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Prologis (PLD)

Participants
Tracy Ward SVP, IR and Corporate Communications
Hamid Moghadam Chairman and CEO
Tom Olinger CFO
Gary Anderson CEO, Europe & Asia
Chris Caton Global Head of Research
Mike Curless Chief Investment Officer
Ed Nekritz Chief Legal Officer and General Counsel
Gene Reilly CEO of the America
Diana Scott Chief Human Resources Officer
Craig Mailman KeyBanc Capital Markets
Manny Korchman Citi
Ki Bin Kim SunTrust
Jamie Feldman Bank of America
Vikram Malhotra Morgan Stanley
John Guinee Stifel
Michael Carroll RBC Capital Markets
Tom Catherwood BTIG
Rob Simone Evercore ISI
Vincent Chao Deutsche Bank
Eric Frankel Green Street Advisor
John Guinee Stifel
Michael Bilerman Citi
Call transcript
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Operator

Welcome to the Prologis Q2 2018 Earnings Conference Call. My name is Chris and I will be your conference operator today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Also note, this conference is being recorded. to call like Ward. to now would turn over the Tracy I you begin. Tracy, may

Tracy Ward

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

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

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

we'll will press measures Gene on who our who with merger in Materials turn started. announced contain results will remarks. With in This results joint Moghadam, Caton, who and Company's Anderson, McAllen] prepared CFO, and our her the to second are a that supplemental our Mike morning, those the and This Hamid focus over today's second I'll with get in for Prologis and Chairman results today EBITDA and provided Reilly, Also On is second such we with on will us Company the FFO website both contains non-GAAP G included information April and release Including Gary financial and are that, from call beyond provide available a CEO, outlook. measures website. not Tom Tom [Coleen XXXX about Chris are on hear Curless, and regarding Scott on Nekritz, reconciliation is posted to the Diana between measures. Reg accordance quarter do the our week and and us. have comment Ed then as we Additionally, XXth, call DCT. will detailed Olinger, SEC’s quarter transaction. what comments we'll the statement guidance; also and cover companies that proxy call are transaction our the

Tom Olinger

morning in our Tracy, net quarter few than and forecast. constrained second Thanks, to absorption very remain being are in markets Market exceptions portfolio strong continues and joining faster limited good our prior check growing supply call. by across despite rents thanks for and availability. our our With be

up and X%. We’re raising for our year up XX points now X.X% growth. same global in estimates over rents and leases our strong XXX globally, to The extending quarter the growth U.S. for store widened U.S. in-place further spread the with XX% almost rent to points runway full at Europe X% and and NOI market in the between stands basis basis XX% at the

momentum second with and the great results, with per FFO Looking $X.XX of year quarter carried started the into to core we that share.

Our well store share and high results of growth were space by as was located demand. These NOI at in remains led U.S. quality exceptional cash X.X%. X% same the

creation was margin over square includes years. estimated development and an totaled was of Stabilizations Occupancy million of five This by on share Our million. had to an U.S. record in with XX XX.X%. quarter feet X which X.X roll $XXX up effective XX.X% over the average Leasing was and of over points leasing XX%. million net term in at million nearly square XX% led of change basis rent XX a the value feet volume China. sequentially

gains. year, far in million realized more So development we’ve $XXX this earned than

activity but back contribution disposition quarter we recycling capital expect second the Our was and of half to the accelerate our year. light, in

for sale. assets as our held wholly-owned both fund classified in increase significant a note You'll and

within set for adding DCT, to major gone going their assets With a forward with their close the high very is and well team. hard. to vote. quality has we and have integration XXth, expect pending the Given funds respect to Prologis look days escrow of transactions to few August that welcoming their been contract employees we some transaction we several following under have The our shareholder to process the and portfolio meeting and

