Prologis (PLD)

Tracy Ward SVP, IR & Corporate Communications
Thomas Olinger CFO
Hamid Moghadam Chairman & CEO
Eugene Reilly CIO
Michael Curless CIO
Christopher Caton SVP & Global Head, Research
Robert Metz BMO Capital Markets
Derek Johnston Deutsche Bank
Craig Mailman KeyBanc Capital Markets
Nicholas Yulico Scotiabank
James Feldman Bank of America Merrill Lynch
Ki Bin Kim SunTrust Robinson Humphrey
Blaine Heck Wells Fargo Securities
William Catherwood BTIG
David Rodgers Robert W. Baird & Co.
Jason Green Evercore ISI
Eric Frankel Green Street Advisors
John Guinee Stifel, Nicolaus & Company
Vikram Malhotra Morgan Stanley
Michael Bilerman Citigroup
Michael Mueller JPMorgan Chase & Co.
Call transcript
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Welcome to the Prologis Q4 Earnings Conference Call. My name is Julianne, and I will be your operator for today's call. [Operator Instructions]. Also note that this conference is being recorded.

I'd now like to turn the call over to Tracy Ward. begin. may you Tracy,

Tracy Ward

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

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

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

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

on Trust. information are Liberty the includes On transaction. transaction between Prologis website. detailed SEC's proxy October and the posted company's the announced merger This joint XX, statement Materials regarding the on the the containing Property about website we are available and

outlook. call comments company our This on quarter XXXX fourth full will results is remarks. focus prepared as transaction our as not our year provide beyond this related well in to and what will The included

are company's hear McKeown, Reilly. Gary morning, Moghadam, Colleen the with and cover And Gene outlook. will Mike today's Hamid and we'll Caton, from results also call This today Tom Nekritz Olinger, who our Anderson, guidance, CFO, Ed Curless, us Chris for

to turn we'll I'll started. and that, call over Tom With the get

Thomas Olinger

was share. The year. a initial than for $X.XX full the guidance. promotes, quarter above of XX% for promotes FFO per FFO, the the $X.XX $X.XX our excellent for Core per share call everyone, excluding grew share morning, Good closed and year year more was you, record Thank Core you thank per year. joining today. X% and another fourth out for for quarter, net The our Tracy. includes

from enter retailer meaningful we Supply are businesses, undergo to are conditions high generating they and chains seen trade customers' as demand or XXXX, good we've critical no very changes levels. deliver business service bankruptcies. to our mission is which market As our on impact structural increasingly

see requirements customers more markets seek categories We strengthen product fulfillment and capabilities. across increased as their to

proprietary with demand million market of a are of showing feet, Our fundamentals flat a healthy with supply. customer reflect methodologies, compared replacement providers activity, assessment remain costs, land gestation the governors like deal Prologis' as Completions conversion metrics I'd scarcity, square in to use excellent. XXXX. quarter. data range third were supply and to share and U.S. remain of estimates. XXXX resulting permitting rates Higher XXX variety in the consistent elongated

Net which X.X%, the last rents year. XXX XX by last increased points absorption at U.S. XXXX. but and from quarter portfolio million limited basis vacancy, year market Market was in ended X% low by square basis historic feet, in XX up points from our

demand is elevated, to is two is additions new and constrain color remain on while list. In markets near-term watch growth. to which this the that no strong, some here expected have but quarter, We will on rent remain Houston, list our vacancy X.X%

in low and portfolios IPT Houston have the XXXX. We in a LPT role

at Tokyo was and XXXX with the Osaka vacancy record. more in their to in where continent in highest in at declined XXX demand more year-end. vacancy points the is for and on healthy. Lehigh pipeline X growth years Our Rent near-term outlook the X.X% remains on specifically accelerating. point rent lowest positive, activity continue Pennsylvania In core supply decreased Europe, is Valley, accelerated, has Japan and X%, Fundamentals growth improve, basis has to than

while rollover the occupancy change term. on U.S. just for the quarter. XX%. Quarter-end as on was term square down pushing at of and focused basis ticked feet at million XX with Turning an Rent U.S. XX average the XX.X%, XX rate was months. is by We to XX% operations our under led nearly flat points leased team sequentially and

