Warehousing & Industrial REITs

Industrial rent mark-to-market remains the dominant sector earnings engine.

Across the tracked portfolio, cash rent spreads on new and renewal leases are running 19.8% (STAG), 25.3% year-to-date (TRNO), 27.7% in Q2 (TRNO), and 39% year-to-date (FR), confirming that below-market in-place rents continue to compound into NOI growth independent of occupancy gains. EastGroup posted 35.2% straight-line rent growth in H1 2026 and raised same-property cash NOI guidance to 6.3-7.3%. The mechanism is structural, not cyclical: leases signed at pre-2023 rents will roll to market over the next three to five years regardless of new supply additions.

Southern California rent cycle has turned decisively negative for infill REITs.

Rexford reported new lease cash rent spreads of -19.5% in Q2 2026, deteriorating from -12.8% in Q1, while management explicitly warned that negative re-leasing spreads will persist 'over the next several years' as leases signed at 2021-2023 peak rents roll down. With 13% of Rexford's portfolio square footage expiring in 2027 alone, the embedded negative mark-to-market is a multi-year NOI headwind. This is the sharpest geographic divergence in the sector: coastal infill markets outside Southern California, particularly Terreno's six-market footprint, are posting 22-28% positive cash spreads in the same period.

Data center conversion has crossed from thesis to capital allocation at Prologis and First Industrial.

Prologis formally introduced Power Pipeline as a tracked operational metric with two defined sub-categories and allocated approximately 40% of its $4-5 billion 2026 development starts guidance to data centers, the first cycle in which data center volume appears in official guidance. First Industrial's $131 million Phoenix land sale at more than 3x prevailing industrial land values provided the first public proof point of data-center-adjacent pricing; management disclosed active power procurement efforts across a 'handful' of additional sites. The binding constraint named by both companies is power procurement, characterized by First Industrial as 'a very lengthy process' and by Prologis as requiring up to four years from preliminary utility agreement to secured energy service agreement.

Cold storage sector inflects on occupancy but leverage constrains Lineage's recovery options.

Lineage posted its first year-over-year same-store physical occupancy gain since its IPO in Q2 2026, with management raising same-store NOI guidance to negative 3% to flat from negative 4% to negative 1%. The structural headwinds of destocking and speculative new supply are both resolving, with management stating COVID-era inventory levels have 'reset closer to historical norms' and new deliveries expected to fall below 2% annually in 2026-2027. The constraint on recovery speed is balance sheet: reported net debt to EBITDA stands at 6.0x against a 5.0-5.5x target, requiring approximately $1 billion in asset dispositions before leverage normalizes and growth optionality reopens.