Two Josh Brown stocks bucking the real estate headwinds: The new data center landlord and a mall owner

Prologis Q1 Revenue

$2.30 billion

Prologis's total revenue for Q1 2026, an increase from the previous year.

Prologis Net Income Growth

66%

The increase in net income for Prologis in Q1 2026 compared to the same quarter last year.

Simon Property Group Q1 FFO

$3.17 per share

The real estate funds from operations (FFO) per share for Simon Property Group in Q1 2026.

§ 01 Executive Snapshot

What: Prologis and Simon Property Group are outperforming despite challenges in the real estate sector.
Who: Josh Brown, Sean Russo, Prologis (PLD), Simon Property Group (SPG).
Why it matters: These companies illustrate resilience and a shift in market perception within the real estate sector amid rising interest rates.

Prologis plans to scale data center capacity to as much as 10 gigawatts over the next decade, reflecting a shift to digital infrastructure.
Prologis reported Q1 2026 revenues of $2.30 billion, up from $2.14 billion year-over-year, with net income rising 66% to $980 million.
Simon Property Group's Q1 2026 real estate FFO grew 7.5% to $3.17 per share, with U.S. mall occupancy at 96% and retailer sales per square foot up 11.8% year-over-year.

Historically, rising interest rates have negatively impacted real estate sectors; however, the current performance of these REITs suggests a potential shift in investor sentiment.
The evolution of Prologis into data centers highlights a broader trend in industrial real estate adapting to technological needs, diverging from traditional e-commerce narratives.

The strong performance of Prologis and Simon Property Group indicates that certain segments of the real estate market may remain robust despite macroeconomic headwinds.
These companies' ability to adapt and innovate could set a precedent for other real estate firms navigating similar challenges in the future.

Continued increases in interest rates could still pose a risk to overall real estate performance and investor sentiment.
Market perception of retail properties might limit Simon Property Group's growth potential, as many investors may still view it as outdated despite recent successes.

Monitor Prologis's execution of its data center expansion plans and any updates on capital allocation for development projects.
Watch for any shifts in interest rates or economic indicators that could impact the real estate market dynamics and influence investor sentiment going forward.

§ 07

What companies are mentioned as outperforming in the real estate sector?

Prologis and Simon Property Group are noted for their strong performance despite challenges in the real estate sector.

How is Prologis adapting to market changes?

Prologis plans to scale its data center capacity to as much as 10 gigawatts over the next decade, reflecting a shift to digital infrastructure.

Why is Simon Property Group's performance significant?

Simon Property Group's Q1 2026 real estate FFO grew 7.5%, and its U.S. mall occupancy is at 96%, indicating resilience in the retail sector.

What risks could affect the performance of these real estate companies?

Continued increases in interest rates and market perceptions of retail properties could pose risks to overall real estate performance.