same-store impacted over cash in in-place was by to annual growth of basis economics. share consistent Globally, point long-term million more our reduction again and XX was X.X% NOI. or than is once and a again, in with spread rent maximize lease NOI average Our market to $XXX strategy our occupancy, now increased XX.X%

of new Strategic third-party AUM existing to a We and and record-breaking equity $XX Capital. Moving billion XX investors to billion. year. grew raised XXXX our was $X.X from

perpetual of Our overlooked Strategic critical or differentiator from Capital fees that business delivers long-term revenue is stream XX% a coming with often undervalued. vehicles, a durable and

a had billion $X.X million. of margin XX% and were year XX% development in Stabilizations which value new we We billion deployment, for $X.X creation projects, estimated build-to-suit. of an $XXX were with stabilizations. starts and For of record started

gains Additionally, XXXX. $XXX in we realized in million development

significant billion of have to future, well for as in sell-downs potential investment capacity capacity run incremental today. billion ventures over with $XX $X.X continue as and We liquidity of our investment rate foreseeable the an our to third-party fund self-fund deployment

Investor acquisitions closed just on X; and January Forum remains IPT, our consistent Liberty, which of X. given guidance close in and expect February which held our November, XXXX, on we For we to includes the

but supplemental. basis, the our Here an X on complete highlights Page our detail, for of to share refer

unchanged highlight at points. Our And like I'd X.XX% X to to NOI growth is same-store cash range X.XX%.

First, comp forecast global of mark-to-market expirations, uplift. this NOI will basis point our growth. XX lease occupancy benefited a which we're QX increase same-store quarter second, an will XXXX the from given year, on future of XXX rent increase be will And and XXXX, by XXXX tough against This first basis up from points to minimal importantly, but a our market our impact increasing have X.X%.

to we be lower accelerate half NOI then in As growth the a year. expect first but the result, of the quarter, same-store back in

preparations the and on Capital, Strategic income promote complete expect closing are of million I excluding million. integration $XXX Liberty million $XXX of IPT to largely revenue, The For is $XXX track. promotes, net and

synergy are day about our We Liberty hitting confident X. targets on

million and to approximately a $X billion approximately combined XXXX, we $X.X Of the share balance, we billion representing Liberty asset already acquisitions, $XXX an expect additional will closed billion the $X have year, good IPT approximately we nonstrategic our $X.X of of These basis. $X.X remaining contract. we end and range are an in of When includes which with is billion portfolios. or of of nonstrategic billion, on our sale And under identified at base. dispositions, IPT Liberty of billion assets. sale has the the from the sales announced For now this assets just X% $X.X of

in we hurry. these and We portfolios don't need to through will due time, work see a

will of the XX%, at assets we sales opportunities. Given to nonstrategic proceeds match that deployment allows a pace our at dispose low us leverage with

million For forecasting $XXX to SG&A, between million, includes and to $X which and million transition cost million onetime of Liberty. related range a $X wind-down we're $XXX

XX% Excluding while these growth costs, real is midpoint annual managing more G&A estate. X.X%, at the

Prologis and of approximately adding wrap core and between range per their XX% $X.XX be of $X.XX high-quality Liberty's midpoint. net XXXX team. XXXX the look at We our assets to forward the including growth. expect We of up, year employees another Year-over-year to we portfolio FFO XX expect to to To promotes, income. to welcoming $X.XX promote share, excluding is growth, exceptional

With that, your questions. I'll Julianne turn it to for back


[Operator Instructions].

