But I can tell you, based on conversations with them, they’re getting a lot of pressure the other way from a lot of other people. So they find it somewhat unusual that we want to see a more aligned set of values that will unlock market and liquidity.Operator And the next question comes from the line of Vikram Malhotra with Mizuho. Please proceed with your question.Vikram Malhotra Thanks for taking the questions. So just maybe going back to your comments about more unevenness or maybe just some upward pressure on vacancy across the US. Can you just sort of give us your latest view on — you said not worried about SoCal, but how would you rank sort of SoCal across your other coastal markets today? And if there is a sort of additional or some softening that you may see, does the Duke acquisition sort of change the overall prospects for the PLD US portfolio?Hamid Moghadam Well, I don’t know for sure how to predict the direction of markets, but I can tell you, I don’t lose any sleep over SoCal at all.
I think that market is extremely tight and some of the shift in demand or softening of demand is to adjacent markets because the space just doesn’t exist in Southern California. So if we had more space, I think we would have more absorption in Southern California as well.The Duke acquisition, as we’ve described many times, it’s very aligned with our portfolio, so fundamentally doesn’t change in any way our view on markets or desired allocation of our capital to those markets. It’s very much aligned with the pre-merger Prologis portfolio. So the only thing I would tell you about Duke is that I — generally speaking, based on the leases that we’ve done, since we acquired portfolio, we are kind of on the order of 4% to 5% higher than we thought we would be in terms of the performance of that portfolio.Operator And the next question comes from the line of John Kim with BMO Capital Markets.
Please proceed with your question.John Kim Good morning. Tim, you mentioned the fund redemption requests were unchanged at 5% of NAV. Do you still expect the redemptions to go basically down to zero in the back half of the year in light of I think you mentioned weakening sentiment on tenant demand?Tim Arndt Hey, John, we didn’t hear any of that. Are you on a cell phone? And if you are, can you get closer to it or something because you were cutting in there?John Kim Is that better?Tim Arndt It’s better. Yeah.John Kim Okay. Sorry about that.Tim Arndt So can you start all over?John Kim Sure. You mentioned the fund redemption requests were unchanged, but I was wondering if you expect those redemptions to go down to zero in the back half of the year as previously stated in light of weakening demand that you’re seeing on the tenant side.Tim Arndt I don’t know.
I can’t really predict the portfolio decisions of well over a couple of hundred different investors making those decisions differently. I would say to the extent that there is — there are redemptions. They are generally not because of the performance of the real estate assets that are invested with us. They are either have to do with denominator issues on their other asset classes, private equity, stock bonds, et cetera, because everything has gotten hit with increased interest rates.Bonds have not been a safe place to be either. So it’s because of them getting over allocated to real estate because of the decline in the value of the other asset classes more than real estate. And among real estate, if you want liquidity, where are you going to go?
You’re going to go to industrial. You’re going to go to apartments, et cetera, et cetera.You’re not going to go to office buildings because you’re not going to be able to get any liquidity out of those. So that’s what’s driving all this. It doesn’t — I wouldn’t look there for learning anything about what’s going on with the industrial market because that’s a reaction to a lot of different things that have nothing to do with industrial demand with supply.Operator And the next question comes from the line of Vince Tibone with Green Street. Please proceed with your question.Vince Tibone Hi. Good morning. Have you seen any material changes in tenant demand or industry-wide development starts activity since the banking crisis? And then on the latter point, has the availability of construction loans changed significantly in the last few months?Hamid Moghadam I’m sorry the last part was the availability of loan.Tim Arndt Constructions loan.Hamid Moghadam Construction loan.
The answer to that one is –Vince Tibone Construction loan.Hamid Moghadam Yes, the answer to that one is absolutely, yes. I think there’s been a significant pullback in the availability of construction loans. On the rest, I mean, what do you think?Tim Arndt Yes, you were talking about customer demand. We’re seeing broad-based customer demand really even looking at our e-commerce, we had 40 unique e-commerce users last quarter alone with Amazon actually being a small size of that very, very small. So overall, broad-based demand, no particular pockets of softness.Hamid Moghadam I would say housing is probably the only, the only aspect that’s a little below normal. But again, if you look at the overall numbers, these — if you sort of forget about 2021 and early ’22, and you saw these numbers that we’re seeing now, you would feel really good about them.
It’s just that in the context of those exceptional years are a little bit softer, but they’re still considered to be really good markets, Chris.Chris Caton Hey, Vince, I think I heard in the middle of your question, what is the trend in development starts in the wake of SVB. So it’s worth knowing the numbers, which is in the first quarter in the United States development starts were off 40% from their peak across our markets and 45% in Europe. And based on the comment I made earlier around construction debt availability, these numbers are going to — you’re going to continue to see starts to curtail in the marketplace.Hamid Moghadam I mean, I’ve never seen such a fast slowdown such a sudden slowdown in construction volume in our business. It’s just been — and I’m not sure it’s only — it was related to Silicon Valley Bank.
It was already happening before that, and SVB just made it worse.Operator And our next question comes from the line of Nicholas Yulico in Scotiabank. Please proceed with your question.Nicholas Yulico Thanks. I just want to go back to some of the commentary about demand may be spilling into 2024 as companies take a longer time and make financial decisions. I guess what I’m wondering is, how much is that an outlook or just broader corporations taking longer times to make financial decisions versus some of the larger categories of leasing like 3PL, general retail, but it may be expecting consumer slowdown and perhaps not fully utilizing their space. And so that’s creating some delay in taking space this year.Hamid Moghadam The utilization rate peaked all time at 87%.
And today, it’s at 85%. And there is a couple of points of margin error on those numbers anyway. But — so I would say utilization is really high. If it were — if utilization were in the high 70s, I would tell you there’s a lot of shadow space and people are going to wait to grow into that space or put it on the market for sub leasing, but we’re not seeing that.So I don’t think there’s a lot of excess slack in the system. And even if you look at the well over publicized Amazon stories that a lot of people waste a lot of time on. I mean, they basically haven’t given anything space back, maybe 7 million or 8 million square feet. Yet it’s taken half the airtime on all these costs for the last year.It just has not been material. I mean, we’re looking for something that just doesn’t exist.
