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Prologis Sells Chicago-Based Data Center Development to HMC Capital
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Prologis (PLD - Free Report) recently sold a data center development located in its Chicago market to HMC Capital. In partnership with Skybox Datacenters, the company is converting its Illinois warehouse into a high-capacity, turnkey data center, with a capacity of 32 megawatts (MW).
The company's data center strategy incorporates both warehouse conversions and ground-up developments. This particular warehouse is part of the U.S. Logistics Fund, a co-investment initiative by Prologis that emphasizes premier logistics real estate, including conversions for higher and better use.
Prologis is actively increasing its power procurement capabilities to meet the rising demand for new data center developments. The company has also been strategically expanding its in-house data center team. Currently, it has secured a total of 1.6 gigawatts (GW) of power on a global scale, with an additional 1.4 GW in the advanced phases of procurement. With 490 MW under construction, Prologis is positioned as a leading data center developer in the industry.
Prologis is working with the largest hyperscalers and thought leaders in generative AI to meet their increasing data center needs. The company boasts the largest portfolio of warehouses globally, and its in-house team of experts is focused on identifying high-value conversion opportunities across its approximately 5,600 buildings and 12,400 acres of land. Since 1999, Prologis has delivered 29 projects.
Prologis expects that within the next four years, it will initiate the development of approximately 20 data center opportunities, with an investment range of $7 - $8 billion.
PLD’s Management Commentary
Per Dan Letter, president of Prologis, "We see great potential for warehouse conversions in key markets and properties in our portfolio. The end-to-end capabilities of our unique data center platform enables Prologis to capitalize on this compelling growth opportunity while delivering outsized returns to our investors and meeting customer demand for digital infrastructure."
Conclusion
The data center industry is currently experiencing significant growth, driven by the demands of the evolving needs of today’s digital economy.
The demand for high-performing data centers is likely to increase in the coming years amid high growth in cloud computing, the Internet of Things (IoT), big data and elevated requirements for third-party IT infrastructure. Hence, PLD’s focus on data centers will help it to capitalize on this upbeat trend, which bodes well for long-term growth.
Shares of this Zacks Rank #3 (Hold) company have lost 0.6% over the past six months against the industry’s 7.9% growth.
The Zacks Consensus Estimate for CareTrust’s 2024 FFO per share is pinned at $1.50, implying year-over-year growth of 6.4%.
The Zacks Consensus Estimate for Cousins Properties’ 2024 FFO per share is $2.68, indicating an increase of 2.3% from the year-ago figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Prologis Sells Chicago-Based Data Center Development to HMC Capital
Prologis (PLD - Free Report) recently sold a data center development located in its Chicago market to HMC Capital. In partnership with Skybox Datacenters, the company is converting its Illinois warehouse into a high-capacity, turnkey data center, with a capacity of 32 megawatts (MW).
The company's data center strategy incorporates both warehouse conversions and ground-up developments. This particular warehouse is part of the U.S. Logistics Fund, a co-investment initiative by Prologis that emphasizes premier logistics real estate, including conversions for higher and better use.
Prologis is actively increasing its power procurement capabilities to meet the rising demand for new data center developments. The company has also been strategically expanding its in-house data center team. Currently, it has secured a total of 1.6 gigawatts (GW) of power on a global scale, with an additional 1.4 GW in the advanced phases of procurement. With 490 MW under construction, Prologis is positioned as a leading data center developer in the industry.
Prologis is working with the largest hyperscalers and thought leaders in generative AI to meet their increasing data center needs. The company boasts the largest portfolio of warehouses globally, and its in-house team of experts is focused on identifying high-value conversion opportunities across its approximately 5,600 buildings and 12,400 acres of land. Since 1999, Prologis has delivered 29 projects.
Prologis expects that within the next four years, it will initiate the development of approximately 20 data center opportunities, with an investment range of $7 - $8 billion.
PLD’s Management Commentary
Per Dan Letter, president of Prologis, "We see great potential for warehouse conversions in key markets and properties in our portfolio. The end-to-end capabilities of our unique data center platform enables Prologis to capitalize on this compelling growth opportunity while delivering outsized returns to our investors and meeting customer demand for digital infrastructure."
Conclusion
The data center industry is currently experiencing significant growth, driven by the demands of the evolving needs of today’s digital economy.
The demand for high-performing data centers is likely to increase in the coming years amid high growth in cloud computing, the Internet of Things (IoT), big data and elevated requirements for third-party IT infrastructure. Hence, PLD’s focus on data centers will help it to capitalize on this upbeat trend, which bodes well for long-term growth.
Shares of this Zacks Rank #3 (Hold) company have lost 0.6% over the past six months against the industry’s 7.9% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are CareTrust REIT (CTRE - Free Report) and Cousins Properties (CUZ - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CareTrust’s 2024 FFO per share is pinned at $1.50, implying year-over-year growth of 6.4%.
The Zacks Consensus Estimate for Cousins Properties’ 2024 FFO per share is $2.68, indicating an increase of 2.3% from the year-ago figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.