Metz, Jeremy from BMO. comes question first Your

Robert Metz

second from side the of come half had the you of of the previously terms uplift think the was obviously rent you in I see percentage to indicated U.S. continue rolling going leases the house, very some here spreads to coastal of in Just higher healthy

from that's EU U.S. size at And so breakdown increase points XXX breakdown the of is driven? terms you XXXX, just a versus in box global and anything basis look as or of here the mentioned, there outsized Tom, much is from an mark-to-market, that the creating you geographic U.S. opportunity in how side to notable rent that the maybe

Thomas Olinger

from Continental the And take stands nothing the -- quarter-to-quarter. Europe out. XXX the space well across I increase that, we increase U.S., things points to really are mean, of the Europe sizes a second part I'll can and But very size our distributed was move little basis a the standpoint, flat. about portfolio, geographies. of given mix of related majority of The the Jeremy. --

Christopher Caton

I Yes, where you are and see stats. things markets, reflected brokerage say a year rates slowdown the up during year. that of a you will actually in I this we give later in guys bit the 'XX, mean, picked things big in saw box activity but The aren't. vacancy healthy in in a would idea good terms that of can in pretty segment

really it's if in that there's new little the So big a anything is box. bit strengthening demand


Bank. Derek Your comes next from question Johnston Deutsche from

Derek Johnston

these to how demand feeling you events? and Phase Do big trade follow-on. to visibility? any to a from feel deal vantage Brexit your leasing shaping box with guys that is completed the up we've be could XXXX seen delta this or Just due X velocity you And due X

Christopher Caton

X Yes. the do good. think anything year, than in say ago. I geopolitical mentioned. we items We're box but pretty did better year the And you we off the little that big the a I'd don't has to is a early in feel pickup quarter starting with

things well. starting So are that off


from Craig question Mailman comes KeyBanc. from next Your

Craig Mailman

fall all IPT Tom, assumptions I to lost change here, But the rent for changed trying have in about assumption over you as know management estimates revenue the or recoup occupancy. to Just lower But occupancy revenues quickly underlying like guidance. here at a downtime? growth separately, to kind aggressively accretion guys to been of how think timing clarification. here, the the the market from nothing just just you'd And of given on it it bound rents sounds then LPT? broadly want push far of kind kind does in there improved you the is takes

Thomas Olinger

part the first that. Craig, take I'll of

it's rent role same-store the let more as the And build low and years. point On pretty won't it's -- for out, the to LPT much important relatively post-acquisition, the revenue to see respond even the you going minimal management. But higher again, the portfolio, accretion to out [indiscernible] impact that to is our Gene portfolios similar IPT then from growth, drive I'll our growth market XXXX. thing remaining for you and in-place in given

Eugene Reilly

rule we we're of a mid-XX% bound would that U.S., range. us range. and to We've in XX% business. been sort this to sort a I'd thumb very with in that, on been XX% a of that introduce. in put opportunity the but I see, as have for opportunities, Yes. this where the particularly say the strongest comfortable general, you ticking we're And in market hesitate lower has can of Historically, is down good

think may that changing. I be

just harder. I than pushing rather So say specific, to go. We're room there's would comfortable some get

Thomas Olinger

growth The have to fewer the markets of tolerate it more of because same have full markets that periods percentage represents higher occupancy, to lower as base percentage need of have lease a power. a equivalent that lower demand compared base in be up to can pricing


Nick Your next from Yulico comes Scotiabank. question from

Nicholas Yulico

of which kind development gave of about just a now? to more you thinking I the drove on how in mix wanted hear the attractive? build-to-suit. And I But markets right increase versus And increasing guidance? particularly, spec about you you what know it's do think really bit little development are some the

Eugene Reilly


me So start let with that.

development. as health California, rates, if good it constraints that's But significant Europe, So on look doing defined the as you're anywhere to to you places also seeing really I than U.S., Dallas that world. Continental more markets, We New vacancy the more or said Southern more submarkets, in supply Area. on want in several the Chicago. focus earlier, at in that's markets are that's But by the the places constrained includes are we'd there that's start. Bay like like Jersey, else In some a be there,

Thomas Olinger

that number have were we the earlier. starts couple We reason get year to more visibility of is into as went a months this year. we this up The for closer

in sure happened So way. were going weren't to some that happen of a the things we positive

is on -- predictable. So some years, highly are has of volatility with just I've But spec being -- the portion up. development it. numbers the volume The acquisition associated commented volume like also for many

sure do We to we'll and development, market we're spec are are markets. minute-by-minute build-to-suits, not dependent build, and really pretty market is obviously do is But there. the the as then -- of we'll And the those the more. is compelled good, conditions of market because The better, not start supply-demand XX% on those in And spec. if dynamics the starts spark demand less. if we'll


