Prologis (PLD) 17 Jul 242024 Q2 Earnings call transcript

Welcome to the Prologis Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Justin Meng, Senior Vice President, Head of Investor Relations. Thank you.

You may begin.

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

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

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

quarter our do those in to have Additionally, are and release contain we financial earnings reconciliation And second press EBITDA measures. and measures accordance non-GAAP. FFO G, a supplemental with Reg such as provided that

results, and conditions our Managing call I'd today. Hamid Tim. that, Moghadam, Dan real-time CEO; Director, guidance. us With like and hand welcome will I'll market are Arndt, to and Chris Founder Tim our our Letter, the President; CFO, with Caton, to also cover over who

and Thank first quarter, joining second in showed the over thank execution our improvement quarter by plan, you, a our activity. solid had you overall underpinned pickup against Justin, We which call. for market all

leased many remained as over feet was achieved portfolio, new This slow XX% XX%. and in to in delivering in over optimized forecast million our well before where at fact, more a and the decision-making environment change quarter XX highest one outperformed the space. existing committing years. our has rent importantly an footprints customers first quarters our This helped In increase of in we few square past occupancy, which

the we the near setting vacancy supply new conditions peak this are believe development of markets keeping We bright on supply and dearth is for continue in low owners XXXX. to rents. we That result, to prioritize with the spot stage more occupancy of be continues property of pipeline and a the very depletion starts. As select pressure in said, many favorable quarters availability, higher to expect successive

growth transition. this is very this through our As evidenced sustain lease change strong mark-to-market rent by quarter, meaningful serving to

In $X.XX including terms promote per quarter, for FFO, core and $X.XX expense share share. promotes, was was results net the of excluding per

We such ended earned high IPO its our XX.X%. seventh since the speaking to at FIBRA the occupancy Mexico, team share vehicle in Global our marking quality of quarter achievements promote in year revenue of and and at that market. portfolio our within the

spread Our U.S. to portfolio the roughly that widened basis market continues our norm XXX from over meaningful points, by points. outperform XXX of historic a has basis

our of quality in crystallized this to mark-to-market $XXX to quarter. during We markets, expect As we flight vacancy continue. million normalizes our lease the

that to of capture. above due based As on in-place net the quarter's Over is $X XX% our that billion of lease estimate change in nearly Net potential mark-to-market XX% are ratio market effective effective rent of rents NOI. representing decline rents, is on to June, the new mark-to-market illustrating opportunity will was metric and we the year intermediate this XX% rent full remain but based we mix, to volatile effective be net expect XX% between can outsized the quarters and commencement to be change near XX%, due above continue in signings. term. mark-to-market This

over over Duke in also and $X projects growth closed deployed effective net development on exceeding effect of year-over-year dispositions the as during from into We a X.X% lease the occupancy on as adjustments $XXX acquisition. average basis quarter of cash despite on Our contributions X.X% in value a over basis, decline each billion new at acquisitions growth net expectations. effective fair of strong on same-store basis, points impact well values our the and and initial was the XXX million

construction. with an The to capacity total our at in currently under of grow installed operating once with $XX NOI will XXX XXX solar portfolio stabilized our the now forecast. which with million line continue our of generate megawatts approximately We megawatts business of energy additional

of debt term sheet at raised balance XX average $X.X Finally, across and of we our rate billion years. X.X% of funds a and a weighted

launched an total, commercial $X borrowing has which also costs paper of XX Outside billion U.S. short-term thus points of far average our in our the program, this we on basis saved

In proposal of as the volume port demand, several seen activity our terms West on increased we've there are Coast for markets, encouraging our of as both and across volumes well including signs portfolio. East

of first conversations the the in customers since with increased continued term. has leasing quarter, near tone caution warrants our overall While the

