Prologis ups earnings outlook amid record lease signings
Logistics warehouse operator Prologis reported record leasing activity in the second quarter. The post Prologis ups earnings outlook amid record lease signings appeared first on FreightWaves.
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Logistics warehouse operator Prologis reported another quarter of record lease signings, prompting it to raise earnings guidance for a second time this year. The San Francisco-based real estate investment trust’s second-quarter results came in ahead of analysts’ forecasts Thursday before the market opened.
Prologis (NYSE: PLD) reported consolidated revenue of $2. 43 billion, which was 11% higher year over year and ahead of a $2. 16 billion consensus estimate. Core funds from operations (FFO) of $1. 63 per share were 17 cents higher y/y and 8 cents better than analysts’ expectations.
“We believe the business is entering its next phase of growth,” said CEO Dan Letter in a news release. “Customer demand is broadening, and our opportunity set is expanding as logistics, digital infrastructure and energy needs increasingly intersect.”
Table: Prologis’ key performance indicators Lease signings covering 67 million square feet of space outpaced the prior record set in the first quarter. Leases commenced totaled 61. 7 million square feet, up 21% y/y. Average occupancy improved 10 basis points y/y to 95% (30 bps lower sequentially).
Net effective rent change on Prologis’ portfolio of multiyear leases was 36. 9% in the quarter, near the company’s goal of 40% for full-year 2026. Core FFO is now forecast to a range of $6. 22 to $6. 30 per share, a 2% increase at the midpoint. The guide assumes average occupancy of 95. 25% to 95.
75% (25 bps higher on the low end of the range) and development starts between $4. 5 billion and $5. 5 billion (a $1-billion increase at both ends of the range). Development projects also include new data center construction.
“Embedded rent growth provides clear earnings visibility, and the scale of the opportunity ahead of us, together with our strong balance sheet, positions Prologis to deliver durable earnings growth and compound long-term value,” said Tim Arndt, Prologis chief financial officer.
Prologis will host a call at noon EDT on Thursday to discuss second-quarter results. More FreightWaves articles by Todd Maiden: ‘Massive opportunities’ for J. B. Hunt in intermodal shift TL, LTL rates to hit new highs in Q3 Knight-Swift opens 4 LTL terminals The post Prologis ups earnings outlook amid record lease signings appeared first on FreightWaves.
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