Prologis Tops Q1 With 64M Sq Ft Leasing and $1.3B Data Center Starts
Prologis achieved record Q1 leasing of 64 million square feet and initiated $2.1 billion in new developments, including $1.3 billion of data-center projects supported by a 1.3 GW LOI pipeline. Lease mark-to-market rose to 17% net effective and market rents ticked upward, offsetting soft conditions in Southern California and Seattle.
1. Q1 Leasing Performance
Prologis booked record Q1 leasing of 64 million square feet, driven by robust demand across core logistics hubs. Softness in Western markets, which comprised 40% of lease roll, tempered rent growth but occupancy still rose by 20 basis points.
2. New Development Pipeline
In Q1, Prologis launched $2.1 billion in development starts, including $1.3 billion dedicated to data center projects backed by a 1.3 GW pipeline under letters of intent. Data center builds carry expected margins of 25% to 50%, well above traditional logistics returns.
3. Lease Mark-to-Market and Rent Trends
Lease mark-to-market reached 17% net effective as market rents recorded their first gain in 2.5 years, offsetting elevated vacancies in Southern California and Seattle. The slower decline in mark-to-market spreads suggests stronger pricing power ahead.
4. Outlook and Guidance
Full-year guidance anticipates net absorption of 200 million square feet against 190 million square feet of completions, supporting rising rents and occupancies. Same-store occupancy is projected to increase by 0.375 points as customer demand remains robust despite geopolitical uncertainty.