Logistics warehouse operator Prologis Inc. sees the market for space remaining tight for some time. On its first-quarter earnings call with analysts Tuesday, management said available supply in the market is still at all-time lows.
Prologis (NYSE: PLD) beat first-quarter expectations, reporting core funds from operations (FFO) of $1.09, 2 cents ahead of consensus and 12 cents higher year-over-year.
A sustained period of high consumer demand along with delays in new projects coming online have kept supply tight. “True months of supply,” which compares current vacancies plus the development pipeline to trailing net absorption, has fallen to 16 months in 30 key U.S. markets tracked by Prologis. Historically, that metric hovers around 36 months during expansionary periods.
During the first quarter, occupancy didn’t experience the normal seasonal decline. It remained flat with the fourth quarter at 97.4%. The metric was 200 basis points higher year-over-year as Prologis had 98.1% of its portfolio leased by the end of the period.
