The Motley Foolยท2025-04-22 11:37Core Insights - Prologis and Rexford Industrial Realty are leading industrial real estate investment trusts (REITs) with attractive dividend yields above 4% and 5% respectively, driven by recent stock price declines [2][6] - Both companies have demonstrated strong dividend growth rates, with Prologis achieving a 13% compound annual growth rate over the past five years and Rexford at 16% [3][6] - Despite near-term market uncertainties, both REITs are well-positioned for future growth due to strong operational performance and embedded growth opportunities [4][8] Prologis - Prologis shares have decreased over 20% from their 52-week high, resulting in a dividend yield of 4%, significantly higher than the S&P 500 average of sub-1.5% [2] - The company reported a 9% increase in core funds from operations in the first quarter and signed 58 million square feet of new leases, indicating strong demand [5] - Prologis has a robust balance sheet and is strategically developing facilities to meet growing demand, particularly for data centers [5] Rexford Industrial Realty - Rexford's stock has fallen more than 35% from its 52-week high, leading to a dividend yield exceeding 5% [6] - The company anticipates a recovery in demand despite current headwinds from tariffs and weakening demand, with existing leases featuring annual rental rate increases expected to add $105 million to annualized net operating income (NOI) over the next three years [7][8] - Rexford projects a 34% growth in annualized NOI over the next three years, driven by lease expirations, new leases at higher market rates, and ongoing repositioning projects [8] Market Outlook - The industrial real estate sector is expected to benefit from limited new supply and high construction costs, supporting continued rent growth in the long term [4] - Both Prologis and Rexford are positioned to capitalize on future growth opportunities, making them attractive investments despite current market challenges [9][10]