Prologis (PLD) 22 Jan 192018 Q4 Earnings call transcript

Welcome to the Prologis Q4 Earnings Conference Call. My name is Kim, and I'll be your operator for today's call. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session [Operator Instructions]. Also note that this conference is being recorded. turn over to Tracy like now the to call Ward. I'd may begin. you Tracy,

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

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

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

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

you. manage period seeing steps customers the hearing Namely, are we're all our of data, from and is to year details the ever, probably top bat for morning, our we're of a will up do address later. taking what joining out mind in over right minute you of most quarter that want to thank to uncertainty. this the capping strongest the the Good of we're great and everyone us. What We fourth for off had increased go through I issues Tom to and that the what

and square deal showing regularly, of me we year. feet first on we metrics, start the gestation elaborate is know. what in monitor interest days robust. proprietary as forward-looking the of customer the which steady. specific we slowest lease We can are conversion data, Q&A, of let December such rates period on XX which XX Based average holding leases in operating usually in million First, and with January, The part signed

to customers We expect with networks. and out logistics activity most strong remain our dynamic improved building new

the clarity saw seen even they slower the haven't surprised growing we be While wouldn't direction in hit segments, any on pause economy. the until further softness if some of we the button users

think we what means. this for Now

clearer lend waters, analysis. disputes are government trajectory. we're its back ball self-inflicted China cheapest to all, is anybody are crystal strong factors is XXX% and causing in shuts than down themselves the quickly any than navigating with confidence and else's uncharted If prior the the fundamental the volatility very not Our on since don't of the a resolved bounce strongest can and form market trade soon, market After stimulus.

in doing billion what our the our the highest best the program, about all now of portfolio properties focused With we this? are non-strategic XX quality completion Now, markets. is on disposition

ever Also, Our space of for preparing investment work risk funds parts historic the the REITs strongest vacancy sheet taken In limited I've to several increased the balance capacity. all as our providing high, sector. of with supply, e-commerce the logistics among low, a for of we've seen hard secular of a historic a additional and account market done volatility. is of tailwind shadow our capital new the market at absence We’ve steps and one the fundamentals already have short, cycle. remain strong ample property to utilization at

bar speculative starts. the raised development all new we’ve First, for

and And to asses plan third, on assumptions actively in have engaged market Second, account last sentiment. ignore weeks, risks business we in the the are the indicators to the and past basis changes month turbulence in be daily we’re of forward-looking of higher not emphasize, to I dialogues seeing a two would the want XXXX Again, environment. monitoring our customer tempered weakness for potential responsible. but in are guidance market, to in any we proprietary signs our any

point We’re in economy, not our in to telegraphing running an we’re inflection just business. trying the be prudent

of dot a lot the by XXX up appreciated the S&P March environment XXXX, this peak back, lost in its market two Looking In era. reminds while years was Nasdaq XX% com me of REITs nearly following the two-thirds of the value, XX%.

uncanny of risk risk attractive today My plenty We’re the of past. predict tech once are companies of capital the but is With doesn’t that. highly that, not to are their but unicorns environments parallels and -- characteristics History survival. does I’ll their over on think with capital leaders bet today’s but well market, there itself, enough it Sure, are money, adjusted the because real are often turn for abundance repeat of that making cheap the managed its we REITs in dependent can naive defensive shine rhyme there between will real that it yields. to generation again Tom. that

push FFO Thanks highlights XXXX for XX.X% Global the $X.XX included and $X.XX to an per held which $X.XX quarter, income share promotes. promote and term. points outstanding cover and ticked continue basis fourth of we steady net year I’ll We quarter. at for Hamid. occupancy the introduce the the U.S. year-end year, rates XX while was guidance. quarter and had at of Core $X.XX as including for down

spread between feet to high in XX now average term XX%. with was XX% leased an extended quarter than share estimate Europe Our our time XX at We million our was by a where change and leases to high. approximately an primarily leases The also rents driven record XX%, months with market below on place be more in modestly rent of net we market. of over the square the effective XX.X% the U.S. in rollovers at quarter all