European lack In we economic Even the of though and XXX XXXX. at completions levels. approach be fourth prioritizing assess simply our projected estimate shift markets cost next into over remain the creating environment, soon. peak meantime, by will many feet and this of space feet clearer heading find containment quarter utilization sits customers We normal in likely few year both starts million range, square pre-COVID million XX%, development below Quarterly as and and vacancies in are square requirements will political still to that a muted in quarters, approximately light customers uncertain tone last peaked urgency, XX near the a which the year. U.S. an of

some. growth anemic and then, will in Until rent most down be in markets modestly

to own where continues California its and Southern sluggish remained higher. remains vacancy drift story, demand

to with rents over Globally, shoots months. quarter, last While to XX soft expect attributed XX the that SoCal. the X% estimate we XX% declined conditions we of the we've next over during decline effective observed persist the some days, green market

concessions, asking conflicting be can of and the XX%. summarize conditions achieved, our that much mentioning it's that rents for so effective as available that takes have across worth largely before quarters with starts investors, is we to wide portfolio X% growth by that several to to optimism rent as there measure difference market low provided and most reason rents demand. global the highlighting We Because subdued of positive puts are due stable intermediate-term evaluating a data not by

quarter mix. buyers of lenders increases amongst depth and There's capital properties reducing yield more now Value European together clearly in growing particular, brought back buyer fall. bidders We portfolio multiple in active, we saw market very the for products sale closed pools to logistics with originally to was In this for well-located the are second which funds. markets. U.S. are a large last Turning saw greater in requirements. quarter, and this the modest our core

brief our Interest the but the are to provide XX% on we elected higher like time, and to was end. across good we data value pricing having reasonable at center achieved pipeline. was off, business, a felt where our momentum in wait update I'd very

energy teams are power net of to sustainability carbon leveraging major key to ensure battery access the our expertise solutions, position in in unlocking all the to our know, you we're As is the dedicated with generation zero pole that utilities. and value. solar And and storage

active To XXX X.X billion secured in megawatts $X.X undergoing we as is expected and of of and power. with date, megawatts $XXX of Of gigawatts available this, have construction XXX discussions. million TEI, build-to-suit TEI. under an megawatts XXX currently predevelopment currently is leaving

of to this, outlook X.X of of gigawatts, billion center for stages investment. we all X-year delivering advanced $X key for also in are which $X to billion Beyond our total procurement data is on an additional

are and out Investor we've this at Overall, business targets growing our progress about we optimistic Day. made significant the laid

to Turning guidance.

is changes few our a making to out year as the expectations. are We playing

a same-store, starts As for few such, and we're otherwise. only changes maintaining There G&A, are occupancy, small development our stabilizations. average forecast

by in capital earnings. guidance to of only are which impact elsewhere not are for We for strategic FX overall our million P&L and the lowering revenue will $XX rates, account hedged our affect

of earnings $X.XX and of capital at to increasing increased completed promote while per will $X.XX a increase to to slight guidance of GAAP FFO, increasing new share, net the our $X.XX markets range to including from and seeing share and attributed billion. deals promotes, per we're promote. activity we billion guidance the excluding midpoint our range are range FFO, we from to $X.X the dispositions prior $X.XX FIBRA in expense core billion Due and Ultimately, billion for per acquisitions $X Core overall to $X.XX $X.XX a to the to guidance between range $X.XX a increasing will our to are range share. $X.XX our a contributions similarly year-to-date,

also long time of period the our at commitment our from in strategic to business but S&P to Our over been leveraging in ability a X% which We've midpoint, core model from of unique only to earnings our XXX growth growth all not that REITs. comes guidance portfolio leading calls our business. and ranks for through adjacent a generate the percentile XXth superior verticals core including nearly scale,

simply is to and on focus continue deliver Our this durable industry-leading growth. to

logistics of like yet, fashion. health, as program I'd an close, also Groundbreakers October exploring is X we annual Leadership on shape As our Thought upcoming best event, and energy our highlight surprising in the London. intersection The Forum taking even to in

website, is the hand see there for and for we hope our I'll call the to information available that, questions. operator Additional back forum the online. to you your With on or

