Core Insights - Logistics real estate demand has reached an inflection point, with improved metrics in net absorption and new lease signings in Q3 [1][2] Demand and Utilization - Customer demand has increased, despite some indicators recovering from a lull due to earlier inventory pull forward [2] - The demand outlook is more constructive, with strategic leasing decisions reflecting growing confidence among resilient customers [3] - Warehouse space utilization improved to 84.7% in October, although the average for Q3 was 84%, which is 100 basis points lower than Q2 [3] Absorption and Lease Signings - Net absorption was 47 million square feet in Q3, 64% higher than Q2 but below the historical pace of 59 million square feet [5] - New lease signings were 10% higher in both Q2 and Q3 compared to Q1 [5] Market Dynamics - Upstream companies front-loaded goods earlier in the year, leading to higher utilization rates compared to retailers, but this trend is expected to reverse as merchandise moves downstream for the holiday season [4] - The industry's vacancy rate is projected to remain around mid-7% due to improving demand and limited new supply [7] - The spread between replacement-cost rents and market rents has widened to approximately 20% in the U.S., discouraging speculative development [7] Emerging Trends - Scarcity is emerging in certain markets and size categories, with new speculative logistics building groundbreakings remaining below pre-pandemic levels [8] - Recent leasing activity has favored large customers in nondiscretionary sectors such as food and beverage, e-commerce, and healthcare [6]

Market Performance - The S&P 500 increased by 0.7% this week, while the Nasdaq rose by 2.2%[1] - Large-cap growth (Russell 1000 Growth) outperformed small-cap growth (Russell 2000 Growth) with a difference of 2.2%[1] - Semiconductor products and equipment led the sectors with a gain of 6.2%[1] Fund Flows - Estimated fund flow for S&P 500 components was -$40.5 million this week, down from +$65.6 million last week[2] - Major inflows were seen in semiconductor products and equipment (+$77.3 million) and retail (+$26.9 million)[2] - Significant outflows occurred in media and entertainment (-$65.2 million) and diversified financials (-$63.2 million)[2] Earnings Forecast - The 12-month forward EPS expectation for S&P 500 components was raised by 0.6% this week, following a 0.4% increase last week[3] - Retail sector EPS was revised up by 2.9%, while energy sector EPS was cut by 1.7%[3] - Overall, 14 sectors saw upward revisions in earnings expectations, while 10 sectors experienced downward adjustments[3]

Group 1 - The article highlights that artificial intelligence (AI) is currently a major focus for investors, leading to a disparity in performance across various sectors, with some underperforming while the market rises due to AI sentiment [1] Group 2 - The investment landscape is influenced by the growing interest in AI, which has resulted in a market uplift, but not all sectors are benefiting equally from this trend [1]

Performance Overview - Baron Real Estate Income Fund increased by 5.43% in Q3 2025, outperforming the MSCI US REIT Index which rose by 4.49% [2] - Since inception on December 29, 2017, the Fund's cumulative return is 97.17%, significantly higher than the REIT Index's 41.54% [2][3] Comparative Rankings - As of September 30, 2025, the Fund ranks in the 2nd, 5th, 17th, and 2nd percentiles for the 1-, 3-, 5-year, and since inception periods, respectively, according to Morningstar [4] - The Fund's Institutional Share Class is ranked as the 3rd, 10th, 28th, and 2nd best performing share class in its category for the same periods [4] Market Outlook - The Fund remains optimistic about public real estate prospects, expecting improving business fundamentals and values to contribute to attractive returns [9] - Positive comments from executives of leading real estate companies indicate a potential improvement in real estate fundamentals [12][13][14][15][16] Investment Strategy - The Fund's portfolio consists of 75% REITs, 22% non-REIT real estate companies, and 3.1% cash and cash equivalents as of September 30, 2025 [21] - The Fund's investment approach includes a focus on both REITs and non-REIT real estate companies, allowing for flexibility in capitalizing on market opportunities [20] Sector Analysis - Industrial REITs represent the largest exposure in the Fund, with a positive outlook driven by demand/supply dynamics and e-commerce growth [23] - Health Care REITs and senior housing are expected to benefit from favorable demographic trends and improving fundamentals [27] - The Fund maintains a cautious but optimistic view on office REITs, identifying specific markets with potential for growth [27] Recent Activity - The Fund initiated positions in Jones Lang LaSalle Incorporated and increased holdings in Prologis, Inc. and The Macerich Company during Q3 2025 [44][46][47] - The Fund trimmed its exposure to certain holdings like American Tower Corporation and Equinix, Inc. due to market conditions and growth outlooks [41][49] Future Prospects - The Fund anticipates a pivotal moment for real estate, with expectations of solid growth in business fundamentals and potential for improved valuations [54] - The overall sentiment in the real estate market is cautiously optimistic, with expectations of continued demand exceeding supply [51]

