Prologis, Inc. (PLD)

Prologis reported third-quarter 2026 results on 15 October, with core funds from operations (Core FFO) of $1.60 per diluted share, up from $1.49 a year earlier 1. Net earnings were $0.86 per diluted share, against $0.82, and total revenues were $2,388 million, up from $2,214 million 12.

Chief executive Daniel Letter said customers are running lean on inventory and that excess capacity within their networks has largely cleared 1. The company signed 60 million square feet of leases, and the owned and managed portfolio was 95.6 percent occupied at quarter end 1.

Rent on leases that started or renewed in the quarter rose 38.0 percent on a net effective basis, which measures the average rate over the lease term 12.

For the full year the company narrowed its Core FFO guidance to $6.25 to $6.29 per share from $6.22 to $6.30, and lowered its net earnings guidance to $4.05 to $4.15 from $4.40 to $4.55 1.

The open question is the SEGRO acquisition 3. SEGRO shareholders approved it on 28 September 2026, and the company expects to complete it in the first half of 2027, subject to regulatory approvals 3.

The other thread is data centers 11. Executives said the power pipeline totals 5.8 gigawatts, with 1.7 of it secured 11. Customers serving the data center supply chain were about 10 percent of new leasing worldwide and 17 percent in the U.S. 11.

Prologis, Inc. began operating as a fully integrated real estate company in 1997 and elected to be taxed as a real estate investment trust (REIT) 4. In June 2011 an articles of merger filing changed the name of AMB Property Corporation to Prologis, Inc. 4.

The company then grew by acquiring rivals for stock 10. On 4 February 2020 it completed its all-stock acquisition of Liberty Property Trust for $13.0 billion, including the assumption of debt 10. The deal added a 108 million square foot logistics operating portfolio, and Prologis expected about $120 million of cost and revenue synergies 10.

The larger deal came in October 2022, when Prologis completed its all-stock acquisition of Duke Realty, valued at approximately $23 billion including the assumption of debt 9. It brought 142 million square feet of logistics space in 19 major U.S. markets and about 17 million square feet of developable land 9. Prologis co-founder Hamid Moghadam said the company was gaining more than 500 new customers in key markets 9.

Revenue shows the scale of those years 5. Total revenues were $4.76 billion in 2021, $5.97 billion in 2022 and $8.02 billion in 2023 5.

Part of 2023 came from performance fees 5. Strategic capital revenue, the fees from managing investors' money in its co-investment ventures, was $1.2 billion that year, and the company earned promotes of $675 million from the third-party investors in one U.S. venture 54.

Since then growth has been steadier 4. Total revenues were $8.20 billion in 2024 and $8.79 billion in 2025, as rental revenue rose to $8,159 million from $7,515 million 4. Strategic capital revenue fell to $592 million from $672 million 4.

Occupancy eased over two years 5. The operating portfolio was 97.6 percent occupied at the end of 2023 and 95.6 percent at the end of 2025 54. In 2025 the company said results stayed resilient despite economic disruption tied to tariff policy proposals announced in April 4.

Leasing still set a record 16. The company signed 228 million square feet of leases in 2025, and it expanded its data center power pipeline to 5.7 gigawatts by the fourth quarter 16.

Leadership changed hands at the start of 2026 12. CRE Daily reported that Letter took over as chief executive in January 2026, and the annual report for the year ended 31 December 2025 was signed by Moghadam as executive chairman 124.

Renting logistics buildings

Prologis owns, manages and develops logistics buildings, the warehouses and distribution centers where goods are stored and moved 4. At 30 September 2026 it owned or had investments in properties and projects expected to total about 1.3 billion square feet in 20 countries, leased to about 6,500 customers 2.

Rental operations are the core 4. They generally contribute 90 to 95 percent of revenues, earnings and FFO, and rental revenue was $8,159 million of the $8,790 million total in 2025 4.

Leases are long and rents are being reset upward 4. The average term of leases that started in 2025 in the consolidated operating portfolio was 70 months 4. The chief financial officer said the gap between old and current rents ended the third quarter at 16 percent, about $780 million of embedded net operating income 11.

Where the buildings are and who rents them

The United States holds 815 million square feet and 84 percent of net operating income, Europe 266 million and 9 percent, Other Americas 130 million and 5 percent, and Asia 116 million and 2 percent 2.

Amazon is the largest customer at 5.6 percent of net effective rent, followed by Home Depot at 1.7 percent and FedEx at 1.4 percent; the top ten customers account for 15.3 percent 2.

Prologis also holds land for future building 2. The supplemental report shows $39.7 billion of estimated build out on land it owns or controls, and the balance sheet carries $4.79 billion of land 2.

Development and data centers

The company builds new warehouses, often for a named tenant (build-to-suit), and is adding data centers 4. In the third quarter it started $964 million of development on its own share, and 18.3 percent of those starts were build-to-suit 1.

