On Prologis' Q2 earnings call, Chairman and CEO Hamid R. Moghadam said high demand for industrial space meant the company could push pricing higher if they wanted to. The company saw a 4.1% rent growth in its US markets, which exceeded expectations.
On that same call, Chief Customer Officer Mike Curless said the competition for space among customers is as fierce as he has seen it. He added that Prologis probably wouldn't lose much business if it did raise rents. Overall, less than 5% of customers are leaving due to higher rents. "I got to tell you the rent becomes a very minor discussion. Just the availability and accessibility of that space becomes the priority," he said.
It was an interesting bit of color from one of the largest providers of industrial space in the world. Rents, the executives appeared to be saying, do not seem to matter to customers desperate to lease space.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
