Chris Caton: Yeah. I’ll just go further, Craig, as it relates to port activity. We went out on a limb in September with the published research report calling for recovery in market share and that is really, really playing out in the port activities. In November, West Coast ports were up 24% year-on-year, inbound shipments are up even more and that will translate to leasing over time.
Operator: Thank you. And the next question comes from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your question.
Caitlin Burrows: Hi. Good morning, team. Tim, earlier you mentioned how development starts are down maybe two-thirds from the peak, and that you’re seeing little in terms of new starts broadly. When we look at your own build-to-suit split of development, it is up year-over-year and then that earlier question just on customer sentiment. So, I guess, combining all of those pieces, how do you think that impacts your decision to do spec development versus build-to-suit over the course of this year?
Dan Letter: Caitlin, this is Dan. I’ll respond here. A few thoughts for you. First of all, we started just over $1 billion worth of spec in the fourth quarter. So, we had talked over the last several quarters about the decline in starts in the marketplace and that’s when we wanted to come out of the gate here with some starts and that’s what you’re seeing us do right now. We have a pretty healthy guidance here for the 2024 starts, at owned and managed of about $4 billion. And if you think about it, that’s 25 million square feet or so of starts that we could be doing this year. And we have a development portfolio right now of about 50 million square feet. So, we’ve got an appetite for spec. Our build-to-suit volume we think is going to shake out in that 40% range as we’ve projected.
And then keep in mind, we talked about this plenty at the Investor Day, we have $40 billion worth of opportunities in our land bank. And we have the ability to make decisions on a quarterly basis where we’re going to build. We own this land in 50 markets around the globe, 300 different sites. So, plenty of opportunities there.
Operator: And the next question comes from the line of Ki Bin Kim with Truist Securities. Please proceed with your question.
Ki Bin Kim: Thanks, and good morning. I just wanted to touch on the development start guidance of $3 billion plus this year. Can you just help us break that down versus — so traditional industrial versus like data centers or other property types? And does the pre-lease percentage that you’re expecting differ a whole lot? And sorry to add a third here, typically, how long would the data center developments take to cash flow?
Dan Letter: Sure. Ki Bin, this is Dan, I’ll hit that. First of all, we gave some guidance on our data center business 30 days ago at Investor Day. We talked about over the next five years, 20 or so opportunities, 3 gigawatts of data centers, $7 billion to $8 billion worth of investment. Those numbers have not changed. As a matter of fact, one thing we couldn’t disclose at Investor Day was, we started over $500 million worth of data centers in the fourth quarter alone. You won’t see us guide to data centers. These are very lumpy deals. And if you think about our data center opportunities, we own over 5,500 buildings. We own or control over 12,000 acres globally. So we have one of the most important components of data centers.
We control the land, right? We talked about power applications at Investor Day. We talked about a number below 50, that number is now approaching 60. Our team is very active growing that data center pipeline. Then the third component of it would be customers and we’re talking to the big hyperscalers on a regular basis. And we think it’s prudent for us to be careful on how we project out what our data center volume will be because there is a competitive nature to this as well. We’re negotiating with these customers and we think it’s important for us. So we will absolutely share with you, when these projects are on the horizon. But right now, our start volume is largely industrial. And then keep in mind, our data centers business is a part of our long — higher and better use business we’re going to build.
We’re going to merchant build these and we’re going to recycle that capital into the business we love so much which is logistics.
Tim Arndt: Yeah. So your question about how long it will take them to cash flow and there is a wider range than traditional industrial. But I would say on kind of powered shell, it’s more in the 12 month to 15 month range from start. And on turnkey, depending on who does it and whether the customer does it or we do it, it could be longer than that by about a year, because since the installations are pretty complicated to get these going. But all of that is built into the budgets and the economics of the transaction. And this point that Dan made on the negotiating posture is really important. I mean, the last thing we want to do, there are four or five customers out there and it’s pretty obvious given the scale of the numbers they can figure out which project is in our guidance for the next quarter if we wanted to go in that direction, and that basically reduces our leverage. So we’re just not going to do that.
Operator: And the next question comes from the line of Jay Poskitt with Evercore ISI. Please proceed with your question.
