Prologis (PLD) 26 Jan 212020 Q4 Earnings call transcript

Welcome to the Prologis Q4 Earnings Conference Call. My name is Amy, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I'd now like to turn the call over to Tracy Ward. Tracy, please begin.

Amy. Thanks, everyone. morning good And to our conference XXXX fourth quarter earnings call. Welcome 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

Additionally, as press are real-time contain Nekritz, our us that Letter, will here Dan and financial please well Olinger, guidance. measures. and Mike Chris in will Tom, McEwan Hamid we release measures Ed measures those today. morning, EBITDA, to G, begin. Anderson, accordance over This that, non-GAAP Tom quarter results turn our and market have you we'll fourth Colleen CFO, result's reconciliation from Moghadam, supplemental also Caton, and provided as with Reg the Gary cover who call I'll such do as to Curless, are Tom. With a and with Gene FFO Reilly conditions hear

because work centered best-in-class done we've and possible the customers. over XX of supply morning today. Tracy. great by everyone you you, significant is our past thank that year. portfolio the and critical call this work years Good our Thank last our team joining challenging incredibly our I year, building accomplishments to were for begin to on their chain want and acknowledging the and In today's an

earnings in billion of sheet model of has cash of more importantly, M&A, is year-after-year. after our unique of with dividends to consistently without earnings maturities points business $XX generated the During lower fortified further the billion logistics outperformed growth. other XXX $X.X XXXX, promotes in which than the This sector-leading on our the deliver REITs X.X% CAGR closed result free continue by of has and flow over merger basis year the balance Since line annually. rates we outperformed

our view environment. to Turning operating of the

back up secure of which transportation holidays. at absorption quarter in proposals ahead feet was net the XX% in remain levels. healthy retail was Lease short-term raised half space list. watch markets all the by the market XXXX, anticipate grow only the growth new feet. of of of by XX U.S. approximately in square on excess grew coming XXXX. under as leasing XPL, XXX million and million to data X.X% leasing. Houston to Broad and record speed shows quarter XX% the more X proprietary square beverage, business a range for and leases has fourth were quarter XX segments. demand accounted rose in new per a experienced and million in of for Our square in which we signed care new activity or new health basis. electronics signed is leases million by This the year-over-year in continued, quarter size-adjusted need the than by day. also feet was record X% Rents the at we our flexibility feet customers customers rents square quarter third In that on the with globally leasing, strong E-commerce consumer The the products, and in led our reflected fourth the fourth of is XX.X% highest in supply food driven elevated U.S.,

square we XXX announced. of Brexit in and our levels been Inventory pre-leased are is markets eventually market for XXXX, In our additional watching with supply decline Central implications largely to U.K. Pennsylvania ago and met second we for moved and share Brexit also two Poland As the and and Osaka, these as to was healthy to feet supply X.X% new in our list Over lead and X%. very we are In vacancies U.K. of we by of just at rise years the XXXX, continent. disaggregation the supply anticipated X million Spain, in NOI. and expect from being X.X% Europe, below The development higher the year-on-year historic growth will Tokyo in demand in In a globe. us in Conditions expect Europe the remain pipeline with each. but We're of the across first rents demand. to to reminder, strong led already have both other high markets quarter of context, to two-third Atlanta Northern we positive balanced begin inventory and quarter. the account expect levels for fourth

market soft. our China, to XX remains half a the our of moderating record suppliers the second even China team. leased we year, in new portfolio, million the credit In the work square as of feet great leadership a For

valuations. to Turning

in X% $X the the and Our and our portfolio, our real above levels. logistics the quarter. globally billion this of sequential managed portfolio X% in rose value nearly now billion the a Applying increase fourth increase to estate posted estimate are we $XXX decade, pre-pandemic and U.S. in rising owned largest by

is half significant highest a and We to continued fundamental savings translate U.S. in two as personal which powerful vaccines in out. GDP than decades. growth recovery growth a based the loaded expect roll on as as combination to governmental economic economic in drivers, continue including will improvement three beyond, more in the spring corporate and XXXX stimulus, first, of The the the significant well back

pandemic XX% early at by on sold the rate U.S. Based holiday Second, the basis the retail XXXX. in e-commerce sales revolution. to XX%. grew goods reports, The penetration least e-commerce in accelerates jumped XXX of points

