PLD Leases Large SoCal Space

ProLogis (PLD - Analyst Report), one of the leading global providers of distribution facilities, recently signed a leasing agreement for 498,000 square feet of distribution space in Southern California for an undisclosed amount. The deal was signed with Continental Tire North America Inc., a subsidiary of Germany-based tire and automotive component manufacturer Continental AG.

With the deal, the facility at ProLogis Park Redlands is currently 88% leased. Continental Tire would utilize the space to store and distribute tires to its customers throughout the region. The leased site is strategically located in close proximity to an interstate network of highways, and provides immediate access to the San Bernardino International Airport.

ProLogis owns and manages interests in over 2,500 distribution facilities, service offices, and properties spanning across 475 million square feet of space (including properties under development). As of Mar 31, 2009, the company had 201.1 million square feet of direct-owned industrial properties – 85.9% of which was located in North America, 11.1% in Europe, and 3.0% in Asia.

With approximately 45 million square feet of distribution space in Southern California, the company has the largest industrial portfolio in the region. Its major customers in the area include Kraft Foods (KFT - Analyst Report), Nike Inc. (NKE - Analyst Report), Unilever Plc (UL - Analyst Report), FedEx Corporation (FDX - Analyst Report) and Home Depot (HD - Analyst Report).

The current leasing agreement signifies that, despite the continuing economic downturn, ProLogis has the wherewithal to sign new leases. The company also has a strong balance sheet to fuel further growth. We reiterate our Buy rating of the company.

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