We annual continue balance the we to synergies expect With million in synergies capital. sources incremental and $XX have as of well of $XX development attractive one as million business, to of of creation. day-one access future best revenue value sheets

capitalize bond weighted and term they of XX of self-fund given we almost of the to over average fund and $X as we rate opportunities arise As very deployment rebalances. $XXX our during in previously a of interest issued X.X% potential well-positioned our announced quarter, years. that billion liquidity, and on million had remain billion We $X

guidance Moving full Also share significant Page cover include guidance updates basis X refer complete our supplemental. acquisition. I'll does the for but on the pending their our to note DCT from our not for detail to year, that accretion of

the the on by Based of second from of transaction results, transition, midpoint incorporate same range cash are impact the be NOI after will stores basis X.X%. points guidance to quarter We this to strength increasing we our XX our updated closing.

we built-to-suit raising increasing and billion also accelerated elements, guidance of $X.X now billion. starts As earned and quarter. our we million a are per Remaining by between now net perspective full $XXX fourth and between pipeline range in lease by expanding income an result will per the $X.X higher of With our contribution the now billion income $X.X to to now $X.X to year We're million valuation net $X.XX share promote range for guidance between be and $XXX $X.XX promote $X.XX can expect gains our billion. be range our by and in Europe, share.

and portfolio. million million, realized share which between midpoint forecast. the across will raising than $XXX approximately range gains $XXX deployment of our million million to by now higher is We’re million $XXX net valuations prior development At XX our by midpoint, driven higher a the be $XX proceeds our development

half are and when they when the back for to earnings put through As are year, development. the you work the between consider trajectory to of you generated think sources primarily need about lag our

at our of in first the will excluding X% $X.XX the in growth, our X% year a midpoint. second average To per does to FFO quarter. event from the all our to $X.XX quarter Putting we out we're As this year, XXXX this X.X% down XXXX up full not three for for core impact increasing when between from plan investor for called expect range we and $X.XX include at annual plan. far the surpassing two guidance we promotes, midpoint core DCT. $X.XX our laid the Again, this years our together be put the result, context at a third share XXXX, FFO the about

was XXX while our basis Importantly, achieved leverage and our this reducing portfolio realigning by points. over

core XXX a FFO every As reminder about X% growth. to of translates leverage of basis points

that, the leading fuel to ahead, significant with build performance. of embedded And continue our Looking land Hamid. turn bank upside, will it rent of combination the capacity over sector out and to our I'll our leverage

Hamid Moghadam

team significant is the let decision-making are If tensions delivery; plans distribution on our customers markets, since aren't We lately. in for negative and located sentiment including Thanks, a be remain appreciation, large a today's of such to on I’d escalating while as touched spite the the any and in leading delivering vast focus the consumption dislocation on DCT, sheet majority political optimistic cautiously and and ground. ever to global our price best it stock in came on shape in to In are in the last for some on or strong translates and attack however, including in sizable businesses see sector enables out platform that point our like city change rhetoric enterprise portfolio been actually to and recent moving the balance and want in and closing, our intensifies the transactions best-in-class from abroad to of they protectionist their into forward outlook, economy results lot trade we've getting been is it Tom. but will questions us consumers. out tariffs I U.S. At of negative same last on carrying built a I time, We've policies, performance relative discussed our perplexing touch initiatives for the create me and we hear call. long-term execute that us. insights so that ours. have they My growth opportunities far are first any may yet to what all comments our guidance. topic on actual we and operating unique, trades portfolio with our lag but this and as

surely to of trade rhetoric has is by which smaller DCT and companies attributable pending is this the of rest I sector. around transaction, the all suspect caused lag in helped it tariffs. Some to

company's our generate believe growth ahead recent performance. this plan confident pack. As questions. let's the executing business only the laser-focused open and the disproportionate a global industry's we'll had company, earnings to and weather effect we the has on Regardless, on to Chris, of continue factor that your up company, our call we dull relative are significantly long-term remain