pause as goods on later share goods. online to grow over would surprise of this spending a experiences While further, expect purchased and we services expand the us, year not consumers

next more years. Our long-term, to increased, a feet chains several the of customers square for a should over generate demand continue cumulative supply for million they retooling plan incremental XXX or

signs believe pace inventory chains impact levels set in These on sales XX% an Third lead inventory near are record. lows. see quarterly November inventory the our we alone. on We to produce years for expect Inventory incremental We demand. utilization play estimate that supply restocking of out, will space in levels. rose had will inventory XXX and higher Longer the to as long-term to term, XX% of customer down fourth quarter. X% levels. it import ticked will in in strong resilient need the containerized volumes early take a to driving nearly feet more to higher changes a U.S. all-time demand U.S. million square as that's the We ratios in remain increase

done by scale, portfolio, cost is high FFO delivering lowest the work and in in results, at we've to our results. per at promotes create grew share. to exceptional financial structure Turning end best-in-class of excluding came XX% core the the $X.XX XXXX and industry the range

change record income year. the led effective share. watermarks per XX.X%, for both rollover U.S. rent on net promote quarter We $X.XX fourth was XX% the high Net of recognized also in by the at

quarter market was we over fourth basis XXXX Our points about XX% XX basis up Collections in-place of Bad rent morning, debt level XX continue XX% quarter both to XX.X%, over of stands our spread at this the expectation. of year, rents and outpace as for now collected and to points XX and for January. the basis sequentially. points below

the completed progress U.S. We the from Hotel portfolio X.X%. than at growth in disputes the led of have by we non-strategic Comcast same-store We assets, Technology exceeding cash the interest less date, of and our in meaningful have a We sale of $XXX the X% now announced assets headquarters. Comcast the the interest set Liberty former million Philadelphia We the more Center. by than related share previously of and our value was U.K. $XXX the on more XX% Four XX%. of primarily a million hotel ownership remaining all the non-logistics NOI consisting to Liberty. of than made sold assets underwritten our Our of acquired construction former and disposition Seasons To Liberty in

our Market team tours our and diligence as team have $X.X in meet all For raised well XXXX digital property we to from as XX% infrastructure. early activities investments billion in our strategic as virtually in yet capitalize person. new capital, conducted investors were with due on

Our more balance liquidity and billion. and with our the $XX of best the between combined than Prologis open-ended capacity vehicle industry leverage in sheet remains

down Our capital markets X%. activity total rate our to in interest the average quarter brought

will look opportunities at additional rates. for refinance We to attractive

at interest rate fact, In mix issue currencies, blended a we could current rates of at and XX-year of X%. our all-in debt

basis. the components key for to share our on our Turning here XXXX, are guidance

portfolio We expect gross debt points for bad expense our to to revenues XX.X% same-store basis to range and cash range between X.X%. X.X% XX of occupancy We're operating between XX to XX.X%. estimating and range between average NOI and growth

in year the drop as occupancy progresses. trend We quarter expect seasonal higher a first the then

negligible range expect revenue capital, $XXX XXXX. $XXX Promote between million will to strategic and For be million. in we promotes excluding revenue

In fact from per we'll of the expenses relates prior amortization promote costs period of to share for promotes. the net year, have $X.XX which

historic share would basis on which be earnings $X.XX average for of AUM, promote Our based to net AUM. in approximately third-party promotable income points XX per $X.XX current

historic be appreciation property or recent this promote average. net above income per ahead, in XXXX share Looking us at to leads to expect

close billion between new and $X.X will expect first the in billion. We majority stabilizations $X.X $X.X half with leases XXXX. billion billion between expected development $X.X and to XX% and with range billion in between to to start and the billion range new for of $X.X Dispositions $X

of investments and including forecasting our at range beyond more estate We per customers using XXXX. to our core growth. and and innovation promotes to our between net per technology, back altogether, XXXX between further competitive FFO, effectively than promote as data will optimism With share that ability are range that, significant at $X questions. result, confidence, expense of the turn your we flat with will exceptional million midpoint operator the deployment purchasing and drive to leverage to power another share. year Core in Putting our excluding entered I'll deliver $X.XX with year-over-year We FFO of this and performance. midpoint remains our value of a the uses are net in growth real it expect $X.XX the $XXX advantages significant unmatched $X.XX for for XX% delivering $X.XX