[Operator Fargo. from first line of Blaine Heck question Wells Instructions] with the Our comes

on that talk occupancy that driven of please? implies the to at It has quarter NAREIT looks update. And second about into that, maintained are the Can that driving you related improved versus some whether and continued And downside have looking about what's your like results talk spreads quarter? just during you might just improvement? guidance, occupancy the as progressed, the that there markets year. the specific any half trajectory, rent Can the if just third momentum guidance

inferring I'll into up understood strong. which between proposal sure it's first are quarter, I Tim. activity you're the third that maintaining few ask second. with to if you I the think question. not that we start of the But may the the picked I is first Blaine, NAREIT the I and was is of weeks the the part, guess I'm and momentum repeat coming quarter, end

way Leasing more the achieving together, watch be the market that of we new in when to pleased that just But outside and We so quarter executed. put in we that all second I it see less think what the strong. a our to little I most. renewals leasing. think in we activity SoCal see drag rents discussed is is we're the We're continues

as pretty precisely our good days much expected year. we feel XX executed from the it ago think and about discussion I

line question Citi. Our comes from of the next Mailman with Craig

It's the Nick obviously, about you you're Craig. and some seeing sounds the like demand different differences But hoping improvement on sizes of Joseph there. talk side, just and an could with it across here geographies. I was demand feeling Maybe

I'll for also healthiest Southeastern with point really global I'd Thanks Chris. It's picture. as U.S., the overall well that as America Europe Latin U.S. being the is the areas the out part the The boost geographies. start but question. in as

the relates what XXX, a best, above but and our maybe remains vacancies the low. to is call, XXX, there. to stable size where XXX Demand it where below As more earnings -- we say, also the a even relative discussed last is over sizes that's availability XXX, there's to on demand are which same categories, story that's is momentum certainly especially but

question Ron comes of from Stanley. Morgan Our Kamdem with next line the

Great.

on sort Just a of the quick conversation. rent question growth

I X% think some sort guys of term, being Maybe commentary what rent forward? down down year in if growth the X% X% about you half are you how in XQ could 'XX. just and back the long of to think provide going the should that expectations talked you XQ after for about X% the targets

that effective thanks out let the quotation me question. talking in there just about stores all see It's And here Tim. the from rents reemphasize, start, Yes. for Ron, method. we're I'll we

as I'll do would case then all portfolio as its months, is Starting talked next divide described, it SoCal rents we NAREIT, our we've taking concessions. else. would, we and everything at incorporating this basically ultimately with So way, we into special XX that about own the

months markets. rent of all else, of it's of we something And that really all X% which within of down is I SoCal there flat, markets does like XX in put be what inflecting. next going we would would function put range non-SoCal modestly next growth And X% months. a in in long and over together, next around to we those put way possibly XX the are on a market to maybe XX the weak do strong, everything a before that negative other probably think inclusive When months, the SoCal, saying, stable of

in year, market growth, up very one down this meantime, In our down even X is change in and this I NOI, that mean, last quarter, we've last XX%, the negative just two down now of last the had a to everybody some in that, fourth quarter. And good highest place one remind quarter one putting rent of second of quarters rent just quarters of within our light quarter. first we're the significant this growth

we're position the fortuitous in carry very where us it's we this lease period. So large just have through mark-to-market transition this

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

Tim, you lease curious, green but could wondering kind I'm to bit line right. activity I kind it new much the you little provide from proposals, that kind is I And quite up just is commented a was that and a out is how development? how for the number strongly for frame of of space detail. And of the kind think Obviously, of just on up vacant more bit for if renewal that might of much years? of couple or of be kind that even to activity because past of just

where been. It highlight supplemental proposals, uptick square to there. leasing, chart lease. is is something new One a XXX in just the That's is. clear. did, feet, do more I'm things above at we've you few a meaningfully The in big And very that that space glad Steve. see thanks, the looking to million you of And you're function just be we nominal

We well. in looks is portfolio. there a bit and have And some there's this as months more little a XX just increased the function also overall next the how vacancy of

available those that proposal added which this is who've activity in the new to we why is of line for a just This context puts lease. noticed quarter, what

look You and characterize, last measured normal. XX% you would chart which when quarter at can see you see that we the as this

Bank Camille Our next from question line comes America. Bonnel of the with of

The the pace development halfway seemed stabilization point this ahead tracking to be of of year. at

And guidance? the developments. stabilizing in progress Coast, made West was some wondering was how looks good these it budgeted your like So this you've to in out compare what I some of does

talk And leases to rents can new you versus how on signed the quarter. So some terms was general underwriting? of much in that

