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The industrial-focused real estate investment trust is better insulated because of the increased importance of industrial warehouse space in the e-commerce era and its geographically diverse portfolio, the analysts said. North America is now 64.5% of its portfolio, down from 79% in the financial crisis of 2008. Europe and Asia holdings have grown to be a bigger percentage in the same timeframe.
It also has better operating metrics than the last significant downturn. In the next two years, 21% of Prologis’ leases expire, compared with 32% in 2008, for example. “Naturally, this should support occupancy even if demand slows,” the note said.
They rate the stock a buy with a price target of $144. Shares dipped 1.5% on Friday.
“We believe there are a handful of factors that should help ensure PLD’s algorithm is relatively protected in the case of a prolonged economic slowdown,” they wrote.
The shares are up 4.5% so far this year.