comes Goldman with with Your of Please first your line Instructions] Caitlin the Burrows today from Sachs. question [Operator question. proceed

year. terms last services almost Your guidance for on XXXX in higher XX% of development

the increased development do through speculative visibility build-to-suit further on go that, how just could in it what there? you you could and of have balance much So kind of be

breaking Yes, the I Caitlin. And that I'll up about talking question. in This are bit, but year. activity development coming take little the a Gene. you're you is think

we're So this year, XX% guiding about transactions. main of to are what

it we're as So, probably in is out. XX% is point, upside. the that's placeholders. bias, But comfortable it this very build-to-suit there to really difficult to we're forecast. we the and forecast And have play at forecast to Tom is few how with But mentioned, the if a going

And probably still second. better but just if then ask out. sorry breaking could if And I'm I

leasing Just, up. Tom, was you mentioned short-term that

compared So how those terms and the wondering regular rents did the versus short-term longer-term leases to of thought leases? leases points just process competing on and in

Caitlin. Thanks,

there. think You the runs I bit just short-term think. bond broke But our process up how we a little -

we're and continue market the your I just for I levels, to stay think question. act of to going at short-term given addresses elevated XXXX. see that move we leasing get customers the quickly probably as into need to and the hope tightness

Stanley. comes from the your question. with Morgan Please Malhotra question of with next Vikram Your proceed line

the Thanks for questions. taking

but at occupancy, going NOI going the maybe first guidance, of get escalators, kind be look that average, to your of rent if to well, that if assuming core So the put X%. expiring. guidance. Seems to from X.X%, I'm above, you just above components together, me not with X% expiration, you're all that same-store we well should on If slight one bumps uptick, which sort I

would if the the to I'm maybe puts range? bottom end us what there get So, of and just can that wondering through walk you are you what

The Yes. by it driven at to in all way is for XXXX rent simplest primarily look change it's same-store roll. on

right occupancy mentioned, So are GAAP that lease about on sorry, cash the roll. much perspective, bad rent as pretty and percent you'll and GAAP in near rent from perspective, XX% XX% normal a you're rent roll, XX-ish free we'll a so think see that. to XX%, roll XX%-ish you then But out a of year-over-year, about portfolio from it call of I'm components guidance. and and And - around should X.XX% the move debt those of roll, going consistent, same-store. bumps on see think midpoint little place about don't on change From bit same drives the get think our you change that

with proceed of line Jamie from America. question. your of the Bank comes Feldman question next with Your Please

of of Thank kind on terms or do get bit election little and a customer think in terms you. Or tentative step are what I was you thinking might we whether should be demand, leadership on hoping any the about certain to markets new trends And perspectives or mean change look Biden's themes back what or might of more watching? that plan, you Thank the warehouse think it just you. what take reaction thoughts Buy just for America guess, well? a your I your think you reaction and to as wondering in policy interesting?

Sure, Jamie. at that. I'll stab take a

the administration first but is I infrastructure they product. headlines. effect actually think newspaper we spending demand for will all, near-term numbers, the the in Buy on you respect the going at to have our and and thing a support that look be most if significant had to previous With U.S. don't that the positive

between a think economy, because we which that recovering and is was It's from years in either same underlying economic material had of the of pretty mix not we be basically, necessarily business drivers last very e-commerce of going the much the and in be growth So, to any bricks just of and policy. the should our the that don't and rate strong mortar But change big in. of all XXXX. same, in haven't that the there's consumption a policy. down four year That bouncing promoted

the affected main the So, around a we will are not edges those drivers. the policy but big think And driver. bit little two be economic

question. question Your from of ISI. the with comes Steve with your Evercore Please Sakwa line proceed next

utilization maybe I the that which chart kind of Page XX I'm proposals upward? and square square look quarter, million is comment guess just wanted where not X that with to and I and space strong lease the to take Tom's have just And utilization. at in kind And shows figure supplemental the trying the the new curious trending of the leasing exceptionally downward of about of then the feet then leasing strong. just is proposals why you maybe

can't activity. I'm Actually to the the level online pretty And running inventory that. the the People enough get issues need that to haven't going the because simple. we containers than channel. more do in inventory channel of to And support with system inventory out are they big of one back in the remember, pre-positioned take It's offline China. inventories in of is we we

a much higher And and stock-outs, utilization so, what's support levels going actually, of we that's lower could but on.

