Prologis, Inc. is a global leader in logistics real estate, operating in high-barrier, high-growth markets across 19 countries on four continents **[0000950170-24-014539_pld-20231231.htm:6]** **[0000950170-24-086882_pld-20240630.htm:40]**. The company is structured into two main operating segments: the Real Estate Segment and the Strategic Capital Segment. Prologis focuses on owning, leasing, and developing logistics properties, with rental operations being the primary revenue driver **[0000950170-24-117407_pld-20240930.htm:42]** **[0000950170-24-014539_pld-20231231.htm:8]**. Additionally, the company manages unconsolidated co-investment ventures and has launched new business lines under the Essentials umbrella, focusing on energy, mobility, and operational essentials **[PLD_3391711_1]** **[PLD_3391232_21]**.

1. **Real Estate Segment** - Owns, leases, and develops logistics properties, with rental operations as the primary revenue driver through operating leases and property cost reimbursements **[0000950170-24-117407_pld-20240930.htm:42]** **[0000950170-24-014539_pld-20231231.htm:8]**.
2. **Strategic Capital Segment** - Manages unconsolidated co-investment ventures, generating revenue through asset and property management services, and is capitalized through private and public equity **[0000950170-24-014539_pld-20231231.htm:155]** **[0000950170-24-048421_pld-20240331.htm:27]** **[0000950170-24-086882_pld-20240630.htm:42]**.
3. **Essentials** - Focuses on new business lines in energy, mobility, and operational essentials, expected to grow significantly in the future **[PLD_3391711_1]** **[PLD_3391232_21]**.

b7f362f7adcdcbb209470953563e8df10b656a153e9a3d8a45f7278c22aad7f2

3f23f2ae2971e44faabe27b2924991851351cb15cf233e8565e683b0408f2717

| Metric [USD] (in thousands) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Real Estate Segment         | N/A     | **1,634,000**  **[0000950170-23-015979_pld-20230331.htm:29]**  | **1,651,936**  **[0000950170-23-034768_pld-20230630.htm:33]**  | **1,777,816**  **[0000950170-23-055980_pld-20230930.htm:33]**  | **6,819,000**  **[0000950170-24-014539_pld-20231231.htm:55]**  | **1,828,209**  **[0000950170-24-048421_pld-20240331.htm:28]**  | **1,853,212**  **[0000950170-24-086882_pld-20240630.htm:35]**  | **1,901,022**  **[0000950170-24-117407_pld-20240930.htm:35]**  |
| Strategic Capital Segment   | N/A     | **135,000**  **[0000950170-23-015979_pld-20230331.htm:29]**    | **799,035**  **[0000950170-23-034768_pld-20230630.htm:33]**    | **136,848**  **[0000950170-23-055980_pld-20230930.htm:33]**    | **1,200,000**  **[0000950170-24-014539_pld-20231231.htm:55]**  | **128,412**  **[0000950170-24-048421_pld-20240331.htm:28]**    | **154,742**  **[0000950170-24-086882_pld-20240630.htm:35]**    | **135,367**  **[0000950170-24-117407_pld-20240930.htm:35]**    |
| Total Revenue               | **308,496**  **[0001193125-23-002762_d321579dex991.htm:20]**  | **1,768,600**  **[0000950170-23-015979_pld-20230331.htm:29]**  | N/A     | **1,914,664**  **[0000950170-23-055980_pld-20230930.htm:33]**  | N/A     | **1,956,621**  **[0000950170-24-048421_pld-20240331.htm:28]**  | **2,007,954**  **[0000950170-24-086882_pld-20240630.htm:35]**  | **2,036,389**  **[0000950170-24-117407_pld-20240930.htm:35]**  |

4e6c713dc175ccfd976f76c7dd139c828ecae93be3a089189b3b4129e5eed8da

Total Revenue [USD, Thousands]

Cost of Goods Sold (COGS) [USD, Thousands]

SG&A [USD, Thousands]

R&D [USD, Thousands]

D&A [USD, Thousands]

Interest Expense [USD, Thousands]

Operating Income (EBIT) [USD, Thousands]

Net Income [USD, Thousands]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

966fd66a0853dfb4c7d6e0d8b31ca5bc5667af0c9669a7aaa4a5602bb09a2b95

| Metric (in thousands) | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2023 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2022 |
|-----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **U.S.**              | $1,757,371  **[0000950170-24-048421_pld-20240331.htm:28]**  | $1,781,805  **[0000950170-24-086882_pld-20240630.htm:35]**  | $1,819,965  **[0000950170-24-117407_pld-20240930.htm:35]**  | N/A     | $1,574,567  **[0000950170-23-015979_pld-20230331.htm:29]**  | $1,586,000  **[0000950170-23-034768_pld-20230630.htm:33]**  | $1,705,656  **[0000950170-23-055980_pld-20230930.htm:33]**  | N/A     |
| **Other Americas**    | $29,723  **[0000950170-24-048421_pld-20240331.htm:28]**     | $31,159  **[0000950170-24-086882_pld-20240630.htm:35]**     | $34,604  **[0000950170-24-117407_pld-20240930.htm:35]**     | N/A     | $25,572  **[0000950170-23-015979_pld-20230331.htm:29]**     | $26,600  **[0000950170-23-034768_pld-20230630.htm:33]**    | $29,442  **[0000950170-23-055980_pld-20230930.htm:33]**     | N/A     |
| **Europe**            | $28,733  **[0000950170-24-048421_pld-20240331.htm:28]**     | $25,695  **[0000950170-24-086882_pld-20240630.htm:35]**     | $28,858  **[0000950170-24-117407_pld-20240930.htm:35]**     | N/A     | $19,156  **[0000950170-23-015979_pld-20230331.htm:29]**     | $21,100  **[0000950170-23-034768_pld-20230630.htm:33]**    | $29,101  **[0000950170-23-055980_pld-20230930.htm:33]**     | N/A     |
| **Asia**              | $12,382  **[0000950170-24-048421_pld-20240331.htm:28]**     | $14,553  **[0000950170-24-086882_pld-20240630.htm:35]**     | $17,595  **[0000950170-24-117407_pld-20240930.htm:35]**     | N/A     | $14,591  **[0000950170-23-015979_pld-20230331.htm:29]**     | $18,000  **[0000950170-23-034768_pld-20230630.htm:33]**    | $13,617  **[0000950170-23-055980_pld-20230930.htm:33]**     | N/A     |

c1cb1bf701079b80c174ca9efc5d0646a74021a0b7390ffcb78798fbb0860fb6

9ed693d7255074e9056929664bdb16fa2bebb068e31074c0a327891f7c9ff4e9

1. Despite noting that market rents decreased approximately 3% globally this quarter, with Southern California being a significant contributor  **[PLD_3402892_2]** , you've raised your acquisition guidance for the second straight quarter  **[PLD_3402892_4]** . How do you reconcile increasing acquisition activity with the softening rent environment, and what gives you confidence in pursuing acquisitions amid these market conditions?

