Zacks Industry Outlook Highlights: Taubman Centers, PS Business Parks and Prologis

  Zacks Industry Outlook Highlights: Taubman Centers, PS Business Parks and
                                   Prologis

PR Newswire

CHICAGO, July 13, 2012

CHICAGO, July 13, 2012 /PRNewswire/ -- Today, Zacks Equity Research discusses
the U.S. Real Estate Investment Trusts (REIT), including Taubman Centers Inc.
(NYSE:TCO), PS Business Parks, Inc. (NYSE:PSB) and Prologis Inc. (NYSE:PLD).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

A synopsis of today's Industry Outlook is presented below. The full article
can be read at  

http://www.zacks.com/stock/news/78678/real-estate-investment-trust-outlook-july-2012

We are bullish on Taubman Centers Inc. (NYSE:TCO) which owns, develops,
acquires and operates regional and super-regional shopping centers throughout
the U.S. and Asia. (Retail shopping centers spanning over 400,000 square feet
of gross leaseable area [GLA] are generally referred to as regional shopping
centers, while those centers having in excess of 800,000 square feet of GLA
are generally referred to as super-regional shopping centers.)

Taubman focuses on dominant retail malls that command the highest average
sales productivity in the U.S., measured in terms of mall tenants' average
sales per square foot. During the first quarter of 2012, mall tenant sales per
square foot improved 13.3% year-over-year, bringing the tally on a 12-month
trailing basis to $659.

Furthermore, the shopping centers are located in the most affluent regions of
the country, thereby enabling retailers to target high-end upscale customers
and maximize their profitability. This, in turn, has enabled Taubman to
command relatively premium rents for its portfolio, thereby ensuring a steady
top-line growth.

In addition, Taubman has one of the strongest balance sheets in the sector
with adequate liquidity. The company has also taken prudent steps to reduce
operating expenses by pruning its pre-development spending in the U.S. and
Asia, as well as significantly reducing its overall workforce. This, in turn,
has improved the bottom line of the company.

We also remain bullish on PS Business Parks, Inc. (NYSE:PSB), which owns,
acquires, develops and operates commercial real estate properties such as
low-rise suburban multi-tenant offices, business parks and industrial and flex
assets. Located mostly in high-population markets, flex properties are a
combination of warehouse and office space and can be easily configured to suit
a variety of uses.

The warehouse component of the flex space is primarily used for purposes such
as light manufacturing and assembly, storage and warehousing, showroom,
laboratory, distribution and research and development activities. The office
component of the flex space is complementary to the warehouse component, and
enables businesses to accommodate management and production staff in the same
facility.

PS Business Parks invests and owns commercial real estate properties in
diversified markets that enables it to tap multiple industry concentrations
and neutralize the operating risks associated with economic down-cycles.
Consequently, the company has a relatively steady revenue stream.

The company also seeks to maximize its cash flow by controlling capital
expenditures associated with re-leasing space by acquiring and owning
properties that can be easily reconfigured and suit a variety of uses. This,
in turn, attracts a wide variety of tenants and provides it with operating
flexibility to protect and enhance market positions by capitalizing on
improving real estate market fundamentals.

Another stock worth mentioning is Prologis Inc. (NYSE:PLD), which acquires,
develops, operates and manages industrial real estate space in North America,
Asia and Europe. Prologis had merged with the erstwhile namesake company in an
all-stock deal to become a behemoth of sorts in the industrial real estate
sector.

The combined entity had brought two of the most complementary customer
franchises on the same platform and created a $44 billion asset pool at their
disposal at the time of the merger. The merger had led to potential cost
savings through operational synergies and had created a stronger platform for
value creation and sustainable growth in the long term.

In addition, Prologis provides industrial distribution warehouse space in some
of the busiest distribution markets across the globe. The properties of the
company are typically located in large, supply-constrained infill markets at
close proximity to airports, seaports and ground transportation facilities,
which enable rapid distribution of customers' products. This has enabled the
company to gain a significant pricing advantage over its competitors.

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