Financial Trends -- 6/10
Prologis is navigating a cyclical trough in industrial logistics with remarkable stability, but the
numbers tell a story of deceleration from peak-cycle growth rates. Core FFO/share growth has slowed
materially, occupancy has declined from peak levels, and same-store NOI growth is decelerating --
though all remain positive. The massive embedded lease mark-to-market (~18% at Q4 2025) provides a
durable tailwind, and the data center pivot adds optionality. However, 2024 was the first year of
Core FFO/share decline in recent history, and while 2025 showed recovery, the growth rate remains
modest. AFFO declined in both 2024 and 2025. The setup is constructive for acceleration in 2026-2027,
but the actual trailing financial trends are mixed.
Weight: 25%
FY25 Core FFO/Share
$5.81
+4.5% YoY | $5.86 ex-promotes
FY25 AFFO
$4,335M
-2.0% YoY | 2nd consecutive decline
Q4 25 Occupancy
95.8%
Inflecting up from 95.1% trough
Q4 25 NE Rent Change
43.8%
Down from 84% peak | 18% MTM embedded
Annual Financial Summary ($M, FY ends December)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Total Revenue | $4,439M | $4,759M | $5,974M | $8,023M | $8,202M | $8,790M |
| Rev YoY | — | +7.2% | +25.5% | +34.3% | +2.2% | +7.2% |
| Rental Revenue | $3,791M | $4,148M | $4,913M | $6,819M | $7,515M | $8,159M |
| Rental Rev YoY | — | +9.4% | +18.4% | +38.8% | +10.2% | +8.6% |
| Core FFO | $2,864M | $3,172M | $4,188M | $5,334M | $5,305M | $5,561M |
| Core FFO/Share | $3.80 | $4.15 | $5.16 | $5.61 | $5.56 | $5.81 |
| Core FFO/sh YoY | — | +9.2% | +24.3% | +8.7% | -0.9% | +4.5% |
| Core FFO/sh ex-Promotes | — | — | — | $5.10 | $5.53 | $5.86 |
| ex-Promotes YoY | — | — | — | — | +8.4% | +6.0% |
| AFFO | $2,875M | $3,332M | $4,056M | $4,711M | $4,422M | $4,335M |
| AFFO YoY | — | +15.9% | +21.7% | +16.2% | -6.1% | -2.0% |
| Diluted Shares (M) | 754M | 765M | 812M | 952M | 954M | 957M |
| Share Count YoY | — | +1.4% | +6.1% | +17.3% | +0.2% | +0.3% |
| Dev Starts (sq ft) | 22,924K | 32,138K | 33,804K | 16,477K | 9,842K | 15,678K |
Note: PLD reports under U.S. GAAP as a REIT in USD. Fiscal year ends December 31. Revenue in
thousands rounded to millions. Core FFO and AFFO are non-GAAP measures per PLD definitions.
Development starts from company transcripts. 2023 share count jump reflects Duke Realty merger.
Mixed trailing trends: Core FFO/share growth positive but modest,
AFFO declining two consecutive years. Core FFO/share dipped
$5.56 in 2024 (-0.9%) before recovering to
$5.81 in 2025 (+4.5%). On ex-promotes basis,
growth was steadier at +8.4% and +6.0%. AFFO declined from
$4,711M peak to
$4,335M -- reflecting elevated capex
and Duke purchase accounting drag.
Quarterly Core FFO/Share ex-Promotes (Q3 2023 through Q4 2025)
Ex-promotes growth decelerating: from +9-10% in H1 2025 to +3% in
H2 2025. On a quarterly basis, Core FFO/sh ex-promotes peaked at
$1.50 in Q3 2025. YoY growth rate
decelerated from +9.2% in Q1 2025 to +2.8% by Q4 2025 as prior-year comps normalized.
Occupancy and Same-Store NOI (Quarterly, Q1 2023 through Q4 2025)
| Metric | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Period-End Occupancy | 98.0% | 97.2% | 97.5% | 97.6% | 97.0% | 96.4% | 95.9% | 95.9% | 95.2% | 95.1% | 95.3% | 95.8% |
| SS Avg Occupancy | 97.9% | 97.4% | 96.9% | 97.1% | 97.0% | 96.6% | 96.5% | 96.3% | 95.5% | 95.4% | 95.2% | 95.7% |
| SS NOI Growth (NE) | 9.9% | 8.9% | 9.3% | 7.8% | 4.1% | 5.5% | 6.2% | 6.6% | 5.9% | 4.8% | 3.9% | 4.7% |
| SS NOI Growth (Cash) | 11.4% | 10.7% | 9.5% | 8.5% | 5.7% | 7.2% | 7.2% | 6.7% | 6.2% | 4.9% | 5.2% | 5.7% |
Occupancy inflecting after 2-year decline: period-end occupancy
rose from 95.1% trough to
95.8% in Q4 2025.
This is the first sequential improvement since Q1 2023 (
98.0%). Same-store NOI growth (NE) hit
a trough of
3.9% in Q3 2025 before rebounding to
4.7% in Q4. Cash SS NOI also
reaccelerated to 5.7% in Q4 from 4.9% in Q2.