2. You've mentioned an uptick in lease commencements with terms less than one year, attributed to customer uncertainty and strategic positioning on rents  **[PLD_3402892_12]** . How does this trend of shorter lease terms impact your long-term leasing strategy and vacancy risk, and what measures are you taking to mitigate potential impacts on occupancy and rent growth?

3. Given that vacancies are up and customers are taking longer to make decisions due to uncertainties, yet you reported strong leasing activity in Q3  **[PLD_3402892_4]** , what catalysts do you foresee that will prompt customers to move from hesitant to more active in 2025, and how are you positioning the company to capitalize on potential demand recovery?

4. With the reduction in your development starts guidance due to slow decision-making in build-to-suits and deferring new speculative development amidst stubborn demand  **[PLD_3402892_3]** , how do you plan to manage growth initiatives in light of these challenges, and what is your outlook for development activity as market conditions evolve?

5. You've tightened and slightly reduced your net effective same-store growth forecast due to increased noncash write-offs from higher bankruptcies expected in the balance of the year  **[PLD_3402892_2]** . Do you anticipate this trend of rising bankruptcies to continue, and how might this affect your future financial performance and risk management strategies?

63e10abb030e4f1b491aa56a6bb1623bcf98598efaea5722b9b29eee4fe28dce

Real Estate

- Rental Revenues

- Development Management and Other Revenues

Strategic Capital

- Recurring Fees

- Transactional Fees

- Promote Revenue

Real Estate Operations Segment

Strategic Capital Segment

Total Revenue

c16674e51ad8e306331a1bbc22a39062664aed9d795e53ad308f764372531af3

1. **Demand and Occupancy Outlook**  
   **Q:** Why is demand softening, and how does it affect occupancy?  
   **A:** Management notes that demand has been subdued due to a combination of factors, including softness in Southern California and other high-rent markets where leasing velocity and rent growth are below expectations. Deferred decision-making by customers has led aggregate demand to be below prior expectations. About **half** of their adjustments are coming from Southern California. They expect occupancy to decline due to lower pre-leasing activity, resulting in a lower average occupancy this year. [\[0\]](0) [\[2\]](2)

2. **Guidance Adjustments and Conservatism**  
   **Q:** How conservative is guidance; risk of further revisions?  
   **A:** Management aims to provide guidance as close as possible to expectations, with a slight bit of conservatism. They acknowledge that conditions could change but strive not to regularly disappoint investors. Adjustments are based on market tone and anticipation of slower demand, not due to undisclosed issues in the portfolio. [\[4\]](4) [\[3\]](3)

3. **Southern California Market Weakness**  
   **Q:** Details on SoCal softness and recovery confidence?  
   **A:** Southern California continues to soften, with the weakest area being midsized and smaller units in the Inland Empire. Orange County remains strong, and Los Angeles has a **4% vacancy rate**. Management is confident in recovery due to factors like the resolution of port labor issues and the expected return of port volume, which can tighten the market quickly. [\[7\]](7) [\[8\]](8)

4. **Reduction in Development Starts**  
   **Q:** What's behind the reduced development starts?  
   **A:** Due to shifting demand and occupancy, development starts are reduced by **$0.5 billion**, split roughly equally between build-to-suit and speculative projects. Management is raising the bar on speculative development but can initiate projects at any time since they own the land and have entitlements in place. [\[6\]](6)

5. **Rent Growth Expectations**  
   **Q:** How has rent growth outlook changed?  
   **A:** Over the next three years, rent growth is expected to be at the lower end of the prior **4% to 6%** forecast, likely around **3% to 4%**. In the first quarter, Southern California rents declined **6%**, while overall U.S. rents were down about **1%**. [\[14\]](14)

6. **Supply and Vacancy Rates**  
   **Q:** What's the updated view on demand and vacancy rates?  
   **A:** The demand forecast for 2024 has been revised down from **250 million square feet** to **175 million** in the U.S. Vacancy rates are expected to peak in the **mid-6%** range later this year but should decline towards **5%** over the next year due to a significant falloff in supply. [\[12\]](12)

7. **Merchant Developer Distress and Opportunities**  
   **Q:** Are other landlords increasing concessions?  
   **A:** Management observes that some merchant developers are becoming distressed due to financing pressures, offering acquisition opportunities. Prologis is engaging with these developers to capitalize on the situation. [\[15\]](15)

8. **Geopolitical Risks and Interest Rates Impact**  
   **Q:** How are geopolitical risks affecting customers?  
   **A:** Geopolitical events and an increase in interest rates by **70 to 80 basis points** are causing customers to delay decisions, especially discretionary ones, impacting leasing activity. [\[10\]](10)

9. **Development Margins and Occupancy Decline**  
   **Q:** Are low development margins reflecting occupancy decline?  
   **A:** The lower development margins this quarter are due to an isolated project affected by weather and infrastructure issues. Excluding this project, margins would be a more reasonable **15% to 16%**. There is no connection to occupancy decline. [\[3\]](3)