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

James Feldman

reading people big I you kind having view chains to supply with it take that it the of where you're the kind a need a picture conversations just things from view. so of aren't get where seem provide could season was right, holiday does like going Maybe like big does seem tenants, there's well. and or still picture hoping their still

the about several for years at people ahead? runway should this how been now, we've as just Just think

Eugene Reilly

Well, real it's the in grew retail at sales and the terms. online in XX%. category, category And shrunk bricks-and-mortar

I demand has Certainly, is kind active of being before. is probably tells gone are you demand percent chunk margin, than a every and them and of that more see Amazon where forward, that XX-some big they the more up. active on the it, we But So of year. going they're market. mean,

and The up, this of as other people broadening we catching demand further for facilities into a move we are are seeing e-commerce category.

So year. on saw the a And likely stronger than would last the And I global probably on and they've little be we margin, sort -- say autos e-commerce than strong. a weaker to that's is historically, very than is thing. of the been probably housing are margin


Your Ki next question comes from Kim from SunTrust. Bin

Ki Bin Kim

those a there's national of in degree year first XXXX outstripped So nuance the probably supply And of growth X.X% statistics. of where demand X.X%. about good was

LA, much absorb available. you demand not the in it contribute to growth numbers, doesn't what's because national example, For probably can't

you when where to the kind eating supply numbers, PLD's is exposure at into dig markets what away demand? of kind unfavorable you think So do of real is the

Thomas Olinger

LPT, and markets Well, would I we you list. off if Dallas an the this of be in leasing. -- -- soft that to Dallas leasing of markets also than XX% markets. take remaining the just IPT And do those our Atlanta, XX%. would X in run that has that year. represent Houston are much Pennsylvania XX% the And those of had the in to has markets down terms portfolio this to is leasing side, is those the goes once number come demand, the global total incredible expected. that be about have you remains U.S. add I better done say, X and markets And our we year interestingly, mean,

will, Central is acquisitions. What in meant markets Anyway, are our the are weaker So it. line Valley percentage if guys if weaker -- to did coming I actually so. our leasing, there markets. I room, giving These down I -- concerned not other -- and basically two as with the something in the overconcentration, markets They're result is and they're about no different. we're PA, me handslick said you of -- proportional overall a Central exactly so all these


question Blaine next Your comes Wells from Fargo. from Heck

Blaine Heck

Maybe at of that's came at had your at billion XXXX. share, XXXX development you're more which I looking in at angle. guidance from XXXX was starts share. starts can to the at $X.X question billion Yet $X you start go guided the a $X.X beginning and for your guidance different IPT over billion acquisitions, the than despite and LPT at

closer guess, So $X year? this we the start I number? end into I'm up how built conservatism much that what chances And just are to again could is billion wondering

Thomas Olinger

think our we do have developments mean year, try paid drive in and We'd something That to make a is mean organization you driving to irresponsible, would to any a paid that all gets number, development company stay out we as to next a we'll number. balance actually that I whatever where and I to lease be there's the compelled I good anything than like then it drive that good pointed like predict for gets the and don't that And that. customer to question the appropriately to to can markets does -- you a this number sure ask for other do and us up well, or need year. we to nobody know. margins. don't get demand. because I don't just places feel we to

it's So all dependent.

activity. just our when plan. out. market business seen people And had it up our demand the playing do. way than we ago, were our unfolded just were And way, ended scaled the we to by world in But who decline thing different was stock only the obviously the very the as looked here, That down conservative better, being We had Remember, we sitting the year we ratcheted responsible weren't the outlook. year significantly. up a and saw we right

to We have the do land it.

to unless We don't demand. to it it. talent do compelled there's have we feel do But the

Christopher Caton

tell market across spec that But development you will We'll at moment different development, we down program, in up time. -- as think speaking it's roughly us. And tells XXX ratchet XX what always with exactly markets. XXX our remember, the particularly we or that bets

So big it's and going be over it's dynamic to time.