Core Insights - FIBRA Prologis reported strong financial and operational results for Q3 2025, despite ongoing trade uncertainties, highlighting the resilience of its diversified portfolio and focus on high-quality logistics assets [4][9]. Financial Performance - Net earnings per CBFI for Q3 2025 were Ps. 1.0027 (US$0.0540), a decrease from Ps. 6.4415 (US$0.3424) in Q3 2024 [3]. - Funds from operations (FFO) per CBFI for the quarter were Ps. 1.0268 (US$0.0561), up from Ps. 0.8343 (US$0.0437) in the same period last year [3]. Operating Results - Period-end occupancy was 98.0%, slightly down from 98.1% in Q3 2024, while average occupancy remained stable at 97.9% compared to 97.8% in the previous year [4]. - Customer retention improved significantly to 81.7% from 52.7% year-over-year [4]. - Net effective rent change was 47.2%, with notable contributions from Mexico City, Reynosa, and Tijuana [4][7]. - Same store cash NOI increased by 14.8%, driven mainly by rent changes and annual rent increases [4][7]. Financial Position - As of September 30, 2025, FIBRA Prologis had a leverage ratio of 22.6% and liquidity of approximately Ps. 19.9 billion (US$1.1 billion), which included Ps. 18.4 billion (US$1.0 billion) of available capacity on its unsecured credit facility [5]. Updated Guidance - The company updated its guidance for 2025, increasing the expected building acquisitions from US$150 million to US$250 million, while building dispositions were adjusted from US$100 million to US$400 million [6].

Portfolio and Operations - Prologis operates a portfolio of approximately 1.3 billion square feet across 20 countries, focusing on logistics real estate in high-growth markets [148]. - The company actively manages its portfolio through leasing, property management, development, acquisitions, and dispositions, recycling capital back into ongoing investment activities [151]. - The occupancy of the operating portfolio was 95.2% as of September 30, 2025, with a net effective rent change of 52.0% on leases that commenced during the nine months ended September 30, 2025 [169]. - The total O&M operating portfolio included 5,455 properties with a total of 1,208 million square feet, achieving an occupancy rate of 95.3% as of September 30, 2025 [203]. - The company signed 31 million square feet of new leases in the third quarter, reflecting continued customer demand despite economic uncertainty [170]. Financial Performance - For the trailing twelve months ended September 30, 2025, the weighted average lease term for leases commenced in the consolidated operating portfolio was 68 months, with rental operations contributing 90% to 95% of consolidated revenues [158]. - The Real Estate Segment's NOI increased to $4.608 billion for the nine months ended September 30, 2025, compared to $4.216 billion in 2024 [175]. - The Strategic Capital Segment's NOI was $244 million for the nine months ended September 30, 2025, up from $208 million in 2024 [175]. - Strategic Capital Segment revenues increased to $439 million in 2025 from $419 million in 2024, representing a growth of 4.8% [193]. - Funds from Operations (FFO) attributable to common stockholders was $4,080 million in 2025, compared to $3,969 million in 2024 [265]. - Core FFO attributable to common stockholders was $4,178 million in 2025, up from $3,870 million in 2024 [265]. Strategic Initiatives - The company expects to generate earnings growth by increasing rents, maintaining high occupancy rates, and controlling expenses, with a focus on rolling in-place leases to current market rents upon expiration [158]. - Prologis anticipates sustained demand for logistics space driven by e-commerce growth, modernization of supply chains, and a focus on supply chain efficiency [149]. - The company plans to grow its strategic capital business by increasing assets under management in existing and new ventures [163]. - Prologis emphasizes sustainability and operational efficiency through its Prologis Essentials platform, addressing customer needs in energy and sustainability [153]. Development and Investments - Prologis has the potential to support the development of $37.0 billion of total expected investment (TEI) in newly developed buildings, with an estimated value creation captured through gains realized upon contributing properties to co-investment ventures [166]. - Consolidated development starts totaled $2.0 billion during the nine months ended September 30, 2025, with 68.3% of these being build-to-suit projects [170]. - The consolidated development portfolio was expected to be completed before July 2027 with a total estimated investment (TEI) of $4.7 billion and was 48.1% leased [187]. Liquidity and Capital Structure - The company maintained total available liquidity of $7.5 billion, including $6.3 billion in credit facilities and $1.2 billion in unrestricted cash as of September 30, 2025 [174]. - The total debt outstanding as of September 30, 2025, was $35.3 billion, with a weighted average interest rate of 3.2% [231]. - The company had a total of $1.325 billion in remaining equity commitments related to certain co-investment ventures as of September 30, 2025 [235]. - The company issued $2.9 billion of senior notes during the nine months ended September 30, 2025, with a weighted average interest rate of 4.3% [217]. Expenses and Gains - G&A expenses increased to $333 million in 2025 from $316 million in 2024, a rise of 5.4% [195]. - Depreciation and amortization expenses were $2.0 billion in 2025, compared to $1.9 billion in 2024, marking a $100 million increase [197]. - Gains on real estate transactions decreased to $53 million in 2025 from $160 million in 2024, a decline of 66.3% [199]. - Net interest expense rose to $742 million in 2025 from $632 million in 2024, an increase of 17.4% [217]. Foreign Currency and Derivatives - For the nine months ended September 30, 2025, the company recognized net foreign currency and derivative losses of $54 million compared to gains of $63 million in 2024 [220]. - The total unrealized foreign currency and derivative losses, net for 2025 were $156 million, compared to $61 million in 2024 [220]. - The company primarily mitigates foreign currency risk by borrowing in the currencies where it invests, creating a natural hedge [268]. - The company uses derivative financial instruments, such as foreign currency contracts, to offset translation adjustments on net assets of foreign investments [268].

