PLD - Earnings call transcript Q2 2020

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Operator

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

Tracy Ward

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

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.

press measures Olinger, from will contain and results to a that supplemental to who Mike our those you Gene with in EBITDA and provided This second the that, such over market Nekritz, hear FFO turn non-GAAP G, Hamid morning, Tom, release financial guidance. And also Tom Ed measures. Curless, Chris are and And reconciliation our measures. Reg CFO, accordance quarter do and have as we Reilly Gary I'll conditions Additionally, Anderson, please McKeown us Moghadam, begin? today. Caton, are call with With results, will Tom. Colleen cover real-time we'll

Thomas Olinger

We us Tracy. you and hope Thanks, are joining yours well. thanks, today. everyone, And all for

capital excluding are debt forecast $X.XX of which Starting $X.XX was expectations and fundamentals, was FFO bad outlook Core promote share, higher terms market revenues. higher NOI above due and activity our our The the The rent our increase strategic higher NOI in for Leasing lower driven income. came in second included by of than promotes, net favorably. beyond. to with for both results and quarter a second FFO, occupancy. and in for valuations trending core quarter out played period collections XXXX in our results, the and better all portfolio,

in rent line guidance quarterly trends XX% since with Overall, We've yesterday, XXXX levels each excellent. rent January. each of Difficulty]. accelerate collections are our For comparison, June [Technical collected provided initial in of results month XXXX the were of collection month receipts March, pace we've the XX.X% for and as with ahead back well. that of we as seen And

XX As a of was rental result, our of the versus basis quarter basis our revenues debt for points. second bad provision XXX forecast points

growth negative bad was Our basis NOI included point from X.X%, a share impact of cash XX same-store which debt.

of strong benefiting of from [Technical including continue new E-commerce Turning to to and activity, was industry very represent leases. to normalized in industries. non-essential remain Difficulty] quarter about base. customer leasing Leasing diversified, segments economy well and the XX% our by XX% customer

Negatively hospitality, days just X.X% our COVID. You'll recall from quarter, the impacted was the oil that XX% in and number of gas These annual segments conventions. of include and restaurants, early first segments represent rent.

view net XX% we increase Completion X%. million year-end days to year-over-year XXXX. XXX XX.X a and XX% XX than the the Market our in expected but last declined our lease by have year-over-year stronger XX operating total for to vacancy in million were year-over-year. and days. XX% and gestation the now XX% XXX Over the XX year-over-year X% we feet, proposals Lease a square we've leases square the forecasting million of down square are amounting feet, signed risen to following quarter portfolio, up decline, feet, has fundamentals days of US from absorption April in total

off the Strong PA, leasing following bulk quarter activity and bulk, vacancy at moved Phoenix Central forecast in X%, for Our also our year-end Atlanta the has watchlist; Europe and X.X% of and markets Guadalajara. Japan now rates have improved in respectively.

quarter which undisciplined due Poland, and private Spain China, spec by West developer in list development Houston, country. this includes to that back extremely the watchlist Our moved one into

higher the USLF of as raised for in For strategic were private more equity, QX a XX% valuations billion forecast. our guidance, year. pace Year-to-date, very came of approximately than which Investor above our funds $X.X our in demand ahead than we've remains XXXX, promote strong. record capital, for our was

Our fund to these open-ended funds a redemption Post NAV, cues will cues fund transactions, currently slight trade for In incremental total in was redeemed and million USLF premium equity nine in with a have will made $XXX $X.X QX, our just million. $XXX due with at investors billion, million totaling open-ended in health billion funds $X.X secondary be an diligence. our in our July. $XX

open-ended with the maintain continue Prologis current to with in $X.X our over line $XX in between billion. billion and totaling we leverage vehicles balance ratings, liquidity to at Looking strength sheet, exceptional combined levels of capacity financial

to guidance Turning XXXX. for

has see dialogue our the customer last our outlook improved Our collections. from given and what of quarter, we data, proprietary in rent pace

year may the timing back reopening, that of those we economies revised related there into to some in and has the our guidance the account. range While be nature half of believe taken headwinds factors

on key share our basis. an Here guidance the of are components our

XX basis means granted the points between the basis cash less the points half with of about of XX points of midpoint that reserve reduction bad same-store points basis year. will a grants rental annual bad we've of basis XXX assumes between for revenues to date, are the by basis the to basis full points of points. of debt at in XX XX rent continue forecasting range XX expect the raising guidance This to deferrals and our revenues. To be and than second of we're year X.X% This and a basis We midpoint points range narrowing debt by gross X.X%. and XX

our quarter the basis from we are in points a not first of XX% end very was as quarter. essentially back second increasing between X.X% much the level. average and and half, healthy midpoint XX XX.X%. higher April in to expected at result as declined by the in the as to slightly slipped occupancy year range narrowing We rents the guided effective growth Occupancy and concessions, net by the a Globally, giving so

back for of to the Looking roughly we year. be half forward, expect flat the rents

rent spread in-place-to-market $XXX represents future of million XX% at and of growth over Our stands annual potential NOI. now

change be to expect year. in rollovers second the more on of XX% than We the half rent

revenue, half and to the capital, promote increasing expect year for we per million full $XXX $XX range increase We're to relative income expect and between year. strategic excluding million earn do $XXX promote by prior any promotes, million. For of $X.XX revenue the back not the our to share we to in now material guidance, our net and

second recognize promote expenses a year, about as will will there reminder, in half $X.XX a we the As be timing of share. of per the mismatch