10. **Tenant Behavior and Rent Elasticity**  
    **Q:** Are tenants becoming more cost-conscious?  
    **A:** Tenants are deferring expansion decisions due to cost considerations but are not significantly downsizing or relocating to less expensive markets. Management believes that deferred demand will convert to real demand in the coming quarters. [\[13\]](13)

bb3f3b678be141454a85386adb6123a348566c91d0eb864bd429818ef0c80ab6

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **General and Administrative (G&A) Expenses**: $415 million to $425 million  **[PLD_3402892_3]** .
  2. **Strategic Capital Revenue**: $525 million to $535 million  **[PLD_3402892_3]** .
  3. **Development Starts**: $1.75 billion to $2.25 billion  **[PLD_3402892_3]** .
  4. **Acquisition Guidance**: $1.75 billion to $2.25 billion  **[PLD_3402892_3]** .
  5. **Contribution and Disposition Activity**: $3 billion to $4 billion  **[PLD_3402892_3]** .
  6. **GAAP Earnings**: $3.35 to $3.45 per share  **[PLD_3402892_3]** .
  7. **Core Funds From Operations (FFO)**:
     - Including net promote expense: $5.42 to $5.46 per share  **[PLD_3402892_3]** .
     - Excluding net promote expense: $5.49 to $5.53 per share  **[PLD_3402892_3]** .
  8. **Development Gain Guidance**: $375 million to $425 million  **[PLD_3402892_3]** .
  9. **Average Occupancy**: 96% to 96.5%  **[PLD_3402892_2]** .
  10. **Cash Same-Store Growth**: 6.5% to 7%  **[PLD_3402892_2]** .
  11. **Net Effective Same-Store Growth**: 5.5% to 6%  **[PLD_3402892_2]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Acquisitions Guidance**: $1 billion to $1.5 billion  **[PLD_3393394_3]** .
  2. **Dispositions and Contributions Guidance**: $2.75 billion to $3.65 billion  **[PLD_3393394_3]** .
  3. **GAAP Earnings**: $3.25 to $3.45 per share  **[PLD_3393394_3]** .
  4. **Core FFO**:
     - Excluding net promote expense: $5.46 to $5.54 per share  **[PLD_3393394_3]** .
     - Including promotes: $5.39 to $5.47 per share  **[PLD_3393394_3]** .
  5. **Core Earnings Growth**: Nearly 8% growth at the midpoint  **[PLD_3393394_3]** .
  6. **Average Occupancy**: Maintained forecast  **[PLD_3393394_2]** .
  7. **Same-Store Growth**: Maintained forecast  **[PLD_3393394_2]** .
  8. **G&A Expenses**: Maintained forecast  **[PLD_3393394_2]** .
  9. **Development Starts and Stabilizations**: Maintained forecast  **[PLD_3393394_2]** .
  10. **Strategic Capital Revenue**: Lowered by $10 million  **[PLD_3393394_2]** .
  11. **Retention Rate**: 70% to 80%  **[PLD_3393394_11]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Average Occupancy**: 95.75% to 96.75%  **[PLD_3379932_3]** .
  2. **Same-Store Growth**:
     - Net effective basis: 5.5% to 6.5%  **[PLD_3379932_3]** .
     - Cash basis: 6.25% to 7.25%  **[PLD_3379932_3]** .
  3. **Strategic Capital Revenue**: $530 million to $550 million  **[PLD_3379932_3]** .
  4. **G&A Expenses**: $415 million to $430 million  **[PLD_3379932_3]** .
  5. **Development Start Guidance**: $2.5 billion to $3 billion  **[PLD_3379932_3]** .
  6. **GAAP Earnings**: $3.15 to $3.35 per share  **[PLD_3379932_3]** .
  7. **Core FFO**:
     - Including net promote expense: $5.37 to $5.47 per share  **[PLD_3379932_3]** .
     - Excluding promotes: $5.45 to $5.55 per share  **[PLD_3379932_3]** .
  8. **Core Earnings Growth**: Nearly 8% at the midpoint  **[PLD_3379932_3]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Average Occupancy**: 96.5% to 97.5%  **[PLD_3370331_3]** .
  2. **Cash Same-Store Growth**: 8% to 9%  **[PLD_3370331_3]** .
  3. **Net Effective Same-Store Growth**: 7% to 8%  **[PLD_3370331_3]** .
  4. **G&A Expenses**: $420 million to $440 million  **[PLD_3370331_3]** .
  5. **Strategic Capital Income**: $530 million to $550 million  **[PLD_3370331_3]** .
  6. **Stabilization Activity**: $3.6 billion to $4 billion  **[PLD_3370331_3]** .
  7. **Development Starts**: $3 billion to $3.5 billion  **[PLD_3370331_3]** .
  8. **Sales Portfolios Proceeds**: $800 million to $1.2 billion  **[PLD_3370331_3]** .
  9. **Contributions to Strategic Capital Vehicles**: $1.75 billion to $2.25 billion  **[PLD_3370331_3]** .
  10. **GAAP Earnings**: $3.20 to $3.45 per share  **[PLD_3370331_3]** .
  11. **Core FFO, Excluding Promotes**: $5.50 to $5.64 per share  **[PLD_3370331_3]** .
  12. **Core FFO, Including Net Promote Expense**: $5.42 to $5.56 per share  **[PLD_3370331_3]** .

81bea0ad9f116b4dcd0003dc7d84a37639ca1bd5a81815fee2059af2470cc8a3

cb57f73c8024cb5b203ec9c6fc5d267487de1d420f7bd258000921223108d66f

Prologis Share of Same Store Property NOI - Net Effective ($ million)

Prologis Share of Same Store Property NOI - Cash ($ million)

Number of Operating Properties

Consolidated Properties (Number)

Unconsolidated Properties (Number)

Consolidated Square Feet (million)

Unconsolidated Square Feet (million)

Percentage Occupied (Consolidated)

Percentage Occupied (Unconsolidated)