was share the cash NOI Our growth same-store of quarter. X.X% for

lease also nominal XX this points more basis sequentially had percentage as value declined trends points important longer pre-rents, to was XXXX we basis located demand to grew in our year quarter well We and third-party real pre-rents XX had that logistics on to which a more by $X.X capital new the of for estate. X.X%. capital AUM Investor note remains drag same-store. $XX It's our cash a billion strong for Given raised strategic lease business. billion. than good

a coming vehicles. revenue strategic continues perpetual fees with capital over of life business XX% deliver Our durable very from or long to stream

and active $XXX billion million. of were with over marks billion completion of the sales approximately front, in creation The an On Development the stabilizations the year program. our an deployment value asset shareholders. of and multiyear $X.X non-strategic disposition significant $X.X margin we of XX% for had value our created quarter estimated

balance markets, sheet to attractive access capital globally the remains one credit capital at to in strong business, best our of the metrics are Turning our terms. continue we and extremely

run as minimal our or have the debt And more recast currencies enough size rates line foreign with denominated We over potential we are of in fund global foreseeable XX% than future. of billion our fund credit, historic self refinancing of near than risk is We at more the lows. now of where base have rebalancing. $X.X deployment for rate our and $X can liquidity from billion

our on basis. which I'll XXXX share an provide for guidance Now

related less consumer outlook We bound and Clearly, and in to inflicted toward self Hamid this mentioned to to our there's paralysis ongoing volatility uncertainty. in and revised resolved. affect that As guidance political these should the the confidence. business soon, issues resolved are capital response the upside corresponding markets guidance be

to ending X.XX% growth cash X.XX%, same-store expect occupancy XX.X%. period NOI and range between and XX% to We between

million $XXX years, recognition Consistent which strategic values timing there revenue million will prior net of is between For income promote per excluding FX rates. today's we be capital, of to difference $X.XX expect on real and expenses. estate $XXX its revenue promote related based and with the of promotes share, and

third majority in promote We revenue the each XXXX. expect quarter recognize the to and $X.XX quarter promote of of expense incur of in

last venture years. the closed week. We over $XXX run have rate between and volume. Contributions Build-to-suits and billion $X.X billion. which starts levels expected more between from Brazil $X reduced than billion, of $X.X will and that development $X are comprise raise our between includes of million below a XX% and Dispositions last will billion billion this $XXX range to million, the expect well formation range our $X several XXXX

uses of free reduced the combination Our through midpoint share timing leverage cash core $XXX lag significant net quarter first approximately into $X.XX. is deployment which of million, to will potential flow, development, a fund at fund to our FFO modest deployment and is which back plan a we proceeds by reinvest There sell-downs.

$X.XX and $XXX we $X.XX Putting core representing $XXX we're and per the of of which this managing XXXX share, XX% SG&A growth million promote a together, while forecasting income. range X.X% range year-over-year to FFO between For net expect at more real estate. between point, all includes $X.XX million,

impact the the of reflects standard. new accounting guidance lease Our

leasing internal comparison, For our year-over-year capitalized costs. of XXXX reflected results $X.XX

quarter As the plan almost midpoint, XXXX called we'll we three high an Day context, X% have excluding for annual to excluding wrap midpoint averaged our in we the our of growth year for provided period three up, guidance, To November promotes excellent the this X% expectations. X.X%. To at and in put FFO XXXX growth this promotes. reach core the had is Investor At our X.X% year. year growth outpacing

I'll in our on our over it turn weakness, signs extremely of to to for are questions. about that, remain great business we lookout your the market While feel With for confident outperform. ability Kim we and