Kim Your question. Capital next proceed your question comes from the line BMO of with John Markets. with Please

your on we starts Thanks. margins? lower Good of could margin XX% despite going if the quarter, quarter. activity a morning. rate dynamic Can In just fourth this on this ramped with and development expected you comment forward build-to-suit up run development lower

that. Yes. I'll take This is Eugene.

years are bit have quite seen forecasted you margins. because to past that these the a are So, going our margins are see and lower several margins historically for than underwritten our

for variety rate growth, cap margins compression. beating been of a have these we rent Now, reasons,

retain for really normalize. see that like. the rate will what long expect a will margins depends But over time environment I you cap I we'll that time on would So think looks this and future

Your next with the with from Please of question comes your Scotiabank. Nick Yulico line question. proceed

if and Thank for was rent regions can hoping break multi-market distribution you and you. talk bit versus difference Touch? that between growth different could markets up, city maybe a I the little And in year? distribution you you Last expectations gateway about this a distribution, just see

here. globally. a better XXXX rent Hi, to and Nick. X% little bit growth It's expect than we Chris Yes, X% be U.S. in

we And geographies United UK in for distribution and we distribution major California. expect as city some terms in a XXXX. Jersey, outperform Southern outperformed well Touch couple markets York, XXXX had Last they gateway New them outperforming. I'm we and States, look, the to example, outperform, combination of Europe. different a highlighted the of Northern New as thinking In markets expect in I'm and thinking to we've that the product And Toronto of types,

next of with Your Derek Bank. your line Please Deutsche Johnston comes proceed the from with question. question

But really European starting hear year portfolio. headwind, in to of a when and would it until bit I evolving and occupancy, on Thanks. 'XX, which dynamics year-over-year things Europe? it point. do was every high leasing back XQ stabilized now ground in in And demand to more the slipping can I a quarter specifically, from like quarters. last the about was in comes we Have first feel admittedly here? believe in six growth the how this is a fact from the comp off-nets expect positive I mean,

Demand are is read. U.S. to that sync vacancy Yes. That Poland. together volatile occupied. case more seem are And is end would than lower. you say, generally of probably move supply The of Spain a may the to balanced is market, rates be from generally the rest the exceptions and the and the of I've but terms math Europe I in two market sort up moving in the well time-to-time big get exception of very Europe

it's the than Spain on have So U.S. occupancies and the anyway. that rollovers in Europe balance in But and in of been rest the that our the drive and volume Poland occupancy really throughout, our of higher margin. portfolio

with your line question Emmanuel the Please proceed Your with question. next comes Korchman from of Citi.

Hamid, business? the Exeter this you. provides deal announced any think to read private is through for you maybe Do this capital ETT morning that one your

traded vehicles assets that I private do time they keep promotes All street. undervalued over to investment and that on margins fact are life increasing. well our generate the significant from XX% our time, of consider to you comps continues in and firms once think management Well, the got our at look publicly business to you capital is and the be by of infinite

or be XX. think in see of maybe low teens I even that most But the are NAV the models think I I that the multiple XXs. low in should

business. it more a so or that street undervalue headache billion bucket has share? I crystallize very on by - not. assets that the Sure. value the that move transaction? think it of $X.XX company the around be So if Would is Probably to continues specific a we in value worth worth But $XXX a trans

to is our upside business. there think NAV we Investment So, our from Management

Your next Please with Markets. proceed Michael question. question Carroll with RBC comes from the of line your Capital

tenant tenant in seeing? the I the the some of I of beginning provide the in year, lot the active. on broaden And demand middle of a has we the you that - do interest know demand XXXX? extremely mean, year, color Can as to more meaningfully out - or to move or seen into Amazon specifically have you're you you tenant see been expect

Yes, the then let demand me broad, start color. sectors that is there plenty of that gets e-commerce are is the more a sector, headlines, they strong but continues player, within biggest give demand, I more lots a are Mike and forms of of on total and our well. then And the other doing of so play. course of is can tenants and But source remember, pretty Amazon you e-commerce we mean, a it think other change Amazon get sure lot the of demand is the lot of that there But from ABR new margin base. because is in

want on support nature. would color people pretty say The the that? of doing convention, exhibition, strong. more I is Mike, exception market that the uses that to with fact, the much hospitality In well of of pretty you provide pretty, things and rest everybody like is

in at and look in leasing let's it Yes, traditional build-to-suits.

