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Prologis Reports Resilient Performance in Q2 2025

On July 16, 2025, Prologis, Inc. (NYSE: PLD) revealed its financial results for the second quarter, ending June 30, which demonstrated a commendable performance despite a volatile market landscape. The company reported a net earnings decline to $0.61 per diluted share, marking a 33.7% decrease compared to the same quarter last year due to lower gains and unrealized foreign exchange losses. However, the core funds from operations (Core FFO)* per diluted share rose to $1.46, reflecting a 9% increase. Notably, Core FFO, which excludes net promote income (expense), was reported at $1.47, up 8.1% from the previous year.

Hamid R. Moghadam, co-founder and CEO of Prologis, expressed pride in the company's operational excellence and preparedness to handle customer demands. He stated, “Our teams performed exceptionally in our operations and deployment activity this quarter, driven by strong execution and a focus on customer needs.”

Daniel S. Letter, the company’s president, added that Prologis has reached historically high leasing pipeline levels. “The trends we’re observing, especially from larger customers, indicate a substantial readiness to engage and make real estate decisions,” he noted. This proactive approach creates confidence in both leasing and build-to-suit activities, positioning Prologis favorably to meet emerging demands.

Operational Highlights

• - Average Occupancy Rate: The owned and managed properties achieved an average occupancy of 94.9% while the period-end rate was 95.1%. In the Prologis share portfolio, the average occupancy slightly lagged at 94.8% but reported a cash same-store net operating income (NOI) growth of 4.9%.
• - Retention Rates: The retention rate for existing tenants was 74.9%, further indicating a strong commitment from current clients to remain with Prologis facilities.

Deployment Activities

For Q2 2025, Prologis engaged in several strategic initiatives, including:

• - Acquisitions: A total of $335 million was allocated to acquisitions, contributing to a weighted average stabilized cap rate of 5.7%.
• - Development: Total development completions amounted to $192 million, projecting a weighted average yield of 6.9% and a margin of 33.2%.
• - Total Dispositions: Dispositions and contributions reached $96 million, with a weighted average stabilized cap rate of 4.5%.

These figures exemplify the company’s proactive investment strategy, focusing on both acquisitions and development opportunities to enhance its portfolio.

Financial Health and Liquidity

Prologis highlighted its substantial liquidity position, with approximately $7.1 billion available at the quarter's end. The company successfully issued $5.8 billion in debt at a weighted average interest rate of 4.5% and a maturity term of 5.4 years, including extending its $3 billion revolving credit line’s maturity date.

The balance sheet reflected a debt-to-EBITDA ratio of 5.1x, affirming Prologis’ robust financial footing with debt representing only 27.9% of total capitalization.

Outlook for 2025

Prologis revised its net earnings guidance for 2025 to range from $3.00 to $3.15 per diluted share, slightly lower than previous projections of $3.45 to $3.70. Conversely, the guidance for Core FFO was adjusted to between $5.75 and $5.80 per share, indicating a resilient business outlook. Timothy D. Arndt, Chief Financial Officer, emphasized the company’s strong operational foundations and optimistic positioning for the ongoing year.

In conclusion, despite facing headwinds in the market, Prologis has maintained a resilient performance backed by solid operational efficiencies and strategic deployment, establishing a strong foundation for future growth. As logistical demands continue to rise, Prologis stands ready to leverage its expertise in guiding global commerce through effective real estate solutions.