Prologis (PLD) is a global leader in logistics real estate with a focus on high-barrier, high-growth markets. PLD leases modern distribution facilities to a diverse base of approximately 5,000 customers across two major categories: business-to-business and retail/online fulfillment.
Benchmark’s Kevin Kelly went on Bloomberg TV to discuss an options trade to generate additional yield on PLD as it has an irreplaceable portfolio which is a critical waypoint for the global economy as $1.3 Trillion of goods flow through their distribution centers which is 1.7% of global GDP.
Other points include: Prologis is using its experience with multistory warehouses in Asia to pioneer the concept in the U.S. where the industrial REIT giant is building the first one in Seattle, and sees additional opportunities for multistory warehouses in San Francisco, Los Angeles and New Jersey. The three-story, 580,000 square-foot warehouse in Seattle could pave the way for more multistory projects in other cities where land is expensive, there’s limited room for new development and warehouse vacancies are slim. These projects are complex, lengthy and expensive at hundreds of millions of dollars each. The returns are also unproven, which is perhaps the main reason Prologis’ peers are on the sidelines, at least for now. They said it’s possible that 10% of its portfolio may one day be multistory.
- Prologis, Inc. (PLD) is a constituent of the INDS Index
- Trade: Covered Call
- Buy (PLD) REIT
- Sell November 2018 $65 Call for $2.60
- Collects over 4.25% in options premium