Yes. question, Camille. here. the Thanks handle Dan. is question for This I'll the

was a stabilization leasing us. has quarter Certainly, slowed a So big for development bit. it

the look business. I a basis. at at is quarter-by-quarter to our at best think book whole look way look the development on of Don't portfolio necessarily it

at portfolio, of the XX%. So margin trending if million look XX billion we're feet, you all to long-term development whole to our $X XX%

at look you it's if high average, our So XXs. XX-year in the

feel really development our about I So good portfolio.

comes Petersen Jefferies. the Our of with Jon next line from question

Great.

market of at top we square more what for Like tenant them like of Home happening to being larger want kind hearing Whether active it activity. context them to on or So is We're that the these talk an feet increase in to and looks people in can in leasing more frame have before decisions right you the impact leased Amazon overall I was active what's is in Depot. looking about maybe some from players see specifically list, your an year. that Amazon the in market? of uptick start waiting are other to this now? we make Is people it

Thanks for Yes, is Dan. John, the this question.

ago. us. them, exactly and had happening lot E-commerce the talked where So Amazon a played multiple and before segment expected. E-commerce year. come to were Sure, the a were this I very pointing quarters customer, Amazon for into a strong. little list to they're would, completions we what with portfolio. going success strong we've about talk last it's we you're some for this top it story, time, some e-commerce made our ago a at it's actually, is on quarter. year given that overall. very as be has decisions Those But been have a any this about was We XX you top segment with strong. a quiet continues was out big operating saw us

Sachs. the Our Goldman line Caitlin Burrows from next of question comes with

just market. the transaction Maybe on

the it materially you a now valuation disposition the XXXX. buyers I you depth deeper versus of Was is think, earlier, higher did. and how mentioned Tim,

acquisition seeing your guess there your on term? of are you in side, opportunity is and who an I what So guys from selling, potential kind near the

of doing the business, for the to seen have globe, markets so We're take as many transaction up. sorts success outperformed our say, thanks year. across which the we're that see from the the open in in why the I values, our disposition. of market community expect getting it's We've the we of a advantage up. board disposition And We've Caitlin, have also continue. would to they're up. transaction interesting turning lot been opportunities a lot excited market of brokerage you us Yes, and guidance normalized. definitely we all really question. we had around hearing over We acquisition saw move opened the market is brokers our in for about the volume

Yes.

lives have because their need asset liquidated. generally other just on The And would but coming portfolios of their have end what's other investors Caitlin, to private those going estate outstanding liquidity are classes thing in real to funds because add that is I in also they the of not need in and you that, that to commitments. the be closed-end portfolio,

from one industrial And pressure been those has sales. these those is there's performance And has of values So of great. really places crystallization that guys to their the important. real realize estate been

a it's that animation So you of suspended last XX was have and natural the course sales on months. things, deferred volume put for some

And million That's good I deals, through. multiple offers now is now say, the good million I the deals of to is market would spot portfolios. $XXX but sort and of for hundred dollars, with couple very coming a But in not million tiny the range. not say would $XXX sweet mega transaction right generally,

comes the Baird. of question line Nick next from Our Thillman with

that little wanted does on Just demand concessions, continue that. color And I expecting the in uptick. the in of historical months? a be wanted of the kind averages? a proposals. rent of you kind XX for dig on uptick little also Are mentioned new to to bit? more kind just see elevated Tim, Has Maybe that next to then free you spurred lease retention

Sure, Nick, thanks.

there's years. back reverting last of -- over between several the of coming at rent typically coming it's to XX% lower area over now normalized that's would as we rent, had just and then And you we level view forecast have We free surge kind I well. I as we in good some more front, this free number, characterize may some much different market free pace a retention will, another mean recently, quarters. normalizes few levels. and the if the places, XX%. rent XX% a -- where discussed as pricing, expectations different to it On that And and had would Think our as think I the

of comes Mizuho. Our next question from the line with Malhotra Vikram

Chris, I So One, I sort absorption, guess you you X on you roll-in mentioned the, just I at also us sort of that in of anticipate of million occupancy rent guess the expand provided you parts. the Day view sort your same-store half? And just growth. and context projection. Could could what your X-year of NOI that for growth the second upon of you net update then think, view $XXX Investor on

thanks for question. the Vikram, It's Chris.