Thank comes you. first Kim Ki [Operator from Bin SunTrust. Instructions] question from Your

open. is line Your

where geographic it's that? or that? If that should tenants, it we any around is any color first, of that is a for or should Or tilt of there slowdown the to rents the pace amount type looking occur expect

from a of situation think a likely is demand on next in I be supply the visibility to for is not change because supply it's lot the problem, side, XX to driven any months. come likely there

the it's So really side. demand

that. store Where And occupancy all drive you obviously a would and would while the is make leasing what of change change it not takes than traffic long as would see and leasing all because the like we're looking buildings, probably see like to see how activity you and like, of some where trying rent it on deal, very actual is like earlier occupancy, conversion indicators down to that. same forward to -- a bit a takes So and through and and rate it in the leasing driven. you showings are so those volumes rent volumes it's leasing we that our on you

you we I of So I basis a what are those literally. that those tell the end referring indicators forward was daily at to. the happens on And can see today.

Your Bilerman Michael next question from Citi. from comes

is line open. Your

bank of of the and one managing to was think talked And land be a can I is in if I spend time wondering comments little Hamid, talking trying starts. bit you managing development you starts. conservative about the about

about As than you XXXX, this into range terms year out think we $X.X late certainly and of is lower as starts, the a about the $X.X XX% billion in from down midpoint of well XXXX. with billion you've put into came which you guidance the did

a that bank you a dropping So can demand those, how a expectation don't want with maybe just context? about you in. pipeline. that don't much side much And land talk that's it's can yield you of help of the the larger is or Maybe to play support side how purely versus have to

we to if the a we built suite suite and is have small is And we suite front, and on. rate. all, visibility guidance, activity to assumed development fall look of First our great on spec. off have build you essentially that we at and know, there But the have built there

couple reduced development had I starts biggest the we was why the in XX%-ish, get higher way years by project three development numbers and is of raise in for $X we're people only XX%, in visibility have or are ready number maybe than a Last share to higher building between our as of mostly billion why more share, the a parks in point patch year. billion decade. because remember ago mentioned skies. or we've numbers at always gross looking building our seventh you building maybe specs that and is this this But four development So ago spec the back smaller. know, maybe that we front that in and a when our not the now that start park. go. exceeded kept Last in we're a year I On $X year, years off and you development going off guidance have to five We cycle, for? sixth and usually

really point control market, we counting So not on is if our totally in about that lack certainly level the demand and significantly, wrong because five developable that, I teens getting not the because at land land of development where project of seen we're a getting continue the our bank of land because while market we yields. is of strength bank, now expectation it's and for and we're spec yields we'll up there you've the XXs pruned in It's that us And so end no to XXs. and and not higher years entitled. good just we certainly level. and mean,

land So out if provides to almost billion it. build for bank $XX all of build we of the were

not So of unfold. to starts capacity capacity in to terms of we years be development good and we got about afraid use additional going put watch for are many year feel the to and as that that, good

question Jamie Your Bank comes America. from from Feldman next of

is line Your open.

did a like you make did make to it number? last also much -- of conservative Can cuts miss mean, what couple out? you provide more just how you worse I actually put weeks get what on you changes and I how to the you little in talk to take where the the bit then was actually this for things you you is have the would revised sounds lower. about in color guidance, hoping could

specifics. Well, really the in can off a part always would that that general we scenario into I Tom moderated certainly there's of to the part have so the we falls is downside of our this this cliff, downside plan our tweaked would the rental or year. But in than less there's the to as say last Obviously, But answer. growth it second get scenario. and plan. original been of areas any world in hard couple

in Those We parts obviously are little or our want we it. got there. Tom, a guidance business. loss development development accelerated We the stabilize reduced do norm year are and of for up our glide occupancy the that. path cranked which to the big to We forward. We've glide you path XX%, the is expectations bit credit the down going to… of

So by points. tempered that on growth, rent we basis XXX about

growth points market will bit lower about lower about rent rent occupancies, NOI, share Xs. talked our XX store be Same that's driven global, in little you growth bad for of the by need down So 'XX average mid in debt we if basis and about just from talked and slower related from transaction core pace lower mentioned same from of down $X.XX%, about deployment $X.XX FFO starts. $X.XX store and about NOI, to a deployment We about about a fees volume. lower $X.XX combination and lower of