We are to prior down $X $XXX range million G&A a forecasting of our million from forecast. $XXX million,

improved has and start million April, expect Our of significantly outlook since $XXX we new spec in for to deployment now half. the capital second

XX% $X.X $XXX build-to-suits for to year, comprising Our revised is full starts the this billion range with of volume. million

we were addition this previously to to on suspended. In construction resume of range, projects plan that $XXX million

currently and contributions $XXX on of acquisitions the the dispositions of projects. are leases by by million $XXX XX% At million. suspended by TEI these million, $XXX midpoint, We roughly negotiating we're increasing

narrowing our share the range share, guidance at $X.XX uses Taking be XXXX these net of projecting original midpoint. and leverage $X.XX of the per now excluding at $XXX beginning per including increasing into to by the at $X.XXX are midpoint the a at we're compares year account, Year-over-year core assumptions the $X.XX promotes XX.X%, to flat. $X.XX while of net million our FFO growth to of midpoint capital promote of share. keeping over income. midpoint, to This sector-leading We

other logistics the outperforming XX.X%, been annually. has points basis XXX REITs CAGR three-year Our more than by

and our mid-XX% We continue to times, billion. maintain free range XXXX after in X.X of of payout dividends guidance significant ratio cash $X a implies dividend coverage flow and the

outlook strengthened. growth business long-term the our forward, Looking has of

some technology risk in to to and significant I coming the with identify not within want us advantage. sure provide sound because data opportunity markets I'm of and and comments at tools competitive beginning portfolio, my through. investments the was Our our repeat a pockets

came for our by a which second and lower So, to quarter above $X.XX I increase quarter. and want a NOI in driven The higher due just FFO, bad revenues. the promotes, debt excluding results NOI income. $X.XX in strategic our repeat FFO the promote capital occupancy. Core forecast was of higher share, Core included to was higher for

quarter have collected we the that line collection we in back our XX.X% rent with of XXXX and January. as were guidance in initial our comparison, yesterday, Overall, rents, and XX% provided June respectively. results trends July For of are excellent and

pace as well. the of for collections receipts seen have March, We ahead month since each XXXX month of with each rent levels accelerate

for a forecast our versus XXX points our provision was -- basis points. of rental debt basis XXX XX bad the second As result, revenues of quarter

bad point debt. growth was X.X%, which of a cash impact NOI share negative XX from Our same-store basis included

continue E-commerce and at segments Turning benefiting industry diversified, to the economy XX% was Leasing base. COVID to our about by remain normalized of strong activity customer of customer in from including from represent leasing leases. non-essential industries. new quarter well very XX% and

You'll number from quarter, days the in recall the first early XX% COVID. was of that

it with that, to for Jason turn questions I'll So your over

Operator

[Operator the from line ISI. Sakwa of Evercore comes instructions] Steve Your question first from

is Your line open.

Steve Sakwa

activity leasing was perspective days. leases of get change there you Asia? I just XX supplemental, QX? about to leasing maybe square just guys on wanted did Thanks. that provide just Good in in last to in the of month occupancy leasing and How drop us little in commenced XX that the you last Thanks. the then actual month in morning, that. just -- circle the actually does number XX on quarter. the million back in the for know provide a impacted foot could Thanks signed also Is the not But could kind Tom. the comment repeating for you in how I some activity. And days? and much to that maybe any you and leases of bit help activity to

Thomas Olinger

start with I'll Okay. that.

in in our last a we as activity And high a leasing was June. from month. leasing saw days, up we've I leasing seen June accelerate. certainly mentioned materially So perspective, XX the picked very certainly

As small it XXX,XXX relates to it's Asia, occupancy under primarily feet. related China and to square spaces in

Operator

-- Go next Your my is ahead. apologies. question

Thomas Olinger

please. question, Next

Operator

Okay.

next Capital from Mailman Your of from comes Craig question KeyBanc the line Markets.

is open. Your line

Craig Mailman

guys. Hey

on quick you're a I box earlier of were concern what box. big question some activity there post seeing or Just know small kind COVID.

the kind know I spaces? guys better of seeing the activity curious, you you bigger still primarily took mean, is in it off. Phoenix bulk Atlanta across are or board Just some big I guys of and

Eugene Reilly

this Yeah, take I'll one. that Gene. is

focused this see activity better are But in recovery. is said excellent segments certainly our property markets are activity the and spaces small in off seeing And led category. -- to We list. struggled. We conversely, taking But softness where we'll that in you bulk have the and quality the And those having has -- that certainly is expect on. bigger more segments with is better we're see spaces now, these this that, those right spaces.

