Financial Data and Key Metrics Changes - The third quarter marked a record leasing quarter with nearly 62 million square feet signed, an increase in portfolio occupancy to 95.3%, up 20 basis points [5][8] - Core FFO was $1.49 per share, exceeding forecasts, with net effective rent change at 49% and cash rent change at 29% [7][8] - Same-store growth for net effective and cash was 3.9% and 5.2% respectively [9] Business Line Data and Key Metrics Changes - The data center business saw an additional 1.5 GW of capacity moved to advanced stages, totaling 5.2 GW secured or in advanced stages [6] - The energy business delivered 28 MW of solar generation and storage, with a goal of reaching one gigawatt by year-end [10] Market Data and Key Metrics Changes - U.S. market absorption was estimated at 47 million square feet for the third quarter, with market vacancy steady at 7.5% [12][15] - E-commerce penetration in U.S. retail sales reached 24%, continuing to drive demand [11] Company Strategy and Development Direction - The company is focused on disciplined growth, operational excellence, and capitalizing on long-term trends in logistics and data centers [17] - There is an exploration of additional capitalization strategies to fully capture opportunities in the data center business [7][24] Management's Comments on Operating Environment and Future Outlook - Management noted improved customer sentiment and decision-making, with larger occupiers pursuing reconfiguration strategies [11][64] - The outlook for global logistics and demand for data centers remains strong, with expectations for occupancy and rent to improve [15][17] Other Important Information - The company is increasing its G&A guidance to $460 million-$470 million and strategic capital revenue guidance to $580 million-$590 million [16] - The company closed on $2.3 billion in financing activity, maintaining a strong balance sheet with a cost of debt at 3.2% [10] Q&A Session Summary Question: Data center capitalization strategies - Management is exploring various capitalization strategies for data centers, including potential funds for property acquisition upon completion [22][24] Question: Net absorption and demand sustainability - Net absorption of 47 million square feet reflects a catch-up from previous quarters, with a normal quarterly demand expected to be around 60 million square feet [29][30] Question: Supply and demand equilibrium - Demand is strengthening, and supply remains low, indicating a potential recovery in occupancy and rents [34][35] Question: Tenant categories and market performance - Demand has turned a corner, with strength noted in larger tenant categories and e-commerce, while cyclical spending categories show some softness [40][41] Question: Growth rate for data centers versus industrial - The growth rate for data centers is expected to be significant, with ongoing discussions about the best strategies for value creation [44][73] Question: Customer sentiment and long-term decisions - Customers are becoming desensitized to short-term volatility and are making long-term decisions, indicating a positive trend for occupancy [63][64] Question: Credit risk and portfolio health - The overall credit health of the portfolio has improved, with bad debt expense expected to remain below levels seen in past crises [68][69] Question: Transaction market and acquisition opportunities - The transaction market remains resilient, with increased volumes and stable pricing, indicating healthy market conditions [77] Question: Spec development leasing pace - The pace of spec development leasing is improving, returning to historical norms after a period of extension [80] Question: Rent change dynamics - Rent change has decreased slightly, but the potential for significant rent change remains due to upcoming lease expirations [84][86] Question: Customer categories and leasing strength - E-commerce and stable growth businesses are showing strength, while cyclical categories like automotive are subdued [90][91]

Financial Data and Key Metrics Changes - The third quarter marked a record leasing quarter with nearly 62 million square feet signed, an increase in portfolio occupancy to 95.3%, and a rent change of 49% on a net effective basis and 29% on cash [4][6][11] - Core FFO was reported at $1.49 per share, exceeding forecasts, with net effective and cash same-store growth at 3.9% and 5.2% respectively [5][6] - The lease mark-to-market ended at 19%, capturing an additional $75 million of NOI during the quarter [6][12] Business Line Data and Key Metrics Changes - The data center business saw an increase in capacity with 1.5 gigawatts moved to advanced stages, totaling 5.2 gigawatts secured or in advanced stages [4][5] - Build-to-suit activity was strong, with nine additional projects signed, bringing the total to 21 for the year, amounting to $1.6 billion in expected investment [8][9] Market Data and Key Metrics Changes - In the U.S. markets, net absorption was 47 million square feet, with market vacancy steady at 