Prologis Inc
For the period ended Mar 31, 2025. Filed Apr 29, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 29, 2025
PLD$126.96-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-25.
0000950170-24-117407
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0000950170-25-060107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 243 previous paragraphs and 241 current paragraphs.
149 unchanged; 81 reworded; 7 added; 11 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 17 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Prologis is the global leader in logistics real estate, operating across high-barrier, high-growth markets. We operate in 20 countries on four continents, with a portfolio concentrated in key centers of commerce, strategically located near end consumers to support the flow of goods. In addition to owning, managing and developing high-quality logistics facilities around the world, we provide integrated infrastructure solutions that help customers operate with greater efficiency, flexibility and resiliency. Our offerings support the evolving needs of modern supply chains, including the increasing connection between physical and digital infrastructure and the growing demand for more sustainable operations.
Current report
customers’ increased focus on building supply chain efficiency. We believe these factors will sustain demand and low vacancy rates over the long term. In the near term, we anticipate customer decision-making may slow as tariff policy has heightened economic uncertainty since early April. However, as supply chains may shift due to the disruption, we believe we are well-positioned to support our customers as they navigate changes.
Current report
Value Creation from Development. Our global development program offers a broad set of opportunities and serves as a profitable way to expand our portfolio, build scale, serve customers, and create value for investors. We create these opportunities by sourcing land for ownership, as well as pursuing both option strategies and redevelopment projects, often referred to as Covered Land Plays ("CLPs"). Development occurs primarily in our existing markets and is focused on logistics facilities, though we also pursue higher-use conversions, including data centers.
Current report
During the first quarter, industrial fundamentals were improving. However, in the near term, we anticipate customer decision-making may slow as tariff policy has heightened economic uncertainty since early April. Through dialogue with our customers, we are staying close as they manage tariff policy volatility and navigate changes that may occur within the supply chain. We will remain disciplined in our capital deployment activities by focusing on build-to-suit development for both logistics and data centers. While we believe we are well-positioned to grow revenues over the long-term given the upside potential in our in-place leases, it is difficult to predict the impact on our business, future financial condition and operating results.
Current report
In February, we issued C$750 million ($520 million) of senior notes maturing in 8 years with a weighted average interest rate of 4.2%, further mitigating foreign currency exposure related to our Canadian investments.
Current report
Depreciation and amortization expenses were $652 million and $638 million for the three months ended March 31, 2025 and 2024, respectively.
Current report
Gains on the disposition of development properties and land were $27 million and $40 million for the three months ended March 31, 2025 and 2024, respectively, principally from the contribution of properties we developed to unconsolidated co-investment ventures in Europe in 2025 and 2024, and from sales to third parties in the U.S. in 2025.
Removed paragraphs (11)
Previous report
Prologis is the global leader in logistics real estate with a focus on high-barrier, high growth markets. We own, manage and develop well-located, high-quality logistics facilities in 20 countries across four continents. Our portfolio focuses on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ diverse logistics requirements.
Previous report
Finally, we believe our long-standing dedication to Environmental, Social and Governance (“ESG”) practices creates value for our customers, investors, employees and the communities in which we do business. The principles of ESG have been an important aspect of our business strategy that we believe delivers a strategic business advantage.
Previous report
Value Creation from Development. The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks. One of the ways in which we create value is through our focus on sourcing well-located land and redevelopment sites through acquisition opportunities. This strategy has allowed us to create opportunities for the conversion of income-producing assets, acquired with the intention for redevelopment, into industrial properties (Covered Land Plays or "CLPs") and data centers.
Previous report
While our proprietary metrics around lease proposals are positive, we expect our customers to exercise caution in their leasing decisions through the remainder of 2024 due to uncertainty in the economic and geopolitical environment. Additionally, we are experiencing slower decision-making with build-to-suits and, as a result, expect limited speculative development in the short term. Despite the current environment, we believe we are well positioned to organically grow revenues over the long-term given the cumulative growth in market rents over the last several years and our existing high lease mark-to-market.
Previous report
Through our investment in consolidated joint ventures in India, we acquired 225 acres of land to support future development opportunities in this new market.
Previous report
In March 2024, we established a commercial paper program, under which we may issue, repay and re-issue short-term unsecured commercial paper notes (“CPNs”) denominated in U.S. dollars. At any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the CPNs outstanding.
