PLD Prologis 10-Q 2026-09-30 section summaries

Prologis, Inc. — Q3 and nine months ended September 30, 2026

Consolidated results

Q3 revenue increased 7.8%; nine-month revenue increased 8.8%. Strategic Capital revenue growth accelerated from 9.3% in Q3 to 29.2% for 9M. Earnings growth also reflected materially higher real estate disposition gains: Q3 gains were $107.973 million versus $47.670 million, while 9M gains on development properties and land were $423.717 million versus $53.363 million, and gains on other real estate dispositions were $359.924 million versus $116.078 million. Nine-month foreign currency, derivative and other gains were $218.809 million, compared with a $53.506 million loss in 2025.

Segment performance

Nine-month total segment NOI was $5,238.9 million versus $4,851.5 million. Strategic Capital’s nine-month revenue and NOI were $566.757 million and $305.076 million, compared with $438.652 million and $243.688 million, respectively; this contrasts with its Q3 NOI decline. Other Americas was a major nine-month Strategic Capital driver (revenue $153.387 million versus $65.933 million; NOI $133.024 million versus $50.334 million), while U.S. Strategic Capital NOI declined to $35.879 million from $55.752 million.

Cash flow and investment

The company issued $2,328.951 million of debt and repurchased or paid down $1,368.921 million. Proceeds from common equity issuance were $2,411.446 million at the parent level; the August offering raised approximately $2.4 billion net through 17.25 million shares. Of the proceeds, $1.0 billion was invested in short-term investments maturing December 2026–February 2027. Cash and cash equivalents ended the period at $2,273.5 million.

Balance sheet, debt and capital

Debt comprised $34.002 billion of senior notes, $1.821 billion of term loans and other unsecured debt, $785.686 million of credit facilities/commercial paper, and $223.134 million of secured mortgages. Its weighted-average effective interest rate was 3.2%, while the weighted-average remaining term shortened to 7.9 years from 8.5. Debt carrying value exceeded estimated fair value of $33.281 billion at September 30. Reported liquidity was $8.836 billion: $5.563 billion of current credit-facility availability, $2.273 billion of cash and $1.000 billion of short-term investments. The company reported compliance with its debt covenants.

The scheduled debt principal maturities were $1.191 billion for the remainder of 2026, $2.046 billion in 2027, $2.728 billion in 2028, $3.392 billion in 2029, $3.069 billion in 2030 and $24.925 billion thereafter. A conditional £3.6 billion ($4.7 billion) unsecured term-loan commitment is available only if the SEGRO acquisition closes; it matures one year after closing, with two possible one-year extensions.

Transactions and other considerations

Prologis agreed to acquire SEGRO plc in August 2026. Consideration includes 0.0920 Prologis shares per SEGRO share, with a partial cash alternative of up to approximately £3.5 billion, subject to pro-rata scale-back, and assumption of SEGRO debt. SEGRO shareholders approved the transaction; regulatory approvals and other closing conditions remain, with completion expected in H1 2027.

During 2026, Prologis formed four co-investment ventures and acquired a partner’s interest in an Asian venture, consolidating 74 operating properties totaling 23 million square feet. Outstanding equity commitments were $884.0 million. Nine-month common dividends were $3.21 per share versus $3.03; shares outstanding rose from 929.153 million to 950.396 million. The company granted performance stock units with $76.2 million of grant-date fair value; unvested awards included 1.616 million RSUs, 4.001 million LTIP units and 1.701 million unearned PSUs.

The interim financial information received an independent accountant’s review, not an audit opinion.

Prologis — nine months ended September 30, 2026

Prologis owned or had investments in approximately 1.3 billion square feet of properties and development projects across 20 countries on four continents. Its reportable segments are Real Estate (rental operations and development) and Strategic Capital. Rental operations typically generate 90%–95% of consolidated revenue, earnings and FFO; Strategic Capital typically contributes 5%–10%, excluding promotes.

Consolidated results

Net gains included $424M from development-property and land dispositions (2025: $53M) and $360M from other real estate dispositions (2025: $116M). The increase primarily reflected property and land contributions to U.S. and European co-investment ventures and U.S. third-party property sales. Prologis generated $2.2B of net proceeds from real estate transactions and acquired $2.8B of net real estate investments. Promote revenue was $84M, or $39M net of related Strategic Capital expenses, earned primarily in Q2.

Core FFO grew more slowly than modified FFO, in part because Core FFO excludes development-property and land disposition gains. FFO is a non-GAAP supplemental measure, not a substitute for GAAP earnings or operating cash flow.

Segment and same-store performance

Prologis-share same-store NOI increased 5.7% on a net effective basis and 5.9% on a cash basis. The comparable Prologis-share measure applies the September 30, 2026 ownership share to both periods; the cash measure also removes noncash straight-line rent and fair-value lease amortization. Properties moving between consolidated and venture portfolios can make those portfolios individually less comparable.

Real Estate segment revenue was $6.507B, with segment NOI of $4.934B. Strategic Capital’s results can vary with venture portfolio size, valuations, transaction timing, promote revenue and foreign exchange.

Leasing, development and strategy

In 9M 2026, Prologis signed 100 million square feet of new leases in its consolidated portfolio (191 million square feet on an owned-and-managed [O&M] basis). O&M occupancy was 95.6% at September 30, 2026, versus 95.8% at December 31, 2025; customer retention was approximately 70% or higher by leased square feet. Rent change on commenced leases was 35.5% net effective on an ownership-share basis for the nine months; for Q3, O&M rent rollovers produced 38.0% net effective increases. Estimated remaining lease mark-to-market was approximately 16% net effective, representing embedded rent-growth potential as leases renew. Prologis reported positive rent change in every quarter since 2013.