Thomas Olinger

Okay.

please. question, Next

Operator

line Our the next from Kim question comes SunTrust. from Ki of Bin

Your line open. is

Ki Bin Kim

of, NOI seeing through guidance, the year But are looked versus or same-store things couple stats trying And all corporate higher. you've and there of your metrics it and customer on get really proposals you I days, The said think past for the I'm that if expansionary of you confidence leasing renewal XX at like customers leasing activity. to to obviously the you the questions. to leasing a increase are for one a just much sense So positive and is higher midway that space? seen guidance that how increased give was XX% when build-to-suit over mostly hard you based activity question, feedback second two stats? mentioned your you confidence

Thomas Olinger

Yes.

me because people best Let look that, And June the scarcity can our some broad conference activity to it's substantially out in I let absolute based. will indication question. spacing operator. me the obviously accelerated difficulties answering Yeah, to it's there of in space having that the Obviously, at start with terms And of tells what something and about -- of here turn have volume you and amount. pretty of get build-to-suit our think, their for you up by because percentage the met. needs that's that month we're

So to -- want that on somewhat? to do want Mike, you elaborate you

Mike Curless

We're broad-based seeing Yeah. everybody. activity,

seen would you we're but But there, seeing of is saw their you activity, it's there's sectors. improvements announced plenty Amazon were Home across remember a got actually activity of and that food the rollouts on is you structural strong bit all lot hype Amazon. Appliance broad-based ramping up the our underway activity pre-COVID. think build-to-suit well Then is from all believed you a definite crowd list. been picked If and clearly to up. business of quite

And They a it, demand so strong. big of part a lot keep it's that look, are but not just of for build-to-suit Amazon. list and broad-based

Operator

Nick of from from line Yulico Your the next Scotiabank. question comes

Your line open. is

Sumit Sharma

Nick. Sumit is This for Hi. here

following actually, question quick up on a the Just build-to-suit.

cap And fourth the the development would up quarter secondly, development rate one So and What's a special follow-up, was these there know quarter from that a thinking of and just as accretive one to there anticipate? stabilized a spec sort and was, I of would has the are pipeline so I in margin. rate so that Brazil, such cap a market USLV. about core coming they think with this fund widespread the XXX% XX% about is the build-to-suit something between that -- Europe promotes. margin

So, what's on driving for lower the income promote expectations those?

Mike Curless

margins. I'll the it's the Sumit, higher build-to-suit Mike. on hit one than first normal

investments, up margins, blend at said, build-to-suit to the are of lease those look with paired very parking but lot, located, the to were more and there incremental the strong of lot in a work tend be over looking small one? of the relatively body would deals that really a well there other Tom, And year sample deal with You're well rents. you flavor. low XXs. parking have couple want I margins Therefore, strong in those see the mid overall to to for normalized that you

Thomas Olinger

in on the are is very promotes will promote half, $X.XX really development. expenses got of those in to effectively just second based second because the eligible second year. promotes it's on be on we've half. promote also your the And second the funds. will Sumit, of be that is lower, Yeah. the going There in AUM in incurring half little remember, small question That

Operator

Johnston Bank. from comes question the Deutsche Derek from line of next Your

open. is line Your

Derek Johnston

innings? Hi, love Thank your where mid we're shifting COVID feel forward landscape? late induced Thanks. secondly, view? Has e-commerce pulled acceleration, And are take. secular it we in demand in Just you. everybody. the your Does to would like early

Hamid Moghadam

many Yeah, overtime. in think is started in go. know game. into terms beginning higher had was e-commerce numbers I in obviously, like can the If We the early think this very which stabilizes in We in a to where Borg-McEnroe the And XX% early The is no goes going be of it innings year places. different the match is this that, And in late rollout XX%, we how teens e-tailers rollout. how telling total are the very, this their the early in low at XX% more we've stages 'XXs. we're than different back growing it vary E-commerce of seeing very excess that their keep e-commerce. have in don't are of are US. I it market the which there leader, Amazon to clear the is businesses of and now the volume, founded but COVID could initially, in far breadth of footing. or And

in stages logistics' we're early has So, on I know, of effect supercharged e-commerce think as a very you sort demand. a and

Operator

the line Your from comes from next of question Korchman Manny Citigroup.