relates So feet. XX million was in to just first quarter absorption square for net as million, demand, the those along, it following XX

have second. the We in XX a million

square XX million expect of to net we so million feet And XX absorption.

million I and feet. call think will for here that's leave rent. with on absorption Tim That XXX Tim to the going have the net we script the year tone in us take a is square full million his XXX had of that to you. that

about modestly We've to up an years the left then shifted. has where and clearly modestly rent in going deferred then of ultimately the of that time months, that we the that been window years, measure terms entire of we of If at fall to X end XX period, think to end our are has, lost. shortened. not to think that course, been be rents is we But to we positive the have XXXX thereafter. flat that highlighted is we way grow about period. to that in environment the really couch that as same that are But over the that we end coming X 'XX window of moving Vikram, in now look rents to the the of is think would XXXX, Yes, time that's the sense the going continue

perspective provide X% concessions. other One Yes. that actually big to is you I forecast our has been since in might X% the change X-year

for in rents have come base Southern since that markets -- one come laid those for if concessions next asking Day X one into see assumption. the it it, Investor our and words, the out other have expansion balance. in the California, over into, rent the forecasts, has off So one of XX effective markets certainly, most we but we as rents, rents even more effective Not And when of had . been months the those you come all burning weaker down in has concessions. been affected

are weakish next the you next give the XX% Just in rents XX% Chris market What of for of to rents XX categorize that over rolling something our stable in of we XX Southern months and months next a about sense before, of XX sort our of are accounts mentioned another over as or markets. months. profile California for the the healthy rental fully the XX%

So this concessions it's where is Southern in in a a problem expansion and rent. reduction an California base both really

with important, we months, that projecting. Fortunately, market the with is next the are XX and mark-to-market the is this the largest Southern California in declines even really

in fact, such Southern word, protection, a on California. downside there's good pretty is in upside if protection expiring there So rents those

in have mark-to-market, So the ironically, most the near markets term. the weakest certainly

next Our Markets. of comes John Kim Capital with line from question BMO the

there past I are near recover. discussion some wanted table? Or in below this this you to that NAREIT, ask still dip the of the about term At then the now of the that quarter at given was remainder Is for would the year. occupancy on risk end XX.X%. the that trajectory XX% and

Blaine's also that was this I realized missed question earlier. I and John, Thanks,

longer midpoint but coming see tougher average little it's that So land. going was about far, quarter there's a bit guidance so I have lease-up hope year-to-date of just very I year-to-date. back new we good quarter is the that thought around leasing. that to possibility, specific our the The in established. comment some we we where XX% XX% reflects we're say would time suppose it. to The we for and that the was that XX.X% conservative. second the range feel about I some we've role in thanks

because market environment other prepared terms think leases. business tight, of ways. Tim's But this a don't if normalized, markets -- were choice. pretty the itself the expanded anything, way, manifests goes the in manifests quality this remarks, It a towards when One I in in of people premium in everything business. this can't X itself quality occupancy, about be think some really I portfolio are much was in in the space, softer the which, have of picky They higher-quality as markets get more cases, has

occupancy really the it's of is, market. numbers. can to very of occupancy move can tell the portfolio X to or as I'm leases, in certainly because the level large I around So compared you, rest as predict X quarter-by-quarter our even premium, hard absolute our of the our But premium confident

going think further. expand to even it's I

from comes Vince line of Green question next Our with Street. the Tibone

there you environment? of be implies there guidance starts Are all are back an year. the starting markets data kind the of starts? in And would Capital the centers all what mostly today allocation this, related logistic comfortable Or acceleration project well? a these in half current spec as some to in planned of

question. for Thanks Vince, it's Dan. the

amount the way the where better first what's going at build well, think is -- So about you That to there. question around sheer And your start that of volume. opportunities is in I entirely to look our all, think see we have. we're logistics of

worth pay of and look spec. We opportunities in around deal-by-deal a the have the We raised every world. market a at the of attention to on fundamentals $XX dozens basis. markets deal through on take bar rigorous billion it process, We've