Previous report
We issued $4.2 billion of senior notes with an issuance date weighted average interest rate of 4.8% and weighted average maturity of 14 years (principal in millions):
Previous report
RESULTS OF OPERATIONS – NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Previous report
The increase due to acquisitions is principally due to the additional NOI in 2024 from the $3.1 billion real estate portfolio acquired in the U.S. on June 29, 2023. Acquisition activity also includes the fair value lease amortization to rental revenues due to in-place leases that were primarily below market at the time of the acquisition.
Previous report
Depreciation and amortization expenses were $1.9 billion and $1.8 billion for the nine months ended September 30, 2024 and 2023, respectively.
Previous report
Except as separately discussed above, the changes in comprehensive income attributable to common stockholders and unitholders and its components for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, are similar to the changes for the nine-month periods ended on the same dates.
Reworded paragraphs (81)
Previous wording
The importance of logistics supply chains has increased dramatically to our customers and the global economy. The long-term trends of e-commerce adoption and supply chain resiliency continue to drive the need for increased warehouse space to store and distribute goods. This demand has translated into meaningful increases in rents and low vacancy over the last several years. We believe this demand is driven by three primary factors: (i) customer supply chains re-positioning to address the significant shift to e-commerce and heightened service expectations; (ii) overall consumption and household growth; and (iii) our customers’ desire for more supply chain resiliency. We believe these forces will keep demand strong over the long term. In the short term, we expect some delay in our customers' leasing decisions over the next several quarters due to uncertainty in the economic and geopolitical environment.
Current wording
Logistics supply chains remain essential to our customers and the global economy. Long-term trends, including the growth of e-commerce and modernization of the supply chain, continue to drive demand toward creating supply chain resiliency through leasing additional space to store and distribute goods. This demand has contributed to meaningful rent growth and low vacancy rates in recent years. We believe this demand is driven by three primary factors: (i) the re-positioning of our customer supply chains to accommodate the shift toward e-commerce and heightened service expectations; (ii) growth in overall consumption and households; and (iii) our
Previous wording
Our teams actively manage our portfolio by providing comprehensive real estate services, including leasing, property management, development, acquisitions and dispositions. We also invest significant capital into new logistics properties through our development activity and third-party acquisitions. Proceeds from the disposition of properties, generally through the contribution of newly developed properties to our co-investment ventures and the sales of non-strategic properties to third parties, allow us to recycle capital back into our investment activities.
Current wording
Our teams actively manage our portfolio by providing comprehensive real estate services, including leasing, property management, development, acquisitions and dispositions. We invest significant capital into new logistics properties through acquisitions and development activity, including both built-to-suit and speculative development and redevelopment of properties into industrial properties and data centers. Proceeds from property dispositions, generally achieved by contributing newly developed properties to our co-investment ventures and selling of non-strategic properties to third parties, enable us to recycle capital back into our ongoing investment activities.
Previous wording
While the majority of our properties in the U.S. are wholly owned, we hold a significant ownership interest in properties both in the U.S. and internationally through our investment in the co-investment ventures. Partnering with the world’s largest institutional investors through co-investment ventures allows us to expand our investment capacity, enhance and diversify our real estate returns and mitigate our exposure to foreign currency movements.
Current wording
While the majority of our properties in the U.S. are wholly owned, we hold a significant ownership interest in properties both in the U.S. and internationally through our investment in co-investment ventures. Partnering with many of the world’s largest institutional investors through co-investment ventures allows us to expand our investment capacity, enhance and diversify our real estate returns and mitigate our exposure to foreign currency movements.
Previous wording
Our scale and customer-focused strategy have compelled us to expand the services we provide. Our 1.2 billion square foot portfolio has provided the foundation upon which we have built a platform of solutions to address challenges that our customers face in global fulfillment today. Through Prologis Essentials, we focus on innovative ways to meet our customers’ operations and energy and sustainability needs. Our customer experience teams, proprietary technology and strategic partnerships are foundational to all aspects of our Prologis Essentials offerings. These resources allow us to provide our customers with unique and actionable insights and tools to help them make progress on sustainability goals and drive greater efficiency in their operations.
