What Economic Slowdown? These REITs Are Running Out of Space
Shares of industrial-focused real estate investment trusts (REITs) have tumbled more than 25% this year. The main issue is concern that the economy is slowing down, which could cool off demand for warehouse space.
However, the industry isn't seeing any signs of a slowdown in demand. That's evident from the recent numbers reported by some leading industrial REITs. They show that these companies are starting to run out of space, suggesting that rental rates could continue their scorching rise.
Leading global industrial REIT Prologis (NYSE: PLD) recently reported its second-quarter earnings, which were exceptionally strong. The company signed 51.3 million square feet of leases during the period -- 43.6 million square feet from its operating portfolio and 7.7 million square feet in its development portfolio -- with rental rates on the same space surging 45.6%, led by 54% rent growth in the U.S. As a result, Prologis ended the period with a 97.6% occupancy rate, while its same-store net operating income (NOI) grew by 8.2%.
Source Fool.com
