Prologis Real Estate Investment Trust Exceeds Expectations With Q2 2024 Earnings

It's earnings season, and Prologis Real Estate Investment Trust (REIT) has just released its earnings report for Q2 2024. Benzinga looks at this REIT's performance numbers to help you decide whether this is the right REIT for you.

Don’t Miss:

• The CEOs of Uber and Salesforce are so impressed with this platform they put their own money behind it. Join them, invest in private credit, and earn 7-9% APY.
• Investor alert: Triple-net properties can put a check in your pocket every quarter—a can’t-miss opportunity for accredited investors.

Prologis (NYSE: PLD) is an industrial REIT that focuses on providing logistics and industrial complexes. This REIT dates back to 2011, when AMB Property and Prologis Trust merged into one entity. Prologis' portfolio includes over one billion square feet of upper-tier logistics and industrial spaces worldwide. As global shipping has become a larger component of traditional and online sales operations, Prologis' services have become an increasingly important cog in the global economy.

Prologis began 2024 with its shares trading around $127 and hit a high near $132 in March before slumping to a year-to-date low of $102.27 on April 30th. Some analysts attributed the steep drop in share price to Prologis lowering its full-year estimates for FFO (funds from operations) in its Q1 2024 earnings report. Since then, Prologis shares have rebounded, which helps explain why so many investors were anticipating today's announcement.

Prologis investors will be pleased to learn that its Q2 2024 earnings report showed the world's largest industrial REIT had a solid quarter. Earnings Per Share (EPS) of $1.34 exceeded analysts' expectations but were still off by $0.49 compared to the same time one year ago, while revenue was $1.9 billion. Here are some other highlights from their earnings call:

• Total occupancy: 96.1%
• Rental revenue: $1.85 billion
• Net Earnings Per Share: $0.92 

On the downside, Prologis also noted that global rents for Q2 2024 are about 2% less than one year ago. Prologis believes a slowdown in the normally lucrative Southern California market caused rent to recede. They expect this trend to continue for the next year, although they also forecast that rents will increase between 4% and 6% over the long term.

 Can you guess which type of investments Morgan Stanley says will reach $2.7 trillion by 2027? It even offers up to 20% APY potential to accredited investors.

A news release from CEO Hamid Moghadam said, "We continue to outperform the industry, driven by our team and the quality of our assets. While customer demand remains subdued, it is improving, and we expect that trend to continue as the construction pipeline shrinks. Meanwhile, our premier global portfolio will continue to benefit from its embedded NOI potential, and opportunities in data centers and energy give us tremendous confidence in future growth.”

Moghadam explained his optimistic outlook on Prologis' earnings conference call when he said, "January of next year, the presidential uncertainty will be gone. I'm pretty sure that the Fed uncertainty will be gone. … What we know for a fact, which is not a prediction, is that start volume is very low, and replacement costs have continued to go up."

Prologis' net earnings per share of $0.92 or $3.84/year translates to a dividend yield of 3.12% based on their closing stock price of $123.21. Prologis had a solid but not spectacular quarter that included an impressive rebound from a difficult period in the Spring. The global storage and logistics industries are here to stay, and Prologis appears well-positioned to help its investors profit from them.

With that said, every industry faces potential headwinds, meaning every investment has potential risk. If there were a long-term downturn in the global economy, the worldwide trade in commercial goods would slow down significantly. That would potentially depress demand for the logistics facilities Prologis operates. It would also put downward pressure on rents and occupancy rates, which could affect investor returns. So, keep these caveats in mind before investing.

Looking For Higher-Yield Opportunities?

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000.

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings. 

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.