build-to-suit and in of the normalized quarters there's typical the traditional are six to then sort broad going leasing Amazon And with them robust the three. that in us was of is, there Amazon to yes, front driving did I with very year on message base fourth activity numbers and e-com We But philosophy quarter plenty XX. quarter build-to-suits and it companies' performance other active. out for their compared after the the call leasing two the a Amazon side, XX forward. speaks that think of On

they're improvement marching restructurings. Perhaps well COVID. restructuring and food a forward beverage, pre COVID couple with restructuring a man folks, with with took during the home of was months of underway but back a healthcare, those there coming underway well they pause and However, vengeance ton with

see while brand just and month more so signed really And encouraged ago, other working Amazon, we'll be a plenty with we'll I ton the Kraft with about names of am talk We a happy next uses. lease a year, about. to of big

Craig Your question. with your Mailman next proceed the with KeyBanc Please question comes Markets. Capital from line of

Maybe changed earlier the we on an stabilizations to year I cadence there of but of something about a of year-over-year stabilizations just curious, it pace that slow. looks, that in kind question, resurgence of the follow-up starts like that last outlook? were And potentially to the expected think I'm development is talking kind going there. there of given Is build-up

because think didn't in. immediately Well, thing COVID I will can if essentially were that the we've environment most kind we them. be those what only and starts deferred But not we of we of restarted things is all know some hit, of when restarting

think is just that's I that pushed it So the out, behind volume we very but got significant.

last next year couple been of would expectations the COVID. I of in I be total the expectations what even to certainly have the at beginning the prior beginning have So But our our increased year - stabilizations level what it beyond would COVID. of say more been of years beginning would the and than of at will would say

from BTIG. comes question line Catherwood next the Your with Tom of

your with question. proceed Let's

mentioned put industrial the something industrial rent last a every real makes markets of for your an go some of a supply-demand Chris in touch assets? the in average New is create developer especially in it Could want jump projects. We're I potentially supply-constrained above we brakes cities, big seems industrial infill in imbalance to growth which this sense. back jump like on a had York development and and of last understand for City. activity lot developer seeing nowadays assets, rent to touch nature but major growth about estate Obviously,

value. is what a on for these going these and all customers It could, really the what's we discovery, pay rental in think there knows I New is to locations, but of is some lot York of ability underestimated nobody in that the and of elsewhere price

and So has the account not infill can at thing should a all the a be got developers, rehabilitated. but these good being, least land you're in buildings price to going is to more for you have have lot that lot time you've other been the that discovery locations, or into of take

think terms see of you in more the it those on in show inelastic and I because will pretty you'll of would pressure absolute pricing So assets, supply price. than is on supply aspects see up

Your line next of Heck Blaine with comes the Fargo. Wells question from Please proceed question. with your

to more several hoping portfolios little year market get the guys or know was sizable hits typically looking in at the in interest this I year investment have and I you a are There your bit the traded early anything that and color in specifically market. half sales second on that U.S. of acquisitions? last on large have been either the

stretched. the getting want that pricing unless it underwriting maybe situations on without you at and with to, color just specifics, more development on helpful. footprint the geographic just Any - being just So in you doesn't of into your would there enough be focus sidelines can talk what on or kept it's these more point? the you Is about this overlap

the So of above. all

quick and Gene in me will answer give Let fill the a you blanks.

capability offer people don't the types everybody and get there showing buyers property people trying very auction these house core many to not that is brokerage at XX real by business margin, other of of a We are good their lot are industrial where up opportunities. because have into the build to a up estate

it So, not price, out of those looking kind is our just on business.

we buy advantage buildings competitive what a not us. very general can them, a acquisitions at also is deals cetera, expertise looking building if table, sell that can deals means that returns, and XX is fit have case where our So our but land of Hairy, to bank, and et of the that we to XXX doing and are we differentiate bring out for that's probably portfolio operational et transaction value-added have and cetera, framework how for that in leasing attractive deals, the

we're lot they I So million do you the We just that is of you after $X other meant sense thing deals. a show question only too, mention would don't deals just a big posed in that the going only up. -