Operator

[Operator Instructions] KeyBanc from Craig first The Mailman Markets. question Capital of comes

open. line is Your

Craig Mailman

question comments your sentiments. Hamid, here. two-part a appreciate tenant Maybe on

of as projects at portfolio portfolio? consumption and your, in starts then bidding kind tariffs where guess and most material maybe in to at contemplating out weigh you do the to costs are least maybe see appetite about you Just curious out things the here exposure the guys of buying least, the XXXX. just advance though materials? you development How are and guys you be the other And risk? look I do guys thinking Or

Hamid Moghadam

that probably trade transshipment and markets in market of part say the more manufacturing the re-exported understand respect material some because the Mexico But the market. to to exposed then you and most added that’s consumption market a and of U.S. are they value are With of it is added broader the to I’d to a tariffs, value that labor U.S. from with the got lot imported to than

number. Mexico, need focus not incremental is of a really for and you commodities the just added a that huge in So, to value lot on

So, only that. apply the would to tariffs

of actually this also Midwest lot imported manufacturing to a lot are comes There the the material that’s end example, and -- level aluminum through relying a manufacturing that be For U.S. exposed the for first the those markets border order are steel in because of bank. could are imported in are of some that the on car

supply. increases and of in in all the see our to that going strong and any really But cost to going small. they projects are a making from to more to those [indiscernible], importantly, so those the have of going kinds expectations, the absorb our that, because impact over it's as far, into I and series so our increases. a With to are respect have seen from effects we are room think margins, on increases increases. lot development cost material of rent time line decision construction translate And are Those you've all those been curtail be we start higher costs with little under next far to of all as

at So, can't increases, just to look that rent look and you got supply cost at the on of impact growth. you the also

Operator

Your next from Korchman question Citi. comes with Manny

Your line is open.

Manny Korchman

I indicator you the assets? of all estate about think data Real that confidence What lagging is that being quotient not a on. this trade leading the that’s the the indicator rather points a effectively you’re into guess rhetoric your for typically seeing indicators going as we leading are and or give and than demand so policies that

Hamid Moghadam

So, our business about for our driver for accounts largest of XX% consumption the it is GDP. by demand far of and

growth as two probably are biggest a of demand. and drivers GDP growth consumption subcategory, within those So,

long-term the reconfiguration because the supply and second of much I of should But say of The that, have addition, chain. or the reconfiguration of e-commerce. I the supply course of driver of we stronger mean biggest recent more top reconfiguration chain. is on demand

will, as look the So that far slowdown, we’ve if and don't We really a seen way projecting factors that supply into so you by demand in of other far. overwhelms any the at the factors. to as and results more pointed indicators be. other really at demand much We that our what will as look underwriting are out. supply you effect Those the leading those future of

Operator

comes SunTrust. Your next from Ki from Kim Bin question

open. is line Your

Ki Bin Kim

impact And how in And about California and increase? talk tenants to rents some is given the California? by in? when So, increase concern you kick in XX. overall will triggered XX% Could of -- ability tax costs actually the a portfolio raise little DCT's there does merger to this on and your was that bit after that of the

Gene Reilly

one. I'll this take so Gene. Yes, than is

year the years split So, XXXX be it’s rolls not likely on appear in to the actual on is for next couple now. It the so so ballot not ballot, timing is going out the effectively from now. more proposal probably may or a XXXX,

vintage average the off said think given with having over assets, property Now the dealing owner on that, our properties. I California we’re DCT commercial better

our Over what -- likely supply our down which you does the be it if I costs? in X.X% X% of likely chain long-term, our tax less as to how increase. see what overall. than exposure and we customers' It’s this affect But would am about is taxes to costs boil increase talking about a customers

hold So, I really isn’t awhile to think and the take it’s I impact think take going to that ultimately great.

Hamid Moghadam

you leads XX portfolio look California in Southern the our for feet and store California then million plus if different at in for business, likes. is Area Bay the licensed XX Yes, overall the about the deal in and example

sooner thereabout So, of million math would numbers, XXX am I everybody's. least focusing in say haven’t and with we and this, feet probably I but I a that done started California a pretty from decade strategy our have at in than California square the sure

lower than people. that likely significantly other our it’s is cost basis So,

everything you that on until will have else advantage and will we space. to whoever actually this rose and par So be is markets, role after split an supplying with have

very position So, I view our is favorable. actually

Operator

comes Your of Bank next Jamie Feldman question America. from of

Your line is now open.