Current wording
Our scale and customer-focused strategy have compelled us to expand the services we provide. Our 1.3 billion square foot portfolio serves as the foundation for a comprehensive platform of solutions that address the challenges our customers face in global fulfillment today. Through Prologis Essentials, we provide solutions to meet our customers’ operations, energy and sustainability needs. Our customer experience teams, proprietary technology and strategic partnerships are foundational to all aspects of our Prologis Essentials offerings. These resources allow us to provide our customers with unique and actionable insights and tools to help them make progress on sustainability goals and drive greater efficiency in their operations. Moreover, the principles of environmental, social and governance are ingrained in our business strategy through our integrated approach to global impact and sustainability, which we believe creates value for our customers, investors, employees and communities.
Previous wording
At September 30, 2024, we owned or had investments in, on a wholly-owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet across the following geographies:
Current wording
At March 31, 2025, we owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.3 billion square feet across the following geographies:
Previous wording
Our business comprises two operating segments: Real Estate (Rental Operations and Development) and Strategic Capital.
Current wording
Our business comprises two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital.
Previous wording
Rental Operations. Rental operations comprise the largest component of our operating segments and generally contributes 90% to 95% of our consolidated revenues, earnings and FFO. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during the nine months ended September 30, 2024, within the consolidated operating portfolio, the weighted average lease term was 63 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses. The primary driver of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, as discussed further below. We believe our active portfolio management, combined with the skills of our property, leasing, maintenance, energy, sustainability and risk management teams allow us to maximize NOI across our portfolio. Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S.
Current wording
Rental Operations. Rental operations comprise the largest component of our reportable segments and generally contributes 90% to 95% of our consolidated revenues, earnings and FFO. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. Through our global footprint, we have a diversified lease portfolio and our revenues from in-place leases are contractual with fixed or inflation-linked escalations. The weighted average lease term was 69 months for leases that commenced, within the consolidated operating portfolio, during the trailing twelve months ended March 31, 2025. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses. The primary driver of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, as discussed further below. We believe our active portfolio management, combined with the skills of our property, leasing, maintenance, energy, sustainability and risk management teams allow us to maximize NOI across our portfolio. Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S.
Previous wording
Development. Given the scarcity of modern logistics facilities in our target markets, our development business provides the opportunity to build to the evolving requirements of our customers while deepening our market presence. We believe we have a competitive advantage due to (i) the strategic locations of our global land bank and redevelopment sites; (ii) the development expertise of our local teams; (iii) the depth of our customer relationships; (iv) our ability to integrate sustainable design features that provide operational efficiencies for our customers; and (v) our procurement capabilities that allow us to secure high-demand construction materials at a lower cost. Successful development and redevelopment efforts provide significant earnings growth as projects are leased, generate income and increase the value of our Real Estate Segment. Generally, we develop properties in the U.S. to hold for the long-term and outside the U.S. for contribution to our unconsolidated co-investment ventures.
Current wording
Development. Our development business provides the opportunity to profitably build modern logistics facilities that address the evolving requirements of our customers while deepening our presence in our target markets. We believe we have a competitive advantage due to: (i) the strategic locations of our global land bank and redevelopment sites for the development of future industrial properties or data centers; (ii) the development expertise of our local teams; (iii) the depth of our customer relationships; (iv) our ability to integrate sustainable design features that provide operational efficiencies for our customers; and (v) our procurement capabilities that allow us to secure high-demand construction materials at a lower cost. Successful development and redevelopment efforts provide significant earnings growth as projects are leased, generate income and increase the value of our Real Estate Segment. Generally, we develop properties in the U.S. to hold for the long term or to contribute to our unconsolidated co-investment venture, and outside the U.S. to contribute to our unconsolidated co-investment ventures.
Previous wording
Through the Strategic Capital Segment, we partner with many of the world’s largest institutional investors through unconsolidated co-investment ventures. The business is capitalized through private and public equity, of which 94% is in open ended ventures, long-term ventures or two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis in Mexico). We align our interests with our partners by holding significant ownership interests in our nine unconsolidated co-investment ventures (ranging from 15% to 50%). This structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S.
Current wording
We partner with many of the world’s largest institutional investors through co-investment ventures. The business is capitalized through private and public equity, and is comprised of 95% open-ended ventures, long-term ventures and two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis, which controls and owns 90% of Terrafina, also a publicly traded FIBRA in Mexico). We align our interests with our partners by holding significant ownership interests in the co-investment ventures. Nine of the co-investment ventures are unconsolidated entities, and one is consolidated, with our ownership in the co-investment ventures ranging from 15% to 55%. As the majority of our investments are in unconsolidated co-investment ventures, this structure allows us to reduce our exposure to foreign currency movements for non-U.S. investments. Management of the unconsolidated co-investment ventures comprises our Strategic Capital Segment.
