Warehouse Kingpin Sees Rebound as Leasing Hits Record High

After years of playing it cool, warehouse deals are suddenly hot again. The world’s largest industrial property owner just logged record leasing activity as companies “become more desensitized to the short-term noise.” CEO Hamid Moghadam calls it, “One of the most compelling setups I’ve seen in 40 years” — signaling a potential upcycle for logistics real estate.

• PrologisPLD
  saw third-quarter revenue climb 9% from last year to $2.21B — outpacing expectations amid a notable 29% jump in newly commenced leases.
• Meanwhile, America’s warehouse vacancy rate just stabilized for the first time in three years — leadingPLD
  to raise its outlook as more tenants commit to long-term leases.

Economics 101: As supply tightens and demand rebounds, Moghadam expects the warehouse market “will stabilize with a much higher level than today’s rents.” With new developments languishing to three-quarters below their peak, he estimates rents could climb up to 25% as the cycle turns. Data center expansion adds more heat, but with vacancies still stuck at an 11-year high, the mood isn’t all euphoria.