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Reflecting investors’ positive sentiments, shares of the company gained more than 3% during the initial hours of today’s trading session. The quarterly results reflect a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor.
Prologis generated rental revenues of $2.04 billion, beating the Zacks Consensus Estimate of $2 billion. The figure increased from the $1.85 billion reported in the year-ago period. Total revenues were $2.18 billion, up from the year-ago quarter’s $2 billion.
Per Daniel S. Letter, president of the company, "Our leasing pipeline has reached historically high levels, and what we're hearing from customers, especially the larger ones, is clear: they're planning, engaging and increasingly ready to act. These trends are evident in both our leasing and build-to-suit activity, and we're in a strong position to meet that demand."
PLD's Quarter in Detail
In the quarter, 51.2 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 74.9% in the quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 94.9% in the second quarter, unchanged from the prior quarter and down from 96.1% in the year-ago period.
Prologis’ share of net effective rent change was 53.4% in the April-June quarter. In the reported quarter, the cash rent change was 34.8%. Cash same-store net operating income (NOI) grew 4.9% compared to 6.2% in the previous quarter.
The company’s share of building acquisitions amounted to $335 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.7% in the second quarter. Development stabilization aggregated $192 million, with 5.3% being built to suit, while development starts totaled $846 million, with 62.7% being built to suit. PLD’s total dispositions and contributions were $96 million, with a weighted average stabilized cap rate (excluding land and other real estate) of 4.5%.
However, during the reported quarter, interest expenses jumped 20.9% on a year-over-year basis to $251.9 million.
PLD's Liquidity
Prologis exited the second quarter of 2025 with cash and cash equivalents of $1.07 billion, up from $671.1 million at the end of the first quarter of 2025. Total liquidity amounted to $7.1 billion at the end of the quarter.
Debt, as a percentage of the total market capitalization, was 27.9% as of June 30, 2025. The company's weighted average interest rate on its share of the total debt was 3.2%, with a weighted average term of 8.5 years.
Prologis and its co-investment ventures issued an aggregate of $5.8 billion of debt in the reported quarter at a weighted average interest rate of 4.5% and a weighted average term of 5.4 years.
2025 Guidance
Prologis narrowed its 2025 core FFO per share guidance to the range of $5.75-$5.80 from the $5.65-$5.81 range guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $5.70.
The company has revised its average occupancy in the band of 94.75% and 95.25% from the previous guidance of 94.5-95.5%. Also, cash same-store NOI (Prologis share) was revised within the range of 4.25% to 4.75%, from the previous guidance of 4% to 5%.
The company has increased its outlook for capital deployment (Prologis share) on development starts to $2.25-$2.75 billion, from the prior range of $1.50-$2.00 billion. Dispositions are estimated at $500-$750 million, up from its previous range of $250 million-$500 million. Spending on acquisitions is revised to $1 billion-$1.25 billion from the previous range of $750 million-$1.25 billion.
Prologis currently carries a Zacks Rank #3 (Hold).
We now look forward to the earnings releases of other REITs, such as Alexandria Real Estate Equities (ARE - Free Report) and Digital Realty Trust (DLR - Free Report) , slated to report on July 21 and July 24, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Zacks Consensus Estimate for Alexandria’s second-quarter 2025 FFO per share is pegged at $9.20, which implies a 2.9% year-over-year decrease. ARE currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for Digital Realty Trust’s second-quarter 2025 FFO per share is pegged at $7.04, which suggests a year-over-year decrease of 4.9%. DLR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Prologis' Q2 FFO Beat Estimates, Rental Revenues Rise Y/Y
Key Takeaways
Prologis, Inc. (PLD - Free Report) reported second-quarter 2025 core funds from operations (FFO) per share of $1.46, outpacing the Zacks Consensus Estimate of $1.41. This compares favorably with the year-ago quarter’s figure of $1.34.
Reflecting investors’ positive sentiments, shares of the company gained more than 3% during the initial hours of today’s trading session. The quarterly results reflect a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor.
Prologis generated rental revenues of $2.04 billion, beating the Zacks Consensus Estimate of $2 billion. The figure increased from the $1.85 billion reported in the year-ago period. Total revenues were $2.18 billion, up from the year-ago quarter’s $2 billion.
Per Daniel S. Letter, president of the company, "Our leasing pipeline has reached historically high levels, and what we're hearing from customers, especially the larger ones, is clear: they're planning, engaging and increasingly ready to act. These trends are evident in both our leasing and build-to-suit activity, and we're in a strong position to meet that demand."
PLD's Quarter in Detail
In the quarter, 51.2 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 74.9% in the quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 94.9% in the second quarter, unchanged from the prior quarter and down from 96.1% in the year-ago period.
Prologis’ share of net effective rent change was 53.4% in the April-June quarter. In the reported quarter, the cash rent change was 34.8%. Cash same-store net operating income (NOI) grew 4.9% compared to 6.2% in the previous quarter.
The company’s share of building acquisitions amounted to $335 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.7% in the second quarter. Development stabilization aggregated $192 million, with 5.3% being built to suit, while development starts totaled $846 million, with 62.7% being built to suit. PLD’s total dispositions and contributions were $96 million, with a weighted average stabilized cap rate (excluding land and other real estate) of 4.5%.
However, during the reported quarter, interest expenses jumped 20.9% on a year-over-year basis to $251.9 million.
PLD's Liquidity
Prologis exited the second quarter of 2025 with cash and cash equivalents of $1.07 billion, up from $671.1 million at the end of the first quarter of 2025. Total liquidity amounted to $7.1 billion at the end of the quarter.
Debt, as a percentage of the total market capitalization, was 27.9% as of June 30, 2025. The company's weighted average interest rate on its share of the total debt was 3.2%, with a weighted average term of 8.5 years.
Prologis and its co-investment ventures issued an aggregate of $5.8 billion of debt in the reported quarter at a weighted average interest rate of 4.5% and a weighted average term of 5.4 years.
2025 Guidance
Prologis narrowed its 2025 core FFO per share guidance to the range of $5.75-$5.80 from the $5.65-$5.81 range guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $5.70.
The company has revised its average occupancy in the band of 94.75% and 95.25% from the previous guidance of 94.5-95.5%. Also, cash same-store NOI (Prologis share) was revised within the range of 4.25% to 4.75%, from the previous guidance of 4% to 5%.
The company has increased its outlook for capital deployment (Prologis share) on development starts to $2.25-$2.75 billion, from the prior range of $1.50-$2.00 billion. Dispositions are estimated at $500-$750 million, up from its previous range of $250 million-$500 million. Spending on acquisitions is revised to $1 billion-$1.25 billion from the previous range of $750 million-$1.25 billion.
Prologis currently carries a Zacks Rank #3 (Hold).
Prologis, Inc. Price, Consensus and EPS Surprise
Prologis, Inc. price-consensus-eps-surprise-chart | Prologis, Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs, such as Alexandria Real Estate Equities (ARE - Free Report) and Digital Realty Trust (DLR - Free Report) , slated to report on July 21 and July 24, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Zacks Consensus Estimate for Alexandria’s second-quarter 2025 FFO per share is pegged at $9.20, which implies a 2.9% year-over-year decrease. ARE currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for Digital Realty Trust’s second-quarter 2025 FFO per share is pegged at $7.04, which suggests a year-over-year decrease of 4.9%. DLR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.