Your line open. is

Manny Korchman

a Hi, everyone. There's up. guess, been, in I coming rebounding supply concern

this to retail that the office we've volumes properties properties and to spec what high be of trying and And keep developers that anecdotal not Prologis, of more conversion we're peers? a lot from that seeing of whether that. to all of maybe we seen? volumes their related competitors see view lower? are and or stuff their build-to-suit secondly, you spec being running going Are from two some risk but questions your or point So One, our in use, terms are even

Eugene Reilly

Yeah.

that But say the that's Poland than online see that run problem buildings older from of year. Houston product I I if would demand about is first. And more for part at little numbers they or the actually of it. a I beginning it's second talked And look we the that the normal you square at Tom the say more take development and is there's me should. would are generally, not in undisciplined at down is mean the there million XXX an about think seeing few. Let warrants. feet, forecast our Houston I The anywhere coming near than building construction. bit one rate places clearly

demand reciprocal And take of will not thing temporarily fall think of this this year construction, about view, because out but excessive. come it obstacles a the accelerate because dip. shopping center level e-commerce I is demand think because obstacles. to as and middle I a of one, about of those of and in the is With box subject those time, the supply we'll high in kinds dense also conversion, right -- that we Look, kind particularly to the And need and because talk and it, of you It's agreements, easement lot short just So, but are we a Number the a boxes to because the back of they my retail. really question, ask the carry first of in redevelop all should part levels locations that of will are of there your growing I'm and it's easy percentage could conversions. of Obviously, to will about go it's in talk in unclear you and more see box. the income. of respect are of one conversions, inventories. again there is not little middle populations oh,

So make there are do the dynamics but that it difficult good, internal are that. locations to

spend they're from to set to not also a economic It's need other And uses. foot, want the are like don't because you that sense there an boxes you way. than arrangements. and these that money to industrial them that takes REAs several an for make you retail and there. up you you issue that to to issue all because need logistics is and neighborhoods So much than imagine in zoning finally, dollars to Also the have square trucks logistics zoning of and where can respect longer convert is traffic lower hundred need retail because to somebody's convert books number for

about hotel they're crazy. logistics but I of temporarily for think not And holiday They're So, tougher you economically, because more the see we this you touch not used takes get But I more purposes. development, but season distribution number really think a or are rooms are we've hear those can before when offices that longer seen long-term last logistics, for than and that time, of things of you'll them, space really surge. viable and really being permanent not stuff in a in The it kind it's for imagine. use. during involved it's

Operator

comes line the Malhotra Your from from Stanley. next Vikram of question Morgan

Your line is open.

Vikram Malhotra

Thanks for the question. taking

second, a two give could of over Just growth months may color have kind the last that and over questions. then you market US versus if now that One, bit few it's few how particularly in of pretty the more -- have, bit And on capital global? the color trended of cost ago, give rent there of little today month which more a us -- have can robust. utilization you been you may on questions but months kind

I'm a even for acquisitions just can wondering, development utilizing bit So more maybe you and M&A? that color little us give between

Hamid Moghadam

Yeah. Thank you, Vikram.

believe market think is the for XXs. are the We've there a the to also balance before, And has never path continued. we'll say think anyway other With I words, interruption. growth with or very those the utilization that pick them being the because this sign numbers been about X%, into in this flatten cycle our on pause I growing believe I had there high best rate In no I era on high it. then questions. track like of were deteriorating. And would basically a in is suggests. and guidance mid the COVID, just of into in occupancies, they year but will reason And way and under hasn't respect it growth. that two we rents of So going same US, in the to vacancy is are up that the

believe growth, between and the of continue I will think that of to on from So, relatively too -- use is projecting to different dissimilar there the I be of with what a capital, be continues it beginning not rental respect market at strong I to year. we companies. were differentiation back trajectory With little think

to pretty tough. of top a also, in our M&A the -- we've at pretty explain there been That's least, So of substantially I land most were portfolio is trading the it. use the terms land incremental we usually it different. we is in already quality. increasingly our But the of returns capital and to and that talking capital disciplined successfully in that the mean, on business. And Don't less have us and of out earlier is compatible to done instances, particularly companies is of always The the attractive, with bank I but don't because less make the historically are right referred targets now. Mike of the each couple are terms best kind the for rates, react because place that on building ask with growth about a pretty margins a multiples. other me are market

that do straight pricing first to. can't I I'd to last the an said -- quarter, estate I just would to kind going amount infinite On is soften. don't but of like assets, look, real think go place of of You we of acquisition logistics development, that's

I are estate of sectors attract and that placed did like fair is lot go real their capital think before. into obviously, going fact, they share going there to because compress to capital there are are to cap that's In rates not a

So performing that are sectors in piling capital few well. the that is

the I our So, out bank. is best think land use of capital building

Operator

line Capital from the Kim of John Your next from comes question Markets. BMO

Your line open. is

John Kim

Thank you.

to Is it of also from -- debt contribute this about there or expense it's other push healthy, picking or half sounds you're year. bad up. leasing second in this indication that an talked greater occupancy? looking are this? Is you discussed You rents in dip that downtime the volume the being over factors to like occupancy the But

