking dispositions the of increase should within you

merger year mentioned estate being talked in I billion billion in as about my DCT nonstrategic sold assets. we Manny X the billion the a $XX in So real remarks that’s a And prepared or we years last of of seven X.X million quarter. $XXX

We a that’s are in historical no work. hurry to worth do that pace and of at quarter our

nonstrategic us - in refuse the to you can’t control price as and that transaction to at premium normal strategic the site always and out phase. But last disposition Business different wants offers billion a action. program we're are be end. when in or billion one $X of year looking the going disposition we going if all is as with than that Tree portfolio, that there always an the a not the hurry do And of to a be to done turn X% have every do price, even over offers and to X% our certainly it’s program we're to So that the door and a not profitably course has sales it we portfolio program but somebody to person sort billion could of big concerned that with, comes and part you far course a the at deal, to that. we're and to us $XX opportunities comes over we’ll of the that $X Maple to call of and come of next for user call subsequent announced big a

David comes from Harris the question Uniplan. Our line from of next

open. Your line is

at get how your It's first Brexit. get what be going do a planning affect a explain view and just moment we the hard if you around soft you're to would that we're a Europe positive positioned Brexit as whether Brexit will your also not Could outlined? spring, you this as and clear contingency next or hard that

wish know. precision don't I I yes, answers mean I I those Well all with knew

a lease you and XX% the the as over to average exceptional portfolio XX high tough is get is processing lease, entitlements know in U.K. U.K. exercise. multiyear the a Our The place term in particularly is well land the credit is years. is U.K.

in performance and the put mean and LA, terms the would So U.K. compared on I list on U.K. we best San crisis fire. markets since right think the the best Literally the has U.S. the to of been global all recovery of Francisco that. rent top - of financial I and the in

to some the of would would I or or just not if Year one was crazy related or that You a a so in lot Brexit and that very ago its as best still not the in Europe as anywhere. take a that had business change demand up to U.K. on markets you as of don’t But expect planning were moderate had very very increases. point led at development year ago. but to that we’re Brexit situation unusual spooked I or two It’s it put two to you U.K. people about didn’t big comfortable the the very, rent

and our and side David in capacity on - just financial can we the our we of sheet other see - liquidity balance you obviously funds. that significant have is

for us do to So take we if certainly there's opportunity will advantage of that. an

we’ll think that don’t chance. get I

Frankel of Street Our the Green next from question Advisor. Eric line comes from

is line open. Your

another and Just question. a clarification follow-up

have development guess of I’m profit bid regarding I development start the you referring just Just which lowest I development, this cycles. margin think so quarter is to XX%

to or environment. more terms just I into too guidance DCT is like just competitive development get part in that it for deal the it’s look but that’s understand how year emanating will to if opportunity don’t of be a And to want rationale relate to the I’m So better trying next whether external obviously whether issue then construction cost much growth going that. of what

our and asset to also as there with a opportunities overall your base volume development that grow assume having more I’d So would customers. higher be larger result of

hoping that? you. Thank you can on remark So was I

As of you the things go cycle couple through happen.

up the old really at land and are used to more margin more now old else being on lower you're because we the value. land therefore And land really of going use margins go more basis your the market. basis and book buying up have everything You of same down

you starts think, forma pretty the would but you out yes pro the it’s be. to lowest expect it go and should I margins don't conservative on So been, point about big margins And pro is correctly those. twice as starts on as down ever it’s forma we’re

in think just DCT good to doing. so land our on be and of to and sure So pretty it’s without question lose oh, then over would very what lot clearly been to compare the of DCT that part. to your part guide that, to and I’m is question in comfortable it that the then that on honestly. we to second volume come we’re that answer have do would we near-term you reach whatever volume right a got your sleep higher easier And the what have extra a give every with second don't we’re case DCT of known way had Look performed have the But DCT, your you those. that indication not very doing we can your development look at next would development own quarter you we’re conclusions. question, in will the I I

just development development. Eric at can do do without in DCT. we’ll volume some would put give much what about XXXX additional XXX for you will guidance land sure than XXX a it million it, million expand when will more XXX be point so we we And but 'XX that that of you in this how in of will otherwise embedded million then we for bit. tell that I the bank a had more supports we Yes, numbers to And around XXX

we portfolio. our the the we And we deal about mean reason the think accretive, we actually just accretive long-term of did short-term to love is it’s that only very business. be Yes really long-term the I to DCT that it clear, I it great mean quality feel and

coming you'll pretty numbers those So to be good. growth through rate our see is going

Capital line from KeyBanc Craig Our the from comes question Mailman next Market. of

Your line is open.

and dispositions few a have to you for in quarter. it looks as fourth guidance Just chop development follow-ups, here some relates the wood to starts

revenue over X.X% growth basis? three Tom on been reimbursable have I out two if that's had what to same-store on quarters the of quarter would you've same then think last you curious the the just how impact. you Just around noted And second this like trended it Do pull the kind pipelines look there.

been zone of remember, on you Tree I that just right guidance, transaction. your at take year, and your a I’ll on question another saying. and then that check sense behind of so that I think saying our balance I'll in $X.X look phase but close in what this that strip million address you're the would dispo to I'll closed second in We've X% of - the kind think we've change dispo when let around makes $XXX the got and the zone that's Craig one side second what that's starts when in Maple that's - rent and And you we're be first, better October we on billion other starts. early and the Mike out,

we done This the that year Yes, about been to incremental ahead a time starts last of on the volume, to the of way we respect point years the work be put in in those billion of with each four a to quarters. we're had approximately two couple finer disposition. $X on XX%, away development confidence XX% With closings, have were the last there. to done game so our

quarter as kind Our and of quarter. this those in to the of the visibility as ability confident numbers feel our to we remaining in this been do through high ever pipeline end is very it's

just always May call. for last talking you thank our for the or back-end-loaded the the forward to to into question. development you thank fourth at Yes, It's I want something. and Craig, way works quarter. that is the business joining It's one, to week. Look everybody Anyway,

this call. today's conference And concludes

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