Warehouse Demand Surges with Prologis Record Leasing

Warehouse Leasing Hits New High

Warehouse demand saw a robust recovery in 2025, with Prologis posting a record leasing year. The logistics real estate giant secured 228M SF in new leases, finishing the year with nearly 95% occupancy. CoStar reports that revenue for the fourth quarter reached $2.25B, up from $2.2B the previous year, signaling renewed strength in the sector.

Leasing accelerated across the US, driven by key markets such as Southern California. Los Angeles alone recorded 42M SF of new deals, bolstered by a major 615 KSF Amazon lease. Overall, the US logistics sector saw over 49M SF of net absorption in the final quarter, outpacing the combined total of the first three quarters.

Data Center Expansion Accelerates

Prologis is also ramping up its data center investments to capture rising demand for digital infrastructure. The company grew its data center power pipeline to 5.7 gigawatts in Q4, and it has projects in advanced negotiation totaling another 1.2 gigawatts. This push comes as part of a broader strategy to align logistics infrastructure with emerging technologies and energy demands, reflecting Prologis’ evolving role beyond traditional warehousing. Data centers are projected to represent 40% of the firm’s $4B–$5B in development starts this year.

US data center projects span major hubs such as Northern Virginia, Silicon Valley, and Dallas, with additional sites planned across Europe. New investment vehicles for data center development are under consideration to further expand the firm’s digital real estate footprint.

What’s Next

Improved sentiment and market conditions suggest US warehouse demand has bottomed out, with early signs of rent growth in top logistics markets. Prologis expects continued momentum in warehouse demand and significant expansion of its data center operations throughout 2026, as the firm leverages its market position to meet evolving tenant needs.