Prologis(PLD) ZACKS·2025-01-14 14:40Core Viewpoint - Prologis is strategically positioned to leverage its modern logistics facilities in key distribution markets, supported by a solid balance sheet and promising development activities [1][10]. Group 1: Company Strategy and Operations - Prologis is focusing on warehouse conversions and new developments in the data center sector, including a recent sale of a data center development in Chicago and a partnership to convert an Illinois warehouse into a high-capacity data center with 32 megawatts capacity [2]. - The company anticipates acquisitions between $1.75 billion and $2.25 billion and development starts in the same range for 2024, indicating a strong growth trajectory [8]. - Prologis plans to develop approximately 20 data center opportunities over the next four years, with an investment of $7 to $8 billion [9]. Group 2: Financial Performance and Outlook - Prologis reported an average occupancy level of 95.9% in its portfolio for Q3, with expectations for 2024 occupancy between 96% and 96.5% [7]. - The company has a total available liquidity of $6.6 billion as of September 30, 2024, with a weighted average interest rate on its debt at 3.1% and a term of 9.2 years [10]. - The Zacks Consensus Estimate for Prologis' 2024 core funds from operations (FFO) per share is $5.45, with a fourth-quarter estimate of $1.38 [4]. Group 3: Market Challenges - The industrial real estate market is experiencing volatility, with subdued demand and high interest expenses posing challenges for Prologis [3][12]. - The company's consolidated debt was $32.3 billion as of September 30, 2024, with a projected 32.5% year-over-year increase in interest expenses for 2024 [13].