2 weeks ago
8
Todd Maiden
Fri, April 17, 2026 astatine 10:22 AM CDT 3 min read
Industrial warehouse relation Prologis said its pipeline is astatine an all-time precocious adjacent aft grounds lease signings successful the archetypal quarter. Among the deals inked were caller contracts representing 64 cardinal quadrate feet of logistics space.
The San Francisco-based existent property concern spot said connected a Thursday telephone with analysts that March was a precise beardown signing month, adjacent with the added overhang of the U.S.-Iran conflict. High vigor prices and involvement rates are not deterring customers’ leasing intentions. It noted peculiar spot successful Dallas, Houston and Atlanta, and successful markets crossed the Midwest. It besides said that its portfolio of properties exceeding 500,000 quadrate feet is presently 98% leased, implying rents for this conception are astir to measurement higher.
New improvement starts equaled $2.1 cardinal successful the archetypal quarter, $850 cardinal of which was tied to logistics customers. Approximately 75% of the logistics starts were speculative, “reflecting improving fundamentals and our assurance successful the request for caller proviso crossed galore of our markets.”
New leases commenced accrued 3% y/y to 66.7 cardinal quadrate feet.
Average occupancy improved 40 ground points y/y to 95.3%, which was successful enactment with the 4th quarter. Occupancy usually steps down sequentially into the archetypal quarter—the seasonally weakest of the year. The Prologis portfolio outperformed the U.S. market, which carried a 7.5% vacancy complaint successful the period.
Management is encouraged by marketplace fundamentals arsenic the U.S. operation pipeline sits astatine conscionable 1.7% of proviso compared to a 10-year mean of 2.6%
Net effectual rent alteration connected Prologis’ portfolio of multiyear leases was 32% successful the 4th and remains connected gait to scope 40% for full-year 2026. Net effectual rent alteration was 50% past year.
Lease mark-to-market (resetting in-place rents to existent marketplace rents) was estimated astatine 17%, oregon $750 cardinal successful aboriginal nett operating income. Mark-to-market was negatively impacted during the 4th arsenic 40% of the leases that rolled were successful softer markets similar Los Angeles and Seattle.
Prologis accrued its 2026 outlook.
Core FFO is present forecast to a scope of $6.07 to $6.23 per share, a 1% summation astatine the midpoint. The usher assumes mean occupancy of 95% to 95.75% (25 bps higher connected the debased extremity of the range) and improvement starts betwixt $3.5 cardinal and $4.5 cardinal (a $500-million summation astatine some ends of the range). Development starts besides see caller information halfway construction.
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