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Rental revenues rose 7.4% year over year to $2.21 billion, exceeding the $2.20 billion consensus estimate by 0.2%. Results benefited from higher rental revenues, steady leasing demand and improved occupancy levels. Growth in same-store net operating income (NOI) further supported the performance. However, elevated operating expenses weighed on the results to some extent.
PLD's Revenue Mix & Expense Trends
Total revenues grew 7.8% to $2.39 billion from $2.21 billion in the year-ago quarter. Strategic capital revenues reached $164.3 million, up from $150.4 million. Development management and other revenues were $17.9 million compared with $9.3 million a year earlier.
Revenue growth was accompanied by higher costs. Total expenses climbed 9.8% to $1.45 billion year over year, with rental expenses of $511.7 million versus $484.6 million and general and administrative costs of $127.6 million versus $110.7 million. Depreciation and amortization rose to $710.3 million from $648 million.
PLD's Leasing & Same-Store Trends
Leases commenced across the operating and development portfolio totaled 55.9 million square feet, down from 65.6 million a year earlier. The owned and managed portfolio posted average occupancy of 95.1%, versus 94.8% last year. Period-end occupancy was 95.6% compared with 95.3%, while customer retention eased to 75.9% from 77.2%.
On a Prologis-share basis, net effective rent change was 38% and cash rent change was 23.4%, below 49.4% and 29.4%, respectively, a year ago. Cash same-store NOI growth improved to 5.9% from 5.2% year over year, while net effective same-store NOI growth climbed to 5.7% from 3.9%.
PLD's Development & Investment Activity
On a Prologis-share basis, acquisitions totaled $702 million at a weighted average stabilized capitalization rate of 4.2%. Development starts were $964 million, with an estimated weighted average yield of 6.6%, an estimated margin of 16.1% and $155 million of estimated value creation.
Development stabilizations totaled $401 million, with an estimated yield of 5.6% and value creation of $39 million. Dispositions and contributions together totaled $169 million at a weighted average stabilized capitalization rate of 5.1%, excluding land, properties under development and other real estate.
PLD's Data Center & European Focus
Prologis' data center power pipeline stood at 5.8 gigawatts secured or in advanced stages as of Sept. 30, 2026. That included 1.7 gigawatts of Secured Power, of which 680 megawatts were under development, and 4.1 gigawatts of Advanced-Stage Power.
Regarding its proposed combination with SEGRO plc, management highlighted shareholder approval as an important milestone toward completing the transaction. The combination is expected to expand Prologis’ European platform. Management cited e-commerce, advanced manufacturing and the build-out of the data center supply chain among the drivers supporting customer demand.
PLD's Liquidity & Leverage Position
Prologis ended September with approximately $8.8 billion in available liquidity. Consolidated cash and equivalents totaled $2.27 billion at September-end compared with $1.77 billion at June-end.
Debt-to-adjusted EBITDA was 4.5 times, down from 4.7 times at June-end, while debt represented 23.9% of total market capitalization. The company's share of total debt carried a weighted average interest rate of 3.3% and a weighted average term of 7.6 years. During the third quarter, Prologis and its co-investment ventures closed $1.3 billion of debt at a weighted average interest rate of 4% and a weighted average term of 4.5 years.
Prologis' Updated 2026 Guidance
Management narrowed 2026 core FFO per-share guidance to $6.25-$6.29 from $6.22-$6.30, lifting the low end but lowering the high end. The Zacks Consensus Estimate for the same is currently pegged at $6.27 per share.
Cash same-store NOI growth guidance on a Prologis-share basis was increased to 7%-7.50% from 6.75-7.25%. The average occupancy outlook narrowed to 95.25-95.50% from 95.25-95.75%. Net effective same-store NOI growth expectations also rose to 5.50%-6% from 5.25-5.75%.
Capital deployment targets moved higher. Prologis now projects $5.0-$5.75 billion in development starts and $2.1-$2.3 billion of acquisitions compared with $4.5-$5.5 billion and $1.5-$2.0 billion, respectively, before the update. Expected development stabilizations increased to $2.5-$3.0 billion from $2.25-$2.75 billion.
We now look forward to the earnings releases of other REITs, such as Crown Castle (CCI - Free Report) and BXP (BXP - Free Report) , which are slated to report on Oct. 21 and Oct. 27, respectively.
The Zacks Consensus Estimate for Crown Castle’s third-quarter 2026 FFO per share is pegged at $1.20, which implies a 7.1% year-over-year increase. CCI currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for BXP’s third-quarter 2026 FFO per share is pegged at $1.80, which suggests a year-over-year increase of 3.5%. BXP currently carries a Zacks Rank #3.
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.
View the Zacks #1 Rank List
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Prologis' Q3 FFO Beat Estimates as Rental Revenues Rise
Key Takeaways
Prologis, Inc. (PLD - Free Report) reported third-quarter 2026 core funds from operations (FFO) of $1.60 per share, up 7.4% from $1.49 a year earlier. The figure surpassed the Zacks Consensus Estimate of $1.58 by 1.3%.
