Fitch Affirms ProLogis' Sr. Unsecured Debt at 'BBB+'; Outlook Stable

Business Wire, Feb 26, 2008

The Stable Rating Outlook reflects Fitch's expectation that PLD's unencumbered asset pool will grow in 2008 through development and property acquisitions as well as through the refinancing of secured debt with unsecured debt. The Stable Rating Outlook further reflects the downside protection provided by PLD's global franchise. While most U.S. recessions have historically lasted between five and 20 months, PLD is well positioned to manage the impact of a U.S. recession, given that 19.9% of PLD's rentable space (including directly owned properties and Property Fund/CDFS JV properties) is situated in Europe (26.8% based on investment) and an additional 8.7% of rentable space is situated in Asia (15.0% based on investment). In addition, the U.S. warehouse occupancy rate over the past 25 years has been between 85% and 95%, indicating that industrial real estate is highly utilized even during periods of recession.

As the Company has targeted increasing total assets owned and under management from $36.3 billion as of Dec. 31, 2007 to $60 billion by the year 2010 (principally by expanding in existing markets but also potentially expanding into India, the Middle East, Russia, and Brazil), Fitch will monitor trends such as how growth in global trade and the ongoing reconfiguration of supply chains affect demand for warehouse space, particularly among multinational firms. Fitch will also monitor financial trends as PLD grows, particularly the company's debt-to-EBITDA ratio, availabilities under the company's Global Line, and fixed charge coverage ratios.

ProLogis is a Denver-based equity REIT that owns, manages, and develops distribution facilities, with operations in 118 markets across North America, Europe and Asia. As of Dec. 31, 2007, the Company had $36.3 billion of assets owned, managed and under development, comprising 508.8 million square feet in 2,766 properties. As of Dec. 31, 2007, PLD had $21.1 billion in undepreciated book assets and a total market capitalization of $27.5 billion.

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