7.5% [11][12] - E-commerce penetration in U.S. retail sales reached 24%, continuing to drive demand [10][11] Company Strategy and Development Direction - The company is focused on disciplined growth, operational excellence, and capitalizing on long-term trends in logistics and data centers [16] - There is an exploration of additional capitalization strategies to fully capture opportunities in the data center business [5][20] Management's Comments on Operating Environment and Future Outlook - Management noted improved customer sentiment and decision-making, with larger occupiers pursuing reconfiguration strategies [10][11] - The outlook for global logistics remains strong, with expectations for same-store NOI growth increasing to 4.25% to 4.75% on a net effective basis [13][14] Other Important Information - The company closed on $2.3 billion in financing activity, maintaining a strong balance sheet with a cost of debt at 3.2% [9] - The strategic capital business saw modest net inflows as investors began to re-engage [10] Q&A Session Summary Question: Data center capitalization strategies - Management is exploring various options for data center capitalization, including potential funds for property acquisition and development [20][21] Question: Net absorption and demand sustainability - Net absorption of 47 million square feet reflects a clear turning point in demand, with expectations for a normal quarterly velocity of around 60 million square feet [28][29] Question: Supply and demand equilibrium - The market is in a classic real estate cycle with strengthening demand and low supply, indicating a potential for rent growth [32][33] Question: Tenant categories and market performance - Demand has turned a corner, with strength noted in larger tenant categories and e-commerce, while cyclical spending categories show some softness [38][40] Question: Same-store NOI guidance - Guidance for same-store NOI growth implies a slowdown to about 3.5% in the fourth quarter, influenced by high prior year occupancy [92]

Financial Data and Key Metrics Changes - Prologis has $200 billion in assets across 1.3 billion square feet in 20 countries, with a development franchise averaging $4.5 billion annually [2][3] - The company has a land bank with $42 billion of investment opportunity, equating to nearly 10 years of development potential [3] - The build-to-suit activity reached a record $1.1 billion in the first half of the year, with eight new build-to-suit projects signed in the third quarter [10][11] Business Line Data and Key Metrics Changes - The leasing pipeline stood at 130 million square feet, with improvements in the conversion of new leasing proposals to signed leases, although still below historical norms [7][19] - Larger space sizes, particularly those over 250,000 square feet, have been leasing better, with strong activity noted in LATAM and Southeast U.S. markets [14][31] Market Data and Key Metrics Changes - The company noted a slowdown in leasing activity due to tariff concerns, but this has improved over the past few months, with a more positive sentiment emerging [5][6] - Vacancy rates are expected to build slightly over the next two to three quarters, with a forecasted bottoming out below 8% in the U.S. [20][24] Company Strategy and Development Direction - Prologis emphasizes a strategy focused on quality earnings and a high-quality portfolio in logistics real estate, targeting markets with significant populations and high household incomes [67] - The company is exploring new capital sources and joint ventures to expand its $65 billion in third-party assets under management [51] - The Essentials business aims to provide additional services to smaller and medium-sized enterprises, enhancing customer relationships and contributing to EBITDA [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding demand trends, noting that the impact of new supply has been more muted than expected [73] - The company anticipates a reset in occupancy and rental rates by 2026, with expectations of returning to typical growth levels thereafter [76][78] - The ongoing e-commerce growth and challenges in new supply are seen as favorable for the logistics sector [58][59] Other Important Information - Prologis is focusing on AI and data center conversion opportunities, leveraging its existing logistics buildings for future use [43][44] - The transaction market is showing signs of improvement, with a 15% increase in volume year-to-date and multiple bidders for transactions [39][40] Q&A Session Summary Question: Has tenant decision-making improved post-tariff concerns? - Yes, there has been a positive momentum in leasing activity, with improvements in the conversion of proposals to signed leases [5][6] Question: What are the trends in box sizes and market activity? - Larger spaces are leasing better, with strong activity in LATAM and Southeast U.S. markets, while Europe has also shown good build-to-suit volume [14][31] Question: How is Prologis addressing the leasing pipeline? - The company is