TenQ

The Prologis story

Prologis owns logistics warehouses worldwide, with growth depending on whether lease renewals can capture higher rents while development and investment partnerships expand the business.

Written from Prologis's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $132.44share price, last close
  • $123.6Bmarket value
  • 19/36TenQ Score checks passed

The story in brief

  • Lease renewals drive growth. In the quarter to June 2026, rent increases on Prologis' share of commenced leases reached 36.9% on a net effective basis, supporting 8.5% growth in same store cash net operating income.
  • Core earnings increased. Core funds from operations, or Core FFO, per share reached $1.63 in the quarter to June 2026, compared with $1.46 in the prior year period.
  • Expansion remains conditional. Prologis proposed acquiring SEGRO, whose board indicated it would be minded to recommend an offer if due diligence and terms are agreed.

What drives the business

  • Prologis combines warehouse ownership, development and investment partnerships across 20 countries, with approximately 1.3 billion square feet of properties and development projects at June 2026 serving customers including Amazon, Home Depot and FedEx.
  • Rental operations generally contribute 90% to 95% of consolidated revenues, earnings and FFO, with contractual rent increases and lease renewals providing the main route to growth.
  • At December 2025, Prologis estimated market rents exceeded its share of existing lease rents by approximately 18%, leaving room for renewal increases even after periods of weaker market rents.
  • Strategic Capital earns management and transaction fees from investment ventures that also help fund development, and its revenue rose to $242 million from $147 million in the prior year period within total revenue of $2,425 million in the quarter to June 2026.
  • Development adds warehouses and selectively converts sites into data centers, supported by land and other real estate investments that Prologis estimated at December 2025 could support $37.3 billion of total expected development investment on a consolidated basis.

What the price assumes

TenQ does not measure the growth implied by Prologis' price through a reverse DCF because free cash flow does not adequately measure a property trust's earnings.

The FFO multiple of 19.68 exceeds TenQ's fixed yardstick of 16.00, although the FFO yield of 5.1% clears its 5.0% threshold.

Against those valuation checks, revenue grew 7.3% over the last twelve months, below its annual 13.7% pace over the last three years, while TenQ's per share FFO growth check registered -2.5%.

What could change the story

  • Competition and trade uncertainty could limit occupancy and rental increases, reducing the benefit of renewing leases at higher rents.
  • Shares outstanding rose 17.9% over the last three years, making growth per share a separate challenge from expanding the property portfolio.
  • Total debt of $36.4 billion compares with $1.8 billion of cash and short-term investments, and TenQ's debt trend check fails even though FFO covers interest plus distributions 1.27x.
  • Currency and interest rate changes can affect revenue, expenses and realized gains, although Prologis hedged the majority of its estimated 2026 euro, sterling and yen Core FFO.
  • The SEGRO proposal remains subject to due diligence and agreement on terms, with no certainty that an offer will be made.

What to watch next

  • Prologis' full year 2026 guidance calls for Core FFO per share between $6.22 and $6.30, making subsequent per share results a measure of whether property growth is reaching shareholders.
  • Average occupancy of 94.9% on a Prologis Share basis in the quarter to June 2026 compares with full year guidance between 95.25% and 95.75%, while same store cash NOI growth of 8.5% compares with guidance of 6.75% to 7.25%.
  • Strategic Capital revenue excluding promote revenue is expected to reach $660 million to $680 million in 2026, alongside realized development gains of $600 million to $700 million.
  • Further SEGRO announcements and results from the Asian venture properties consolidated in April 2026 will help distinguish acquisition effects from growth in existing properties.

Sources

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