Estimated Value Creation ($ million)

b4b78c6ad86d6895246740a3adece514e2429349fd4d8a5310db9841863a63d3

2c6136ddc300e50e06918f461ab74add6d5b5481029c36c4e59f3d4ab563a908

| Name               | Position                                           | Start Date         | Short Bio                                                                                                                                                                                                 |
|--------------------|----------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Hamid R. Moghadam  | Chairman of the Board and CEO                      | December 2012      | Hamid R. Moghadam has been the **Chairman of the Board** since **January 2000** and a **Director** since **November 1997**. He became the **CEO** at the end of **December 2012**  **[0001193125-24-070135_d550115dpre14a.htm:12]** **[0001193125-24-081522_d550115ddef14a.htm:12]** .                                                      |
| Timothy D. Arndt   | Chief Financial Officer                            | April 2022         | Timothy D. Arndt has been the **CFO** since **April 2022**. He joined Prologis in 2004 and served as treasurer from December 2013 to April 2022  **[0001193125-24-070135_d550115dpre14a.htm:29]** **[0001193125-24-081522_d550115ddef14a.htm:29]** .                                                                                         |
| Carter H. Andrus   | Chief Operating Officer                            | January 2024       | Carter H. Andrus has been the **COO** since **January 2024**. He was previously the global head of operations from January 2022 to January 2024  **[0001193125-24-081522_d550115ddef14a.htm:29]** **[0001193125-24-070135_d550115dpre14a.htm:29]** .                                                                                         |
| Joseph Ghazal      | Chief Investment Officer                           | January 2024       | Joseph Ghazal has been with Prologis for **23 years** and became the **CIO** in **January 2024**. He was previously the Global Head of Capital Deployment  **[0001193125-24-081522_d550115ddef14a.htm:29]** **[PLD_3369468_13]** .                                                                               |
| Edward S. Nekritz  | Chief Legal Officer, General Counsel, and Secretary| June 2011          | Edward S. Nekritz has served as the **Chief Legal Officer, General Counsel, and Secretary** since the merger in **June 2011**. He joined the Trust in **September 1995**  **[0001193125-24-070135_d550115dpre14a.htm:29]** **[0001193125-24-081522_d550115ddef14a.htm:29]** .                                                               |
| Colleen McKeown    | Chief Human Resources Officer                      | N/A                | The documents do not provide specific information about Colleen McKeown's start date or detailed biography as the Chief Human Resources Officer [N/A].                                                                                         |
| Deborah K. Briones | Upcoming Chief Legal Officer and General Counsel   | January 1, 2025    | Deborah K. Briones will assume the role of **Chief Legal Officer, General Counsel, and Secretary** effective **January 1, 2025**. She has been with Prologis since **2004**  **[0001193125-24-144502_d816407d8k.htm:1]** **[0001193125-24-144502_d816407dex991.htm:0]** .                                                            |
| Nathaalie Carey    | Upcoming Chief Human Resources Officer             | January 1, 2025    | The documents do not provide specific information about Nathaalie Carey or her start date as the upcoming Chief Human Resources Officer [N/A].                                                                                                 |

98f601d37f5a7a591b52e8b5aec37d6a97e61328b0e0dfc9ea148be6eb48a880

- U.S.

- Other Americas

- Europe

- Asia

Unconsolidated Co-Investment Ventures

c450a45ebb44be691454a15f709783e9c8fad1f43b8dd005e5d53fdc3a0243eb

**Annual guidance for FY 2024:**
- **General and Administrative (G&A) Expenses**: $415 million to $425 million  **[PLD_3402892_3]**  (no prior guidance)  
- **Strategic Capital Revenue**: $525 million to $535 million  **[PLD_3402892_3]**  (no prior guidance)  
- **Development Starts**: $1.75 billion to $2.25 billion  **[PLD_3402892_3]**  (no prior guidance)  
- **Acquisition Guidance**: $1.75 billion to $2.25 billion  **[PLD_3402892_3]**  (raised from $1 billion to $1.5 billion  **[PLD_3393394_3]** )  
- **Contribution and Disposition Activity**: $3 billion to $4 billion  **[PLD_3402892_3]**  (raised from $2.75 billion to $3.65 billion  **[PLD_3393394_3]** )  
- **GAAP Earnings**: $3.35 to $3.45 per share  **[PLD_3402892_3]**  (raised from $3.25 to $3.45 per share  **[PLD_3393394_3]** )  
- **Core FFO (Including net promote expense)**: $5.42 to $5.46 per share  **[PLD_3402892_3]**  (raised from $5.39 to $5.47 per share  **[PLD_3393394_3]** )  
- **Core FFO (Excluding net promote expense)**: $5.49 to $5.53 per share  **[PLD_3402892_3]**  (raised from $5.46 to $5.54 per share  **[PLD_3393394_3]** )  
- **Development Gain Guidance**: $375 million to $425 million  **[PLD_3402892_3]**  (no prior guidance)  
- **Average Occupancy**: 96% to 96.5%  **[PLD_3402892_2]**  (no prior guidance)  
- **Cash Same-Store Growth**: 6.5% to 7%  **[PLD_3402892_2]**  (no prior guidance)  
- **Net Effective Same-Store Growth**: 5.5% to 6%  **[PLD_3402892_2]**  (no prior guidance)  

9ab0e4ddeef8137002f7049e18080f59621a9e85dad747ce9699c76def417350

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 2002  **[0000950170-24-014539_pld-20231231.htm:97] [0000950170-24-014539_pld-20231231.htm:99]**  | Present  | Current auditor   |

38b49fb817f1b1181cb8a9daea722fcc6c1919078ad4bdec38c97d5647c39007

- Total Revenue: $2,036 million (+6% YoY)  **[0000950170-24-117407_pld-20240930.htm:11]** **[0000950170-24-117407_pld-20240930.htm:6]** **[0000950170-23-055980_pld-20230930.htm:11]** **[0000950170-23-055980_pld-20230930.htm:6]**   
- Real Estate: $1,901 million (+7% YoY)  **[0000950170-24-117407_pld-20240930.htm:35]** **[0000950170-23-055980_pld-20230930.htm:33]**   
- **Operating Income (EBIT)**: $1,251 million (+42% YoY)  **[0000950170-24-117407_pld-20240930.htm:11]** **[0000950170-24-117407_pld-20240930.htm:6]** **[0000950170-23-055980_pld-20230930.htm:11]** **[0000950170-23-055980_pld-20230930.htm:6]**   
- **Interest Expense**: $230 million (-52% YoY)  **[0000950170-24-117407_pld-20240930.htm:11]** **[0000950170-24-117407_pld-20240930.htm:6]** **[0000950170-23-055980_pld-20230930.htm:11]** **[0000950170-23-055980_pld-20230930.htm:6]**   