So we on all a we're out pretty lose. there situations, that the much standards, we're of most that of looking if and moves those in our not quality with offers meet everything there there lot but at ones core thankfully

side we're We're as the good lot selling with those the So well. of of on that. transactions

just a things. XXX go had through Investment had Committee. I last Yes. of mean couple I matters we year

sizes underwrite it, means we that will it. it every So look we deal, range a look Every single single of we at at deal at deal. and look

bit an we makes picky uninterested. We read are us, this on wouldn't for but that's it we that quality execute sense we're when explanation. And were into - I

line Please the from question. comes Dave with question next Rodgers of Your Baird. proceed your with

gain [technical you're we difficulty] around really era trends. short-term marginal, XXX,XXX economic economics happen. of it see delay Tom, COVID little offset it I'm I'm driving in the to but having think a boxes, an heading amount I on are have going the occupancy we wanted are economics leave to for just just fourth lease to trying bit economics to if of leases of with gone. from follow and range. but feet is square see percentage XXX,XXX quarter, impact X were this up did Is be on same kind you [indiscernible] figure what's the larger the economics. going, that right really lease said to if earlier economics I XXX wondering a a or

those. both take Dave. I'll of Yes,

with leases leasing we than one, - less other have consistent first excluded across of one are metrics - agreement metrics. our the from the year the On around that's logistics our remember our what we do

if segments we that points. is they story what's quarter. new versus costs XXX the yeah, and it's economics, under up basis driving QX leasing I of actually you're are is higher then turnover same what higher wouldn't QX, wouldn't feet sizes this strong. quite quarter that we is costs, last look renewals. in I look square it saw happening that space in XXX,XXX at other But We regarding mix and saw at So see went looking turnover is And slightly the at - did and

just its that's segments think I doing are some end at well. and happened quite activity noise quarter and all that

Your the from with line question. Frankel proceed your Green next question comes Street. of with Eric Please

This occupancy a blend capital from XXX you of so your quarter-over-quarter. down or that be still about But the most you you those portfolio for then about about on the And basis like assets mentioned sale the just elevated, operating saw but points portfolio, sale might somewhat talk Liberty forward. of going maybe held pace to question we're non-industrial of related is secondly, looks went Bay portfolio at Area can sales allocation. looking

maybe the there just is on local Thank economic affecting demand. industrial So comment you. how environment

the our capital how levered. - on for Yes, we measure XX%-XX% of with pace - you on depending we're it mentioned need sales,

are nothing So ourselves assets we want to and don't dilute than those doing other appreciating.

has gotten our after no decade - about more pretty this Bay Gene lineup Bay with my the with want question the model. that industrial hit take comment to hard to may in selling soft. capital match is almost the general that needs, Area, pretty we'll a So Area this our is say is There of - Area Bay be and we'll the assets respect them and time we'll respect self-funding straight - to downturn. With

been ago. I rolling leases expire, to rental say is them market high would there it as market, to as in even appreciation just say up softer the would are good many been as has news cases than these LA So have - still a but big we is much and in that not that way year so it is a

keep on, add vacancy Eric. Yes Bay San and The Francisco thing thing the in Hamid mind Francisco, everything X%-X.X% to I'd is one San agree in said with only area.

weak high very as a of isn't on if rate. conditions you it have So top vacancy

we're So disconnected very obviously now. watching performance with and vacancies not dead with the right it fundamentally is are but much the LA, -

thing the Bay other One would I about say Area.

five XX land maybe competing so, or the square just taken number that square supply trend I feet, out years of feet up in gobble XX continues been million last has uses we're industrial. because think and is million the

of actually is core where the - converted been markets supply things. down. all has So Bay actually to converted going been It's submarkets kinds apartments, one to it's of life other in science Area those

from Your your Please proceed question. Dilts the UBS. of Brent next question with comes line with

saw improvement ending in you Asia what about strong drove in globally but in could specifically. nice XQ, Occupancy occupancy talk rebound a the

place got China the vast new is very in a leasing expect And the aggressive company fabulous addressing our space was our the in new team in China doing in in that. in in and spec basis a that we're been vacancy and job. was team has China We of the majority vacancy