Previous wording
This segment produces durable, long-term cash flows and generally contributes 5% to 10% of our consolidated revenues, earnings and FFO, excluding promotes. We generate strategic capital revenue from our unconsolidated co-investment ventures, principally through asset management and property management services. Revenue earned from asset management fees is primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services. In certain ventures, we also have the ability to earn revenues through incentive fees (“promotes” or “promote revenues”) periodically during the life of a venture, upon liquidation of a venture or upon stabilization of individual venture assets based primarily on the total return of the investments over certain financial hurdles. Promote revenues are recognized when earned at the end of the promote period for the specific co-investment ventures. We plan to grow this business and increase revenues by increasing our assets under management in existing or new ventures. The majority of the strategic capital revenues are generated outside the U.S.
Current wording
leasing, acquisition, construction management, development and disposition services. The majority of the strategic capital revenues are generated outside the U.S. In certain ventures, we also have the ability to earn revenues through incentive fees (“promotes” or “promote revenues”) periodically during the life of a venture, upon liquidation of a venture or upon stabilization of individual venture assets, based primarily on the total return of the investments over certain financial hurdles. Promote revenues are recognized when earned at the end of the promote period or upon liquidation or stabilization. We plan to grow this business and increase revenues by increasing our assets under management in existing or new ventures.
Previous wording
We believe that the quality and scale of our portfolio, our ability to build out our land bank and redevelopment sites, our strategic capital business, the depth of our customer relationships and the strength of our balance sheet are differentiators that allow us to drive growth in revenues, NOI, earnings, FFO and cash flows.
Current wording
We believe that the quality and scale of our portfolio, our ability to develop our land bank and redevelopment sites, our strategic capital business, the depth of our customer relationships and the strength of our balance sheet are differentiators that allow us to drive growth in revenues, NOI, earnings, FFO and cash flows.
Previous wording
Rent change represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with previous net effective rental rates in that same space.
Current wording
Rent change represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with previous net effective rental rates for the same respective spaces.
Previous wording
Rent Growth. As a result of several years of increases in market rents, our in-place leases have considerable upside potential to capture these higher rents and to drive future organic NOI growth. This is evident in the positive rent change we have experienced in every quarter since 2013 and was significant to our operating results over the last several years. We estimate that our share of the lease mark-to-market is approximately 34% (on an NER basis), which represents the growth rate from in-place rents to current market rents based on our share of the O&M portfolio at September 30, 2024. Therefore, even without further market rent growth, we expect our lease renewals to result in higher future rental income.
Current wording
Rent Growth. We have experienced positive rent growth every quarter since 2013. As a result of several years of increases in market rents, our in-place leases have considerable upside potential to capture these higher rents and to drive future organic NOI growth. We estimate that our share of the lease mark-to-market is approximately 25% (on an NER basis), which represents the amount by which current market rents exceed our in-place rents based on our share of the O&M portfolio at March 31, 2025. This lease mark-to-market has remained meaningfully positive despite recent quarters of lower or even negative market rental growth due to the compounded nature of market rent growth. Therefore, even without further market rent growth, we expect our lease renewals to result in higher rental income over the next several years, given our remaining lease terms.
Previous wording
Based on our current estimates, our consolidated land and other real estate investments, including options and CLPs, have the potential to support the development of $36.0 billion ($40.7 billion on an O&M basis) of TEI of newly developed buildings. We measure the estimated value creation of a development project as the stabilized value above our TEI. As properties are completed and leased, we expect to realize the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio.
Current wording
Based on our current estimates, our consolidated land and other real estate investments, including options and CLPs, have the potential to support the development of $36.3 billion ($41.2 billion on an O&M basis) of TEI of newly developed buildings. We measure the estimated value creation of a development project as the stabilized value above our TEI. As properties are completed and leased, we expect to capture the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio.
Previous wording
Strategic Capital Advantages. The co-investment ventures provide capital from third parties that allows us to grow our O&M portfolio, contribute to self-funding our development activities through the sale of newly developed assets to these vehicles and produce substantial fees for our management of the assets. We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At September 30, 2024, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $55.7 billion across 519 million square feet.
