Prologis reported robust fourth-quarter execution, signing 57 million square feet of leases and driving occupancy toward 96%, 300 basis points above the broader U.S. market. Core FFO finished the period at $1.44 per share including net promote expense and $1.46 excluding it, both at the top end of guidance. On an own-and-manage basis, average occupancy was 95.3% for the quarter (95% for the full year), with period-end occupancy at 95.8% and a retention rate of 78%. Net effective rent change reached 44% for the quarter, adding roughly $60 million of annualized NOI, while lease mark-to-market stood at 18%, representing nearly $800 million of embedded NOI yet to be realized.

Management highlighted that U.S. vacancy, which ended 2025 at 7.4%, has likely peaked and is set to improve. Fourth-quarter net absorption of 59 million square feet exceeded completions for the first time since 2022. For 2026, Prologis expects net absorption to approach 200 million square feet versus 155 million last year, with deliveries projected at 180–185 million square feet, down from 200 million. This dynamic should drive vacancy toward 7.1–7.2% by year-end, supporting cash same-store NOI growth of 5.75–6.75% and net effective same-store growth of 4.25–5.25%.

In Q4, Prologis sold approximately $900 million of noncore assets and acquired $625 million at attractive discounts to replacement cost, generating a 150-basis-point IRR spread. Development starts totaled $1.1 billion (48% build-to-suit), bringing full-year starts to $3.1 billion (61% build-to-suit). The energy business surpassed 1.1 gigawatts of installed capacity, exceeding its four-year goal, while strategic capital milestones included the IPO of a China logistics REIT and the anchor closing of a U.S. Agility Fund. A new development-focused vehicle was also launched to complement existing open-ended funds.

Prologis is capitalizing on data center demand by expanding power access to 5.7 gigawatts and stabilizing 72 megawatts of projects. Every megawatt in the pipeline is under discussion, with 1.2 gigawatts in letters of intent or pending lease execution. The company anticipates that about 40% of its $4–5 billion owned-and-managed development starts in 2026 will be data centers, with 60–70% structured as Powered Shell and the remainder turnkey. Additionally, the 10-gigawatt power pipeline opportunity remains on track, providing a strategic edge through land and customer relationships.