Your next from BTIG. question comes from Catherwood Tom

William Catherwood

had back to Following up to how developments, extended fourth from months quarter. Investor start X on And you Blaine's quarter Day, at plus. months question development Hamid, obviously, on line kind XX the time the a in the of huge mentioned XX the has

and risk you pipeline? willing that land continue now? kind your mean far of Just And as on feed a given books take carry you the to complexity, kind how to where due to far to case, of more right from risk starts, as that the to that's if or the a looking complexity the does need standpoint are to you're land on standpoint out go development

Hamid Moghadam

-- be were there trying we're variable, draw. to Yes. as other were would lands on remember, that right reduced our that the percentage land quite. X But that are if markets on. actually We're balanced. If thin the variables other are some generally going to total Tom, that that One not and around of company. And only we're where to we're is our almost conclusion are the there goal, assets markets a where

that on via also, sheet. and So going land we're auctions other balance headwind that's way. a one controlling things up don't lot the the And of other show

any say to dealing we're the for taking Mike, balance So more -- without land do how on about that? of exposure. anything kind about need want more more that's with that you sheet

Michael Curless


year. in in are land picking we're managed in shape. our of customers be I think exposure, we'll we're We major very effectively to. think think our shape there. pretty good good the that terms spots migrating And our last I land in markets strategic going forward And In where I

Hamid Moghadam

And I by front mean assumptions to it's has not the sorry, lease-up -- the our the and expansion cycle side. mostly physically not way, entitlement on them I'm build end And any been the extension get the extended. in the certainly, is taking to buildings. in on development development us longer the stabilized

on really it's end entitlement. front the on So the


Your David from Rodgers from Baird. next question comes

David Rodgers

fundamentals that a concerning different maybe couple global some did well? auto? had you coming I can outside you one base of matter the what maybe of the that that things call, Tom, out of questions and laying your Are market, think what just e-commerce been before good But of I you of Amazon about source numbers. we you're kind and that XX% out being think, use track, a of of or that little net of then, supply-demand a on maybe, absorption kind impact just Hamid, you the denote all trailing at of And one. two, just the lower. of job throw you was guess as the has a can getting where comment? And beginning kind comment bit the guys guys of I XX% little use, of no seeing of you been the embedded that's of at a kind clarify, kind from, was construction that

Eugene Reilly

off, be XX% like it's Yes, percentage market. I of as a point XX% e-commerce overall e-commerce. latest X they're of sales, is the think, number. is a but think And or might of e-commerce the I I actually

they're like overall X.X% sales. So of retail

I I around it. came not is but demand this emphasize earlier, maybe The uniform the think country. up can

what doesn't of a is we've tell of you short markets but can this all supply just is exceptional XX And X demand, don't that tight years, it's and the so of after a now. for it number. supply God, I years demand, been the predicting of demand some last there got where up. year we've where positive falling the just number that And show I is, know lot demand that supply exceeds

And of it's all the doesn't scraped that is square between -- and and mean, feet the even So into of we've estate estate real demand. being big and obsolete. industrial -- that's base, I and million higher supply feet becoming but XX -- XX all market, take it's for account a got better billion real difference uses

sleep do I'm Chris, losing you that. over any So not have...

Christopher Caton

have XXXX. the on net million XXX of is absorption feet. in The numbers, Just X-year specific XXX million we square average

and work that the growth made So more than rate absorb with stock. absorption, difficult net some is of X% X.X% it is vacancy indicators, it's year. as really the price XXXX. good really quarter late there in Gene And at pretty feel you discussed, momentum improve which that consistent When up like our average, demand the look rents growth X-year at will just whether X%, XX, to U.S. trends we saw the so in the in makes in IBI, year, whether were fourth the in the more proprietary it's last or in us like at

Eugene Reilly

XXXX into negative more positive, was did a positive going than lot but picture the was than the Market or better call it less much a today. it ago. feels now Yes, -- it it mean -- is I right than year positive. mean was on I less


Green Your comes from question from Evercore. next Jason

Jason Green

continue basis point a Just developing In yields. assets spread too supplemental. on become now at XXX spreads developing total, what narrow to do assets? point guess I to question this per you're development