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

Your line is open.

guidance demand even drivers there expense the demand hand would or between is your on of one the impact whether terms In pushing strategy break the bigger occupancy rents declining economy? at weaker occupancy this supply of of of down a versus conservatism imbalance you impact your the more some from that of year, on a for of because

supply. demand to no demand is in There last mean, supply much exceeded I surprise XXXX year imbalance. our even

here demand by falls even more sitting square a between of high that the to these again and range, days you XX move if by an demand going the five market exceed But won't points. of in bit if vacancy been supply one five than years. that supply been year. XX vacancy supply rate We've wrong years rates even telling in effective we're four or shortfall or million last of here demand will short we've and the Now, little XX this with say foot or for basis the X% four

moved spoken, the look levels maintain of we not our budged things. also think really It's running vacancy It So I our trying be and it's direction. Frankly have that rents. market the underlying to when rates not so in pricing occupancy as that in wrong stated power those full, has only it's buildings. to you push particularly don’t is at not objective utilizations utilization these fact high. It's are are the low, are just

customers tied, our that is do we have they're more we and to drive space pricing. want indication every So but need really

and you it prudent levels? around things you’re occupancy saying that my by have more if we’re why this be trying rent during to to adjust reducing rent answer pushing reduce And So your prudent forecast for critic to. us And would overly in do be might growth be, a turn the subsequent in we the opportunity bit. to environment, thought move always year, quite if quarters we we that when to

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

Your is open. line

environment yields development between global than the full you at prudent. level. 'XX mix X.X% wanted get weaker guys I quarter bit growth fourth the has and And lower at year certainly the I into to yields X.X% when look a that the development

So for and pressures some costs? environment labor yield lower breakdown, the construction due how is guess those and I and to XXXX of Can materials? this is this impact cost development the on new you. norm between share new you Thank

read obviously partly it's very because in wouldn’t we development. it's its lower range. And rental its yields, lower too but a year the built-to-suit moderated XXX have the a can to out I so in the still whatever we bit we prior range, guiding XX% before going So in maybe we in you that points had our to X,XXX spec mix of rental much XX% that of into as ahead growth, moderated be mix the and profitable keep of growth come margin, see, years. every basis little margins And margins the some to partly more

I as And we’re good to opportunities. market where taking guess being I it. been, it development, what anywhere there reducing the profitable, don’t out can guidance margins. holds going best response development the ample it's find what it's look, at near pretty profitable up said to think our like it has Again about we’re know margins. get we going our I because good don’t be, feel question we So we’re in we we’ll on really but get to think not If previous the is,

question Markets. comes the from line next Your KeyBanc Mailman Capital of from Craig

line is Your open.

you Jamie’s you give tweaked basis for And I a little where Tom, heard Can to was could think you Hamid, you bar mentioned had to starts. expectations? bit detail a opening But new in from points. speculative just clarify on you yield remarks it? then the just Could just raised same-store that it maybe took cash follow-up, before you a maybe you I XX question. more your just haircut maybe guys -- where

and then I'll… that and ahead go answer Tom,

yes, Craig, lower same-store of versus points basis more. on our basis So market volatility points XX based XX assessment our original the plan,

And I want maybe first can I thought to the ask answered if the see nuance I in part way, the question the of different it. but you

new I was tweaking wanted didn’t I for, -- a sense where bar hear is to stars or it just I a exactly apologize you're is here that of I on just just… -- what raising you're you. it get if it yield

No…

So the underwriting is…

okay, built yields, by No, sat it's let's suit what said table whack loan to we around XX%. happens see What and is to we not. that the let's our we said,

let's volume spec our out. and XX% by let's and and we those came that's to that whack So numbers happen where what say can around size we

bottoms of built was was it So to by But not starts, it are -- the not deal definition the deal build up up bottoms not up was the it a by for starts that exercise. spec way that suits. I spec mean

