Two Josh Brown Stocks Bucking the Real Estate Headwinds: The New Data Center Landlord and a Mall Owner

Why It Matters

The moves show that industrial and retail REITs can generate resilient cash flow and upside by adding digital‑infrastructure and high‑quality mall assets, mitigating the traditional drag of rising interest rates on real‑estate valuations.

Key Takeaways

• Prologis targets 10 GW data‑center capacity by 2036.
• Q1 2026 revenue for Prologis rose 7% to $2.30 B.
• Prologis development spend forecast $4.5‑$5.5 B, 40% data centers.
• Simon Property’s U.S. mall occupancy hit 96% with sales $819/sq ft.
• SPG dividend increased 7.1% to $2.25, yielding 4.4%.

Pulse Analysis

Prologis’s aggressive expansion into data‑center real estate reflects a broader industry shift toward digital infrastructure as AI and cloud computing demand surge. By converting existing warehouses and launching greenfield projects, the REIT aims to deliver up to 10 GW of capacity over the next decade, positioning itself as a hybrid logistics‑and‑technology landlord. This diversification not only adds a higher‑margin, inflation‑resilient revenue stream but also aligns with corporate tenants seeking proximity to data hubs, bolstering occupancy rates and supporting a stronger earnings outlook.

Simon Property Group’s recent performance underscores the resilience of premium‑mall assets in a post‑pandemic consumer landscape. With occupancy at 96% and retailer sales per square foot climbing to $819—a near 12% year‑over‑year rise—the company benefits from a concentrated tenant base where no single lease exceeds 5% of revenue. The 7.1% dividend increase to $2.25, yielding 4.4%, signals confidence in cash‑flow generation and reinforces SPG’s appeal to income‑focused investors, even as the broader REIT sector grapples with higher borrowing costs.

Together, these two REITs illustrate how strategic asset allocation can offset the traditional headwinds of a rising rate environment. While higher yields typically pressure real‑estate valuations, Prologis’s data‑center focus and Simon’s high‑quality mall portfolio provide stable, growth‑oriented cash flows that attract both growth and dividend investors. Analysts will watch for breakout price moves—above $148 for PLD and $210 for SPG—as potential catalysts, while monitoring interest‑rate trajectories that could influence future capital‑allocation decisions across the sector.