Market Performance - The S&P 500 index increased by 2.4% this week, while the Nasdaq rose by 3.9%[1] - Large-cap growth stocks (Russell 1000 Growth) outperformed with a gain of 3.2%, compared to small-cap value (Russell 2000 Value) at +2.5%[1] - The technology hardware and equipment sector led the gains with an increase of 3.9%[1] Fund Flows - Estimated fund flow for S&P 500 components was +$65.6 billion this week, down from +$91.7 billion last week[2] - Semiconductor products and equipment saw the highest inflow at +$22.9 billion, while media and entertainment experienced the largest outflow at -$13.2 billion[2] Earnings Forecast - The forward 12-month EPS estimate for S&P 500 components was revised up by 0.4% this week, consistent with the previous week[3] - The automotive sector saw a significant upward revision of 9.0% in earnings expectations, while durable goods and apparel experienced a downward revision of -0.5%[3] Risk Factors - Key risks include uncertainties in economic fundamentals, international political situations, U.S. fiscal policies, and Federal Reserve monetary policies[3]

Core Insights - The article discusses the investment potential and performance of PLD, highlighting a beneficial long position in its shares [1]. Group 1: Company Performance - PLD has shown strong performance metrics, indicating a positive outlook for investors [1]. - The article emphasizes the importance of conducting thorough research before making investment decisions related to PLD [2]. Group 2: Investment Considerations - The article suggests that past performance of PLD does not guarantee future results, urging investors to consider this when evaluating their investment strategy [3]. - It is noted that the views expressed may not reflect the broader consensus, indicating a need for independent analysis [3].

Core Viewpoint - Shares in Kering, the owner of Gucci, experienced a significant increase following the announcement of better-than-expected sales at its flagship brand, indicating a potential turnaround for the company [1] Group 1: Company Performance - Kering reported improved sales figures for Gucci, which exceeded market expectations, contributing to a surge in the company's stock price [1] - The positive sales performance at Gucci has raised optimism among investors regarding a long-awaited turnaround for Kering [1] Group 2: Market Reaction - The surge in Kering's shares reflects increased investor confidence in the luxury brand's recovery and future growth prospects [1]

Core Insights - Prologis, Inc. is recognized as one of the largest and most favorable REITs for investment, particularly in the industrial sector, offering significant upside potential due to continuous expansion [1] Company Overview - Prologis is the largest industrial REIT globally, indicating a strong market position and potential for growth [1] Investment Strategy - The article emphasizes the importance of dividend investing as a pathway to financial freedom, highlighting its accessibility for investors [1] - The author shares insights from extensive experience in M&A and business valuation, focusing on sectors such as tech, real estate, software, finance, and consumer staples [1] Financial Health Assessment - The author conducts financial modeling and due diligence to evaluate company health, which is crucial for making informed investment decisions [1]