ProLogis (NYSE:PLD), a leading global provider of distribution facilities, recently signed 3 new lease agreements spanning about 174,000 square feet of its development portfolio in the U.S. The continued leasing activities show signs of stabilization in the industrial property market fundamentals after a prolonged recession that pushed down the sector.
About 103,000 square feet were leased to a leading healthcare company in Inland Empire, California. The lessee will occupy the space at ProLogis Park Redlands. The company also leased about 54,000 square feet to Associated Global Systems, a third-party logistics provider. The lessee will occupy the space at ProLogis Park Pompano Beach in Southern Florida. At the same time, about 17,000 square feet were leased to a third-party logistics provider in Seattle. The lessee will occupy the space at ProLogis Park SeaTac.
ProLogis has witnessed a growing customer interest in new build-to-suit development projects across the globe. In addition, leasing decisions that were earlier postponed due to volatility in the markets are gradually coming off the shelf. In order to decrease the risk associated with cyclical local real estate markets and economies, and increase the stability and predictability of the earnings, ProLogis has also drastically reduced its non-income producing assets on the balance sheet.
With improving property values and growing institutional demand for quality properties, ProLogis expects to generate $1.3 billion to $1.5 billion of proceeds in 2010 from sales of existing assets and contributions to funds primarily in the U.S. The company intends to utilize the proceeds to fund its existing development portfolio as well as development starts in 2010.