Jamie Feldman

So, the down think quarter percentage was and you in starts XX%. of about I development your built-to-suit

So, to ahead going the going how that back talk trend uncertainty XX mix given and so about planning this expect and development about out the last the you how looking part your out be there? conviction question, farther to I much maybe we to think You of even about could forward pipeline? starts what think going for first should And was, think Craig's can you question you do talk forward?

Mike Curless

Mike Jamie, this Curless. is

multimarket if quarters, really look built-to-suit four at to you range we're look trend. where the quarters the think trailing that’s of of expecting about the Currently, percentages indicative get I can't you see a at two you average for XX% while there the and we real out in strong And the this way up growth lack requires space the have about in U.S, pipeline a confident very Europe year. key feel markets. available to of about

second an overall the half around built-to-suit on up settle in percentage percentage expect So, arrow in I to and then XXs.

Operator

Your Morgan next Vikram from Malhotra from question comes Stanley.

Your line now open. is

Vikram Malhotra

color close me up, guidance about type, occupancy, market but the some the on obviously get driver rents by we here growth of maybe that more from and to to from and to it to key peak product Wanted thoughts took push that ability here. maybe obviously seems

surprise are you terms seeing can in, changes anything So, this any you of just maybe talk rents about you in quarter? that

Hamid Moghadam

real then specific, on and you some comment and this based but can work see start the I Gene will can I Chris think Well, and has part that of to Gary on Caton you, costs done shared that estate with customers, not that extent to approximately -- the the and becoming chain more small the just costs more attribute. have supply the of it's value of to cost reached and

focused decision I much think of from focused levels shift a to more you're mentality getting a a to cost service experience and the making criteria process. decision

against XX of or look one grind a penny able landlord people rent. it bottom other out last being the years have of XX pick these run to with getting good the to for pretty line, So, customers and

and that of portfolio, one that we’re user that lot smart that leases. increasing below-market another market burning keep so and religion XX% because out off the one to and and of mark-to-market even for with -- number lock under affect piece a a right a good up the of mind service think at our the so be take to location its keeps Also look when levels their we space to go in in get thereabouts they continuous it supply that and and that really just have the them ability utility a figured the or a have is get competition with lots undersupply I quickly. the space now of ones very though

on or market there so or the So, no power. at our good always be far so better is everybody great look, but I’m continuous the to and really predicting recession possibility pricing and strong a something recession else, of in. our that

Gene Reilly

through. a vacancy we to Europe talking are some in just very starting mentioned his growth been time Tom but rates is down. Europe couple positive about are Its and we've demand. it about market rent for I come the opening maybe comments sentiment actually in mean healthy see Europe, So, now, remarks, of

We we are talking a it have touch maybe about. months at to didn’t over this costs Hamid X% is are its growth are way what on up, or approaching And XX XX% high going that rent did construction last X.X%. level, and that they market been the underpinning

growth rent our this for up points year taken to have X%. market You XXX assumptions basis almost

compression. and of of see points will we basis this cap So, the phase in that’s rate start come through XX to finally

setting would even cap market rents up rate So, the compression higher. aside be

good coming from So, are think things Europe I finally.

