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]

Core Insights - Dividend-paying stocks are attractive investments for generating passive income and have historically provided strong total returns through earnings growth and shareholder payouts [1] Group 1: Brookfield Infrastructure - Brookfield Infrastructure's shares have declined nearly 10% from their 52-week high, resulting in a dividend yield of 4.2% [4] - The company has a strong dividend payment history, increasing its dividends for 16 consecutive years at a 9% compound annual rate [5] - Future dividend growth is targeted at 5% to 9% annually, supported by organic growth drivers and recent acquisitions, including a $500 million investment in Colonial Enterprises [6][7] Group 2: PepsiCo - PepsiCo's stock has dropped over 25% from its 52-week high, leading to a dividend yield of 4.4% [8] - The company recently raised its dividend by 5%, marking 53 consecutive years of dividend increases, qualifying it as a Dividend King [8] - Despite current headwinds affecting growth, PepsiCo is investing in healthier food options, which is expected to reignite earnings growth and support future dividend increases [10] Group 3: Prologis - Prologis shares have fallen more than 15% this year, resulting in a dividend yield of 3.7% [11] - The company reported an 11% increase in core FFO per share in the first quarter, driven by new leases at higher rates [12] - Long-term demand for warehouse space remains strong, with Prologis planning to build data centers to meet growing digitalization needs, supporting future dividend growth [13][14] Group 4: Investment Potential - Brookfield Infrastructure, PepsiCo, and Prologis offer dividend yields significantly higher than the S&P 500 average, along with strong earnings growth potential, making them attractive investment opportunities [15]