- Prologis signed 62M SF of leases in Q3 — its highest ever for a single quarter — driving revenue up 9% year-over-year to $2.2B.
- The company is committing $8B to build 20 data centers over four years, targeting up to 100 projects globally to meet rising AI demand.
- Two-thirds of Q3 development spending went to customized projects for major clients, totaling $1.6B across 21 deals so far this year.
- CEO Hamid Moghadam held his final earnings call ahead of retiring after more than four decades in the industry. President Dan Letter will take over as CEO in 2026.
Record Quarter Amid Cooling Market
The industrial market has softened, with national vacancy rising to 7.5% and rent growth stalling, reports CoStar. Despite these challenges, Prologis posted its best leasing quarter on record. The strong performance was driven by renewed tenant activity and robust build-to-suit demand. CFO Tim Arndt noted an “inflection” point in both occupancy and rent, signaling a potential rebound in the sector.
Revenue reached $2.2B in Q3, beating analyst expectations. The company also slightly raised its full-year earnings guidance to between $5.78 and $5.81 per share.
Bet On AI And Digital Infrastructure
Prologis is accelerating its move beyond warehouses with a growing focus on data centers. The REIT advanced another 1.5 gigawatts of power capacity for data centers to later-stage development, bringing its global pipeline to 5.2 gigawatts.
The company plans to invest $8B over the next four years to build 20 data centers. Its long-term goal is to reach 100 projects. Arndt highlighted the synergy between Prologis’ real estate expertise, access to capital, and global tenant base as key advantages in the AI-driven infrastructure space.
Build-To-Suit Leads Development Spending
Build-to-suit developments accounted for two-thirds of Prologis’ development spend in Q3. Nine new BTS deals were signed during the quarter, part of a total 21 deals year-to-date representing $1.6B in investment. The company now expects total 2025 development starts to reach between $2.75B and $3.25B — a $500M increase from earlier forecasts.
Moghadam Steps Aside
This quarter marked the final earnings call for Hamid Moghadam, co-founder and longtime CEO of Prologis. After more than 40 years leading the company, Moghadam will retire from his role at year-end but will remain as executive chairman. President Dan Letter is set to take over as CEO.
Moghadam reflected on the company’s evolution from a regional industrial player to a global logistics and infrastructure powerhouse: “To witness that arc and to have had the privilege of leading this company through it all — it’s been surreal.”
Why It Matters
With record leasing, rising development forecasts, and a bold move into data centers, Prologis is positioning itself as more than just a logistics leader. The company is emerging as a foundational player in the future of AI and digital infrastructure. Its leadership transition comes at a pivotal moment for both the company and the broader industrial sector.
