• Core FFO: $1.42 per share including net promotes; $1.43 per share excluding net promotes.
• Occupancy Rate: 95.2%, down 70 basis points from year-end.
• Net Effective Rent Change: 54%; on a cash basis, 32%.
• Same-Store Growth: Net effective growth at 5.9%; cash growth at 6.2%.
• Net Effective Lease Mark-to-Market: 25%, representing $1.1 billion of incremental NOI.
• New Developments: $650 million started, with nearly 80% in build-to-suits.
• Data Center Power Capacity: Expanded by 400 megawatts, totaling 2 gigawatts in advanced stage category.
• Solar and Storage Capacity: Over 900 megawatts in operation or under development.
• Capital Raised: Approximately $400 million in new capital for flagship open-ended funds.
• Debt Issuance: $550 million raised at a weighted average rate of 4.1%.
• Moody's Rating: Upgraded to A2.
• Guidance for Core FFO: $5.65 to $5.81 per share including net promotes; $5.70 to $5.86 per share excluding net promotes.
• Development Start Guidance: Reduced to $1.5 billion to $2 billion.
• G&A Guidance: Increased to $450 million to $470 million.

• Warning! GuruFocus has detected 8 Warning Signs with PLD.

Release Date: April 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Prologis Inc (NYSE:PLD) delivered a strong quarter, leasing 58 million square feet and breaking ground on several build-to-suit developments.
• The company expanded its power capacity by 400 megawatts to support growing demand for data centers, marking a 13% increase.
• Core FFO per share exceeded forecasts, with occupancy ending the quarter at 95.2%, better than expected due to strong retention.
• Prologis Inc (NYSE:PLD) has a global footprint with a highly diversified rent roll and a fortress balance sheet, providing resilience in uncertain times.
• The company has over 900 megawatts of solar and storage capacity either in operation or under development, advancing towards its 1 gigawatt goal for the year.

Negative Points

• Prologis Inc (NYSE:PLD) is maintaining its earnings guidance due to uncertainty from global tariffs and their downstream impacts.
• The instability created by recent global events may disrupt logistics and supply chains, slowing decision-making among customers.
• Occupancy dropped by 70 basis points from year-end, reflecting a decline in retention despite being better than expected.
• The company is reducing its development start guidance and capital deployment expectations due to uncertainty in capital markets.
• Leasing volumes have decreased by approximately 20% in recent weeks, and further slowdown is expected.

Q & A Highlights

Q: Are there lessons from prior disruptions that can guide the current environment, especially regarding consumption and demand? A: Hamid Moghadam, CEO, explained that while a recession would impact consumption, the long-term trend of consumption is upward. He noted that past tariffs did not significantly affect consumption, and changes in production origins did not alter consumption patterns.

Q: Can you explain the occupancy drop in the first quarter and expectations for the rest of the year? A: Timothy Arndt, CFO, stated that the drop was due to a high volume of lease expirations in the first quarter, which was expected. The company anticipates occupancy to remain stable for the rest of the year, even under stress test scenarios.

Q: How are Asian 3PLs and their risks being managed, particularly in the Inland Empire West? A: Chris Caton, Managing Director, noted that Asian 3PLs, which represent a small portion of Prologis' rent, are mitigating risks by diversifying sources and growing their domestic footprint. Their performance will depend on evolving policies.

Q: What impact does Amazon's market activity have on overall demand and pricing power? A: Daniel Letter, President, confirmed that Amazon is active in the market, contributing to strong e-commerce leasing activity, which is back to high teens in percentage of overall leasing.

Q: Can you elaborate on the statement that a disconnected world requires more warehouse space? A: Hamid Moghadam, CEO, explained that during times of uncertainty, supply chains need to be duplicated, leading to increased inventory and space requirements. Historical events like Brexit have shown that such transitions increase the need for warehouse space.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.