Petersen with question your is Your the next proceed Please Jonathan Jefferies. question. of line with from

your were markets I places Hamid, at U.S., about and you realize the think on have through - Area outflows into I Jersey, just markets. Bay that Chicago, looking Southeast Area Southern four Yes the York-New the is pandemic of people constrained California, obviously New in supply seen broadly I'm maybe hoping decent more Bay so pick up you top the those talking just maybe just the was what with and in

in thinking benefiting demographically how places or Atlanta were? like go going So incremental I in expect Dallas do you to and and that investment of terms forward. you Florida, they think are do back we mean places more I'm kind investment things just expect of

middle There trend the breather actually good markets. that to think so pretty a that are it's decade in created of it's that been last a more so to all it's created for think take I I probably mean those this - don't the above market many area, ocean. created of Look quarter, you in that's running falling cap I I the the of for think but you've really No, just for happen. had California's into far the were had not decade some mentioned been than a cheering at it's those look in imbalances at lot of and in the going the of look markets people markets. that, country some

year-end, year about XXX,XXX ended people don't specifically think have look don't are compares like them for XX, the year before I but at it's Bay a California June a - you XXX,XXX the more measure but of in people. numbers. no, this to numbers normal pretty the So, - I the they XX, actually so year overall move June the way if the and interesting you California year Area, that had out

always the you of California is this but all total have churning internal So of that there and population still growth. X.X% that happened that of is

to pace And you'll of to of people so growing, think all just kind situations. same the still have do expect coming before. was don't is California growing some So, California. some I of at with forever, We have to it's from last not as those it back the outflows home things temporary work

prices the on rental moderated, I side. think, housing have certainly

of softer yeah, it it So, that tear kind but to has. it's to such been come than a moderation California's had been, some I have on would it's think a and

Ki next line from Trust. Your Kim of with question the Bin comes

line open. is Your

average You've do maybe it's underwriting Have at have definite on looking you versus all already on touched the to think it. changed industrial but builder follow-up XXXX or can I and where parameters buyer? margin, standards this, on your the

moved required underwriting moved in has I our cost down are of returns the the market down, capital down I think direction weighted has returns as moved have lower. same with mean average the capital

as real and compressing at assets look coming way or returns the where we created value that people situation lower the money the the of so is has bad sector The What lot and are assets. and the to into assets not want So between great situations, box. good two pick just industrial yield relative really that industrial a estate well. in is the

they those to of lower can So is rates. take buyer tend leveraged those of a which better lot in people be also advantage

the way those marketplace in changed. assets but lower That's obviously rents the the we ability and cap but of the and the has that compete So, assets to never higher rates changed. of has underwrite primary of terms because pricing in quality filter,

with your comes line question. question with the Please next Mike proceed Your of from JPMorgan. Mueller

Looking at USLV soon? that you and anytime PELP XX% U.S. gravitating down there. Do is ownership stakes about see

one ventures our have places good we plenty In actually rights other have - it's we like those certain no, we've and that disposition. capital they're to And ventures we venture XX/XX continue deal partners. been Norges with would but with them our we of be mostly USLV got our both - XX% with Norges it was that coming from and in of a hold is and to it, sell down and investment

there if don't we non-strategic going quite haven't tapped we we're fund for it, to it dispositions but think So of our some the contributions. and I need source that need time. capital. also for It's We can out sell

with of next Scotiabank. proceed question. comes Your Please from with question the Nick line your Yulico

Sumit here This in for is Nick.

debt than lot recently puts availability some as as labor themselves out some a on sell long. like page doing no more flyer a analysis of and new markets well market more to been you've Inland in in shed example So for Atlanta seem one Empire

I'm it So or certain it what you could labor is Is if labor whether markets a the light it shed it is markets. if shed or in issue, and back interested in understanding on problem availability is? in some

I shortage you weren't was, coming but question your The through pretty I labor a think be of yes, perfectly, answer think constraint. labor clearly, continuing is labor everywhere. is, is much to

labor May number the That the I from three really quality early calculus be surprised I think number unemployment customers, April have rate. early COVID heard continues back was of relatively I and And given the of two when COVID. in thought the our would that number I frankly and moderated it large problem. labor. of in is stages downturn key one, in to so, and And stages the

dent community their but steps matter how large to So customers. whatsoever. warehouses have in get. But is places no not labor problem that like. where as is places the initiatives that there hard even to initiative taken to Because that there going people where address much we've workforce but Are to how adjusted. you we just try labor They already work there of or It's place-to-place a from it not for we as no begin there geographical they differences have. lot make with a in our in know differences put for geographical labor sure, as would those don't put our

one rate year. competing with labor and all is XX% they're that the in very So kind another it's a high, of about turnover

amenities environment all for are to So small really those relatively more. be changes paying in and move environment and than paying people can more to to more addition that attention in compensation labor attractive customers

