Friday, February 16, 2007

Prologis's incredible business model


http://www.prologis.com/prologis/splash.aspx

Prof. Serapio has mentioned this company a few times in an enthusiastic, admirable way. He loves their business model.

Today he gave some background. Prologis is a company that forecasts trade between regions (countries) and invests in real estate right before the peak trading (not 5 years or more before). Prologis buys up land and offers to sell/lease warehousing to the companies that participate in the trading.

Prologis also manages REITs (Real Estate Investment Trusts, pronounced 'reet') which have become really popular with investors once expecting 40-50% returns on their global investments. REITs tend to be a security like a mutual fund. REITs collect investments and are used in aggregate to invest in real estate development. Today, REITs are yielding 15-20% with much more international development risk being removed than every before.

So Prologis seems to have two revenue streams and make money off of investor’s unsecured capital, WOW!

1 comment:

Anonymous said...

i thought you would appreciate being notified of a typo in your title. Prologis' should be Prologis's according to a business style. http://www.businesswritingtips.com/wbwt/tip199.htm
I've seen two rules;
1. only add the apostrophe and 's' when the extra syllable isn't awkward to pronounce.
2. add ('s) to proper nouns like people and company names (except historical figures like Jesus)

May 5, 2007 at 9:26 AM

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