Better Buy: Prologis or Rexford Industrial?
Real estate investment trusts (REITs) have been out of favor lately, with warehouse landlords like Prologis (NYSE: PLD) and Rexford Industrial (NYSE: REXR) performing worse than the average REIT. There are some logical reasons for this even though company-level results for both of these businesses have remained fairly strong. If that sounds like an opportunity to you, the next question should be which one to pick?
Interest rates have risen, and that's led investors to reevaluate prices of income-producing stocks since other income options (like high-yield CDs) are now more competitive. This is a big reason for the broad decline in the REIT sector. Higher rates also put pressure on profits as higher rates raise a REIT's borrowing costs, making it more expensive to finance construction and property purchases.
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Source Fool.com