Current wording
Strategic Capital Advantages. The co-investment ventures provide capital from third parties that allows us to grow our O&M portfolio, contribute to self-funding our development activities through the sale or contribution of newly developed assets to these vehicles and produce substantial fees for our management of the assets. We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At March 31, 2025, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $58.5 billion across 552 million square feet.
Previous wording
Balance Sheet Strength. We have a long-held strategy to build and maintain a balance sheet that is strong and flexible by using conservative levels of financial leverage. At September 30, 2024, the weighted average remaining maturity of our consolidated debt was 10 years and the weighted average interest rate was 3.1%. Through our refinancing activities we have substantially addressed our debt maturities until 2026. At September 30, 2024, we had total available liquidity of $6.6 billion. We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise.
Current wording
Balance Sheet Strength. We have a long-held strategy to build and maintain a strong and flexible balance sheet by using conservative levels of financial leverage. At March 31, 2025, the weighted average remaining maturity of our consolidated debt was 9 years and the weighted average interest rate was 3.1%. At March 31, 2025, we had total available liquidity of $6.5 billion. We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of
Previous wording
Staying “Ahead of What’s Next™”. We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale in procurement and innovating through data analytics and digitization efforts. This includes investments in early and growth-stage companies that are focused on emerging technologies for the logistics sector. Through Prologis Essentials, we support our customers through service and product offerings, including innovative solutions to operations and energy and sustainability needs that can make our customers' decision process easier while helping them advance their environmental goals.
Current wording
Staying “Ahead of What’s Next™”. We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale in procurement and innovating through data analytics and digitization efforts. This includes investments in early and growth-stage companies that are focused on emerging technologies for the logistics sector through Prologis Ventures, our corporate venture capital group. Our Prologis Essentials platform provides our customers with solutions through services and products that address their operations, energy and sustainability needs, simplify their decision making and support them in achieving their environmental goals.
Previous wording
SUMMARY OF THE NINE MONTHS ENDED SEPTEMBER 30, 2024
Current wording
SUMMARY OF THE THREE MONTHS ENDED MARCH 31, 2025
Previous wording
Our operating results were strong during the nine months ended September 30, 2024 despite the softening of rents and occupancy in the market. Due to increases in market rents over the last several years, our existing lease mark-to-market drove rent change on rollover and same-store growth in our O&M portfolio. Our operating portfolio occupancy was 96.2% at September 30, 2024 and rent change on leases that commenced during the nine months ended September 30, 2024 was 69.5% on a net effective basis, both metrics based on our ownership share.
Current wording
Our operating results and leasing activity were strong during the three months ended March 31, 2025. Due to increases in market rents over the last several years, our existing lease mark-to-market continued to drive rent change on rollover and same-store growth in our O&M portfolio. This lease mark-to-market has remained meaningfully positive despite recent quarters of lower or even negative market rental growth due to the compounded nature of market rent growth. The occupancy of our operating portfolio was 95.1% at March 31, 2025 and rent change on leases that commenced during the three months ended March 31, 2025 was 53.7% on a net effective basis, both metrics based on our ownership share.
Previous wording
We generated net proceeds of $2.4 billion and realized net gains of $811 million, principally from the contribution of properties to unconsolidated co-investment ventures in the U.S. and Europe, and sales of non-strategic properties to third parties in the U.S.
Current wording
We generated net proceeds of $174 million and realized net gains of $64 million, principally from the contribution of a property we developed to an unconsolidated co-investment venture in Europe and sales to third parties in the U.S.
Previous wording
At September 30, 2024, we had total available liquidity of $6.6 billion, including borrowing capacity on our credit facilities of $5.8 billion and unrestricted cash balances of $781 million.
Current wording
At March 31, 2025, we had total available liquidity of $6.5 billion, including borrowing capacity on our credit facilities of $5.8 billion and unrestricted cash balances of $0.7 billion.
Previous wording
We evaluate our business operations based on the NOI of our two operating segments: Real Estate (Rental Operations and Development) and Strategic Capital. NOI by segment is a non-GAAP performance measure that is calculated using revenues and expenses directly from our financial statements. We consider NOI by segment to be an appropriate supplemental measure of our performance because it helps management and investors understand our operating results.
