Prologis Raises Development and Acquisition Ambitions for 2026

Prologis ended the third quarter with stronger operating results and a larger capital-deployment plan. The logistics REIT now expects $5.0 billion to $5.75 billion of development underway at year-end and raised 2026 acquisition guidance to $2.1 billion to $2.3 billion.

The quarter provided support for that confidence. Prologis reported $2.388 billion of revenue, up from $2.214 billion a year earlier, and core funds from operations of $1.60 per diluted share, compared with $1.49. Core FFO is a commonly used REIT measure that adjusts earnings for property depreciation and certain other items.

Leasing was also firm. The company signed about 60 million square feet of leases and reported occupancy near 95%. Build-to-suit demand, where a facility is developed for a specific customer, is expected to account for much of this year's starts.

Data centers and power-related projects are becoming more important. The source report said they represented 17% of U.S. leasing in the quarter, while Prologis sees potential for more than 150 million square feet of related demand through 2030. That opportunity is large but lumpy because hyperscaler decisions involve long timelines and substantial infrastructure.

Higher interest rates remain the check on expansion. Management said rents needed to justify new speculative projects were about 27% above market, discouraging supply but also raising the hurdle for investment. Investors should watch fourth-quarter starts, acquisition yields and funding costs. Growth creates value only if projected rents and occupancy compensate for the cost of capital.