Gary Anderson

that Yes, participants a in year these that of back you remind talked there could XXXX XXXX, exceeding And rents being XXXX. in calls be going wouldn’t by U.S. I’d rental those have happen were surprised in of the Europe those I and growth we've XXXX about accelerate certainly and are that if to after rates be been in that long-term the to possibilities actually a

actually a sort end Europe tailwind and a up headwind. to is being going So, of

Operator

Your next of John question comes from Stifel. Guinee

line Your open. is

John Guinee

alone in in in look asset Florida, South Chicago, buildings a inventory to your the in the second all Seattle. of time, I XX at a disposition including, X.X number quarter sold you billion. X also comments Noticed X your you've And bank? reduction same think and just the activity stunningly handful dropped sales, like land or land in XX Any on low the

Tom Olinger

trying bunch we've sheet. of we but X don’t gives get whole are land which the have capacity it land that actually land them around to to under a what us auction, growth, carry there. the is and balance doesn’t we on bank bank. comment me to have for show merger the Let getting since bank, land billion to The that been And we

So, me to the is want it where land let be. to dispositions, ask Mike respect bank we getting comment. to With

Mike Curless

been suggested up dispositions we to underway. we have with a busy well well X over half Mike. is John, respect this of as billion Dispositions revving have second

U.S. deposits, with mentioned Pricing the Europe very in remarks, transactions both the time real in list. U.S. expected opening in some contract one-off start U.S., portfolio equal several our the a in seller, and Tom Europe is the markets in to transactions regional a bright to and the strong in that up a As about are Certainly, amount make series good the the activity and good be

is year, we all end shape work done ability done will the very our and of this in the to this year. this pretty way get through be working non-strategic to feel of the after about list, we good our darn bullish of So our rest

Hamid Moghadam

done through will will of as exception go we DCT. would It our with be be then non-strategic list, what of part

Operator

comes Your RBC Michael next Capital Carroll question from of Markets.

is open. line Your

Michael Carroll

impact provide What U.S. additional you market? and tariffs mainly the to understanding Can in in details concentrated of facilities interested on typically used export out your exports some in particularly of these the warehouses are could and tariffs things the country the I’m port how portfolio? type build

Hamid Moghadam

the things and are importing. A stuff of like and stuff we into that that warehouses. I the stuff lot containers soybeans actually are mean goes don’t product go that through we're Most U.S. is what of exporting. are things exports agriculture is, really our manufactured the

don’t a at see So, on big all. impact I that

Operator

Your BTIG. comes from next Catherwood question Tom of

is line open. Your

Tom Catherwood

when stabilization, your guys from would yields you but development and XQ have these ranged X.X%. X quarters on to we X the you look then X.X% Switching between reported yields X.X% over back likely started ago to projects, and back if yields

anywhere of you’re short like of in XX points XX looks that up basis it time, So, yields. from picking to period

X upward yields between outlook the the And from development that’s yields over kind lower going and kept So biased anything your on ago is frame? short really what’s quarters driven them now and altered the question has changed here time of forward?

Hamid Moghadam

even and higher higher because would we’ve are margins than we growth at have compression. we would the yields rental had development expected because larger that rental before be what would rate notwithstanding it’s cap the have been have would Well, time, projected growth than

last the up at than have realizing. So, we been or much actually in end a perform X we X lower years margin, least we

that is for the So explanation that.

development I is impact scrutinized forward, going think respect of approved we to As construction costs. the to every with the that deal higher

slippage than the from on We cushion underwriting of been margins. But now. using cap visible a way. rates actually in all the building But cap in terms fortunate is our for guessing game, today so higher rates rents rates we’ve are of the both purposes about this far and year-and-a-half other some cap and and exits we’re rents for

be when big but not rates. imprudent We’re build cap big and with in expecting that rents not we’re to dealing any, it'd

Operator

comes of Simone Evercore from Your Rob ISI. next question

Your line is open.