For the nine months it started $3.9 billion of consolidated development, including $2.1 billion of data centers 3. At 30 September 2026 the consolidated development portfolio had $6.1 billion of expected total investment and was 34.8 percent leased, including $2.6 billion for data centers with 680 megawatts of power capacity 3.

Data centers need electricity first 4. The company lists its ability to secure and grow access to power as a development advantage and plans to convert some logistics sites into energy-ready data center developments 4. Its pipeline is 5.8 gigawatts, and letters of intent from customers cover about 1 gigawatt 11.

Strategic capital: running money for other investors

Prologis partners with large institutional investors in co-investment ventures and earns fees for managing them 4. Ten of the ventures are unconsolidated and one is consolidated, and the company's ownership in them ranges from 15 percent to 55 percent 4.

Third-party assets under management stand at $68.3 billion, and strategic capital revenues were $164 million in the third quarter, up from $150 million 2.

Energy and services

Through Prologis Essentials the company sells customers operational, energy and sustainability services 4. It reports more than 1 gigawatt of solar generation and storage capacity on its owned and managed portfolio 4.

The people

Daniel Letter is chief executive and a director, Timothy Arndt is chief financial officer, Lori Palazzolo is managing director and chief accounting officer, and co-founder Hamid Moghadam is executive chairman 49.

Rivals and current problems

The 10-K says real estate ownership is highly fragmented, with competition from many owners and operators, and that competitively priced space could limit occupancy and rents 4. SEGRO, a British logistics property company, is the target of the pending acquisition 7.

The company said higher interest rates are affecting capital markets, and it lowered its net earnings guidance for 2026 111. CRE Daily reported on 3 November 2026 that Goldman's Jan Hatzius expects AI's growth boost to peak around late 2026, while Apollo's Torsten Slok sees no payoff beyond big tech 13.

Letter said the pipeline the company quotes has not been affected by data center moratoriums, though a pause could slow a project by a quarter or two 11. The 10-K says legal proceedings in the ordinary course are not expected to have a material adverse effect 4.

The umbrella, in words

Prologis, L.P. is a direct subsidiary of Prologis, Inc., and Exhibit 21 counts 373 domestic and 210 foreign subsidiaries 6. It names, among others, Liberty L.P., Duke Realty Limited Partnership and DCT Industrial entities 6.

Three publicly traded vehicles sit under strategic capital: Nippon Prologis REIT in Japan, China AMC Prologis Logistics REIT in China, and FIBRA Prologis in Mexico, which controls and owns more than 99 percent of Terrafina 4. The company owned 20.7 percent of its open-ended venture in China at the end of 2025 4.

Prologis Ventures, its corporate venture group, invests in early and growth-stage companies working on logistics technology 4. The SEGRO acquisition has not closed 3.

Two large holders report stakes in Prologis 1415. BlackRock reported 93,407,943 shares, 10.0 percent of the class, in an amendment with an event date of 31 May 2026 14. Vanguard Capital Management reported 7.52 percent as of 31 March 2026 15.

The main event is the SEGRO acquisition 7. Under the terms, SEGRO shareholders receive 0.0920 new Prologis shares for each SEGRO share, with a partial cash alternative of about £3.5 billion 7. Prologis said it expects completion in the first half of 2027 7.

The company says the combination would create a European operating portfolio of 368 million square feet, expanding its European footprint by 47 percent, and a combined European development pipeline of 13 million square feet 7. It expects a broadly neutral to minimally dilutive effect on Core FFO per share in the first full year after completion 7.

Prologis will apply for a secondary listing on the London Stock Exchange, and approval is a condition of completion 7. It expects to keep its A2 and A credit ratings from Moody's and S&P 7. The deal needs no vote of Prologis shareholders 7.

For 2026 the company's guidance is average occupancy of 95.25 to 95.50 percent and cash same-store net operating income growth of 7.00 to 7.50 percent 1. It expects development starts of $5,000 million to $5,750 million and acquisitions of $2,100 million to $2,300 million on its own share 1.

On data centers, executives said much of the roughly 1 gigawatt under letters of intent should start in 2027, and that 85 percent of the 5.8 gigawatt pipeline can start by 2030 11. They estimate data center supply chain customers will need upwards of 150 million square feet through the end of the decade, and the company plans to publish research on it 11.

To fund the cash portion, the company entered into a £3.6 billion unsecured term loan in August 2026, with borrowing available only once the SEGRO acquisition closes 3. The 10-Q also records a public offering of 17.25 million shares that raised about $2.4 billion in net proceeds 3.

Management also expects build-to-suit projects, buildings made for a named tenant, to be 55 to 65 percent of development starts for the full year 11.

The consolidated development portfolio is expected to be completed before February 2029, with total expected investment of $6.1 billion 3.