Prologis granted rent relief to just 7% of tenants that asked

Prologis CEO Hamid Moghadam and 230-19 Int. Airport Center Blvd in Queens (Credit: Prologis; Google Maps)

Prologis CEO Hamid Moghadam and 230-19 Int. Airport Center Blvd in Queens (Credit: Prologis; Google Maps)

Prologis, one of the largest owners of industrial real estate, granted rent deferrals to just 7 percent of its tenants who asked for help because of the coronavirus.

“This relief is targeted at our smaller customers with legitimate needs stemming from Covid and not for opportunistic requests,” said Chief Investment Officer Gene Reilly, speaking at Tuesday’s first-quarter earnings call in which the company reported higher net profit and revenue. Of the deferral requests that were granted — which totaled $18 million — customers received on average 33 days of deferral. The deferrals were structured to be repaid over the remainder of the year.

Reilly said another 23 percent of requests are still under review, but those requests have slowed. The company has already denied 70 percent of total deferral requests, representing 4.3 percent of its gross annual rent.

Prologis reported higher earnings from the January through March period, encompassing the escalation of the Covid-19 pandemic across the globe. Net earnings rose by nearly 41 percent, to $489 billion. Total revenue was up sharply from the previous quarter: $978 billion compared to $772 billion in the last three months of 2019.

The company’s executives noted that leasing demand has been high from e-commerce companies and those that stock essential products. They projected the pandemic will accelerate the shift to online shopping and will lead some companies to keep more inventory on hand than they had in the past.

For instance, 40 percent of the new leasing Prologis has undertaken recently has been to e-commerce firms, compared to just 23 percent pre-pandemic, Reilly said.

Still, the firm, in a bid to remain conservative because of the uncertain nature of the pandemic, said it was projecting reduced demand for the remainder of the year. Prologis lowered its guidance for the rest of 2020, anticipating no rent growth and lowering the net earnings per diluted share range to $1.81 to $1.88, from $1.98 to $2.13.

The firm also anticipates occupancy for the year to come in between 94.5 and 96 percent, down from 96 and 97 percent. Sixty percent of Prologis’ customers are growing, with the rest shrinking, Reilly said.

Prologis’ stock was down 0.34 percent, trading at $88.24, shortly after 2 p.m. Tuesday.

Write to Mary Diduch at [email protected]

Telemundo unveils plans for new $250M headquarters

Rendering of the NBC Universal Telemundo headquarters
Telemundo unveiled plans on Tuesday for its new global headquarters, a complex within the Prologis Beacon Lakes industrial park in northwest Miami-Dade County. 
NBCUniversal and Comcast will invest more than $250 million in the 560,000-square-foot development. Telemundo will consolidate about 1,300 jobs currently housed at buildings throughout the county into the two-building, 560,000-square-foot campus. Brian Smith, Mike Davis and Audley Bosch of Cushman & Wakefield represented Telemundo in the build-to-suit lease, according to a press release.
The project broke ground Tuesday morning.
Last week, Prologis sold 37 acres of undeveloped land within Beacon Lakes to SunTrust, which will be Telemundo’s landlord. SunTrust Equity Funding also closed on a $185 million loan for the property, west of the Florida Turnpike along Northwest 25th Street.
Terms of the lease were not disclosed, but in the press release Cushman & Wakefield said it was “likely the most valuable lease in Florida history.”
Telemundo site map (click to enlarge)
The development will house the division’s offices, broadcast and production operations, including the Telemundo Network, Telemundo Studios and Telemundo International, as well as the cable network NBC UNIVERSO and its digital media operations. Telemundo’s new digs will include an advanced production facility, network operations center, set design operations, post-production facilities and more than 100,000 square feet of executive offices. Shows such as the Nuevo Dia morning show, Al Rojo Vivo, and Novela productions will be produced there, Cushman & Wakefield said. The facility is slated to open in 2018.
In a press release, Cesar Conde, chairman of NBCUniversal Telemundo Enterprises and NBCUniversal International Group, said the investment underscores the company’s commitment to the Hispanic market in the United States. “Our new global headquarters will fold all of our division’s offices and production studio spaces into one state-of-the-art facility that will help us do business in a more collaborative way,” Conde said.
Telemundo, which was purchased by NBCUniversal in 2010, currently has studios at 7355 Northwest 41st Street. Records show that SunTrust paid just more than $22 million for the portion of Beacon Lakes. The industrial park spans 478 acres and home to Ryder Logistics, Panalpina and Amazon. – Katherine Kallergis

Source: The Real Deal Miami