Prologis reported that during Q4 2025 it signed 57 million square feet of new leases and drove average occupancy to 96%, outpacing the broader market by 300 basis points in the U.S. Core Funds From Operations (FFO) came in at $1.44 per share including net promote expense and $1.46 excluding net promote expense, finishing the year at the top end of guidance. On an own-and-manage basis, period-end occupancy reached 95.8%, up from 95% a year ago, while retention rates held at 78%. Net effective rent change was 44% for the quarter, adding approximately $60 million of annualized net operating income and leaving $800 million of embedded NOI yet to be realized through lease mark-to-market upside.

Management highlighted that U.S. industrial vacancy, which ended 2025 at 7.4%, is expected to improve to roughly 7.1%–7.2% by year-end 2026. In Q4, net absorption of 59 million square feet outpaced completions for the first time since 2022. The company projects net absorption of about 200 million square feet in 2026 versus 155 million last year, while deliveries are forecast at 180–185 million square feet, down from 200 million in 2025. Market rents declined at their slowest pace since 2023, with many key markets showing positive rent growth for the first time in two years.

During the quarter, Prologis sold $900 million of non-core assets and acquired $625 million of high-return properties at discounts to replacement cost, generating a 150-basis-point spread in expected IRR. Development starts totaled $1.1 billion, with 48% designated build-to-suit, bringing full-year starts to $3.1 billion with 61% build-to-suit. In its energy business, Prologis raised installed solar capacity to 1.1 gigawatts—surpassing its four-year goal of 1 gigawatt—and plans further installations across untapped rooftops and land sites, recognizing that solar revenue remains small relative to rental NOI but is expected to scale over time.

Prologis plans to allocate approximately 40% of its $4–5 billion of owned-and-managed development starts in 2026 to data centers. The company expanded power access by 5.7 gigawatts in Q4, stabilized 72 megawatts of new projects and holds 1.2 gigawatts under letter of intent or pending lease. Management reaffirmed its long-term 10-gigawatt power pipeline opportunity and provided 2026 guidance calling for average occupancy of 94.75%–95.75%, net effective same-store NOI growth of 4.25%–5.25% and cash same-store growth of 5.75%–6.75%, with core FFO expected to be $6.00–6.20 per share including net promote expense.