Rental revenues rose 7.4% year over year to $2.21 billion, exceeding the $2.20 billion consensus estimate by 0.2%. Results benefited from higher rental revenues, steady leasing demand and improved occupancy levels. Growth in same-store net operating income (NOI) further supported the performance. However, elevated operating expenses weighed on the results to some extent.
PLD's Revenue Mix & Expense Trends
Total revenues grew 7.8% to $2.39 billion from $2.21 billion in the year-ago quarter. Strategic capital revenues reached $164.3 million, up from $150.4 million. Development management and other revenues were $17.9 million compared with $9.3 million a year earlier.
Revenue growth was accompanied by higher costs. Total expenses climbed 9.8% to $1.45 billion year over year, with rental expenses of $511.7 million versus $484.6 million and general and administrative costs of $127.6 million versus $110.7 million. Depreciation and amortization rose to $710.3 million from $648 million.
PLD's Leasing & Same-Store Trends
Leases commenced across the operating and development portfolio totaled 55.9 million square feet, down from 65.6 million a year earlier. The owned and managed portfolio posted average occupancy of 95.1%, versus 94.8% last year. Period-end occupancy was 95.6% compared with 95.3%, while customer retention eased to 75.9% from 77.2%.
On a Prologis-share basis, net effective rent change was 38% and cash rent change was 23.4%, below 49.4% and 29.4%, respectively, a year ago. Cash same-store NOI growth improved to 5.9% from 5.2% year over year, while net effective same-store NOI growth climbed to 5.7% from 3.9%.
PLD's Development & Investment Activity
On a Prologis-share basis, acquisitions totaled $702 million at a weighted average stabilized capitalization rate of 4.2%. Development starts were $964 million, with an estimated weighted average yield of 6.6%, an estimated margin of 16.1% and $155 million of estimated value creation.
Development stabilizations totaled $401 million, with an estimated yield of 5.6% and value creation of $39 million. Dispositions and contributions together totaled $169 million at a weighted average stabilized capitalization rate of 5.1%, excluding land, properties under development and other real estate.
PLD's Data Center & European Focus
Prologis' data center power pipeline stood at 5.8 gigawatts secured or in advanced stages as of Sept. 30, 2026. That included 1.7 gigawatts of Secured Power, of which 680 megawatts were under development, and 4.1 gigawatts of Advanced-Stage Power.
Regarding its proposed combination with SEGRO plc, management highlighted shareholder approval as an important milestone toward completing the transaction. The combination is expected to expand Prologis’ European platform. Management cited e-commerce, advanced manufacturing and the build-out of the data center supply chain among the drivers supporting customer demand.
PLD's Liquidity & Leverage Position
Prologis ended September with approximately $8.8 billion in available liquidity. Consolidated cash and equivalents totaled $2.27 billion at September-end compared with $1.77 billion at June-end.
Debt-to-adjusted EBITDA was 4.5 times, down from 4.7 times at June-end, while debt represented 23.9% of total market capitalization. The company's share of total debt carried a weighted average interest rate of 3.3% and a weighted average term of 7.6 years. During the third quarter, Prologis and its co-investment ventures closed $1.3 billion of debt at a weighted average interest rate of 4% and a weighted average term of 4.5 years.
Prologis' Updated 2026 Guidance
Management narrowed 2026 core FFO per-share guidance to $6.25-$6.29 from $6.22-$6.30, lifting the low end but lowering the high end. The Zacks Consensus Estimate for the same is currently pegged at $6.27 per share.
Cash same-store NOI growth guidance on a Prologis-share basis was increased to 7%-7.50% from 6.75-7.25%. The average occupancy outlook narrowed to 95.25-95.50% from 95.25-95.75%. Net effective same-store NOI growth expectations also rose to 5.50%-6% from 5.25-5.75%.
Capital deployment targets moved higher. Prologis now projects $5.0-$5.75 billion in development starts and $2.1-$2.3 billion of acquisitions compared with $4.5-$5.5 billion and $1.5-$2.0 billion, respectively, before the update. Expected development stabilizations increased to $2.5-$3.0 billion from $2.25-$2.75 billion.
PLD's Zacks Rank
Prologis currently has a Zacks Rank #4 (Sell).
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 Crown Castle (CCI - Free Report) and BXP (BXP - Free Report) , which are slated to report on Oct. 21 and Oct. 27, respectively.
The Zacks Consensus Estimate for Crown Castle’s third-quarter 2026 FFO per share is pegged at $1.20, which implies a 7.1% year-over-year increase. CCI currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for BXP’s third-quarter 2026 FFO per share is pegged at $1.80, which suggests a year-over-year increase of 3.5%. BXP currently carries a Zacks Rank #3.
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.