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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 $2.09 billion, missing the Zacks Consensus Estimate of $2.17 billion. However, the figure increased from the $1.94 billion reported in the year-ago period. Total revenues were $2.25 billion, up from the year-ago quarter’s $2.2 billion.
For 2025, the company reported core FFO per share of $5.81, up 4.5% from the previous year. Moreover, the figure came in line with the Zacks Consensus Estimate. Rental revenues of $8.16 billion increased 8.6% year over year but missed the consensus mark of $8.38 billion.
PLD's Q4 in Detail
In the fourth quarter, 43.8 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 77.7% in the quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 95.3% in the fourth quarter, up from the prior quarter’s 94.8% but down from the year-ago period’s 95.6%.
Prologis’ share of net effective rent change was 43.8% in the October-December quarter. In the reported quarter, the cash rent change was 27.3%. Cash same-store net operating income (NOI) grew 5.7% compared to 5.2% in the previous quarter.
The company’s share of building acquisitions amounted to $516.8 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.2% in the fourth quarter. Development stabilization aggregated $539 million, with 37.5% being built to suit, while development starts totaled $1.02 billion, with 47.9% being built to suit. PLD’s total dispositions and contributions were $1.89 billion, with a weighted average stabilized cap rate (excluding land and other real estate) of 5%.
However, during the reported quarter, interest expenses jumped 12.2% on a year-over-year basis to $260.5 million.
PLD's Liquidity
Prologis exited the fourth quarter of 2025 with cash and cash equivalents of $1.15 billion, down from $1.19 billion at the end of the third quarter of 2025. Total liquidity amounted to $7.6 billion at the end of the quarter.
Debt, as a percentage of the total market capitalization, was 24.6% as of Dec. 31, 2025. The company's weighted average interest rate on its share of the total debt was 3.3%, with a weighted average term of 8.2 years.
Prologis and its co-investment ventures issued an aggregate of $3 billion of debt in the reported quarter at a weighted average interest rate of 3.1% and a weighted average term of 7.2 years.
2026 Guidance by PLD
Prologis provided its 2026 core FFO per share guidance in the range of $6.00-$6.20. The Zacks Consensus Estimate for the same is currently pegged at $6.11.
The company expects average occupancy to be between 94.75% and 95.75%. Cash same-store NOI (Prologis share) is projected in the range of 5.75-6.75%.
The company has issued its outlook for capital deployment (Prologis share) on development starts of $3.00-$4.00 billion. Spending on acquisitions is projected to be $1.00 billion-$1.50 billion. Dispositions are estimated at $1.75-$2.25 billion.
We now look forward to the earnings releases of other REITs, such as Healthpeak Properties, Inc. (DOC - Free Report) and Essex Property Trust (ESS - Free Report) , which are slated to report on Feb. 2 and Feb. 4, respectively.
The Zacks Consensus Estimate for Healthpeak’s fourth-quarter 2025 FFO per share is pegged at $1.83, which implies a 1.1% year-over-year increase.
The Zacks Consensus Estimate for Essex’s fourth-quarter 2025 FFO per share is pegged at $15.97, which suggests a year-over-year jump of 2.4%.
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 Q4 FFO Meets Estimates, Rental Revenues Rise Y/Y
Key Takeaways
Prologis, Inc. (PLD - Free Report) reported fourth-quarter 2025 core funds from operations (FFO) per share of $1.44, meeting the Zacks Consensus Estimate. This compares unfavorably with the year-ago quarter’s figure of $1.50.
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 $2.09 billion, missing the Zacks Consensus Estimate of $2.17 billion. However, the figure increased from the $1.94 billion reported in the year-ago period. Total revenues were $2.25 billion, up from the year-ago quarter’s $2.2 billion.
For 2025, the company reported core FFO per share of $5.81, up 4.5% from the previous year. Moreover, the figure came in line with the Zacks Consensus Estimate. Rental revenues of $8.16 billion increased 8.6% year over year but missed the consensus mark of $8.38 billion.
PLD's Q4 in Detail
In the fourth quarter, 43.8 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 77.7% in the quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 95.3% in the fourth quarter, up from the prior quarter’s 94.8% but down from the year-ago period’s 95.6%.
Prologis’ share of net effective rent change was 43.8% in the October-December quarter. In the reported quarter, the cash rent change was 27.3%. Cash same-store net operating income (NOI) grew 5.7% compared to 5.2% in the previous quarter.
The company’s share of building acquisitions amounted to $516.8 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.2% in the fourth quarter. Development stabilization aggregated $539 million, with 37.5% being built to suit, while development starts totaled $1.02 billion, with 47.9% being built to suit. PLD’s total dispositions and contributions were $1.89 billion, with a weighted average stabilized cap rate (excluding land and other real estate) of 5%.
However, during the reported quarter, interest expenses jumped 12.2% on a year-over-year basis to $260.5 million.
PLD's Liquidity
Prologis exited the fourth quarter of 2025 with cash and cash equivalents of $1.15 billion, down from $1.19 billion at the end of the third quarter of 2025. Total liquidity amounted to $7.6 billion at the end of the quarter.
Debt, as a percentage of the total market capitalization, was 24.6% as of Dec. 31, 2025. The company's weighted average interest rate on its share of the total debt was 3.3%, with a weighted average term of 8.2 years.
Prologis and its co-investment ventures issued an aggregate of $3 billion of debt in the reported quarter at a weighted average interest rate of 3.1% and a weighted average term of 7.2 years.
2026 Guidance by PLD
Prologis provided its 2026 core FFO per share guidance in the range of $6.00-$6.20. The Zacks Consensus Estimate for the same is currently pegged at $6.11.
The company expects average occupancy to be between 94.75% and 95.75%. Cash same-store NOI (Prologis share) is projected in the range of 5.75-6.75%.
The company has issued its outlook for capital deployment (Prologis share) on development starts of $3.00-$4.00 billion. Spending on acquisitions is projected to be $1.00 billion-$1.50 billion. Dispositions are estimated at $1.75-$2.25 billion.
Prologis currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 Healthpeak Properties, Inc. (DOC - Free Report) and Essex Property Trust (ESS - Free Report) , which are slated to report on Feb. 2 and Feb. 4, respectively.
The Zacks Consensus Estimate for Healthpeak’s fourth-quarter 2025 FFO per share is pegged at $1.83, which implies a 1.1% year-over-year increase.
The Zacks Consensus Estimate for Essex’s fourth-quarter 2025 FFO per share is pegged at $15.97, which suggests a year-over-year jump of 2.4%.
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.