Malhotra from Morgan from comes next question Vikram Stanley. Your

is open. Your line

just expectations focus talked to other conservative. us just you've maybe past, tempered And to color out for baking But want markets just you in call turn you're of there others. know in on high-single-digits coastal you any this I can that's more give you're market in a the are markets coastal rent fundamental driving then be mid can about comments on you've specifically? couple in versus some maybe I what seeing growth and some the in where

and But a The a X rents X a more to we like even rent. the have forecast land analysis variability our market-by-market there's year. and update that answer very question X, in of is X, of is in lot market-by-market is detailed short We like forecast we and those numbers times plus. coastal more couple plus

Metz Markets. Your next BMO Capital from from question comes Jeremy

Your line is open.

are competitive costs I Two intra first if how from limited the of new to just of really to a supply just me, second land just the Tom threat today quality months portfolio of being want questions comment the given is overall your is done much guidance. roof go now. sites the some just or wondering conversation, back built to out just for the repositioning DCT on there. few and that I one given under supply portfolio you've a point. the rising this have you U.S. all I'm just can amount just at then on not the for And one

how expecting trending the accretion that. just Can you're think that's I do amount? feel like you XXXX originally about in appropriate it's $X.XX still of and from talk you

in I'll first go that. 'XX had more like is on in $X.XX because Jeremy, XXXX we accretion The $X.XX, annualized.

So we got $X.XX in that plus XXXX. of

back as the So synergies of than is incremental all would expectations overall I But our better said, going in real $X.XX. all 'XX way everything our we QX one day is plan. increase we say in hit

And Osaka we Chicago, that -- to Central I It last be the so positive and pretty to markets, much list did ago. a of would about seems wanted if we better we where we're about add over some that say say I the list. concern and have picked than there're And months would And to expand couple really would supply. carefully. say like we're Madrid over Atlanta would you in hump on the with that a feel Dallas have I I've there. and couple side, PA, internationally, had markets starts in watching up would would markets the those I months, are Houston Chicago the too and of supply respect

in them the but see So numbers around less more markets. move will constrained supply these you'd probably naturally

Your from Markets. Capital comes next Michael Carroll from question RBC

open. Your line is

Or and some know you are think conserve portfolio? for provide color of you why last Tom, it revenue that XX and can say tenants increased quarter at in you that would what's is I conditions bit? just I you the roughly uncertain are is seeing risk. you that’s highlighted that's specific you little of assumptions basis your that XXXX, the macro more assumptions points on bad any debt there those

-- it's really the It's later.

have basis revenue where over If XX several We at lows that quality. of around long debts bad our more over historic last feel points trending like good you periods been XX points historically. really they've been look years, see time. really number the of We credit about at basis

exposure our quite think towards, small, small extremely rise I assumed we tenants is how norms. to from say. would that bad I historic total approach debt But we not yes, this have in budgeting, our all expenses

they're So great rising our our bottom about about just the mentioned. coming I great historic feel credit off the Hamid towards as I of is exposure. quality, again, prudent spirit But in being norms. This feel

next your And from BTIG. Tom comes question from Catherwood

open. is line Your

you if Just which with starts of development considering roughly combined, looks $X.X by XXXX, at it starts million, to did by XXXX here, guidance like nearly sense sticking But in your make billion for outpace the quarter. stabilizations we going the new million. stabilizations starts $XXX and $XXX look are fourth outpace XXXX

that I all what or we're else being in factors account other the that stabilization? longer even for XXXX stabilize, this would the equal, at. Are to lag or of in new construct amount you're looking So stabilizations assume the starting taking than would greater the developments be

