TCA Morning RE Brief

Prologis reported Q1 2026 results yesterday that exceeded expectations on every key metric. Core FFO came in at $1.50/share (vs. $1.48 consensus), EPS hit $1.05 vs. $0.81 expected, and revenue reached $2.30 billion. The company signed a record 64 million square feet of leases, with occupancy at 95.3%. Cash rent change was +31.9% and same-store NOI grew 8.8% on a cash basis. Management raised full-year guidance, with Core FFO now projected at $6.07-$6.23/share and development starts increased to $4.5-$5.5 billion -- 40% allocated to data center build-to-suits. The data center pipeline now stands at 5.6 GW with 1.3 GW under LOI. PLD stock rose 2.4% pre-market. (Prologis IR, MarketBeat)

The industrial bellwether confirms that national logistics fundamentals are firming. The 75% speculative share of logistics starts signals management's confidence in demand recovery. For the Southeast, Prologis's aggressive capital deployment means more competition for land and tenants in Charlotte, Savannah, and Raleigh-Durham. The data center crossover -- $1.3B in Q1 BTS starts alone -- also signals where institutional capital is pivoting, potentially pulling development attention from pure-play logistics sites.

Monitor Prologis supplemental for Southeast-specific occupancy and starts. Evaluate whether TCA sites with power access could support data center conversion interest. Track whether the 5.6 GW pipeline intensifies competition for Duke Energy grid capacity in the Carolinas.

A joint venture between Lingerfelt and Partners Group closed the sale of a nearly 1.2 million-square-foot industrial portfolio in metro Richmond for $175 million. The portfolio -- Walthall Distribution Center (3 buildings, South Chesterfield) and Northlake Distribution Center (1 building, Ashland) -- was acquired in March 2023 for $105.6 million, representing a 66% gain over three years. The JV invested $9 million in capital improvements and executed 875,000 SF of new leases and renewals, bringing the portfolio to full occupancy at sale. JLL brokered the transaction. (REBusinessOnline)

At roughly $146/SF for fully leased Richmond industrial, this validates strong institutional appetite for Southeast logistics assets and demonstrates the value-add playbook still works in secondary markets. The 66% return in three years amid rising rates underscores that well-located, well-managed industrial product commands premium pricing. Richmond vacancy sits at 4.6% with rents growing 5.5% YoY, supporting continued investor interest in the market.

Benchmark TCA Richmond holdings against the ~$146/SF comp. Evaluate whether similar repositioning opportunities exist in the Chesterfield or Ashland corridors. The buyer was undisclosed -- consider reaching out to JLL for post-transaction market color.

CBRE's Q1 2026 report shows the Raleigh-Durham industrial pipeline has surged from 2.2 million SF in Q4 2024 to 5.6 million SF, with ongoing deliveries expanding supply and pushing availability higher. On a year-over-year basis, vacancy rose 2.9% and availability increased 1.5%. However, asking rents increased 7.0% YoY market-wide, and Eastern Wake County showed tightening availability with notable absorption from several large occupancies. The RTP/I-40 Corridor saw increased leasing activity, reinforcing its position within the market. Cary sustained the highest asking rents while Granville County remained the most affordable. (CBRE)

Raleigh-Durham is at a bifurcation point. The 5.6M SF pipeline is the largest in years, yet quality-driven demand is keeping rents up. The divergence between Eastern Wake (tightening) and broader market (softening) mirrors the flight-to-quality dynamic seen in Charlotte. Class B and C properties are making up a larger share of available space, putting downward pressure on blended asking rates even as Class A commands premiums.

Focus acquisition and development activity on Eastern Wake County and the RTP/I-40 Corridor where demand is firming. Avoid exposure to older product in softer submarkets. Track whether the elevated pipeline translates to vacancy compression or further supply-driven pressure through mid-2026.