Rumors of Amazon's Impact on Industrial Real Estate Have Been Greatly Exaggerated
E-commerce giant Amazon (NASDAQ: AMZN) sent shockwaves through the industrial real estate market earlier this year by saying it had more warehouse space than it currently needed. Multiple reports suggested the company wanted to unload at least 10 million square feet of capacity. Investors feared that this wave of new supply would cool off the red-hot industrial market, leading them to sell off shares of industrial-focused real estate investment trusts (REITs).
However, leading industrial REIT Prologis (NYSE: PLD) brushed away those concerns on its recent second-quarter conference call. Here's what the REIT had to say about Amazon's comments and the broader warehouse market.
Morgan Stanley analyst Ronald Kamden brought up the elephant in the room on the call by asking Prologis' management team for an update on Amazon, given the company's comments and reports it was putting a boatload of space back on the market. Amazon is the REIT's largest customer, with leases covering more than 33.5 million square feet, supplying 4.8% of the company's rental income.
Source Fool.com
