Zacks Industry Outlook Highlights: Plum Creek Timber, Simon Property Group and Prologis

Zacks Industry Outlook Highlights: Plum Creek Timber, Simon Property Group and

PR Newswire

CHICAGO, Nov. 9, 2012

CHICAGO, Nov. 9, 2012 /PRNewswire/ --Today, Zacks Equity Research discusses
the U.S. REITs, including Plum Creek Timber Co. Inc. (NYSE:PCL), Simon
Property Group Inc. (NYSE:SPG) and Prologis Inc. (NYSE:PLD).


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


We are bullish on Plum Creek Timber Co. Inc. (NYSE:PCL) that owns one of the
largest and most geographically diversified private timberlands in the U.S.
The company produces lumber, plywood and medium density fiberboard in its wood
products manufacturing facilities. Plum Creek's diversified timber and land
base provides excellent operational flexibility to respond to changing market
conditions amid a challenging macroeconomic environment.

In addition, the upsurge in demographic trends driving housing markets and
demand for real estate properties across the nation provides a strong economic
backdrop for the company to demonstrate solid financial performance in the
future. Housing starts are expected to be up 25% in 2012, and increase from
750,000 starts in the current year to 900,000 in 2013.

Plum Creek benefits from large economies of scale and capitalizes on the
increasing value of timber over time to offset several negative effects of
cyclical commodity pricing. Furthermore, Plum Creek makes prudent investments
in the growth of its timberland assets and harvests trees at the most
'economically mature' point in the life cycle of a tree. The company also
acquires attractive timberlands and uses advanced practices to improve
productivity of its forests, which augments its timber inventory.

We also remain bullish on Simon Property Group Inc. (NYSE:SPG) the largest
publicly traded retail REIT in North America, with assets in almost all retail
distribution channels. The company's international presence gives it a more
sustainable long-term growth story than its domestically focused peers. The
geographic and product diversity of the company also insulate it from market
volatility to a great extent and provide a steady source of income.

The company has one of the strongest comparable sales per square foot in the
industry. Comparable sales in the combined portfolio were $562 per square foot
during third quarter 2012, compared to $514 in the prior-year quarter. In
addition, Simon Property generally enters into long-term leases with
companies, which insulate it from short-term market swings that have weighed
on other players in the industry. With a favorable supply/demand relationship,
rising earnings estimates, robust growth projections, and a healthy dividend
yield, Simon Property offers an enticing upside potential going forward.

Another stock worth mentioning is Prologis Inc. (NYSE:PLD) that 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 worth of asset pool
at their disposal at the time of 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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