Eugene Reilly

about the I that Yeah, a conclusion -- has one. the on John. good. two quarters take our I'll draw optimism from I been demand. wouldn't It's Gene. wouldn't next forecast Demand

of our but expanding, portfolio, about at are the mentioned shrinking. As some customers outset XX% and have, are we

until for won't we So that come reopening, of complete the have reality the economies of And rest it's the balanced out is we year. view we see COVID a and clarity.

year actually But later I ago, until So, XXXX, you'll of there I going clarity balanced on a has think the said I think And have be a as the this. moments we're -- reopening, point out you to in continuation see a come is to growth. Hamid there view. would few to of rent to have

Hamid Moghadam

Yeah. only essentially that thing we're year, of and original add at XXX we're -- the demand I which And sorry, million the other to forecast. XXX would feet feet is of the from demand million forecasting projecting of now beginning of supply, XXX and million and feet is supply, our square and down demand,

obviously, you square forecast demand, rental if go growth. XX have So along with feet pause in of million a you to

than higher demand, XX million the these knows, lead inventory guesses. So both our it. demand But I before year. XX% we make of described to in in generally and view, which out will this an lost up, reasons we also the than rental that of and when the this that share of are consistent outlook along actually more picture we've the increase X% with e-commerce feet between But namely to is I or we surge sort my nobody in lose come all before, think of level mean, will project to goes best stabilizing thing, a for

Operator

comes Your the question Jefferies. Jon next Petersen from of line from

is open. line Your

Jon Petersen

exposure to to with on markets? exposure guys. quicker now are markets But IPT than was US. on are underwriting. LPT quarter, all, thinking transactions, -- to both update international Good considering first versus you doing on their versus hoping right the you. feet the your and those I then how could also increased getting you greatly US it seem us the Great. was of Thank international back exposure How US to be curious

Hamid Moghadam

places spectrum. on is it, is one suffering Yeah. overbuilding. you which a have International side from like Poland, of big And

X% where of then which the is you pretty Tokyo vacancy in now have the places everything is get. you You the was and Osaka leasing and spectrum vacancy. the of building end under up Spain, schedule. have would demand we has ahead we're on are other in range, X% the weakened much teens never that

of is US, there overseas. all granular So sort terms would in of -- but together, markets And actually Gene in I comments obviously, a on tad that, not consistent they are market generally, you if throw slower wide may terms than materially the so. very strength. have But of of the say overseas but a variety more

Eugene Reilly

asked [indiscernible] by seen underwriting is a the Yeah. year. and few we'll is ahead on But so so Obviously, of looking be what to a even us, to little of those exposure for about the Central months. Jon Liberty, we've the And challenging which of to a at bring going we're you ahead that the leading piece Houston hand, And portfolio, things bit other a bit. -- Pennsylvania revisit the of actually then little portfolios, the last both of Pennsylvania lot us, far. actually biggest in for bit underwriting through the on But end are it, has way, plan done quite well, good.

Operator

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

open. is line Your

Jamie Feldman

in hoping deliveries I know there given was color 'XX, was on markets. your in just heading you. it's here year's development to what this off, out points. lingering rising guidance, comfort what that starts? did And you PPP to the about are even you burning lingering get cases more subsidies Number that look one mentioned two you on things pullback give then the Great. other look things is, looks positive some I pipeline this risks the also into thoughts Like there? some thinking gave you like election, ahead, whether -- just Thank increase there like. get like given what Can though or

Hamid Moghadam

observe is just but Customer We going But, talk give the to real happens ahead you behavior We Gene, don't the real-time is basis. make the Gene market. short the and answer what in a customer behavior. go on short. Jamie, answer, about details.

Eugene Reilly

projects Yeah. and January I spec XX in like We're sort still net the below mean, of $XXX way XX million we're of specifically, plan. those forecast, of a the markets. adding to different Jamie, are

there on if markets. that be placed are that in And bets demand So, are those surprised customer I number wouldn't increases. based the being

about asked also You what XXXX. into happens going

what about have much did XXXX, building I before than more see we a wait think we'll obviously in but we spec we to April. happens talk today view confident on

Operator

of comes Your line from next Rodgers question Dave from Baird. the

open. is line Your

Dave Rodgers

are And -- to moved how service-oriented as Yeah. Wanted out year big infill thinking accepting you versus they're you've guys So and Good there. differential going about portfolio in you more what the and and first think question. are kind those to they're just that? customers customers respect the between was of with Is of conversations targeting anticipating still distribution-oriented your the about customers. what are? those with end there rents morning that's from rents maybe a

cap enough grow just is point do second increasing materially Do need the of the make rate debt compression, need the to past happen? Or to happen? vacancies? that see we is get we again rents we The you. to equation for side of before see that Thank