Rob Simone

X% wondering maybe NOI year. the store update which any to range I guidance the first the if describe back or It from like it be out was same quarter. discreet second X% of kind might you was obviously to half over driving quarter of to what if wondering, could could you that? on I for to means just down comment is the and seems half the second line items imply that the

Hamid Moghadam

half same to normalized of driver off main more second approaching the free be burn rent store is levels. The going

about going our Free applies bumps and a points, think -- off saw and XX can bit X.X% points. little get growth basis other basis burn about is in of to the you first is by gets what to you rent we be guidance half get of you half which same second to items XXXish in half there and occupancy If going X.X%. rent in you the are change imply of about midpoint then our that store

Operator

Chao next Bank. from Vincent Your comes question of Deutsche

open. is line Your

Vincent Chao

which guidance, of questions compression in on increased the question answered, the I obviously but just significantly, earlier been rate mentioned cap gain been that’s think and just the then my commentary was valuations. pretty some a development have of Most on

are cap second earlier catch -- in maybe up conservatism some quarter that compression more or the just your rate the curious, seeing the you So from accelerate in is that year? really

Tom Olinger

were was interest market to never it the rates saw continued year. a up, cap in compress the time view throughout I rates private rates. going when would cap there have the we say that Even

and I not a movement it's step continuous been would function. a So, say

Operator

next comes Eric Your Green Advisor. of question Street from Frankel

open. now is line Your

Eric Frankel

Two questions, one regarding trade.

Economic integrated that Wall throughout are of for a Development to going is supply toward million The allow down they're put to infrastructure chains a be if Journal of have and, articles scale from York to infrastructure in place how sort or prices? higher a goods comment could just related Corporation some a transit are $XXX business Street just solutions? rail and and second for about wondering the this in -- for opportunity given type the planning Is via there more putting in I’m there $XXX And U.S. settle to put million to Just City larger anything morning of the tariffs waterways your we're rather than of the then trucks those done, company road world if New

Gene Reilly

with looking at your maybe and back go it's with first Sure, it the respect and the they forth not of trade through interconnected notwithstanding world is same given country recent factor balance things before through stocks, and of a X to question, the I protection times trade X normal, countries and to your absolutely or more end so, some and because up mean the economies you’re countries often consumer. different the calling of not that right. with very everyday getting simple

year. a a much, is world XXXXs somewhere somebody the economy than more complicated picture and view it this much over of make sort So, shifts something

terms saw would move a in of there around. China have flexibility things is all quickly. that move and things but this of the very you will Eastern then on around and Western more lot cost quickly from and tell when around and global Thailand, labor manufacturing very effects it and the to all move global economy, kinds unanticipated China economy So, Cambodia I We in

So, economy. difficult pretty it's the affect the and take to I think action unilateral global

in you think is end up own I economy your doing peril. putting what

risk but jobs, suppress So, is the we a I the idea economy looking rate because this and that a some see is why to finally for people, great are rate? taxing not global are same the to not people very to risk unemployment risk a bigger because economy in that economy the basically high X% is It's U.S employing that. the

think a With risk to is. specifically. Jersey know, transit opportunities, respect the presence where you got huge big as I I all mean them. we're looking sure, that's of we in at New dependent

and examples anything New respect New happens with specific transit, to will in give that a storage the rail LA, container because don’t in I that Jersey, rail places and land some active of at of been So the have beneficiary respect we've and for the cycle us the into strong land you a these yards we’re Chicago of this land for area lot with of York has way acquirers on-site carrying great that storage been are of development the capacity give flexibility because next very to can future yields the container we a by leasing timing and our developments. lot

Operator

Korchman Manny Your next comes Citi. Instructions] from with question [Operator

open. is line Your

Manny Korchman

want point made Tom, I you revisit the to just earlier.

being run the $X.XX a using would into ramp imply XQ rate XQ. think XQ I which big below, a guidance

be that’s that a Just we think in should or wondering, take is something up leasing or if there just to about items one-time going else? natural

Tom Olinger

the what are we QX we in track Yes, number reverse one. in is QX see seeing Manny,

capital liquid occupancy there respect more is here some is and into less of because We liquid the would particularly expected deployment, to continues the dispositions. we've than and it's deployment beginning because deployment growth that the rent real more a growth good thought to year. of earnings get good just taken But too. timing quarter have two care our penny when But we with line transactional That better are of by creates fundamental bottom growth higher seeing quarter. so -- about we that advantage going at with of than is have more much less things, strategic a accelerating of to net that drag or I news actually just on are have given the That’s And revenues then business don’t course takeaway. the any all we story some timing we fourth and then related. quarters the between some and the third NOI expense

are the I it same will mark-to-market a think to setting nicely store but portfolio the not expanding assure stronger that. really beyond be for growth, have We And rate is only we in going would growth period. time up extended an that, for