first, go is this things. Tom I'll a Olinger,

we stabilize And in number of stabilization a particularly particularly 'XX, particularly to one. assets throw going you're as to think the And a come if from ahead 'XX, building a year of think of QX. a unwinds. I standpoint, would we're going be But back there. XXXX then I multi-story consistently lot is 'XX in bit starts takes when and are generally And really lot little think where the you see of in half to when of had mix go. number underwriting, stabilizing look overseas longer that we that at board I the across two NOI when about, I say you

up that's than Rents rates the higher be. has part a our we're they we'd where that would you be of ahead we're of are underwrote. mix thought or factored could But So say, I are thought pace, component. good be, at development leasing see margins up to good would higher pipeline leasing we than we we in at

really feel all good I So about that.

So the add is number. XXXX going just to the pipeline. incremental stabilizations, going so to interest, only But there. be low an when X said, lift that I volume year out already we've it sort figure is those which from And XXXX, would for the lot to income the yields gotten a Tom of development underline misunderstood. return guide generally given convert it's in go a year of huge to good out outlook yield math really even is plus put we're don't a not is to very which through think capitalized statement thing that paid something of terms is up take of the And a of I we've on volume, only is for. doesn't really, XXXX to coming growth lease the our

question Your John comes Jefferies. Peterson from from next

open. is line Your

thanks. Great

leasing or quarters this It's operating probably been pretty past four quarter months. terms XX So than that. and supplemental, around your consistently just XX about months was metrics looking the through longer your for

look that -- rent lease to it terms? different into or wanting there? So, any is mix? read is contracts a lease in longer guess Prologis these do the I customers free of anything it terms And pushing or escalators, terms Is for longer

is bit development things. but during terms actually the because are of one. was is that the Yes, a John, the mix There quarter, take XX Gene. lease this months, I'll XXX a operating portfolio

quarter pace with the volatile see warn you at And that's to everybody, this the is I So XX. quite but increasing, quarter. also

really it’s going We in it direction. have high, see the been good pushing right term to

You're trailing but should changing to XX see up. an probably sort that next not of quarter, average going be

Frankel from Street Eric from Advisors. comes Greenfield question next Your

Your line is open.

you. Thank

to management the war grow all tariffs in you AUM, get you what you fund so? whether the and terms point business, then, have maybe do sense put how question escalate logistics like their at will the wanted and a China is a really guys you markets if just give this if the trade the appetite Just of a U.S. quick And what your in geographic we does a can on imported you of sense for much impacted of outlook that? do can is, goods, investor by on to with have most

me let one. a stab the at So, second take

our think, consumption in U.S. of if you of from markets. demand of comes majority the vast think those the I about most population markets,

a so slow have would an and coming is actually margin. goods there lot of things an is LA where because by the also Now, one markets that would change effect coast think, those will Chicago from incremental inland would in and are like markets more you that New consumption think be currency there where take you on people mitigating Jersey some bit. the markets But flow location longer port, those the it than of the just so are the usually from tariff. would I But those throw most are of too. on a coming imports, ones couple the than little through

first So, of question, part what Eric? your the was

management… Fund

Fund management is very strong.

can't no get time weren't that lot if money, their Our amount concerned it. longer, more raising cues capital could for There's it sense we we a about take would be lot invested. if investors of to a the invest

So, seems terms defying the gravity in sector much everywhere. investor pretty demand, to be of

Question next comes from Rodgers from Dave Baird. Your

open. is line Your

and Can X.X% Tom, and of rate what kind ’XX? stroke? on by you the just you’re in just on I And Europe, with vote the up morning some Gary what trends post or in Hamid, market for last might follow out you uncertainty your the there. And of the in then maybe of seeing the where China give wanted be months rent growth over that Europe to broad slowdown? been couple way has rate a U.S. Asia, Brexit expecting growth. good Yes, cap the

Mike, Hey, point of different components breakout at we this the won’t global.