Geographic Highlights (YoY):  
- U.S.: -13%  **[0000950170-24-117407_pld-20240930.htm:35]** **[0000950170-23-055980_pld-20230930.htm:33]**   
- **Other Americas**: +16%  **[0000950170-24-117407_pld-20240930.htm:35]** **[0000950170-23-055980_pld-20230930.htm:33]**   
- Europe: +10%  **[0000950170-24-117407_pld-20240930.htm:35]** **[0000950170-23-055980_pld-20230930.htm:33]**   
- Asia: -6%  **[0000950170-24-117407_pld-20240930.htm:35]** **[0000950170-23-055980_pld-20230930.htm:33]**   

87622fba9f79b54c3bed8a97edb15e4b8f53a641661c0b3279c1b997d0ac10d0

6ca72ab709b2e4c20240d419ddbc1cd7674b16b34fad0b3c659ad154e741488b

a1bac421acaa85cad95af01ead85e4a0c43c00919d94d470ee1360e1017642f6

| Year | Amount Due (in billions) | Debt Type         | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|-----------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | 0.002 **[0000950170-24-117407_pld-20240930.htm:25]**                | Secured Mortgage     | 4.0 **[0000950170-24-117407_pld-20240930.htm:65]**           | 0.01% = (0.002 / 32.29) * 100 **[0000950170-24-117407_pld-20240930.htm:25]** **[0000950170-24-117407_pld-20240930.htm:65]**                                      |
| 2025     | 0.540 **[0000950170-24-117407_pld-20240930.htm:25]**                | Unsecured Senior Notes, Term Loans, Secured Mortgage | 3.4 **[0000950170-24-117407_pld-20240930.htm:65]** | 1.7% = (0.540 / 32.29) * 100 **[0000950170-24-117407_pld-20240930.htm:25]** **[0000950170-24-117407_pld-20240930.htm:65]**                                      |
| 2026     | 2.067 **[0000950170-24-117407_pld-20240930.htm:25]**                | Unsecured Senior Notes, Term Loans | 3.3 **[0000950170-24-117407_pld-20240930.htm:65]**           | 6.4% = (2.067 / 32.29) * 100 **[0000950170-24-117407_pld-20240930.htm:25]** **[0000950170-24-117407_pld-20240930.htm:65]**                                      |
| 2027     | 2.678 **[0000950170-24-117407_pld-20240930.htm:25]**                | Unsecured Senior Notes, Term Loans, Secured Mortgage | 2.2 **[0000950170-24-117407_pld-20240930.htm:65]** | 8.3% = (2.678 / 32.29) * 100 **[0000950170-24-117407_pld-20240930.htm:25]** **[0000950170-24-117407_pld-20240930.htm:65]**                                      |
| 2028     | 2.701 **[0000950170-24-117407_pld-20240930.htm:25]**                | Unsecured Senior Notes, Term Loans, Secured Mortgage | 3.2 **[0000950170-24-117407_pld-20240930.htm:65]** | 8.4% = (2.701 / 32.29) * 100 **[0000950170-24-117407_pld-20240930.htm:25]** **[0000950170-24-117407_pld-20240930.htm:65]**                                      |
| Thereafter | 24.896 **[0000950170-24-117407_pld-20240930.htm:25]**             | Unsecured Senior Notes, Term Loans, Secured Mortgage | 3.2 **[0000950170-24-117407_pld-20240930.htm:65]** | 77.1% = (24.896 / 32.29) * 100 **[0000950170-24-117407_pld-20240930.htm:25]** **[0000950170-24-117407_pld-20240930.htm:65]**                                    |

fefb64964ca688c0c6b32cf0cd8b9d84690b107f684d5fa9626315143e513fb2

07cc32a4e0de1ca4fb570faca09240f9a086c69cfd4cf1de8993504039e68ff0

- **Prologis has a substantial land bank with $38 billion worth of embedded opportunities**, allowing them to rapidly initiate up to $10-12 billion of projects, positioning them for significant future growth.  **[PLD_3379932_10]**
- **They maintain confidence in their long-term outlook for 2025 and 2026**, underscoring resilience and strong strategic positioning despite short-term adjustments.  **[PLD_3379932_18]**
- **Strong demand and market rent growth in key markets such as Mexico, Texas, Southeast U.S., Pennsylvania, Netherlands, and Germany** support future earnings growth prospects.  **[PLD_3379932_12]**

b400c0bb18c2897ca3fa1e5859fc458f5f3b4b26f7bb21738d40585b8e89a542

- **Prologis reduced its development starts guidance by about $0.5 billion**, reflecting expectations of shifting demand and raising the bar on speculative projects. This reduction includes both build-to-suit and speculative developments.  **[PLD_3379932_10]**
- **Occupancy and rent growth are lower than previously expected**, particularly in high-rent markets like Southern California, where **vacancy rates are rising** and **leasing velocity has been subdued**. This softness is also observed in other markets such as **New Jersey, Seattle, and Savannah**.  **[PLD_3379932_4]** **[PLD_3379932_11]**
- Management has **lowered its internal demand forecast for U.S. net absorption from 250 million square feet to 175 million square feet** for the year, indicating an expectation of **weaker demand** in the near term.  **[PLD_3379932_16]**

e1f16dfabba6ea6db5e1ac455d8e88901c531137f031edd6f650ee9719e9401b

1. **Market Rent Growth Outlook**  
   **Q:** How do rent growth forecasts align with prior guidance?  
   **A:** Management confirms that near-term rent growth remains soft, with market rents declining **3% this quarter**.  **[PLD_3402892_15]**  They anticipate softness to persist into the middle of next year but highlight that **replacement cost rents are 15% higher** than current market rents.  **[PLD_3402892_4]**  They stress that long-term earnings won't be significantly impacted and expect rent recovery beginning late next year and accelerating thereafter.  **[PLD_3402892_4]** **[PLD_3402892_15]** 

2. **Demand Recovery Timing**  
   **Q:** When will customer demand pick up and utilization improve?  
   **A:** Management notes that customers are engaged but taking longer to make decisions due to spare capacity in supply chains.  **[PLD_3402892_4]**  They observe that **utilization has increased from below 84% at the start of the year to mid-84% now**, indicating customers are working through spare capacity.  **[PLD_3402892_4]** **[PLD_3402892_10]**  They expect demand recovery to emerge late next year and accelerate into 2026, but the exact timing is uncertain.  **[PLD_3402892_4]** **[PLD_3402892_10]** 