Hamid Moghadam

seeing Gene are plenty you compression, Dave, already start, let cap me transaction evidence are held particularly last they sync On valuations in is if I and holding that's details. if we have those that in Europe. the in will are And -- evidence way the they touch, flat respect of by give that With mean Prologis it, And generally backwards operates remember with of more cap the values rates rate been just space, I looking. pretty category. and to declining. way cases we spaces valuations there were in our some that too of the be had what not markets. we've transactions, our shows whether balanced. is up. of larger paper exactly each date, all times, to of a there major out in is categories four said that's all in distribution those fact, last it's that space, of have portion in gateway out as And the many cities, month would distribution think And and

last than changed the haven't strategy much old It's markets was get we questions our this days different infill very The locations. to about more -- we markets. just such that and did we allocation So, really markets large materially than these before.

a getting coming in is do on these portfolio the of to of from, portion that? days. lot elaborate attention is that Gene, where that's you general want which So,

Eugene Reilly

discovery use pricing for these on specifically market infill kind types have product seen imagine, Yeah. thing more, bit you to much -- upside. these actually range. rent submarkets growth And so growth immature a we you of date, the span far in there that those because the higher is are growth add locations. of this I'd to much huge can asked The are generally going only about And rents surprised But us a has in in the and locations. rent as is, certainly basically

Hamid Moghadam

and times, range costs thought will labor by it One there, a the us talk made you've being wide it logistic logistics rents join to of I only about other this but call total or give heard transportation. many that rest X%, X% just are and

in XX costs. pay rent So for basis points really that's the ability to item of more total more XX% an logistics even not the because the paid is that's if on issue costs, customer they their X%

this, is is rental So that's when vacancy, anxious determines competing growth customers' speaking, where best in at spaces drives not rents. that the pay we around many around. generally operating what drives ability it. really out X% what not aren't there of is which terms competitor to next how rent. dropping That's And are, your What you're

most to worlds Houston's we generally of the continue markets. we Obviously, in the -- to So, have are continue power different. do pricing

Operator

question Wells comes from the next Your line of Blaine from Fargo. Heck

Your line is open.

Blaine Heck

out Great. there. Thanks. Good morning

on just same-store. So questions of collections couple a rent and here

frankly. collection REITs guys excluding might billing relative X% pre-COVID June headwind guys figures then pretty rent it's to that strong reported the the us come numbers kind If I of a there. you that's expectations? the your tangible based of uncollected of still And for post still amount seems to then rents, can and a just secondly, for that's quarter is to lot think collection on that rents. me out same-store second results But headwind cash you have very impressive, June give it in like relative cash cash you of gave in case, rent deferred the face you the collection to be

same-store reconcile So of can maybe helpful. can few you That even would be percentage rents. X.X% uncollected really cash how a cash points be with

Thomas Olinger

Okay, Blaine.

points July. of rent July, XX%. collected of and in basis about I'll so basis collection, we rent we rent the XXX deferred collected in as June, restate, about points We in on XX.X%. So June In XX

due. rents not that So

not it's numbers those in of So collections numbers. those

ahead March. ahead as month, stated, We're collections, since extremely year our Now well. we're Every I doing are of last of schedule.

Now, we of a to are we've all believe collect what we reserve. going we the in with covered cash bad exception the debt think

We've We've that of customers basis debt and assessed we've XX we've our at looked -- XX basis to looked different all we space gone sizes. metrics. individual really bad industries, feel across assessed. points about range assessed good at the portfolio through points. We've we've So,

if we but it's is the I also about meaningfully debt projected so Now fact that lower anchor strong. than history lower, it's for basis of in collections -- back because average sure, would the our on And points. are XX bad to had April,

years, years, XX go of you averaged If XX bad basis points XX we've debt. back

in Now, that's our in QX. kind high was points and saw the XX GFC, basis we here of what

covered second So, I adequately this in half I getting of the good And probably in the and think the bad about debt rest range we've some. door. then feel the cash got

Operator

Your next RBC. from line question from Michael Carroll the of comes

is Your line open.

Michael Carroll

with? market? just space absorb weak that supply you PA? Can demand? it's Yeah. is Houston, to individual in with And to that improvement Is that down are that in dig market we on take developers have issues to So to a in it deal highlighted. activities? issues better color in the Thanks. that energy drove provide I bit going you're Central construction longer-term -- time some a just Gene, simply just you the wanted are slowing then also what or these And trends seeing

Eugene Reilly

Yeah.

leasing. all it's Pennsylvania, in So

In obviously is the demand. to Houston, two headwinds So you improvement related have leasing. in

COVID. amount You've of got of you huge well And energy year. a as have beginning progress pricing as the at in this construction

was frankly, majority But not. vast was that the of some suspended. Now,

easily So, of much going overhang going year because in to so supply. there's next have just space Houston into time, you're some an

we or have I now, would things didn't have think, that I developers more not, that. In projects jury to Right hoped appear the frankly, disciplined. be disciplined frankly being seen terms stopped. of is would see But We out on that.