around have And basis and world when may that we think between many we change start. make year. now I on decisions building we the markets be deal-by-deal a this we'll in So that

hard it's anything to right So certainly now. peg

strong. of if and Southeast, I would is specific Northern But Nashville, Houston, strong. strong you're Europe demand there. super names markets, very pretty for say, is Mexico asking the

places most spec the those are So likely to starts. see you're development

question line Ki Truist next Bin Kim from comes Our Securities. the with of

your about talk to wanted business. I center data

you deployment. on provided, not changes can X-year business? that from just updates in it of outside ahead you're of seems I'm looking you're incremental the in, the correct, X but you for like gigawatts demand your Given that's least at comment if maybe seeing sure in plan

are the data optimistic since our time Day. of about more We our Investor business center

numbers relationships those have team we've some terms Ki of has team the it I the come are And think the from, the sector we renewable where utilities. part some specialists Bin, and that we energy done very that recruiting is energy excellent of excited. have, joined of that in with in team have secondly, excellent

difficult don't really And to these that's data the oftentimes hyperscalers got market. the that that mission-critical balance real and companies it know compete just And finance in to well. a are something And is that we have in center players in have deployments X sheet ability this These companies. that missing increasingly lot private deliver And and for component. execute of important. is super becomes estate for obviously, environment, a the

both going forward. going Prologis, and So are just sheet we think balance get better talent the competitive because position and to better for of

next Mueller with Our of line Mike JPMorgan. comes from the question

are terms Where footprints? think XPLs in of do their we you resetting

question. for thanks Mike, the

double we're market And More XPL California space really the the Southern is in now. almost an dynamic interesting So the in XPLs, more they simply certainly, seeing right more across where took lot there's acute COVID. where What a average during that's the just is, slack up system. U.S.

have you customer space. a a deliver is of lot market the don't And that XPLs that in for a Now can't have scattered excess space you throughout networks. their

to need in market, X% a very emerged lease to excess XXX,XXX XX top example, we us of foot By major said, space X% recently in customers one a led which way to us. network, of a long-term came and have yet our for our large square

about X the serve purposes. that market think is to basically XPL XPLs way One Yes. this

act consider any business XPL what that players they And I into to own differently are and by Some just be focus principles. because directly leases than activity comes baseload that want that those to companies, their those else entered want business. doesn't that from on somebody business. volume It to outsource to

surge is component component sort the the That Then of likely more to is there XPLs. be volatile. is of that

that On are becoming markets base on rest the that's of activity. the the softer, pretty suffer the are portfolio. The excess way when stays see actually component upswing, expect part you And to when consistent with where the you down, the more. markets

specific share be has of low California XPL Southern to the the XX% in terms range in business. of

XX% portfolio it the total average business, of lot a surge is XPLs. versus baseload of leased of by the is that Now business is the of is some about which but U.S.,

markets those bigger exposure on surge of with obviously, have problem this to XPLs So component. the more

from Our of the line with comes next UBS. Goldsmith Michael question

You the remain outlook, demand on continue confident on the side. particularly intermediate-term to

everything today. So through maybe timing evidence excited? we've just can of already And playing you you out? up walk to how you the us do of sum see recovery kind then What that the gets heard today you that see

Look, predicting weekend presidential point are respect of when with a interest highly you've a got on, volatile. the market up, obviously, election to wars of with an and inflection at couple coming events you've got going a cycles, rates which particularly got you've that's Fed this is,

you, or specific can But XX is to tell And full And recovery that You've X that. for us we the know us months going the X months you forecast, XX that good. extent things we're me on. gives or of very months. not you're got asking should the whether major market confidence, what argue let

unrecovered. softest just they've months the are and Southern in years that to recover markets They've half a California the is soft about for sense markets actually are this going stabilize going been never matter latest don't done are because XX think frankly to up. the other out. my straight need And between XX months the now markets XX they are the and having that than this I more

think the XX talking I of you months So markets were about next the turn as corner. various sort

that gone. If be I kind to be your I were think of next of Fed number, will January uncertainty pretty will head gone. year, a if uncertainty I'm and presidential into the sure get the going you pick

low very start prediction costs And that to up. fact, we So know and costs it moderated, replacement to continue continued is is entitlements, land Construction start. down on and political to the those have will and but for not a be up. which exactions what go approvals have is a volume go

you confident long-term of you is and really over it even But quarters couple if about our strength super business, an difficult. I'm want it. of the quarters have calling answer, a So or

next comes Todd Markets. question from Capital of the KeyBanc line Our Thomas with