3. **Core FFO Beat vs. Guidance**  
   **Q:** Why did you only raise full-year guidance by $0.01 despite a $0.06 beat?  
   **A:** Management explains that the perceived beat was due to previously forecasted events, including gains from **Prologis Ventures exits and tax items**.  **[PLD_3402892_5]**  They do not consider it a beat and note that currency gains were largely unrealized and hedged.  **[PLD_3402892_5]**  Therefore, they only modestly raised full-year guidance as these events were already contemplated.  **[PLD_3402892_5]** 

4. **Capital Deployment and Funding**  
   **Q:** How will you fund increased acquisitions and what's planned?  
   **A:** Management expresses confidence in their **long-term outlook**, with increased acquisitions reflecting that confidence.  **[PLD_3402892_4]** **[PLD_3402892_7]**  They have significant balance sheet capacity and anticipate more normalized levels of capital recycling soon.  **[PLD_3402892_7]**  Acquisitions are globally spread, focusing on markets where they seek to build additional scale.  **[PLD_3402892_4]** **[PLD_3402892_7]**  Funding will come from their strong balance sheet and improved strategic capital fundraising.  **[PLD_3402892_7]** 

5. **Occupancy and Vacancy Trends**  
   **Q:** When does availability peak, and how will occupancy affect earnings?  
   **A:** Management expects market vacancies to peak later this year but suggests the peak may extend into early next year due to cautious demand.  **[PLD_3402892_10]**  Recovery is expected to emerge later next year and accelerate into 2026.  **[PLD_3402892_10]**  They note that forecasting occupancy is challenging but acknowledge that declining occupancy could be a headwind for same-store growth.  **[PLD_3402892_10]** 

6. **Asian E-commerce and 3PL Demand**  
   **Q:** Is increased demand from Asian 3PLs sustainable?  
   **A:** Management confirms they are leasing with these customers and expect them to continue leasing into next year and beyond.  **[PLD_3402892_11]** **[PLD_3402892_16]**  They note that **Asian 3PLs represent roughly 20% of net absorption this year**.  **[PLD_3402892_11]**  Growth is driven by shifts in business models due to past tariffs and the acceleration of Asian imports, which are up **21% since 2019**.  **[PLD_3402892_11]**  They apply rigorous credit evaluations to these customers.  **[PLD_3402892_11]** 

7. **Digital and Energy Business Update**  
   **Q:** What's the progress on digital and energy initiatives?  
   **A:** Management reports progress in their energy business, with over **50 megawatts of new solar starts** this quarter, expanding globally.  **[PLD_3402892_8]**  In data centers, they have **1.6 gigawatts of secured power**, with **490 megawatts under construction**, and are building internal capabilities.  **[PLD_3402892_8]**  A portion of development starts this quarter includes a powered shell converted to a turnkey data center deal.  **[PLD_3402892_8]** 

8. **CapEx Increase Explanation**  
   **Q:** What drove the jump in CapEx this quarter?  
   **A:** The increase in CapEx is attributed to significant leasing activity, particularly in **Southern California**, where high rents lead to higher commissions.  **[PLD_3402892_13]**  Property improvement expenses can be lumpy between quarters, but on a trailing 12-month basis, they are normal.  **[PLD_3402892_13]** 

9. **Regional Occupancy Trends**  
   **Q:** Why did occupancy in Asia and Latin America decline?  
   **A:** Management attributes occupancy declines primarily to impacts in **China**, with some oversupply issues in **Japan**.  **[PLD_3402892_13]**  While the U.S. portfolio is stabilizing, Asia and Latin America have experienced setbacks due to regional factors.  **[PLD_3402892_13]** 

10. **Short-term Lease Trends**  
    **Q:** Why are there more leases under one year?  
    **A:** Management notes that some customers opt for shorter-term leases due to uncertainty.  **[PLD_3402892_12]**  Additionally, in certain markets, they strategically offer shorter leases anticipating rent recovery and preferring to reset rents sooner.  **[PLD_3402892_12]** 

11. **Net Absorption and Supply Completions**  
    **Q:** What were net absorption and completions this quarter?  
    **A:** Net absorption was **40 million square feet**, and completions were **63 million square feet** in the U.S..  **[PLD_3402892_9]**  Deliveries have declined from a peak of **135 million square feet per quarter** a year ago and are expected to continue declining.  **[PLD_3402892_9]**  The under-construction pipeline is at its lowest point since 2017.  **[PLD_3402892_9]** 

12. **Development Stabilization Guidance**  
    **Q:** Any regions driving higher development stabilization?  
    **A:** Management states that their development book is spread globally, with no specific regions driving higher stabilization guidance.  **[PLD_3402892_14]** 

de565a20177603ac581261d1c77ca329b14ca6d7eeedbdeb675c0bee90dae26e

- **Prologis expects global market rents to decline modestly in the next 12 months, projecting a decrease of **2% to 5%**, primarily due to softness in Southern California.**  **[PLD_3393394_12]** ,  **[PLD_3393394_6]**
- **Southern California, which accounts for **23%** of Prologis' rents rolling over in the next 12 months, is experiencing both an expansion in concessions and a reduction in base rents, negatively impacting the company's mark-to-market opportunities.**  **[PLD_3393394_12]**
- **Macroeconomic uncertainties—including wars, interest rate inflection points, and the upcoming presidential election—make predicting market cycles difficult, leading to caution in Prologis' outlook and potential delays in market recovery.**  **[PLD_3393394_16]**

34d5b5e105691e75b8f45be7dbbe717bedcce6be5317097c2f176d07c22760b4

- **Conditions remained soft in many of Prologis's markets**, with **net absorption below pre-COVID levels**, impacting rents. **Globally, market rents decreased approximately 3% this quarter**.  **[PLD_3402892_2]**
- **Higher bankruptcy filings are affecting revenues**, with bad debt impacting revenues by approximately **35 basis points**, elevated from the normal **15-20 basis points**. The company expects **higher bankruptcies in the balance of the year**, leading to increased noncash write-offs.  **[PLD_3402892_1]** **[PLD_3402892_2]**
- **Demand remains soft in Southern California**, with **Class A outperforming Class B properties**. The excess capacity in this key market will take time to work through, potentially impacting rents and occupancy.  **[PLD_3402892_2]** **[PLD_3402892_6]**