Current wording
We evaluate our business operations based on the NOI of our two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital. NOI by segment is a non-GAAP performance measure that is calculated using revenues and expenses directly from our financial statements. We consider NOI by segment to be an appropriate supplemental measure of our performance because it helps management and investors understand our operating results.
Previous wording
Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements for the nine months ended September 30 (in millions):
Current wording
Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements for the three months ended March 31 (in millions):
Previous wording
See Note 10 to the Consolidated Financial Statements for more information on our segments and a reconciliation of each business segment’s NOI to Operating Income and Earnings Before Income Taxes.
Current wording
See Note 10 to the Consolidated Financial Statements for more information on our segments and a reconciliation of each reportable segment’s NOI to Operating Income and Earnings Before Income Taxes.
Previous wording
This operating segment principally includes rental revenue and rental expenses recognized from our consolidated properties. This segment also includes the operating results of our energy assets. We allocate the costs of our property management and leasing functions to the Real Estate Segment through Rental Expensesand the Strategic Capital Segment through Strategic Capital Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. In addition, this segment is impacted by our development, acquisition and disposition activities.
Current wording
This reportable segment principally includes rental revenue and rental expenses recognized from our consolidated properties. This segment also includes the operating results of our renewable energy assets. We allocate the costs of our property management and leasing functions to the Real Estate Segment through Rental Expensesand the Strategic Capital Segment through Strategic Capital Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. In addition, this segment is impacted by our development, acquisition and disposition activities.
Previous wording
Below are the components of Real Estate Segment NOI for the nine months ended September 30, derived directly from line items in the Consolidated Financial Statements (in millions):
Current wording
Below are the components of Real Estate Segment NOI for the three months ended March 31, derived directly from line items in the Consolidated Financial Statements (in millions):
Previous wording
The $401 million change in Real Estate Segment (“RES”) NOI for the nine months ended September 30 compared to the same period in 2023, was impacted by the following activities (in millions):
Current wording
The $139 million change in Real Estate Segment (“RES”) NOI for the three months ended March 31 compared to the same period in 2024, was impacted by the following activities (in millions):
Previous wording
During both periods, we experienced positive rental rate growth due to increases in market rents over the last several years. Rental rate growth is a combination of higher rental rates on rollover of leases (or rent change) and contractual rent increases on existing leases. If a lease has a contractual rent increase driven by a metric that is not known at the time the lease commences, such as the consumer price index or a similar metric, the rent increase is not included in rent leveling and therefore impacts the rental revenue we recognize. Significant rent change during both periods continues to be a key driver in increasing rental income. See below for key metrics on rent change on rollover and occupancy.
Current wording
Significant rent change due to higher rental rates on the rollover of leases during both periods continues to be a key driver of increasing rental income. See below for key metrics on rent change on rollover and occupancy.
Previous wording
The following table summarizes consolidated development activity for the nine months ended September 30 (dollars and square feet in millions):
Current wording
The following table summarizes consolidated development activity for the three months ended March 31 (dollars and square feet in millions):
Previous wording
At September 30, 2024, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before August 2026 with a TEI of $5.4 billion and was 32.8% leased. This includes the development of data centers with an aggregate TEI of $1.1 billion, on a consolidated basis. Our investment in the development portfolio was $3.1 billion at September 30, 2024.
Current wording
At March 31, 2025, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before July 2027 with a TEI of $4.4 billion and was 32.2% leased. This includes the development of data centers with an aggregate TEI of $0.6 billion, on a consolidated basis. Our investment in the development portfolio was $2.6 billion at March 31, 2025.
Previous wording
This operating segment includes revenues from asset management and property management services, transactional services for acquisition, disposition and leasing activity and promote revenue earned from the unconsolidated co-investment ventures. Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties, timing of promotes, foreign currency exchange rates and other transactional activity. These revenues are reduced by the direct costs associated with the asset and property-level management expenses for the properties owned by these ventures. We allocate the costs of our property management and leasing functions to the Strategic Capital Segment through Strategic Capital Expensesand to the Real Estate Segment through Rental Expenses, both in the Consolidated Financial Statements,
Current wording
This reportable segment includes revenues from asset management and property management services, transactional services for acquisition, disposition and leasing activity and promote revenue earned from the unconsolidated co-investment ventures. Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties, timing of promotes, foreign currency exchange rates and other transactional activity. These
Previous wording
Below are the components of Strategic Capital Segment NOI for the nine months ended September 30, derived directly from the line items in the Consolidated Financial Statements (in millions):
Current wording
Below are the components of Strategic Capital Segment NOI for the three months ended March 31, derived directly from the line items in the Consolidated Financial Statements (in millions):
Previous wording
Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the nine months ended September 30 (in millions):
Current wording
Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI for the three months ended March 31 (in millions):
Previous wording
We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture. The promote revenue we earned during the nine months ended September 30, 2023, was primarily from Prologis Targeted U.S. Logistics Fund in the second quarter of 2023. Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs to the calculation of promote revenues. The asset valuations are prepared by third-party valuation firms.
