Where Are Hottest Areas for Distribution Centers?

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March 5 (Bloomberg) -- Prologis Chairman and CEO Hamid Moghadam discusses the building of distribution centers used by many diverse companies on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)


When are you building this distribution center -- where are you building these distribution centers?

We are active in asia, latin america and here in north america, and we are building everywhere.

This is not an isolated event.

In the world is getting more interconnected.

Consumption is increasing, and our buildings enable that commerce.

Here in the u.s. are we seeing a uniform recovery or uniform growth?

We see pretty good growth.

It is not exuberant by any stretch of the imagination, but it is pretty solid.

If you think about the fact that the nongovernment sector is accounting for all of our growth, that sector is growing well.

It is the other historically that has pulled its weight, the other 25% that is stagnating.

The new supply buildings is in check.

What do you mean?

Before, in recoveries, construction would come back quickly.

This time it has not, and that is because ranks have been pretty well.

It does not always make sense to build new buildings.

Until rent is recovering -- you are able to hike your rent.


We get pricing power and because we have a good balance sheet, and a good relationship with customers, we can be at the leading edge of building new facilities.

When you are building new facilities, what do clients ask that is different than five years ago?

They are getting bigger, much bigger.

Hey big building 10 years ago would be half a million square feet, and now one million square-foot buildings are run-of-the-mill and some are approaching 2 million square feet.

Why is that?

They can combine into fewer facilities, and they are moving from outline locations close to population centers are fair getting bigger.

I would think it would be the opposite -- they are getting bigger.

I would think it would be the opposite.

They were moving away to get further from higher rent, and now to be closer to customers they are coming in a big city, and it is difficult to do getting a big piece of land in a big city.

It has to be expensive.

Is that a situation where only the biggest companies will be able to afford that kind of convenience?

The bigger companies do it themselves, and smaller companies do it through third-party providers.

Everybody is trying to get closer to customers.

Five years ago, they would go to out-of-the-way places to save on taxes, but the tax issue has gone away in e-commerce, and they're coming right in with the population is.

It is all because of this demand for same day delivery -- it is going in that direction . nothing is getting slower.

We will be back with hamid moghadam, the chairman and ceo of prologis.

Coming up, dish pulling ahead in the race to deliver television over the internet.

Can it succeed where others have failed?


This text has been automatically generated. It may not be 100% accurate.


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