Nicholas Uliko's questions to Prologis (PLD) leadership • Q3 2025
Question
Nicholas Uliko asked about the impact of tougher lease expiration comps and COVID leases on the declining cash net effective rent change, and whether an 'occupancy-first' strategy on renewals has impacted mark-to-market.
Answer
CFO Tim Arndt explained that while the lease mark-to-market (net effective) decreased to 19% from 22% last quarter, the immediate rent change remains strong in the low 50s, highlighting the wide potential for rent change. He pointed to the expiration schedule in the supplemental, showing positive rent change (40% next year, then 30%, 20%) even without further market rent growth. He also noted that the aggressiveness in pushing rents, measured by deals lost due to rent, is starting to lift again after grounding to zero in 2023-2024, indicating tightening market conditions.