Warehouse has benefitted strongly from retail’s move online. As companies strive to get goods to consumers faster than ever before, they are filling warehouses, especially those close in to major metropolitan markets.
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Prologis, which, according to its website, owns more rooftops than any other real estate company, reports its properties are 97 percent occupied, the highest occupancy rate Moghadam said he has seen in his 30-year career. Its customers include Amazon, Home Depot, FedEx,UPS and Wal-Mart.
“Demand is modest,” he admitted, “But when you overlay that on tight supply, it is really giving us pricing power and rental growth like I’ve never seen before.”
Moghadam brushes off concern that warehouse demand could be hurt by a slowdown in China’s economy.
“There is still a pretty spectacular rate of economic growth. Exports from China are definitely slowing down, but domestic consumption in China is growing at double-digit rates, and that creates warehouse demand in China, and we’re active in china,” he said.