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No more room at the logistics warehouse inn, Prologis says

Space in its markets`effectively sold out,' CEO says

A Prologis facility in Norway. The company's CEO said that capacity is "sold out." (Photo: Prologis)

The world’s largest logistics warehouse operator said publicly on Friday what everyone has sensed and experienced for many months: There is no more space to be had, at least right now.

Prologis Inc. (NYSE:PLD) Chairman and CEO Hamid R. Moghadam said in the San Francisco-based third-quarter earnings report that “space in our markets is effectively sold out.” Given that Prologis operates 995 million square feet of logistics warehouse space in 19 countries, that represents a lot of markets.

The company’s third-quarter results were “underpinned by record increases in market rents and valuations, Moghadam said. Vacancy rates are at “unprecedented lows,” he added.

The company’s core funds from operations, the yardstick by which its financial performance is measured, came in at $1.04 per diluted share in the third quarter, up from 90 cents in the 2020 quarter. It beat analysts’ consensus estimates by a penny. Prologis raised its full-year core FFO guidance by 0.7% to a range of $4.06 to $4.08 a share.

Prologis maintained its outlook on average occupancy for the year at between 96.25% and 96.75%.

In a sign of very robust pricing momentum, Prologis in the third quarter posted a 27.9% “net effective rent” increase over the 2020 period. The term is defined as the change in rates on new and renewed leases commenced during a specific period compared with the previous rental rates for that same space. The measure excludes leases of less than one year.

Shares were up 1.7% in premarket trading Friday. Shares are up more than 30% from the same period in 2020. Prologis is an investor in FreightWaves.

One Comment

  1. Tcs53

    This is nonsense! There’s empty warehouse space everywhere you look around the Chicago area. Brand new, used and empty whatever you want. Prologis is here in the area they would know that.

Comments are closed.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.