Net Effective Rent Change on Renewals/New Leases (PLD Share)
Rent change normalizing from extraordinary levels: peaked at
84.0% in Q3 2023, now
43.8% in Q4 2025.
Still impressive in absolute terms -- 44% rent change on renewals is exceptional for any
REIT -- but the direction is clearly down as the mark-to-market narrows. Net effective lease
mark-to-market ended 2025 at ~18%, representing ~$800M of embedded NOI yet to be realized
even without any increase in market rents.
Acceleration / Deceleration Analysis
| Signal | Detail | Direction |
|---|---|---|
| Core FFO/sh Growth | +24.3% (2022) to +8.7% (2023) to -0.9% (2024) to +4.5% (2025) | Decelerating |
| Same-Store NOI (NE) | ~9% avg (2023) to ~5.6% (2024) to ~4.8% (2025); Q3 trough 3.9% | Decelerating |
| Period-End Occupancy | Fell 290bps from 98.0% peak to 95.1% trough; now 95.8% | Decelerating |
| Net Effective Rent Change | Peaked 84% Q3 2023, steadily declined to 43.8% Q4 2025 | Decelerating |
| AFFO | Outright decline: -6.1% (2024), -2.0% (2025) | Negative |
| Revenue Growth Re-accelerating | Total rev +7.2% in 2025 vs. +2.2% in 2024 | Accelerating |
| Occupancy Inflecting | Q3-Q4 2025 first sequential improvement since Q1 2023 | Accelerating |
| Development Starts Recovery | 15.7M sf in 2025 vs. 9.8M in 2024 (+59%); Q4 strongest since Q4 2023 | Accelerating |
| Share Count Stable | +0.3% dilution in 2025; Duke merger dilution (+17.3%) fully behind | Stable |
| Cash SS NOI Reaccelerating in Q4 | 5.7% in Q4 2025 above Q2-Q3 levels; 2026 guidance 5.75%-6.75% | Accelerating |
2026 Guidance and Outlook
| Metric | FY2025 Actual | 2026 Guidance | Implied Growth |
|---|---|---|---|
| Core FFO/sh | $5.81 | $6.00-$6.20 | +3% to +7% |
| Core FFO/sh ex-Promotes | $5.86 | $6.05-$6.25 | +3% to +7% |
| SS NOI Growth (NE) | ~4.8% | 4.25%-5.25% | Roughly stable |
| SS NOI Growth (Cash) | ~5.5% | 5.75%-6.75% | Accelerating |
| Average Occupancy | ~95.3% | 94.75%-95.75% | Wide range |
| NE Rent Change | 43.8% (Q4) | High 30s to ~40% | Normalizing further |
| Development Starts (O&M) | $2.8B | $4B-$5B | +43% to +79% |
Penalty / Modifier Assessment
| Factor | Impact | Detail |
|---|---|---|
| AFFO declining 2 consecutive years | -0.50 | AFFO fell -6.1% (2024) and -2.0% (2025); elevated capex + Duke accounting drag |
| Occupancy/rent inflection emerging | +1.00 | Q4 2025 first clear signs: occupancy rising, SS NOI reaccelerating, market vacancy declining |
| Durable mark-to-market | +0.50 | 18% lease MTM providing ~$800M embedded NOI runway over multiple years |
| Share dilution | None | Post-Duke, share count growth minimal (+0.2-0.3%/yr); no equity issuance |
Final Score: 6 / 10. Positive but clearly decelerating
financial trends with early signs of inflection. The trailing data shows a company coming off
peak-cycle metrics with earnings growth that has slowed materially. Rent change normalization
from 84% to 44% and occupancy down ~220 bps from peak are real headwinds, partially offset by
revenue growth and the first occupancy improvement in two years. Data center optionality and
mark-to-market runway may drive re-acceleration but are not yet reflected in trailing results.
Transcript Context (Q3 2024 through Q4 2025)
Mark-to-Market Opportunity: Net effective lease mark-to-market ended 2025 at 18%,
representing ~$800M of embedded NOI yet to be realized -- without any increase in market rents.
The rate of decline has "slowed considerably" and several U.S. markets plus most LatAm and Europe
are seeing expansion again. Replacement cost rents are 50% above in-place rents.
Data Center Pivot: Power pipeline grew to 5.7 GW (secured + advanced stages).
1.2 GW in LOI or pending lease execution. ~40% of 2026 development start guidance ($4B-$5B) is
data center. Sold turnkey facility at "compelling economics." Exploring data center fund with
large institutional investors. Material new growth vector not yet reflected in trailing financials.
Tariff / Trade Impact: Management noted tariff uncertainty is now treated as a
"planning assumption rather than an impediment" by customers. Customer sentiment improved markedly
throughout 2025, with record 62M sq ft leasing in Q3 2025 and 57M sq ft in Q4. E-commerce
represented 20% of new leasing in 2025, its best year since 2021.
Occupancy Inflection: Q4 2025 was the first quarter since 2022 where net
absorption exceeded completions in the U.S. U.S. vacancy declined to 7.4%. Management expects
vacancy to improve to ~7.1-7.2% by end of 2026. International markets (Japan 97%+ occupancy,
LatAm, Europe) continue to outperform.
Daloopa (company_id: 536) and PLD earnings call transcripts (Q3 2024 through Q4 2025)