actively working to convert deals in the pipeline, focusing on optimizing occupancy and rent change rates [19][20] Question: What is the outlook for net absorption and vacancy rates? - The company expects net absorption to be between 75 and 100 million square feet for the year, with vacancy rates projected to bottom out in the coming quarters [24][25] Question: How is the transaction market performing? - The transaction market is improving, with a 15% increase in volume year-to-date and relatively flat values guided by appraisals [39][40] Question: What are the company's plans regarding AI initiatives? - The company plans to increase spending on AI initiatives in the coming year [62] Question: How does Prologis view the future growth of the logistics sector? - The company believes growth will remain stable, supported by favorable supply and demand dynamics [58][59]

Financial Data and Key Metrics Changes - Core FFO including net promote income was $1.46 per share, and excluding net promotes was $1.47 per share, both ahead of forecasts [8] - Occupancy ended the quarter at 95.1%, down just 10 basis points sequentially, widening outperformance to the market by 290 basis points [8] - Net effective same store growth was strong, with rent change across the global portfolio monetizing an additional $75 million of NOI, reflecting a 53% net effective basis and 35% cash [8][9] Business Line Data and Key Metrics Changes - The company started over $900 million in new development, with nearly 65% being build-to-suit activity across seven projects in the U.S. and Europe [9] - Build-to-suit starts for the first half totaled $1.1 billion, marking the largest start to a year [10] - The build-to-suit pipeline remains full with over 30 projects representing more than 25 million square feet in active dialogue [15] Market Data and Key Metrics Changes - In the U.S., net absorption was subdued at 28 million square feet, with market vacancy ticking up 10 basis points to 7.4% [14] - Market rents declined approximately 1.4% during the quarter, while values remained flat [13] - The leasing pipeline reached historically high levels at 130 million square feet, reflecting significant interest and need for space [15] Company Strategy and Development Direction - The company remains committed to serving customers at the center of consumption, focusing on logistics real estate as a strategic asset [19][20] - The strategy includes expanding the distributed energy platform and increasing development starts, particularly in data centers [11][17] - The company is excited about broader global potential and sees meaningful opportunities in the U.S. market [12][19] Management's Comments on Operating Environment and Future Outlook - Management noted that while conditions remain choppy, the underlying activity reflects a market that is active and moving forward [19] - There is confidence in the long-term trends driving the business, despite short-term uncertainties [19][41] - The company expects to see improved clarity in policy and trade arrangements, which will be key determinants of net absorption pace [16] Other Important Information - The company closed on $5.8 billion in financing activity, contributing to over $7 billion of liquidity held at quarter end [12] - Strategic capital business saw net outflows of approximately $300 million during the quarter [13] - The company is making steady progress toward its goal of one gigawatt of solar production and storage by year-end [11] Q&A Session Summary Question: Can you provide more details on the leasing pipeline and its impact? - The leasing pipeline is promising, up 19% year on year, with good balance across different deal stages and types [24][25] Question: What is the cadence of leasing activity from Q1 to Q2? - Leasing activity accelerated through May and June, ending the quarter only down about 10% from normal [31] Question: Can you elaborate on the guidance and factors driving it? - The environment has calmed significantly since April, leading to improved visibility and confidence in guidance [36] Question: How do you see the timing of the growing pipeline translating to signed leases? - Decision-making remains deliberate, with clarity on the macro front being crucial for converting the pipeline into signed leases [40] Question: What are the expectations for occupancy in specific regions? - Occupancy is expected to improve, particularly in Asia, while other regions may experience volatility [103]

