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So, how do we feel about ecommerce as we head into 2026? Well, that's a question for Prologist, the real estate investment trust focused on logistics, mainly warehouses and fulfillment centers for e-commerce, but they got a big data center kicker. Here's a company that reported a strong quarter in mid-occtober, but it's about to have a big management transition with co-founder and longtime CEO Amogan stepping down at the end of the year.
He's been on our show since 2012. He is staying on as executive chair though. Effective January 1st, the current president, Dan Letter, will take over as CEO. So, what does this mean for the business? Let's check in with Hamid Mogadon. He's the co-founder, chairman, and outgoing CEO. I can't even believe I have to say that.
Mr. Moadon, welcome back to Bad Money. Thank you, Jim. I hope you're well. Oh, and I hope the same for you. I want to wish you uh well and great health. new year coming up and mostly I need you to impart some wisdom because you've been spot on now for for 13 years with us. Where are we in terms of what you've seen in terms of the revolution, the need for warehouses, e-commerce, and whether business has caught up to your vision because you were about a decade ahead of everybody.
Well, Jim, that's nice of you to say. I I think the business has evolved in a great deal and maybe e-commerce is the latest uh aspect of it that has changed. But if you really roll the clock back to 42 years ago when we started this business, the real estate industry was a highly fragmented business.
It was all very opaque and in the private market. It was actually mostly financed with tax deals and u and the idea of global companies serving global customers on a scale that we have been doing and it being available to the average investor through a restructure or public restructure was unheard of.
So um I think depends on which aspect of it you want to focus on but certainly the business the format pretty much everything has changed in the last 42 years. Why don't we talk about durability because that's what our investors want. They want to be able to be consistent. They want to be able of course to compound because compounding is the best way toward wealth.
Uh Prolic has been an amazing compounder. First stock that I followed that bottom during the great recession. What how about the durability of what you've established and what you see in the future? Of course uh you know the our business is ultimately based on the success of our customers. We collect rent and hopefully over time because of places we select for investment uh those rents grow and earnings grow along with them.
So um it's a pretty simple business if you really look at it. I mean the dividend yield is somewhere between 3 and 4% depending on the day and the growth rate over time has been in the high single digits. So that uh that is a pretty good return in my book uh on a consistent basis. And of course uh there are times that it's below, there are times that it's above, but we're never going to be the growth stock that tomorrow you can triple your money in.
But uh year after year, uh it's a good place to have capital. I always say that you need more than just the ones that you can triple your money in because they're the ones that can go to zero. Zero very bad. That's how you that's how you're not you become poor. Now, you were uh always willing to say where things were.
At one point, you told me there was overbuilding. One point you said there's overbuilding in Southern California, but the rest of the country is good. I need you to help me with data center. I I know that you're perfectly willing to say if it's overbuilt. Are are do do people know what they're doing?
Uh some people do and some many people don't. Uh so, it's everybody's uh favorite uh line of business these days, of course, to state the obvious. There's a lot of capital and plans and press releases that are that we see every day. But if you're asking me 10 years from now, will data centers be a pretty significant investable aspect of the real estate universe?
I would say absolutely. Whether they will be growing at the rate that people project or not depends on a lot of things, including changes in technology. I mean, I I'm not smart enough to answer that question, but will demand grow? for sure. Will technology grow even at a more rapid rate, thereby reducing the need for real estate?
I don't know. Um, we'll find out. But like everything, it's a good thing in moderation. Okay. You've gone in, but not in the way that say an Oracle's going in. Not in the way that I see a lot of the the big hyperscalers going in. Do you think that some of these people kind of they're not this is not their specialty?
Why would they know what they're doing? This is what you do for a living. It's not what they do. Well, on the real estate uh side, um building a data center is not that different than building anything else. It requires a lot of energy, but it requires entitlements, permits, the ability to execute on time, etc., etc.
The technology companies know the insights better than anybody. They know the technology really well. But we know what it takes to get one of these structures up so that they can move their equipment into and get into business quickly. And I think increasingly having a strong balance sheet, having a strong brand, having a 40-year, you know, track record of performing for big global customers is going to be a differentiator.
And like everything else, there's going to be an overinvestment and there's going to be a shakeout. I don't know when, I don't know how, but it always happens. And we certainly hope to be a winner in that business. You know, if you look at history, we've always done better after a crisis. uh because uh it sort of wipes out the field and the ones that were I guess swimming with bathing suits come out um looking pretty good.
Well, look, I want to thank you for everything you've taught us. Uh it is I know we're all getting old, woman's not going to be on TV anymore. It happens to everybody, but I I want to thank you for your wisdom and uh if you have a parting thought to us, please give it right now. Uh Jim, it's been a pleasure working with you.
The only part uh parting thought I have is that the public markets are an excellent way for individuals to gain exposure to the best businesses in the world. And it's ironic that we have a fraction of the companies that we had that are public today and that you know private equity has taken over the world and now we're talking about of course uh the um everyday investors being able to access that business.
much longer conversation, but I think we should not lose of that transition that we're sort of giving up the most transparent way and efficient way of investing in in the future of this uh economy to maybe a somewhat less transparent way. Wow. Okay, that's a great cautionary note. And in the meantime, thank you for all the money you've made for shareholders in a very reasonable never uh I never felt you ever bet the farm on anything, which is kind of what we really need.
That's Hamid Mogadam. is the co-founder, chairman, and CEO of Pro Lodges. Thank you. Thank you. Thank you. Like say there's always a bull market somewhere, and I promise try to find it just for you right here on Man Money. I'm Jim Kramer. See you tomorrow.
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