Hamid Moghadam

get or and When in do if many or problem last the XX we've a on do pretty, is, No, we mean, or XX% a basis XXX developing. double healthy we'll But at won't guess, they not I The going egg? for we maybe of range like it. do those years, when as with cap build-to-suit, sell margin points But a a around that's the just great had and that. margin we can triple years, a a build-to-suit credit low I on tenant however rates are really great the that in we margins. something it. easily spec I'm only we're XX% Chicken is can't say, pretty are. teens low I really focused. as stop -- And mean margin

do an sure. up X we'll those have for these XX would more, through on, I that And do there's at XX look maybe goes what on arrow what mean any stabilized we deals. forma all it I at maybe have out the a performance it's and them when numbers from recap XX grade reds where lower a we of are them recap costs, yields few we than market and we on do definitely of But deals every very of The that. big that them. sort even I on we green were say margins margins, of least, on out cycles. would there pro on of someday, that So deal our say, of them have them.

foreseeable so and the to at I expect for continue good, that least So, far so future.


comes question from Eric Street Advisors. next Your Green Frankel from

Eric Frankel

sincerely you growth buying using we is guys facility Bronx ago York generally? also of them. more boroughs. Walmart and are types like certainly not that City that Walmart.com in leased of has a increase based -- -- it than years? you of couple on starts guys seems on to in think for to lot then 'XX. And supply bound acquired another the you a rent be that is a noted question. little years you reflect to New Can couple can and And active this assets it different bit XQ higher apologize asking overall more does development development market talk But the how volume in about is your and I going But whether second last you -- that in

your experiences could there? about just maybe talk you So

Christopher Caton


is not where the that market with from going to pursue. do experience in has the think Bronx the is strategy pursue think it building nothing that decision We to for real do estate, I to Walmart's building the with, well, actually upside were they leased. re-leasing has to that an a

-- Walmart have obviously, it. credit on we So and

what feeling So And we're now we're it the not think of -- Gene, other think? we picture, a means than respect in with company. you about X ago. better strategy supply quarter than the right I I or a to supply did change don't do anything think

Eugene Reilly


last -- wasn't development we the that in supply. is sure, able little quarter years, engine ago, in think for bit for at happened look hit a if industry supply. couple I worse a to the the what's And felt the of you Eric, U.S., Chris' estimate about

that is simple. So the space. same I to expect is the every And difficult It day it's -- thing. more pretty difficult it's year, and the next explanation very develop

So arrow. I probably a say is would there down

Christopher Caton

-- be the way XX all of would looking about. million on XX something another. you the globally side that, something we're field be like pretty totally be thing supply vacancy going thing for because million, about. because good to side. feet XX Supply rate into more virus to affect something on or construction of close a another, things may more or have than like can way some worry recession it's visibility worry But I million, some the day, be Supply, power. pretty right or out, about worried one Look, this pricing think. like out X/X, that If of the Certainly, left is to move the or we you one the a under should that unknown demand more that's now. But the doesn't because supply of war thing that of if or maybe what or at demand end that, X/X is, stuff falls clip be to bad the year off going thing supply what I

So what number we that know kind is. of

room wiggle XX% the the on supply. really last of So XX%, is


John question from Stifel. next from comes Your Guinee

John Guinee

million but XXx implied and looks that a issuing probably impressive XXX more about cap. is year-over-year Great. like growth, XX% X.X Very, very even multiple forward shares impressive

FAD at FAS Are on GAAP If GAAP accounting, probably portfolio than Liberty a coming XXX you IPT liberty you're cap bringing at at about and liberty to because to the talk you're and about rate thoughts cap in also -- it, talk can about both and the for much you higher these XXXX? and cap your rate talk that growth a growth assets are dividend rate. cash the of

Eugene Reilly

leases talk built-in an first call is, is in lease years mean well. but about average the guestimate these it you pretty Can't average rent X can Yes. X%. and component, it, I growth

you years -- know because get the of the than on math, close to the do guestimate. pretty by I actually how gap not my kind reason trouble, that's So can much it don't in should the X%, is the higher going to But be way, X damn is. math the what of the I'm number