shares, XXX Xs it's our said expectations. Our midst in original from I basis the points down it's about and as

of to I it rent in With respect or growth, do and minus, in we sort XXXX. range expect greater the Europe mean, to be the than plus X% market has U.S. been

rent market downward to year, the sort respect with but slightly in view of growth, still of our in tempered have mid next Xs. terms We

part question? of Another that

you think I it. get No,

question comes John Stifel. Guinee from from next Your

open. is line Your

And how not fund end aren’t in versus guys open to really you’re looking look you difficult guys is business your you way? stock But business that your at common to push cost capital, you? it does just you capital, have analyzing really fund that to suffering price? Great, brethren don’t equity even right or at the problem. to a look time are now seem office versus your it make from to cost what sense common Your when making easy, have point

with sector common all respect equity. of company the that in only to think this equity, truly hasn’t I we’re First any raised

and You mean issuing equity DCT could buy or ’XX call more we an raise, equity equity haven’t I like raised but to anything that.

to have and of funding we in our that we most self shown model, have over we’re our a you, is that. So very view as funds. committed And invested we’re

position our -- into So, there and fund. people expand who their to demand want is ample there is for

XX on like our just not sources, run some based normal but of years M&A, got run a normal capital from rate, rate. So, we’ve those

raising we and we’re which philosophy not to have is going simple don’t So, is soon. anytime our pretty equity, need on to

again you I capital business, So invested say to important. going look with -- at long our private And I’m is respect capital that mean, it's that. for different John, we it is known a really each have our in business, a time, has as other our and it don’t I business, this

good sheet. in like, our our are not deal deals in So We our we all vehicles the private deals invested our and balance that lower that it's in locality. yield do vehicles in capital do

as all So treat same. the we business

today seem given to high inflation approaching in That’s total much capital. environment the in think I return to cost in it, trading adjusted mid leverage And don’t an I the to generally difference volatility probably Xs, XX%, see the they risk and class, I think line capital because the the is is of one our X with and about the a asset between to where sector sector around that sector another. is in X% I public appropriate of think the XX%. around way cost generally and private

a think another. than richly they're but side X% I one within that private little side, the public bit reasonably of more is valued probably

we're capping growth sectors, part the much in go know is do expectation So that at may difference with I very but the not have but that to everything, different around different wider other of good that of growth sectors. capturing rates. We

at if I basis, be to they're going risk different between in looked think you sectors. IRR in So, on very similar

next question Your comes from from Michael Bilerman Citi.

Your line open. is

certainly A how given robustness. your to and of a tenants indicated, continue with lot to I sounds how a year, data macro the you you've it there's demand. in opening uncertainty. prudence discussions definitely the of think And this in about lot forecasting stats comments support talked your have Hamid, robust gone built a for about

the if your be wondering, you is taking a to the draw forward I'm expectations you you conservativeness what mismatch tenants can telling sort there? relative prudent are parallels are could that or and that your to maybe in So of

Okay.

to going our the that customers guessing last we You is of I are really weirdness of this know, at don't XX be. of know than more what the end to much do. as day, think days Everybody the implications

those So, I is haven't what strong earnings companies pretty yet, what our so we'll they plans very Their end it say gotten but gotten year. procuring with the think far yet. basically the the customers from were probably through going months, much the haven't concerned, estate of they see they in their as had is that, that and call hearing of capacities on we're business the as haven't couple a memo businesses real may They But department they slowing. calls.

Jamie Bank from Feldman comes of question next from America. your And

Your line is open.

this I the wanted XPL we're industry. your seeing on thoughts in consolidation some of

how you do continue impacts demand say, time? over you see how we business to and as think tenant if kind do Just your of this

to It's little, dynamic and boxes be around prefer good masses have consolidated the is it's we concentration, the profitable, to fragmented of is it's customers. consolidation to moving that that. extremely have, think have move. much But a is the profitable to going It change boxes more because long We level doesn't think This very more from to little need I capitalized, really more, rather a the fragmented time. it's dynamic, the anything going even I don't business. to an point this The larger landlord profitable better about A just for customers, still those how business. more and if tenant continued do B. to it's

into good. So some that pricing is coming I in terms think business their discipline of how all price they services

