Kevin Kelly, managing partner at Benchmark Investments, joined RealVision on how he is utilizing optionality for a unique play on warehouse giant, Prologis (PLD). In this interview with Brian Price, Kevin says E-Commerce will drive greater demand for the real estate solutions offered by Prologis. Filmed on July 16, 2018, discussion points include:
- Prologis is a critical waypoint for the global economy and ownership of industrial properties has generally provided stable and predictable returns.
- Prologis has irreplaceable portfolio that is concentrated in population centers where consumption and supply chain reconfiguration drive logistics demand.
- Industrial real estate has contractual rent escalations which is also capturing strong market rent growth in rollover leases as rents in the industrial sector have escalated by 20-30 percent in the past few years.
- Omni-channel and e-Commerce requires three times (3X) the warehouse space of traditional brick-and-mortar stores as well as more-sophisticated logistical services.
- HD is going to double their warehouse distribution space from 55M square feet to 110M square feet in next five years.
- Home Depot Inc. plans to spend $1.2 billion over the next five years to speed up delivery of goods to homes and job sites as the rise of online shopping resets consumer expectations. Will add 170 distribution facilities across the U.S. so that it can reach 90% of the U.S. population in one day or less.