Prologis(US:PLD)2025-10-28 20:14Portfolio and Operations - Prologis operates a portfolio of approximately 1.3 billion square feet across 20 countries, focusing on logistics real estate in high-growth markets [148]. - The company actively manages its portfolio through leasing, property management, development, acquisitions, and dispositions, recycling capital back into ongoing investment activities [151]. - The occupancy of the operating portfolio was 95.2% as of September 30, 2025, with a net effective rent change of 52.0% on leases that commenced during the nine months ended September 30, 2025 [169]. - The total O&M operating portfolio included 5,455 properties with a total of 1,208 million square feet, achieving an occupancy rate of 95.3% as of September 30, 2025 [203]. - The company signed 31 million square feet of new leases in the third quarter, reflecting continued customer demand despite economic uncertainty [170]. Financial Performance - For the trailing twelve months ended September 30, 2025, the weighted average lease term for leases commenced in the consolidated operating portfolio was 68 months, with rental operations contributing 90% to 95% of consolidated revenues [158]. - The Real Estate Segment's NOI increased to $4.608 billion for the nine months ended September 30, 2025, compared to $4.216 billion in 2024 [175]. - The Strategic Capital Segment's NOI was $244 million for the nine months ended September 30, 2025, up from $208 million in 2024 [175]. - Strategic Capital Segment revenues increased to $439 million in 2025 from $419 million in 2024, representing a growth of 4.8% [193]. - Funds from Operations (FFO) attributable to common stockholders was $4,080 million in 2025, compared to $3,969 million in 2024 [265]. - Core FFO attributable to common stockholders was $4,178 million in 2025, up from $3,870 million in 2024 [265]. Strategic Initiatives - The company expects to generate earnings growth by increasing rents, maintaining high occupancy rates, and controlling expenses, with a focus on rolling in-place leases to current market rents upon expiration [158]. - Prologis anticipates sustained demand for logistics space driven by e-commerce growth, modernization of supply chains, and a focus on supply chain efficiency [149]. - The company plans to grow its strategic capital business by increasing assets under management in existing and new ventures [163]. - Prologis emphasizes sustainability and operational efficiency through its Prologis Essentials platform, addressing customer needs in energy and sustainability [153]. Development and Investments - Prologis has the potential to support the development of $37.0 billion of total expected investment (TEI) in newly developed buildings, with an estimated value creation captured through gains realized upon contributing properties to co-investment ventures [166]. - Consolidated development starts totaled $2.0 billion during the nine months ended September 30, 2025, with 68.3% of these being build-to-suit projects [170]. - The consolidated development portfolio was expected to be completed before July 2027 with a total estimated investment (TEI) of $4.7 billion and was 48.1% leased [187]. Liquidity and Capital Structure - The company maintained total available liquidity of $7.5 billion, including $6.3 billion in credit facilities and $1.2 billion in unrestricted cash as of September 30, 2025 [174]. - The total debt outstanding as of September 30, 2025, was $35.3 billion, with a weighted average interest rate of 3.2% [231]. - The company had a total of $1.325 billion in remaining equity commitments related to certain co-investment ventures as of September 30, 2025 [235]. - The company issued $2.9 billion of senior notes during the nine months ended September 30, 2025, with a weighted average interest rate of 4.3% [217]. Expenses and Gains - G&A expenses increased to $333 million in 2025 from $316 million in 2024, a rise of 5.4% [195]. - Depreciation and amortization expenses were $2.0 billion in 2025, compared to $1.9 billion in 2024, marking a $100 million increase [197]. - Gains on real estate transactions decreased to $53 million in 2025 from $160 million in 2024, a decline of 66.3% [199]. - Net interest expense rose to $742 million in 2025 from $632 million in 2024, an increase of 17.4% [217]. Foreign Currency and Derivatives - For the nine months ended September 30, 2025, the company recognized net foreign currency and derivative losses of $54 million compared to gains of $63 million in 2024 [220]. - The total unrealized foreign currency and derivative losses, net for 2025 were $156 million, compared to $61 million in 2024 [220]. - The company primarily mitigates foreign currency risk by borrowing in the currencies where it invests, creating a natural hedge [268]. - The company uses derivative financial instruments, such as foreign currency contracts, to offset translation adjustments on net assets of foreign investments [268].