Two Josh Brown stocks bucking the real estate headwinds: The new data center landlord and a mall owner
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — I’m old enough to remember when people were bullish on Prologis (PLD) because of its reputation as “the landlord of e-commerce” circa 2021. I was trading the stock back then for this exact reason. When Amazon and every other retailer needed warehouse space close to consumers, Prologis had the locations, the scale, and the relationships. That story hasn’t gone away, but there’s a new one running alongside it. The company is now pushing aggressively into data centers, using both conversions of existing warehouses and greenfield developments, with publicly stated ambitions to scale data center capacity to as much as 10 gigawatts over the next decade. Corporate customers tied to U.S. data center construction are making up an increasing share of Prologis’s forward-looking pipeline, as suppliers move their distribution centers closer to data center developments. The world’s largest industrial REIT is quietly becoming a digital infrastructure company, and most investors still have it filed under “e-commerce warehouses.” The benefit of doing our Best Stocks in the Market research is that it forces me to ask why a stock in the “wrong” sector might be among the market’s leaders when most people just hear the name and ticker and revert back to their previously held biases. “Oh, Prologis, that’s that ecommerce REIT I used to hear about during Covid.” Guess again, fat boy. New era, new fundamental driver. Sean’s going to explain to you why Prologis and another REIT everyone thinks they understand, Simon Property Group (SPG) , are acting well this year despite everyone’s concerns over higher interest rates – a well understood negative catalyst for most of the sector. We’re also going to lace you with the usual Monday morning high-level stats from the rest of the list. On a personal note, I want to thank you for understanding our absence last week. I promised my wife a no laptop vacation and our editors here at CNBC Pro let us off the hook for a couple of columns so I could stay married. I know you missed us. We missed you too. But now we’re back, with a vengeance. Let’s do it. As of June 8, there are 184 names on The Best Stocks in the Market list. Top sector ranking: Top industries: Top 5 best stocks by relative strength: Sector spotlight: Real Estate Prologis, Inc. (PLD) Sean — Friday was a weird day in the markets. Besides the obvious AI-winner trade unwinding, rates were higher in reaction to a better-than-expected labor report. The market is (and has been) confirming what we’ve all been thinking. Pending any disasters, we aren’t getting a rate cut this year, and we probably aren’t going to get one anytime soon. Most people would think if rates are not going lower, or worse yet, if rates go higher , real estate is in for further pain. Historically, that’s what usually happens. Here’s the real estate sector spider on the top pane vs the 10-year yield on the bottom: For the most part, it’s a mirror image of each other, until you look at 2026 – where both price and yield go higher. That’s exactly what happened on Friday of last week. Yields popped 12 basis points (not a small move) and real estate finished as one of three sectors in the green, up 1%. In response to that, we wanted to get into the unloved real estate sector to see what’s trending. First up is Prologis (PLD), a name we wrote about in February . Prologis is the world’s largest industrial REIT, owning and operating roughly 758 million square feet of logistics and distribution facilities. The rate-sensitive nature of industrial REITs hit PLD hard in 2022 (-31.32%) and again in 2024 (-18.11%), but YTD in 2026 PLD is up a decent 14%, inclusive of a 3% dividend yield. L ooking at the fundamentals, Q1 2026 was a strong quarter across the board. Total revenues came in at $2.30 billion (up from $2.14 billion a year ago), net income rose 66% to $980 million, and core FFO (funds from operations, think of this like EPS for REITs) per share grew to $1.50 from $1.42. Same-store NOI grew 6.1% with occupancy holding at 95.3%. The company signed a record 64 million square feet of leases and started $2.1 billion in new development — including $1.3 billion in data centers. For full-year 2026, Prologis raised guidance, lifting development expectations to $4.5–$5.5 billion, with roughly 40% allocated to data centers. Josh — Prologis (PLD) has been in a steady uptrend since bottoming out near $105 in the summer of 2025. It seems the evolution of this company into a data center landlord has now become better understood. It’s rallying with the rest of the AI theme. The stock broke out in November and ran to $148 before settling into a multi-month consolidation range just below that level. That sideways action has allowed the 50-day moving average to catch up to price, which now sits at $140 directly beneath the current quote of $144. The next technical event to watch is a clean break and close above $148, which would represent a breakout from that consolidation and open the door to a new leg higher. The RSI is sitting at 55, which is about as neutral as it gets. There is no momentum tailwind here yet. This is a stock that has done its consolidating and may be coiling for the next move. For traders, the stop goes below the 50-day in that $138 to $140 area but I wouldn’t do that. I like it better for an investment than a trade. Instead, consider giving it more room and look to the 200-day at $129 as the line in the sand, though that level is far enough away that a retest there would require a reassessment of the whole trend. Back in March, $129 was support when everyone was worried about the war with Iran. I’d be comfortable betting the buyers show up above that level once again. Simon Property Group, Inc. (SPG) Sean — Simon is a totally different REIT than PLD. Simon Property Group is the largest retail REIT in the U.S., owning and operating 212 domestic and 42 international properties. Its scale and the scarcity of high-quality retail real estate give it a durable moat — no single tenant accounts for more than 5% of consolidated revenues. Simon delivered a solid Q1 2026. Real estate FFO grew 7.5% to $3.17 per share. U.S. mall and premium outlet occupancy hit 96.0%, and retailer sales per square foot reached $819 — an impressive 11.8% year-over-year jump. The company signed over 1,100 leases covering 4.7 million square feet and raised its quarterly dividend 7.1% to $2.25 per share, earning it a 4.4% yield. Full-year 2026 guidance was also raised, with real estate FFO guided to $13.10–$13.25 per share (roughly 5% growth at the midpoint) and management expecting all capital needs to be funded from internally generated cash flow. Josh – Simon Property Group (SPG) just broke out to all-time highs on Friday. That’s where we start. Think about how many market players hear “Simon, oh that’s the malls, I’m not interested in that.” Well, it’s been compounding at 32% a year since the pandemic, so what do they know? The stock spent the back half of 2025 in a steady uptrend, got hit hard in February when the Iran war sell-off dragged everything down, and found its footing right on the 200-day moving average near $180. Buyers showed up, the stock reversed, reclaimed the 50-day, and just made new highs at $210. The buyers had to come in at $180 to save the uptrend and they did. Textbook. That’s the whole story in one sentence. A pullback that held exactly where it needed to hold, and now price is breaking into new territory. RSI at 64 confirms the momentum without flashing any warning signs of being overbought. This is a stock with wind at its back and more room overhead. The investor stop is anchored to that February low near $180, where the 200-day held. If SPG is back below $180, the thesis needs to be revisited. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. 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