5ac55ceefc9f25fdd15be9bb691f9d0abf4fd9ace7c4e8c66da4568497fb5286

1. **Rent Growth Outlook**  
   **Q:** What are your rent growth expectations going forward?  
   **A:** We anticipate that effective rents will be modestly negative over the next 12 months, particularly influenced by Southern California, with overall rent declines ranging from **2% to 5%** before inflecting upwards. Despite recent quarters of negative market rent growth, we've achieved significant rent change and NOI growth, with a **74% increase**, one of our highest quarters.  **[PLD_3393394_6]**   **[PLD_3393394_12]** 

2. **Occupancy Trends and Guidance**  
   **Q:** Can you discuss occupancy trends and future guidance?  
   **A:** Our year-to-date average occupancy is around **96.6%**, and while we anticipate some challenges due to tougher lease renewals and longer lease-up times, we feel confident in maintaining occupancy within our guided range. We expect retention rates to average around **75%** in the coming quarters.  **[PLD_3393394_4]**   **[PLD_3393394_13]** 

3. **Demand Trends and Outlook**  
   **Q:** How are demand trends across different sizes and geographies?  
   **A:** Demand remains strong, especially in the Southeastern U.S., Latin America, and Europe. Larger spaces above **100,000 square feet**, particularly over **250,000** and **500,000 square feet**, are seeing the strongest demand momentum. Demand below **100,000 square feet** is stable, with vacancies especially low.  **[PLD_3393394_5]** 

4. **Southern California Market Impact**  
   **Q:** How is the Southern California market affecting your performance?  
   **A:** Southern California is a unique case with both an expansion in concessions and a reduction in base rent. It accounts for about **23%** of our rents over the next 12 months. Despite projected declines, it offers significant mark-to-market opportunities, providing downside protection on expiring rents. The impact is expected to stabilize over the next **12 months**.  **[PLD_3393394_6]**   **[PLD_3393394_12]** 

5. **Transaction Market Activity**  
   **Q:** What are you seeing in terms of transaction market activity?  
   **A:** The transaction market has normalized with increased activity. We've outperformed in dispositions, prompting us to raise our guidance. The market is strong with multiple offers on portfolios, especially in the **$100 million to $200 million** range. This opens up exciting acquisition opportunities for us globally.  **[PLD_3393394_10]**   **[PLD_3393394_18]** 

6. **Development Pipeline and Margins**  
   **Q:** Can you update us on your development pipeline and margins?  
   **A:** Our development portfolio, valued at **$6 billion** and comprising **35 million square feet**, is trending towards our long-term margin of **24% to 25%**. Despite some slowdown in development leasing, we feel very good about our portfolio, matching our 20-year average margins in the high **20%** range.  **[PLD_3393394_8]** 

7. **Impact of Tariffs on Industrial Real Estate**  
   **Q:** How might tariffs impact industrial real estate and your strategy?  
   **A:** While tariffs could lead to higher inflation and potential economic headwinds, we're not overly concerned about the direct effects. Our focus on the consumption side of the supply chain means that goods will still need to be consumed in the U.S., regardless of their origin. We don't foresee a radical demand shift affecting our business.  **[PLD_3393394_17]** 

8. **Data Center Business Outlook**  
   **Q:** What's the outlook for your data center business?  
   **A:** We're more optimistic about our data center business since our Investor Day. We've strengthened our team with specialists and have excellent utility relationships through our renewable energy team. Our strong balance sheet positions us well to meet the critical needs of hyperscalers, enhancing our competitive position in this market.  **[PLD_3393394_15]** 

9. **3PLs Resetting Footprints**  
   **Q:** Where are third-party logistics providers in resetting their footprints?  
   **A:** The 3PL market currently has slack, especially in Southern California where there's a higher concentration of 3PLs. This excess space is scattered, but demand persists for large requirements. The market comprises both baseload business and a more volatile surge component, with SoCal experiencing more of the latter.  **[PLD_3393394_15]** 

10. **Retention Rates and Free Rent Concessions**  
    **Q:** How are retention rates and free rent concessions trending?  
    **A:** We expect retention rates to remain around **75%**, aligning with historical averages. Free rent concessions are reverting to normal levels after experiencing unusually low free rent during surge periods. As the market normalizes, concessions are adjusting accordingly across different regions.  **[PLD_3393394_11]** 

a532fa22bb41cb350a249c290847f8041d6bccee0b6d2ba8a53cf696db3f51b2

- **Net absorption is projected to increase from 192 million square feet in 2023 to 250 million square feet in 2024**, indicating strong demand growth.  **[PLD_3370331_16]**
- **Tenant sentiment is improving**, with **45% of available space under active proposals** and an expanding build-to-suit pipeline, suggesting increased leasing activity.  **[PLD_3370331_8]**
- **Acquisition pipeline is expected to be much higher in 2024**, with the company anticipating strong acquisition opportunities compared to the low volume in the prior year.  **[PLD_3370331_17]**

9fbf3e330de129e801277b8221a6620d7bebdce7b7515656355133351fd1a21e

- **Prologis owns land in over 50 markets globally**, with **plenty of opportunities that pencil today**. They have a land bank that includes **covered land plays and options** not visible in the land bank, indicating **no shortage of opportunities** for development.  **[PLD_3402892_7]**
- **Prologis has significant capacity on its balance sheet**, with **healthy and strong credit ratios**. **Strategic capital fundraising is improving**, providing ample funding for future growth and acquisitions.  **[PLD_3402892_7]**
- **Southern California has a bright outlook**, being a **$2 trillion economy** with **23 million people**. **Employment is up in the last year**, and **container imports are up 12% since 2019**. **High and rising barriers to supply** restrict new development, positioning Prologis favorably in this key market.  **[PLD_3402892_6]**

f6ffae5e7adb580974be3a5679fb2a4d85a5ee500333454b58e8ce1b5b67cb81

- **Optimism in Data Center Business Driving Growth:** Prologis is increasingly optimistic about its data center business, having secured 1.3 gigawatts of power and making significant progress in recruitment and utility relationships. This positions the company to exceed its five-year targets and enhances its competitive advantage.  **[PLD_3393394_15]**
- **Strong Leasing Activity and Positive Execution:** Despite market challenges, Prologis is experiencing strong leasing activity, particularly in renewals, and is achieving rental rates outside of the weaker Southern California market. The company feels positive about its execution and the year ahead.  **[PLD_3393394_4]**
- **Normalization of Transaction Market Enhancing Growth Opportunities:** The transaction market is normalizing with increased buyer interest, allowing Prologis to outperform in dispositions and be excited about acquisition opportunities globally. This improved market environment supports the company's growth plans.  **[PLD_3393394_10]**