And Berenberg from your comes Sharma next Capital. question from Sumit

Your line open. is

question, Thank utilization. you quick your for taking on question a a

your trying was higher it's skewness? the much lower around wonder distribution, year-over-year trying whether based last assuming, I a get the range just just sense it's XX.X%. to says, comment shifted XX%, to pretty and same the of on BI So, if has could your the report that comments. on I'm you of median

that. and Chris that's will So, answer above pay grade, Caton my

hey, Yes, Sumit, the for question. thanks

you've utilization and bang historical on over rate can in range reports, As the seen XX% of we're XX% right between XX it's last a months. the that and peek

is utilization at levels. So running peak

question Your comes Advisor. Green from from next Street Eric Frankel

Your line is open.

Thank you.

starts up. I talked accelerate. Just to ago one a quarters few trade about quick the really follow Hamid, we've just maybe talk wars know

how supply changing goods manufacturing of stuck chain. company anything origination moving? are Has of in of terms their their their terms were of in in been how any talk kind Just there different

certainly by this I Not not because all the supported data that tell notwithstanding and talk. that can

at to China don't and I events record if doing place and the was know. any was lag we of anticipation know I any last that. of more that's people seen of I from volume But of lag don't levels between think recorded. the deficit haven't prior because time taking action cares it the

were the ago. same make that Mexico the macro conversation about generally can in terms shifting point exact having we but Mexico of people and year more I are is production think I to manufacturing, half

react So, around than can these things so. people faster can move

Your next question comes from Blaine Heck from Wells Fargo.

open. is line Your

Thanks.

here, or to on cap an and as though you're there if markets. U.S. little in decrease a even asset markets get the and been infill increase we've where you're to pricing out holding all? rates especially steady has cap But wondering, rates I'm continuing at the seen wanted seems in inflection maybe any seeing it commentary Just coastal there seeing

And have tell in have those upscale, if portfolios. the deals let's you were of literally transactions -- that away couple so very that. we at us blown though NAV, interest last I'll away that leave to closed been for on it we well blown bows those other pursued, by we

Green Your next from question Jason from Evercore. comes

Your line open. is

Good morning.

and ago, in months Just guys capital quickly point? recent ask ago institutional elections announced happened wanted XX on months the given Brazil that to JV at you the demand about this

So this is Gene.

certainly very the not is is a The a has of business broadly recently did at may from environment to this far changes. President more political we've that sort people business You're a new as of activity friendly, lot now. down customer as but there be seen ask, it guess demand talking about best institutional general more demand, a institutional we But right that optimism point demand we big is certainly and speaking, is obviously, sign there. JV. a given And my the lot

seen and give you the policy world. the economic more global me that comment of around was tail that at the add in to something just about most of one the let uncertainty Probably, more found that, that the interesting index. statistics most last time let trying but a And of that called me it's I've Being policy weeks understand it's That degree I the saw interesting. the actually question, scale spending ago, timing points. uncertainty of couple couple I we're a a is

During global and of government and the north Iraq and all And X/XX breaking index China the XXX. At that, it it at attack peak it's out, that got war the shutdown Brexit, XXX; well the of was today was to crisis, at given XXX. the and financial XXX. war the

related I to rigor is there the we’re world academic have Now, any whether anything or just in that this I a but no certain environment. fascinating found it much index, idea less thinks

Mexico you business a or a have can you because world. exactly turned read customers we and usually stuff position as just reason bad we're taken before, is bad, much and doing, kind the that the tuned, we all we to that's talking soon. because be have fine. that this But sharp is good as be and really for living what quarter around. into your we're I think viewed I said on are of don't uncertain it this forward in And the stay how quickly too saw interest Now we've this, to saying eye need vigilant, look Thank to of keep

This may call, you concludes today's conference disconnect. now