I -- demand have a you we issue. in as unfortunately think think issue aspect of need monitor supply but to Houston, the we that as I it, So well

Operator

Eric of Your next the Green Street question Frankel comes from Advisors. from line

is Your line open.

Eric Frankel

you. Thank

e-commerce reconfiguration a Obviously, -- appliance supply you about in home been Could improvement of again. because Mike, to obviously commented some and adjusting surge talk adjust they e-commerce beverage. are Amazon how And big companies, sales. warehouse to or companies, at just box curious you looking quite chain the Just by had longer, they retailers efforts about active. their adjusted has food on improvement longstanding I'm some of the home footprints huge they've talk if there all? to

Mike Curless

Eric. Thank Yes, you.

pace those have from names We list business are the but household traditional retailers, mortar not and from shipments. to certainly you looking would that our at to activity shift are more consider from some e-commerce, we retail the the seeing seeing to brick consumer in prospect we're that warehouse on and

definitely that in we're segment. uptick an So, seeing

Hamid Moghadam

strong. Yeah. particularly Home improvement are and grocery sectors

Operator

line Catherwood comes of question from BTIG. the Tom next from Your

open. is Your line

Tom Catherwood

to specifically to immune no pain obviously, follow and bricks industries. reduced on retail your brick good XXXX, the is Eric's wanted lower happening morning. you Thank the in mortar and Since to I and you've retail. growth I from But mortar about side. and one assume exposure just actually that's question

know what up shadow Prologis? exposure other challengers on And to like of mortar is there own, brick then especially that is some your XPLs So and tenants could like a exposure small risk first show number, retail off, but that the of for can it's almost a have your I us their retail apparel second, exposure for you side? remind retailers,

Chris Caton

Hey. This question. for Thanks Chris. the is

going customer specifically, there. traditional our So base roughly and first, and as mortar to it be native brick in X% relates to both of apparel is retailers e-commerce is that and there

a So, you're to diversity. going have

Our our looks approach, through organization. the analysis

it's in. a a so described you XPL, it's whether think through So we just that retailer, like exposure whether

So it risk. decade has the the for you're thinking whole way we've how with been been talking about about consistent

Operator

next Mike the Your comes of JPMorgan. from line question from Mueller

open. Your is line

Mike Mueller

Hi. for there leasing changes that Yeah. you've durations lease the been the bumps Are in getting any to activity? recent

Hamid Moghadam

and extended, But a decade. Right materially. not that of -- thing, same are lease longest Mike, level we've this before probably materially. about had leases in has duration. seen the the of basically Not about stayed term the durations

higher frankly. what is normally is we typical or of While growing to in coming business moving to the part of out somebody that month-to-month going the be a expensive new space space But is cycle was have the bigger of may this smaller way happens leases who's and going and where expensive. space other pretty a committing

and the out basically of solution rent sometimes kick So, is just pay best couple overage months. it to

higher are on same were of one year as which profile consistent longer than the respect slightly percentage effective have rent they about before. end, more free how under year. is we But with before, pretty a down. go a with So, much leases rent to comes escalation the front that the And structures, the ones

Face the most haven't changed markets. were that I all rents think effective much down mentioned rents that in X.X%. Tom

Operator

question next from the Nick Yulico line Scotiabank. Your of from comes

open. is line Your

Sumit Sharma

Thank for you again. my Hi, guys. here Sumit taking question again.

that let's kind we other your retailers grounds Layering X and What New I'm or your infill you're assume So of these closed putting York the on does properties it with that stuff more in increased City, portfolio from in sales manifest to the properties, hearing thinking rent the have perspective, like change more how about Meadowlands are traffic. growth Walmart they properties? US When in, is you Walmart City not Prologis' And of sort that expecting those and is in are you're for rent view? New or situations Exit of off goes what that of of what's Thanksgiving, on online a and terms thinking does Tracy say, Bronx. underwriting growth how York but today? in

Hamid Moghadam

probably in no of read what The and the property able because have in thing obviously, to very re-lease it Walmart described attractive headlines, we we had And at actually I them the one they property you that would e-commerce say needed to is player no you about that, in with another economics. major specifically as interruption were longer Bronx.

much York have your didn't too, can be specific in And to Walmart. headwind. of is only I New a direct to see area a they impact from So presence the anyway that's Walmart the it question that for if

to started. They be get into. to proven market, it they for tried to they've So, and were had that the into market I that's question a was if with were the Walmart. But changed And market into get many getting to it that the years was e-commerce really going difficult just for while appeared apparently, your but come a story know Walmart. their way don't than had mind. they broader