Financial Data and Key Metrics Changes - Core FFO including net promote income was $1.46 per share and excluding net promotes was $1.47 per share, both ahead of forecasts [7] - Occupancy ended the quarter at 95.1%, down just 10 basis points sequentially, outperforming the market by 290 basis points [7] - Net effective same store growth was strong, with rent change across the global portfolio monetizing an additional $75 million of NOI, reflecting a 53% net effective basis and 35% cash [7][8] Business Line Data and Key Metrics Changes - Build to suit activity saw significant growth, with $1.1 billion in starts for the first half, the largest start to a year ever [9] - The company signed agreements for an additional three build to suits post quarter end, indicating strong demand from major customers [9] - The leasing pipeline reached historically high levels, up 19% year on year, with a good balance across different deal stages and types [24][25] Market Data and Key Metrics Changes - In the U.S., net absorption was subdued at 28 million square feet, with market vacancy ticking up 10 basis points to 7.4% [13] - Market rents declined approximately 1.4% during the quarter, while values remained essentially flat [12] - The leasing pipeline stands at 130 million square feet, reflecting significant interest and need for space [14] Company Strategy and Development Direction - The company remains committed to its strategy of serving customers at the center of consumption, focusing on logistics real estate as a strategic asset [18][19] - There is a strong emphasis on expanding the distributed energy platform, with a goal of one gigawatt of solar production and storage by year-end [10] - The company is increasing development starts to a new range of $2.25 billion to $2.75 billion, reflecting improved visibility in logistics starts [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted that while conditions remain choppy, the market is holding up reasonably well, with expectations for improved demand as clarity on policy emerges [15][18] - The company expressed confidence in long-term trends driving the business, despite short-term uncertainties [18] - Management highlighted that the current environment has calmed significantly since April, providing improved visibility for guidance [35] Other Important Information - The company closed on $5.8 billion in financing activity, contributing to over $7 billion of liquidity held at quarter end [11] - Strategic capital business saw net outflows of approximately $300 million during the quarter, with teams developing new offerings [12] - Bad debt trends were better than expected, with expectations of around 40 basis points for the balance of the year [71] Q&A Session Summary Question: Impact of Liberation Day on Leasing Pipeline - The leasing pipeline is promising, up 19% year on year, with good balance across different deal stages and types [24][25] Question: Cadence of Leasing Activity - Leasing activity accelerated through May and June, with the quarter ending only down about 10% from normal [31] Question: Guidance Details - The increase in guidance is due to improved visibility and outperformance in the quarter, with confidence in landing at the stronger end of the range [36] Question: Timing of Growing Pipelines to Signed Leases - Decision-making remains deliberate, with clarity on the macro front needed to convert the pipeline into signed leases [39] Question: Bad Debt Trends - Bad debt is trending better than expectations, with elevated levels around 35-40 basis points [71] Question: Geographic Market Dynamics - Strong long-term fundamentals in certain markets like Southern California could lead to a quick recovery as demand increases [78][79]

Market Overview - The S&P 500 has experienced a sell-off, dropping more than 10% from its peak, with many individual stocks declining even further [1] Dividend Stocks - Falling stock prices have increased dividend yields, making it an opportune time to invest in high-quality dividend stocks [2] - Kinder Morgan, NextEra Energy, and Prologis have all seen declines of over 13% from their recent peaks, making them attractive for dividend investors [2][10] Kinder Morgan - Kinder Morgan's stock has decreased just over 13%, raising its dividend yield to 4.3%, significantly higher than the S&P 500's 1.3% [3] - The company plans to increase its dividend by 2% this year, marking the eighth consecutive year of dividend growth [3] - Kinder Morgan generates substantial excess free cash flow after dividends, allowing for investments in expansion, including a recent $640 million acquisition in North Dakota and $5 billion in new pipeline projects [4] NextEra Energy - NextEra Energy's stock has fallen nearly 14%, resulting in a dividend yield of 3.1% [5] - The company has a strong track record of dividend growth, having increased its payout for 30 consecutive years at a 10% compound annual growth rate over the past 20 years [5] - NextEra Energy is heavily investing in renewable energy capacity, which is expected to support adjusted earnings growth within its 6% to 8% annual target range through 2027 [6] Prologis - Prologis' stock has declined 15.5%, increasing its dividend yield to 3.6% [7] - The company has achieved a 13% compound annual growth rate in dividends over the past five years, significantly outpacing the S&P 500 and average REIT growth rates [7] - Prologis benefits from strong demand for logistics real estate driven by e-commerce growth, allowing for rent increases and investment in new development projects, including data centers [8]