Thomas Olinger

million you and number, IPT also the to adjustments. And in out announced that's straight-line but adjustments, transaction. on John, but presentation because $XX value includes back point net rent more the that's we back fair embedded We And to you Liberty we that lease a the when gave that. come rent I'll had the portfolios, in straight-line

said To getting point the to we levels because the dividend, consistently going we're we're pay at as pretty we'll -- ultimately and out we've can where past, to staying. FAD as you to are which our threshold dividend close growth, need our as FAD the -- we -- see in what with about to AFFO minimum your increase

here. that's a theme So seeing you're consistent


comes Your next Morgan. Mueller from Michael question JP from

Michael Mueller

can talked Valley. a just you little You you wondering see what more about, seeing a driving us on was Lehigh in were you if I give demand in think, pickup I color that? that

Eugene Reilly


X a over activity recent Lehigh I bit in the little about but is Lehigh news bit in past a question experienced was little last Valley overbuilding, question pretty think is Your but year, the your Valley. has, And low, good. months

bit I now. a with Central is So demand little where demand Pennsylvania, contrasted is that is right strong. still there weak would say

Christopher Caton

general both is think combination I of supply Gene, chain that modernization. Yes, a driving

and feeding to and of a amount see in store serve who wanting the also region we e-commerce network are greater York. fair particular New also So customers some their

Hamid Moghadam

vacancy Jersey. And in New probably record low

Eugene Reilly


Southern New product. there's Jersey, virtually no

Christopher Caton

would core New proximity New Valley demand. in particular there York. the message to prioritization of and be of key and proximity that Jersey That's driving a So Lehigh the


comes Our Eric Green Advisors. question from next from Street Frankel

Eric Frankel

touch Amazon how is the directly going about I -- housekeeping always debut supply you I'd impacting few using automation billion I other question, just to how of more also and trying much Walmart, they're earnings from maybe thinking product a $X then to office? about have customers But consumers they're guess, this utilizing speaking Can Obviously, centers. reinvent their IPT to Liberty, And are guess an via in one quarter. you second, to how automation sales how to that they be think and And distribute just could talk upon from your Of I chains? I fulfillment that's thoughts product pickup. quick is the stores of item. it. them,

Eugene Reilly

a going to to this way a employees making topic that's it we employees that, of I'm more because is and to pretty because demand. coming you to hard the automation Will generally we on one that he with And lot on don't kind on logistics time paper Chris, spent But its do a together think a Well, pitch so of of these may is out impact extensive get of see it's productive, days, of -- automation think and O'Donnell detailed. this work.

et of cetera, goods, that some special that the automation. different not quite of purpose in very industry the can that's sizes, really is downside products, standardized automation of away. for impetus such the we're a mean you unless We're shapes, installed And can marching or automation that I have have et cetera. that general time is you handle the but direction, state lot automation purpose

automation what we're able just needs particularly the from customers ability is to our their do that be of our of And -- way capital are hearing beyond majority also to the the that. three PLs customers,

have with amortize to time. able over order -- automation, their contracts be they Chris? to of customers So and longer-term in those period longer and implement a investments need to

Christopher Caton

two adoption are is the the still complexity pace; operations facility Yes, investments spot within to pretty and and complex things. and rate on. customer two, a rising automation at going the One given space, Underlying low, some logistics of moderate an these and our on of that nature. low the is in ROIs translates are that variety that of

productivity-enhancing equipment. I'd XX make a to point back Another what look for you That's at is. That's relates time, forklifts. whether long years this around really been

this productivity we've so to seen our constant a effort different. facilities, And employee no within improve and is

in this are As the that needing about activity it but "buy chains to to online in-store store. just support that are serve e-com, pick not marketplace the in There's fleets more activity up existing requirements something handle store store". in have to seen also to and more supply automation think reference relates also kind as specific to you of serve to we make, well,

Thomas Olinger

billion fluid, the to respond Eric, I'll this, and them. said, $X to small. out be relative going we proceeds IPT question split that your remains with to the for we're is quite would it's but in of as disposition the to going component say to I fund first sales office LPT. redeploy But match opportunities

be would that's but the again, I say so And left piece that. of out would a office fluid, it small is