Operator

from Korchman question next the comes Manny line of Citigroup. Your from

open. is line Your

Michael Bilerman

focused the a trying Hi. Bilerman November time with It's the trying to lot a value able you has spent to team garner allow be solutions that have the Michael essentially Manny. supply real estate topics of chain beyond find really to rent. of the to Investor to was of more one and Hamid, on at lot Day, the costs would

I all be pay think you upside structure. from Therefore, to you solutions, transportation, more more like opportunities as a items, have to do if costs looking you stand? I about So ergo data to and million of overall that, over we're sort trying things? we earlier cost your them smaller for advance other is $XXX to those think And rent little was allowed able potential and a a implemented you rent. Where at of those looking digital find these the any reduce able ultimately costs of charge rent. at tenants to labor before should part bit further, been allow to how to these of talked get you benefits it time initiatives getting And

Hamid Moghadam

part been Gary let has point, of my time glad answer. that's a our from performance there mixed. the Sure, brought that are you I'm But vantage up important I'll spending And on. real we very you Michael. what give because

the very more are too I warehouse those are early with going So our initiative, aspects offerings, well, pretty going a offerings procurement have of with that The initiatives, track. and LED and our say things are transportation, result. I say would that would our are respect go to use services product on aspirational IoT, well our the to generally of our product

actually making On as labor front, really progress well. the we're good

also other come were picture. with right mixed COVID out time, interrupted frankly obviously But a those it's like rolled specifically some we to things towards to up focused on of now. that problems other them products this offer has new services market to They in So targeted and services to we our customers. are COVID. our deep-cleaning ability

for would was so would say, I same and than it is that I materially before. our the enthusiasm stronger before say And or business stronger than

Our we to execution has haven't in medium provide that. some by COVID of it Gary, been has more in there? color term but do you in been interrupted other on want pretty our good areas, areas some and changed the objectives

Gary Anderson

eye eye about. was Yeah, that period is some just you at that that traction. the bull's a kind And gotten areas pretty a shown In Hamid are the good Those were we've of had we little remember, bit. that the focused. Michael, Investor the bull's talking our if Day. currently area we

growing we that not those leave longer optimistic Difficulty] it's at we're revenues essentials, bit more term. I [indiscernible], transportation believe are In and and for So it then little IoT we think point. huge. that -- and would there, about [Technical delayed

Operator

Your next Bin from the of Ki question comes SunTrust. from Kim line

open. Your line is

Ki Bin Kim

Any IPT, update supposed assets. Liberty was bought material plans? to you've So a part the off guys dispositions. of already, XXXX to sell of be those but if it of believe you and lot correctly, it I year original was remember when plan And a I done kind for to

Hamid Moghadam

call if that Yeah, Ki we actually pushed back. you call and Bin, the that, in before the last remember

now. deployed under very are We right

under Our leverage is XX%.

there whatsoever is to no so properties. sell And rush those

even I anytime quickly If for we're put the a don't letters and push more significant IPT not what we we need more. strong the frankly and it And that a of and And packages do got you it? or UK. interest our execution until capital That's collecting the haven't out in the poking would we've We of that of bit estate why demand adjust that little Liberty to are And pretty on But out on from pretty for the from you do quadruple is out that that a it, we sale figure that is we portfolio because around, -- very rest in do to you now to have going and think one, I offers. -- we tell that. deployment have of very triple product process we're we do liquid bit. real can and a can decision right meet expected.

Operator

from comes Jefferies. question line of next Jon the from Your Petersen

open. Your is line

Jon Petersen

Great.

but you Any rent on are smaller, guys Asia difference a could collection is between maybe the if one. out material I and we curious there the Just chance top between those I'm there quick US? too. break Europe is any here. just markets. know hour

Hamid Moghadam

actually just that and at daily drill obviously, basis the a even look what it than actually we to ability We by look down more by at market. We have you country, Yeah. and, it can on asked. detail

gone five out countries of and always we're have than part would government we UK. focused basically that you say being And pay obviously, But the there that. focused collections collections collections. in the I have would on materially or are So those more last say months has rents. lot out are two and as And we data said, months. lower there to are on don't France it a And that on I the your good four very stand elsewhere. is

their vast payments we we healthy names ultimate But collection And those no rents you choosing majority I two side, is household of we'll regulations. numbers, other very the of almost in those But not deferrals no the to believe so to pay the markets take those people just are out, lot not And have or up for them. a to of now. those lot a and or of are defaults no rent Asia. if -- on subject Asia collect late mean, companies, are of speak

comparable and two there, within the So the it very I the in the XXX world. points all the throw US mentioned with deviations. a that between meaningful the of between basis They the rest the numbers are if US. of you being blend are couple And

was I think last that question. the

for So, really want to participation. your thank you

to talking Take quarter. to we the in. all the logistical today, world about we next care. And forward live that's you look Sorry but glitches

Operator

call. today's concludes That conference

You disconnect. may now

Prologis (PLD) 21 Jul 202020 Q2 Earnings call transcript