Third Avenue Management Found a Great Value in Prologis Inc. (PLD)

Third Avenue Management, an investment management firm, published its “Real Estate Value Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of +10.70% was recorded by the fund for the Q1 of 2021, outperforming the benchmark, FTSE EPRA NAREIT Developed Index, that rose to +6.11% for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Third Avenue Management, in its Real Estate Value Fund Q1 2021 investor letter, mentioned Prologis, Inc. (NYSE: PLD), and shared their insights on the company. Prologis, Inc. is a San Francisco, California-based real estate investment trust company that currently has an $84.3 billion market capitalization. Since the beginning of the year, PLD delivered a 13.98% return, extending its 12-month gains to 37.12%. As of May 11, 2021, the stock closed at $114.86 per share.

Here is what Third Avenue Management has to say about Prologis, Inc. in its Q1 2021 investor letter:

Prologis, Inc. (a U.S.-based real estate investment trust that is the largest owner of modern logistic facilities with a platform that expands more than 950 million square feet of space in 19 countries globally) completing $2.0 billion USD of debt placements at a weighted average interest rate of 0.9% with an average term of more than 13 years. In the process, the company has further solidified one of the most compelling capital structures in the real estate industry with a prudent loan-to-value ratio of approximately 25% that is primarily comprised of fixed-rate debt at an average cost of 1.8% for a term that exceeds 10 years. As a result, the long-tenured management at Prologis (including one of the true leaders in the real estate space CEO Hamid Moghadam) have set up the company for what could be a very rewarding period ahead as incremental rental income and asset management fees seem likely to accrue disproportionately to shareholders on the “bottom-line” with its interest costs locked-in.”


Our calculations show that Prologis, Inc. (NYSE: PLD) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Prologis, Inc. was in 36 hedge fund portfolios, compared to 33 funds in the third quarter. PLD delivered a 5.63% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.