Operator

question of Guinee John next comes Your from Stifel.

open. is line Your

John Guinee

going of let some questions. have saving think to Tom, to you debt have then one-time at the the I own XX-year a the pretty already of process are paid you XXX see expect debt? expected think savings took What at And redeploy get cost tendering you answered do XXX DCT there? two cost How you can XXX? if many as now, in million of bond just capital. sort and or at you million capital me did for have and to given but you bonds XX-year I significant achieved XXX do we advantage execution the items this you you

Tom Olinger

frankly John, said yes. $X.X it's this and we question, if your what we on to before debt. yen. of can DCT U.S. savings to of second We And Tom, to is that not assume because better we and it so yes, going year accommodation easily over -- achieve going billion that to do we saw are going we some, dollar, X.X the doing holds get quite in through we think which you will then the and and are are euro be debt answer projected and billion connection at as the look XX with average

that was get average better. come have to we at that X.X%. in. our will weighted the are cost than the out not to And of could better debt reify debt all that duration going debt. And we with So, rate, transactional we and regarding I’m this confident rates thought DCT do cost that transaction, see said we we going very are we if to

so and the a expect would at match that cost as the underlying they at look economics We incurring in always will and look looking we look at I return will we economics debt real transaction or these out, maturity the while a any make the get pencil, to the sense. economic be but transaction, NPV that on basis take things trend of to always debt economics any

Operator

Citi. from comes question next with Your Korchman Manny

open. is line Your

Michael Bilerman

Bilerman. Michael It’s

from to -- to and bit I wanted that biggest the just little clearly sort come and perspective. talked has XPL U.S. mortar look risk players significant there’re in terms traditional those really exposure transport right of be you situation you and be attention most about understand verticals the you've paying going here trade to economic which leading now the to economy is the to of your to of the now the the your global sort rollovers to therefore by and rather an your customers and is economic and players me sort portfolio e-commerce of just impact impacted are Would the while their Let retailers given is And of of here at be bricks desires utilization? right and a indicators space conversations going and in a back its economic one. lagging the manufacturers, would

to the happening? it know which are about of the you give ones what going what's think most data is that what’s those accurate you So you -- can -- spending time

Tom Olinger

on let I think two segments our we’re also terms answer players those a retailers the you’ve And out parallel just heard a will by and building supply obviously the one chain of terms obviously in growth of questions e-commerce players e-commerce upside. I don’t focused that. two you of of downsides mean business? there’re e-commerce focused and coming in So, lot me of in upsides, is are there’s on traditional players, One if there. very the embedded In announcements but that we’re terms most that upsides are and what it,

the aluminum good warehouses. near that lot good And bad looking in a cars a to and we German of retailers car with term the other going and retail replace business. car of going affect So do stronger. most trading to the that where a repairs warehouses, then that sort have that is with the be Similarly, are side. know and get like, to steel into renewals on and you’re the the really to renew on the struggling go but all mean shake and are parts very price lot we’re talk this we tariffs, tariffs, over of of of I going side direct the to Europe. significant, lot stored to the to where on this that in Correspondingly, market will cars retailers look see on stored not and don’t goes a With for watch and on the lot not list that’s we’re news have very-very you a news about up. cars impact of impact on possibly impact being are that’s those be these proactive would news car to of lease think customers heard, is American elimination in in that cars autos, but I going I in if of strong get up, some respect going

we’re probably most things mentioned. that nearest looking on the at autos, term the So, the as impact you

Hamid Moghadam

Michael’s Take and you forward the not you we care. if Thank joining question last was call I to look talking Okay, one. for next before. to think our quarter,

Operator

This concludes today’s conference call.

You may now disconnect.