Eugene Reilly

to -- office, non-Comcast would I through expect we're the that. Yes,

a of to over straightforward anyway, lot office that dynamics liquid, important there's But that the what And economics deal. you pretty So are. know, We a -- comes wiggle really is, leased, the customer, know And on of know of and of that's time do ideal position. not type only it's the matter is that kind we it's what a down XXX% what's pretty as the with happens. very room time economics which of to customer and Comcast. the

So of office on industrial. We've match is gone. just We're kind not funded. in the a hurry big

mean I we're -- XX% -- XX% As levered. leased

why So funds? good do in want hurry. not a We're more a It's than would to we match market.


question Vikram next from Stanley. Morgan Your from comes Malhotra

Vikram Malhotra

us Two the you the deck, by Could slide On its breakout? size. give gave same XX using Slide out you occupancy that rent quick of broken ones. spreads the

Thomas Olinger

Tom. spreads categories. The this quarter different were across the Yes, Vikram, this is all consistent rent size pretty

very than across up I quarter, bit, think the small probably but a space X this under consistent higher a XXX little sizes. normal, picked all little

Eugene Reilly

softened, -- of more coming big other it's recovering now I is small couple last way maybe went of space, back recovered and was recently, the a little a bit the ahead space a in and would X.X the ago. it big small bit. year, is space Then quarters. space say years Most way

So they're to they're directions. even different from all but even, coming


Korchman comes next Your from Manny from question Citi.

Michael Bilerman

on It's industrial, by put Michael your Bilerman work It's sort the a you focus capital get the with last from insatiable a a thoughts is on to year global comment right? And on that here class, them sort an that market years. for a sort was paying wanted play few feel you we development how I works about to asset assets favorite self-serving. I capital on of into to their and get And that in of market basis your know is SEGRO's there's it with granted of how about full a acquisition overall. price he really plans clearly well? has Sleath's about I differentiating wanted as your you earlier made made been investors private that for way the even to may desire disposition this and and sort question Manny. Hamid, assets And had what are pricing comment on about and global basis market. assets for But that the of acquisition see just

Hamid Moghadam

basically the put are are to the mean and if in an with pretty incremental here priced slightly active are been I But are, the opportunities a replacement that's or and good acquisition to market we've developer, and cost. there about, talking different is they're Europe, returns more that bank are use work land they same quite best below we Yes. bank less, those I and obviously investments capital thing, the a have And you on high. what which is, your saying expensive. still there accent. are like of is mean remember, you land

is For Europe short-term in income example, discounted.

like around I opportunity -- best rates, for an that have But interested can to that you I if cap buy it. on be the kind don't billion X, would could buy go up, maybe good buy are come below if mean treasuries, of their or can the perfectly market. I there mean, of treasuries, Mexico, you in The a there $X in has replacement is know very that story. the And a a that billion acquisition to lease big you of So are Europe. something, a X. where building, kind thing we'd but X there's but two their cost, building different in world were I of are look if in. places you stuff on that product, you mean where year buy a at $X that of things some rest it spread goal you or

little Europe. Gene? So different, the is would global a generally agree I picture their commentary but for with

Eugene Reilly

negative I there's much countries in add basis, look got get the and while Yes, Europe. at rates. yields And economies, wouldn't that. best on mean, Europe, to I a be rates negative to risk-free in you expensive relative four

expensive. I'm not environment rate frankly Europe sure in So that cap today that all is

Hamid Moghadam

-- this. Europe math to the say Europe, I thing other will on do would about The has it interesting be

Europe in relatively in haven't, size proportionately of There a are it's products is We and U.S. the but are in the quality new smaller than a a institutional and asset a lot institutional this industry Europe, focused investors industrial guess. it the lot Europe, is that still of is in class

opportunities. focused yields I a think on market you've on hard. got in institutional fewer So Europe lot capital And with of private pretty pushing a that's

all to preferred in markets development anyway. is So these acquisitions

if last call, next not that we and joining for you quarter, the Take Thank was think to you talking to forward look I our question. sooner. care.


participation. Ladies and your concludes for gentlemen, call. you this Thank conference today's

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