Hamid, be might get your think with just globally? thoughts impact just the tariffs And and on trade to industrial allocating a in have following up I'd curious does that conversations little on, anything change maybe on U.S. impacted item. potential might how having real tenants prospective whether bit, or you be uncertain and another potentially estate really, The as you're on that about result. today tenants a capital

a that's Yes, question. really good

tariffs. So first a race of between on both all, I parties think there's

are you But the on side what not this supply think to of I'm at the which to tariffs. supply lead is sure going tariffs, remember to is at probability of is consumption day, specifically outcome, So the I going in end we Trump outcome higher to Probably chain. China. point, which never the on chain. We've the supporting more is need more end production the of focused that the to lead

goods goods, get So needs these same consumed of to amount of markets. in confused volume the --

the border. the people the the to end China a has to going Most at on other lot part in With One a that are suppliers moved Mexico, are already where Asia, some markets. consumed of of of has Southeast over respect northern to tariffs in are of day, all Asia, shifted business on them U.S. But of China, the them strategy specific they're in lot to it as particularly of Plus get of

demand product. see between or need in overall markets we of radical shift terms of for kind our So a don't

So that's main the driver.

demand The second that that there in for order relax extent a effect and will real estate is which slower cause the have to the going effect industrial to Fed Economics the turn to XXX, tariffs, inflation have, are economy, higher and will affect else. on headwind overall obviously, everything and could you're

China, in under be are I they I'm care about, China But the that really connection about effect the somehow containers don't So to most think going people think effect, were if second all that, think the to materialize. come at it that's earnings going from. kind don't everybody's direct way about people pressure to this be the worried effect, because the not problem of They land the order L.A. a fact of primary will L.A. in where calls which it's important. But and

last question Our with Scotiabank. will come line from Yulico the Nicholas of

strategic of revenue. there valued the think should what you're potential the be that fund pricing Can How you for about on are funds capital transaction talked kind versus to You right we upside could the relate where now, side, whether earlier improving. seeing? about market revenue flow the that

tell think turned fund valuation, on Europe. of We early values. can we our we're both And confidently I and the I cycle. the were the adjusting U.S. now side On good that you corner in our have

people's I values real adjusting they've think in in funds, a feet of lot dragging other their part. been the

of some are intentionally it not appraisers always because the of it backward-looking. Some intentionally and is

data comp it reflect And takes been for adjusted. those until there's and values to set, data the time itself have in

will a in continue now occurred I ago, really just months market that the X, to So think XX being X, experience decline acknowledged. are but values

we've to think by process, because that a between already in link our really understand. independent and going direct way, of is, will up which funds values that's past our valuation also be important more the I and

do A don't lot and appraisals these funds others. of independent

mixed of because may messages you ahead and we've curve. So that's been hear on just the that,

of is spent and into fund acquisitions estate, the flows raised question, investment tremendous real money which has to there your is that not a second been part managers. amount As of industrial in by

spent. money And going me is that get tells to my experience that,

be And capital a that's going lot of the forward. transactions I for to going think source of so

everything estate new been of a of biggest XX%, portfolios. the portfolios of they've has to declined buildings XX%, industrial component and office because have terms are that real XX%, their else, pressure In had under these remember, XX%, lot allocations in value which

liquidity So they're forward front they're as investing for a being in pressure to and more foot mode. opposed looking under

than allocations just new the It's back, of real back upswing. all cycles. of but volume of to slower think capital kinds I is So coming estate, their coming on will most the it slow be

right. All

in So enjoy Take the summer. interest everybody you see soon, the Thank We'll hopefully, rest company, that you I pretty the your and question. was for care. the at again think Groundbreakers. of last

your participation. That Thank today's you. does conclude We teleconference. appreciate

disconnect may of the your your Enjoy this rest lines You time. day. at