Your America. the next question. question proceed your Feldman line of with comes Bank with Please from of Jamie

part the out bricks put any I'm conversions about the for as land REIT some taking development buying XXXX you your to follow-up. composition on research curious, lately. should - news XXXX on starts. that from of and becoming and larger multi-storey with retail a starts? think just seen to mortar how Prologis a maybe some REIT thoughts rotation from of Thanks e-commerce urban We've similarly we your development additional And

Well least Jamie, to. steady you're I referring been pretty terms of buying land don't in papers for But land years or we've know what urban eight basis. at in seven place covered a

after land as for for staging those So and the certain time place and but just time a Europe. we've We're been it's this been at not it leased quite in either now we've long areas. in and some covered U.S. in can buying business we're also it broadening be markets, those

wait three strategy we strategy them infill market good multi-storey have an in multi-storey land. I nothing a that our to plan. to is sense. returns with very economics, entitlements land but and rents the you and year. for we infill specifically, certain building drives opportunistic We there says get convert strategy have certain business those, mean very while this That were that industrial or to you thou multi-storey build in locations can You on or in don't shall

Your Please the Citi. next question Emmanuel of your Korchman question. comes line with with from proceed

or taken just do racking you next to lead boxes few think can of to others? leasing over automation, you et square end is of going by think discuss existing versus years? care demand the I rejiggering, get innovation XXX of with feet your million incremental demand earlier, true cetera How that more incremental much from Tom

better Chris and automation is a of work probably a that. position answer lot around space. in to modernizing Actually, done We've

don't you So why talk that? Chris to

introduction of likely expect the it's so sure, about Manny globally. to XXX e-commerce and referring feet the more technologies. U.S. we stat the square generate don't think no, Yes will I it perhaps million Manny's more efficiency that XXX in specifically, square million feet

think chains strengthen this about time. is to over I supply needing

to the to be of the it supply world's are through and relates is with XXXX and the to productivity the and going to to of - in reassess Instead, a couldn't change it to XX-hour feet mix. see specific assets, I look A we markets, And the distribution both to going Last earlier, supply million a they as market research of in you're lot referring when think that we've lot want look on that - locations brick-and-mortar global you're lot in as Mike focus cities. a of think well locations, at forward, customer lot Touch diversity was chain. As going a We there. incremental - see XXX city take e-commerce, don't at chain particularly automation, done those I as of customers there. see beyond, to e-commerce diversity go how to that starting square

technology. bringing new much So about rather requirements introducing more in than estate it's real

didn't question in conversions, I I you retail answer of our at of Jamie's if the jump and can once Chris's Yes, paper. and about end that. thinking that part latest have

add a that. to don't to have I lot whole So

you about actual converted. converted, but see that than some space space you will think will I headlines see more

So, about in variety paper. you reasons the read that of can a for

And your comes Capital line John proceed Kim with of the with from next Please question. question BMO your Markets.

Thank you.

considered because you it originally for of looks forward? $X like need But the Liberty's you non-core to you portfolio, original $X.X refresh with portfolio about just Liberty looking going how really company much you're can billion, now the proceeds. don't you sell On billion us dispositions, the considered of partially

of $X.X to some it billion, that view Comcast. this Philly it's really office assets suburban hasn't front remember that a - of - sold an I The it's only it's logistics billion downtown thing well way, still. Of is office, is it leased about the that $XXX million and $X.X on Yes, correctly, we that. put changed about if that remains not

fine rest And and for the know straight So that you've assets assets meet most there. as of It's heard. are they're are don't in and quite standards. they're considered that of out industrial. they don't the up I perfectly the XX% just our be available these assets top, portfolios just sale But would appreciating

more XX% that underwrote. mentioned Tom the non-industrial think we even than we picked I value ones on up

but even do now, we industrial of on bunch So of give is sell the dilution. at that we'll really right not we're going back think no that. capital than could if just It's it - doing price I sitting sense a anything, terms of better high to around a in

be to last call to Take talking John, So and was on course coming the we're care. again, patient with forward that for our that. of quarter. going we you question you look being thank so during everyone the to the

conference Thank your call. And you you this concludes today's for participation, disconnect. may now