The Wall Street Journal - 28.10.2019

THE WALL STREET JOURNAL. Monday, October 28, 2019 |B7

BUSINESS & FINANCE

THE TICKER|Market events coming this week

Packaged-foods maker Mondelez International, whose brands include Oreo, reports results Tuesday.

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Monday

Earnings expected*
Estimate/YearAgo($)
Alphabet 12.32/13.06
AT&T 0.93/0.90
AvalonBay 1.22/1.39
T-Mobile US 0.96/0.93
Walgreens Boots
Alliance 1.41/1.48
Welltower 0.45/0.17

Tuesday

Consumer confidence
Sept., previous 125.1
Oct., expected 128.8

Earnings expected*
Estimate/YearAgo($)
Amgen 3.53/3.69
Mastercard 2.01/1.78
Merck & Co. 1.24/1.19
Mondelez 0.60/0.62
Pfizer 0.62/0.78
Stryker 1.90/1.69

Wednesday

Fed rate-policy meeting
Target rate 1.75%-2.00%

Mort. bankers indexes

Purch., previous down 4%

Refinan., prev. down 17%

EIA status report

Previouschangein stocks in

millionsof barrels

Crude oil down 1.7

Gasoline down 3.1

Distillates down 2.7

GDP Deflator

2nd qtr., final up 2.4%

3rd qtr. adv. est. up 1.9%

Gross domestic product:

Percentagechange,annualrate

2nd qtr., final up 2.0%

3rd qtr. adv. est. up 1.6%

Earnings expected*

Estimate/YearAgo($)

Apple 2.83/2.91

ADP 1.33/1.20

CME Group 1.76/1.45

Facebook 1.91/1.76

GE 0.12/0.13

Starbucks 0.70/0.62

Thursday

Initial jobless claims

Previous 212,000

Expected 215,000

EIA report: natural gas

Previouschangein stocks in

billionsof cubic feet

up 87

Chicago PMI

Sept., previous 47.1

Oct., expected 48.6

Employment cost index

2nd qtr., previous up 0.6%

3rd qtr., expected up 0.7%

Personal spending

Aug., previous up 0.1%

Sept., expected up 0.2%

Personal income

Aug., previous up 0.4%

Sept., expected up 0.3%

Earnings expected*

Estimate/YearAgo($)

Altria Group 1.15/1.08

American Tower

0.95/0.83

Bristol-Myers 1.07/1.09

Celgene 2.70/2.29

Cigna 4.36/3.84

ICE 0.96/0.85

Friday

Construction spending

Aug., previous up 0.1%

Sept., expected up 0.2%

ISM mfg. index

Sept., previous 47.8

Oct., expected 49.0

Nonfarm payrolls

Sept., previous 136,000

Oct., expected 85,000

Unemployment rate

Sept., previous 3.5%

Oct., expected 3.6%

Earnings expected*

Estimate/YearAgo($)

AbbVie 2.30/2.14

AIG 1.01/(0.34)

Chevron 1.49/2.44

Colgate-Palmolive

0.70/0.72

Dominion Energy

1.14/1.15

Exxon Mobil 0.67/1.46

• FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES)  ADJUSTED FOR
  STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS

jumped 46% year over year in
the third quarter as it shifted
warehouses and moved inven-
tory closer to customers of its
one-day shipping program.
Given the growth of Ama-
zon and other online outlets,
it seems logical that a bet on
the continuing shift to e-com-
merce would be crowded. But
the strength of Blackstone’s
belief that the supply of urban
warehouses will remain tight
as demand continues to ex-
plode—a recipe for higher
rents—has led it to outbid the
few other large-scale competi-
tors vying for the assets.
“This isn’t a contrarian the-
sis,” said Ken Caplan Black-
stone’s co-head of real estate.
“We think there’s been such a
fundamental shift that people
just don’t recognize it has
happened yet. They are still
adjusting their views.”
Growth in gross domestic
product and leasing used to
be tightly correlated, but leas-
ing is now significantly stron-
ger than might be expected
given GDP growth, Mr. Caplan
said.
Blackstone’s funds don’t re-
port performance metrics. But
logistics real-estate firm Pro-
logis Inc. said this month that
rent increases for existing
tenants hit a record of 37% in
the third quarter.
Blackstone’s tenants in-
clude some traditional distri-
bution and storage companies
plus more third-party logistics
operators that contract with
retailers to handle distribu-
tion and fulfillment. More
than half of tenants’ costs
come from transportation, and
only about 4% to 5% comes
from rent, Mr. Caplan said.
That makes them more
willing to stomach higher
rents as long as it means min-
imizing the distance between
the warehouse and their cus-
tomers. Warehouses also re-
quire much lower capital ex-
penditures than office
buildings or retail space.
This isn’t the first time
Blackstone has been bullish on
warehouses. It began snap-
ping them up after the finan-
cial crisis when vacancies
spiked and construction
halted. Between 2010 and
2014, it bought 117 million
square feet of U.S. warehouses
and saw rents rise 31%.
It assembled these into In-
dCor Properties Inc., which it
sold in 2015 to a group includ-
ing investment manager GLP
and Singapore sovereign-
wealth fund GIC Pte. Ltd. for
$8.1 billion. About half of the
assets it bought from GLP this
year were among those it pre-
viously owned.
Blackstone replicated the
strategy in Europe, forming
Logicor Europe Ltd., which it
sold in 2017 to sovereign-
wealth fund China Investment
Corp. for about $14 billion.
These days, retailers are
leasing smaller spaces inside
cities where it is harder to
build because of land avail-
ability and local zoning laws.
That dynamic has brought the
vacancy rate for U.S. indus-
trial and logistics properties
to near-historic lows—4.4% in
the third quarter, compared
with 12.1% for offices, accord-
ing to real-estate firm CBRE
Group Inc.

Continued from page B1

Blackstone

Bets on

Warehouses