068298ec0b159a36fb050fecfcd9c56177153aa678b827915c8e36c00767febd

- Prologis expects vacancy rates to rise, peaking at around **6% to 6.1%** in the **first half of 2024** due to high levels of incoming supply, which may pressure rental rates and occupancy.  **[PLD_3370331_11]**
- **Coastal markets** underperformed in **rent growth** in 2023, with better pricing and rent growth occurring in the **Sunbelt markets**, which have **higher vacancy rates**, suggesting potential challenges in key markets for Prologis.  **[PLD_3370331_6]**
- **Tenant sentiment**, especially among big tenants, has been **slow over the last 12 to 18 months**, with only **marginal improvements** recently, potentially impacting leasing activity and revenue growth.  **[PLD_3370331_18]**

78eaf05114ecee8326a9137b3be9ce5005e8dbe36c4880666a950ed4016a976d

1. **Supply and Demand Trends**  
   **Q:** What's your outlook on supply and demand over the next quarters?  
   **A:** We project **250 million square feet** of net absorption and **285 million square feet** of completions in 2024, with supply front-loaded. Vacancy rates are expected to rise by **50–75 basis points** to peak around **6%–6.1%** in the first half, then decline meaningfully into 2025 and 2026.  **[PLD_3370331_11]** 

2. **Leasing Spreads U.S. vs. International**  
   **Q:** Will the U.S. continue to lead in leasing spreads, or will the gap tighten?  
   **A:** The gap is expected to remain relatively similar, with the U.S. continuing to lead due to the pronounced lease mark-to-market effect in the U.S. compared to elsewhere. This effect will sustain for quite a while, keeping the spread wide.  **[PLD_3370331_5]** 

3. **Tenant Sentiment and Big Leasing**  
   **Q:** Is big tenant leasing activity improving as tenant sentiment strengthens?  
   **A:** Tenant sentiment has marginally improved in the last 30 days. Proposal volumes are healthy, with **45%** of available space in active discussions. Build-to-suit conversations are also improving, indicating early signs of increased big tenant leasing activity.  **[PLD_3370331_8]** 

4. **Spec Development vs. Build-to-Suit**  
   **Q:** How will decreasing development starts impact spec development vs. build-to-suit?  
   **A:** We plan to pursue both spec and build-to-suit developments. We started over **$1 billion** in spec projects in Q4 and have a **2024 guidance of $4 billion** in starts, reflecting an appetite for speculative development. Build-to-suit volume is expected to be around **40%** of total starts.  **[PLD_3370331_9]** 

5. **Data Center Development Plans**  
   **Q:** Can you break down the $3 billion development starts between industrial and data centers?  
   **A:** The majority of development starts are industrial. We began over **$500 million** in data center projects in Q4 but won't provide specific guidance due to the lumpiness and competitive nature of these deals. Data centers typically take **12–15 months** from start to cash flow for powered shells, and longer for turnkey projects.  **[PLD_3370331_10]** 

6. **Valuation and Cap Rates**  
   **Q:** Has pricing adjusted correctly with changes in the 10-year Treasury rate?  
   **A:** Real pricing and returns haven't significantly changed, as market participants weren't trading based on higher return requirements despite higher treasury rates. With treasury rates stabilizing and expectations converging, valuations are nearing a bottom in both the U.S. and Europe, leading to anticipated increases in transaction volumes.  **[PLD_3370331_12]** 

7. **Retailer Inventory Restocking**  
   **Q:** How does retailer restocking affect leasing demand seasonally?  
   **A:** Leasing demand is typically back-end loaded toward Q4 due to holiday sales. This year, stronger-than-expected retail and e-commerce sales caught retailers short on inventories. As a result, space utilization is down, and retailers will likely need to restock inventories, which should drive leasing demand moving forward.  **[PLD_3370331_12]** 

8. **Vacancy Rates and Leasing Timeline**  
   **Q:** How long will it take to lease up new deliveries and see vacancy decline?  
   **A:** Vacancy rates are expected to peak at around **6%** in the first half, which is historically low. It will take time to absorb availability, but vacancy rates are projected to decrease from **6%** to **5.5%** and likely to **5%** over time, given the supply cliff and ongoing demand.  **[PLD_3370331_13]** 

9. **Big Box Leasing Interest**  
   **Q:** Is there increased customer interest in big box leasing?  
   **A:** Yes, we're seeing definite signs of increased interest from large customers. After holding off, they're beginning to build out their networks again, especially in e-commerce. With the economy performing better than expected, big box tenants are returning to the market.  **[PLD_3370331_15]** 

10. **Stabilization Timing and Port Disruptions**  
    **Q:** What's the timing for development stabilizations amid elevated supply, and how are tenants adapting to port disruptions?  
    **A:** Stabilizations are well spread throughout the year, with some pulled forward to late December. Stabilization volume is **46% leased already**, **300–400 basis points** above recent averages. Regarding port disruptions, it's early to see medium-term leasing decisions, but the ratified West Coast labor agreement provides a clear landscape, and growth is resuming in Southern California. Disruptions in Panama and Suez are prompting a return to traditional shipping routes, positively impacting West Coast activity.  **[PLD_3370331_14]** 

fc2821ba59a202fe25d7efb117666fef75e5a010499b5cf81c652cf69cfe6a26

Prologis Inc (PLD)

Financials