Current wording
We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture. Changes in asset valuations within the co-investment ventures during the promote period is one of the significant inputs to the calculation of promote revenues.
Previous wording
For promotes earned after January 2024, we amended the Prologis Promote Plan ("PPP") to award up to 25% of the third-party portion of the promotes earned by us from the co-investment ventures to our employees. This award is issued as a combination of cash and equity-based awards, pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested. For promotes earned prior to January 2024, up to 40% of the third-party portion of promotes earned was awarded to certain employees.
Current wording
The Prologis Promote Plan ("PPP") awards up to 25% of the third-party portion of the promotes earned by us from the co-investment ventures to our employees. This award is issued as a combination of cash and equity-based awards, pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested. As a result, expenses recognized in the current period may relate to promote revenues recognized in prior periods.
Previous wording
Transactional fees include leasing commissions and acquisition, disposition, development and other fees.
Current wording
Transactional fees include leasing commissions, acquisition, disposition, development and other fees.
Previous wording
G&A expenses were $316 million and $292 million for the nine months ended September 30, 2024 and 2023, respectively. G&A expenses increased in 2024 as compared to 2023, principally due to inflationary increases and higher compensation expenses. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.
Current wording
G&A expenses were $115 million and $111 million for the three months ended March 31, 2025 and 2024, respectively. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.
Previous wording
The following table summarizes capitalized G&A for the nine months ended September 30 (dollars in millions):
Current wording
The following table summarizes capitalized G&A for the three months ended March 31 (dollars in millions):
Previous wording
The $78 million change in depreciation and amortization expenses for the nine months ended September 30, 2024 compared to the same period in 2023, was impacted by the following items (in millions):
Current wording
The $14 million change in depreciation and amortization expenses for the three months ended March 31, 2025 compared to the same period in 2024, was impacted by the following items (in millions):
Previous wording
Gains on the disposition of development properties and land were $160 million and $274 million for the nine months ended September 30, 2024 and 2023, respectively, primarily from the contribution of properties we developed to unconsolidated co-investment ventures in the U.S. and Europe in 2024 and in Japan in 2023. Gains on other dispositions of investments in real estate were $651 million and $158 million for the nine months ended September 30, 2024 and 2023, respectively. The gains recognized in 2024 are primarily from the contribution of operating properties to our U.S. unconsolidated co-investment venture, and both 2024 and 2023 include the sale of non-strategic properties in the U.S.
Current wording
Gains on other dispositions of investments in real estate were $37 million and $17 million for the three months ended March 31, 2025 and 2024, respectively, primarily from sales of properties to third parties.
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Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
This segment generates durable, long-term cash flows and generally contributes 5% to 10% of our consolidated revenues, earnings and FFO, excluding promotes. We generate strategic capital revenue from our unconsolidated co-investment ventures, principally through asset management and property management services. Revenue earned from asset management fees is primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing
Current report — wording carried from elsewhere
our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise.
Current report — wording carried from elsewhere
revenues are reduced by the direct costs associated with the asset and property-level management expenses for the properties owned by these ventures. We allocate the costs of our property management and leasing functions to the Strategic Capital Segment through Strategic Capital Expensesand to the Real Estate Segment through Rental Expenses both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 3 to the Consolidated Financial Statements.
Current report — wording carried from elsewhere
ventures, which are recognized in operating activities in the period the cash is received, generally the quarter after the revenue is recognized.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
based on the square footage of the relative portfolios. For further details regarding the key property information and summarized financial condition and operating results of our unconsolidated co-investment ventures, refer to Note 3 to the Consolidated Financial Statements.
Previous report — wording carried elsewhere
short-term basis. The maturities of the borrowings under the credit facilities and the notes under the commercial paper program generally range from overnight to three months.