Consolidated development starts totaled $3.896B of total expected investment (TEI), versus $1.966B in 9M 2025; build-to-suits represented 67.9% of starts by TEI (68.3%). Stabilized-project TEI was $2.005B versus $1.714B, with weighted-average stabilized yield of 6.9% versus 6.8%. Estimated value at completion was $2.462B versus $2.189B, while the weighted-average development margin declined to 22.8% from 27.7%.

At quarter-end, 74 properties in the consolidated development portfolio had $6.1B TEI, were 34.8% leased, and had $3.2B invested, leaving approximately $2.9B of additional investment required. The portfolio included $2.6B TEI of data-center projects with 680 megawatts of power capacity and was expected to be completed before February 2029. Separately, land and other real estate investments, including options and Covered Land Plays, were estimated to support $34.9B of development TEI ($39.7B on an O&M basis). Prologis is selectively expanding into data centers, where energy access, power procurement, strategic sites and build-to-suit arrangements are key enablers.

Strategic Capital comprises 13 unconsolidated ventures and one consolidated venture, with Prologis ownership interests of 15%–55%. In 2026 it formed four co-investment ventures. At September 30, unconsolidated ventures held an operating portfolio with $62.8B gross book value across 548 million square feet.

Cash flow, financing and liquidity

Operating cash flow included $530M of operating distributions from unconsolidated entities (2025: $455M). Cash interest paid, net of capitalized amounts, rose to $824M from $711M; cash taxes paid, net of refunds, were $165M versus $106M. G&A expense increased to $384M from $333M, principally from inflation and higher compensation. Capitalized G&A as a share of total declined to 18.1% from 21.2%.

At September 30, 2026, consolidated debt was $36.832B, versus $35.037B at December 31, 2025. Its weighted-average remaining term was eight years, versus nine years at year-end, and its weighted-average interest rate was 3.2% at both dates. Prologis issued $2.155B principal of senior notes at a 4.3% weighted-average rate; total debt issuance proceeds were $2.329B in 9M 2026 versus $2.955B in 9M 2025. Ratings were A from S&P and A2 from Moody’s, both stable; Prologis reported compliance with its financial debt covenants.

Available liquidity was $8.8B: $5.5B of credit-facility capacity, $2.3B of unrestricted cash and $1.0B of short-term investments. Prologis also raised $2.4B net by issuing 17.25 million common shares. Scheduled debt principal payments were $1.2B for the remainder of 2026 and $2.0B in 2027. The $3.0B global credit facility was extended to June 2030, with an option to extend to June 2031. A £3.6B term-loan facility (approximately $4.7B) is conditional on closing the SEGRO acquisition and other conditions.

Prologis had $10.7B invested in and advanced to unconsolidated ventures. Those ventures had $20.5B of third-party debt, with a five-year weighted-average remaining term, a 3.6% weighted-average interest rate and a 30.8% weighted-average loan-to-value ratio based on gross book value; Prologis did not guarantee that debt.

SEGRO transaction, distributions and risks

On August 4, 2026, Prologis agreed to acquire all issued and to-be-issued SEGRO shares for 0.0920 Prologis common shares per SEGRO share, with a partial cash alternative of up to approximately £3.5B (25% of total consideration) at 1,031.7 pence per SEGRO share, subject to pro-rata scale-back. SEGRO shareholders approved the transaction on September 28; completion is expected in H1 2027, subject to remaining conditions, including regulatory approvals. Prologis is applying for a secondary London Stock Exchange listing. The acquisition carries closing, timing and expected-benefit risks.

At September 30, 950.396 million common shares and 19.068 million common limited partnership units were eligible for distributions, totaling 969.464 million. Quarterly cash dividends were $1.07 per common share in each of the first three quarters of 2026, up from $1.01 in 2025. Series Q preferred stock carried an 8.54% annual dividend rate; cumulative preferred dividends rank ahead of common dividends.

Key sensitivities include continued leasing demand and occupancy, development execution and unleased pipeline exposure, and the timing and valuation dependence of disposition gains and promote income. Prologis cites economic and political conditions, interest and foreign-exchange movements, financing access, data-center execution, venture performance and acquisition risks among other uncertainties. It manages currency exposure through local-currency borrowing, co-investment structures and derivatives.

Market risk

At September 30, 2026, Prologis had minimal net equity exposure denominated in currencies other than the U.S. dollar, reflecting natural hedging through local-currency borrowing and the use of derivative and nonderivative instruments.

The undesignated contracts were principally in pounds sterling, Canadian dollars, euros and yen. The estimated settlement payment could be partially offset economically by higher U.S.-dollar earnings when those currencies are translated.

Prologis generally borrows at fixed rates and may use derivatives to fix the rates on variable-rate debt. A 10% increase in rates on average variable-rate debt—equivalent to 30 basis points on that debt and 1 basis point on total average debt—would increase annual interest expense by $5 million.

The sensitivity analysis is hypothetical and has limited predictive value; realized effects depend on future exposures, hedging strategies and market rates.

Disclosure Controls and Internal Controls

As of September 30, 2026, Prologis, Inc. and Prologis, L.P. each concluded that their disclosure controls and procedures were effective. During Q3 2026, both continued implementing a new financial system intended to further automate global close and consolidation processes and related controls. Neither entity reported other changes to internal control over financial reporting that materially affected, or were reasonably likely to materially affect, those controls.

As of September 30, 2026, Prologis reported no material changes to the risk factors described in Item 1A of its Form 10-K for the year ended December 31, 2025. This section identifies no new financial metrics, business developments, or industry-specific risk updates.

For the quarter ended September 30, 2026, no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements. This section reports no financial results, business developments, or other material changes.