Brief Note: Invest in Prologis?

Prologis (PLD) is a great company. It’s reputation is higher than that. But they may not be the stellar investment that many think. Herein a brief look.

PLD is the iconic industrial REIT. Their market cap exceeds the total of the rest of the industrial sector. PLD is focused primarily on the logistics area, building and owning warehouses that support commerce.

The pandemic accelerated demand for logistics. Industrial rental rates skyrocketed.

More recently that demand has moderated a lot. It is unclear how far that moderation will go.

And this is THE THING about industrial properties. They are easy to build and subject to big swings in supply vs. demand.

The problem is that it is hard or impossible to see such overbuilding in real time. So crashes may be a surprise.

That was certainly true across the great recession. Industrial properties were hit very hard.

So many analyses are based only on recent history. That can mislead, as we will see.