Prologis
| Prologis, Inc. | |
|---|---|
| Type | Public (REIT) |
| Traded as | NYSE: PLD S&P 500 component |
| Industry | Real estate Logistics |
| Founded | 1983 (AMB predecessor); 1991 (Security Capital Industrial Trust); merged June 2011 |
| Founder | Hamid Moghadam, Doug Abbey and T. Robert Burke (AMB) William Sanders (SCI) |
| Headquarters | San Francisco, California, United States |
| Key people | Dan Letter (Chief executive officer) Hamid R. Moghadam (Executive chairman) |
| Products | Logistics and distribution real estate, development, investment management, energy |
| Employees | Approximately 2,700 |
| Website | prologis.com |
Prologis, Inc. is an American real estate investment trust headquartered in San Francisco that owns, develops and manages logistics property. It is the largest industrial real estate company in the world by a considerable margin.
As of 2025 it operated more than 6,000 buildings comprising approximately 1.3 billion square feet of space across 20 countries in North America, Latin America, Europe and Asia, together with more than 15,000 acres of land, and served approximately 6,600 customers.
The company was formed in June 2011 by the merger of AMB Property Corporation with ProLogis, two American logistics property companies, in one of the largest real estate transactions after the financial crisis. Its strategy, as The Economist has described it, concentrates on warehouses close to large urban areas where land is scarce, which is the characteristic that distinguishes it from operators of cheaper space in remote locations.
Prologis occupies an unusual position in the world economy. Research it conducted with Oxford Economics concluded that in 2022 approximately US$2.7 trillion of goods produced or sold worldwide passed through its facilities, equivalent to about 2.8 per cent of global gross domestic product.
Hamid Moghadam, who co-founded the AMB predecessor in 1983 and led the combined company from 2011, became executive chairman on 1 January 2026, with Dan Letter becoming chief executive.
History
AMB, 1983 to 2011
Hamid Moghadam, an Iranian-born engineer educated at the Massachusetts Institute of Technology and Stanford, founded Abbey, Moghadam and Company in 1983 with Doug Abbey as an investment manager for institutions. T. Robert Burke joined in 1984 and the firm became AMB Property Corporation, investing in office, industrial and neighbourhood retail property for large institutional investors.
The firm's formative decision came during the savings and loan crisis of the late 1980s, when it avoided serious damage by concentrating on industrial parks and shopping centres and began exiting office property in 1987, a judgement that looks considerably better in retrospect than it did at the time. It launched its first private equity fund in 1989.
AMB became a public company in late 1997 with more than US$2.8 billion under management, and in 1999 sold its retail portfolio to concentrate entirely on industrial property.
The internationalisation began in 2002, with a facility developed for Procter & Gamble and an expansion programme directed at distribution facilities near global trade hubs, principally ports and airports, in Latin America, Asia and Europe. An internal development division was added in 2004, and by 2011 the company was expanding in China and Brazil.
ProLogis, 1991 to 2011
Security Capital Industrial Trust was formed in 1991 by the real estate entrepreneur William Sanders, a figure of considerable influence in the institutionalisation of American property investment, and became a public company in 1994.
The entity was reincorporated as ProLogis, Inc. on 24 November 1997 under K. Dane Brooksher, a former senior KPMG executive, and SCI adopted the ProLogis Trust name in July 1998, by which point it operated in 84 markets across 12 countries with a market capitalisation approaching US$5 billion.
Expansion was rapid. Meridian Industrial Trust was acquired in November 1998 for US$862.5 million in stock, making ProLogis the largest owner of industrial and warehouse property in the United States. The first property funds were formed in 1999, Japan was entered in 2001, the company joined the S&P 500 in 2003 and entered China the same year through a joint venture with Suzhou Logistics Center. Keystone Industrial Trust followed in 2004 and Catellus Development Corporation in 2005 for US$3.6 billion.
The strategy then went too far. Aggressive development funded by heavy borrowing left the company badly exposed when credit markets closed in 2008. Jeffrey Schwartz was replaced as chief executive by Walter Rakowich, who cut costs, raised capital and sold assets, including a portfolio sold to the Government of Singapore Investment Corporation in December 2008, with which ProLogis formed Global Logistic Properties, and the Chinese operations and some Japanese interests sold to GIC in 2009 for US$1.3 billion. Further financing came from Deutsche Pfandbriefbank in August 2009, and Blackstone bought a portfolio for US$1 billion in late 2010.
The episode is the clearest illustration of the central risk in the business: development is profitable and requires capital committed years before the buildings are let, and a company that has committed too much when financing stops must sell at the worst moment.
The merger and since, 2011 to 2026
AMB agreed in January 2011 to acquire the larger ProLogis for approximately US$8.7 billion, in what was formally an acquisition and practically a merger of equals. The combined company took the Prologis name, with the lower-case L, was headquartered in San Francisco and retained an office in Denver.
Completed in June 2011, the transaction created a company with an estimated market value of US$24 billion and approximately US$46 billion of assets under management. Moghadam and Rakowich served as co-chief executives, with Moghadam becoming sole chief executive in 2013.
The subsequent fifteen years have been a sequence of large acquisitions, fund formations and disposals, conducted in a market whose demand grew faster than almost any other category of real estate because of electronic commerce.
Notable transactions include the 2013 initial public offering of Nippon Prologis REIT on the Tokyo Stock Exchange; the Prologis European Logistics Partners joint venture with Norges Bank Investment Management, the manager of the Norwegian sovereign fund, for US$3.1 billion in March 2013; the acquisition with Blackstone of a 17 million square foot portfolio from the Lehman Brothers estate for US$960 million in August 2013; the spin-off of FIBRA Prologis in Mexico in 2014; the purchase of KTR Capital Partners with Norges for US$5.9 billion in June 2015; DCT Industrial Trust for US$8.5 billion in August 2018; Liberty Property Trust for US$13 billion in January 2020; Industrial Property Trust for US$4 billion the following month; and Duke Realty for approximately US$23 billion in October 2022, the largest American commercial real estate transaction since the pandemic began.
The company also made several purchases whose purpose was the land rather than the buildings, including Hilltop Mall in Richmond, California, for US$117 million in April 2021, and in June 2022 the land beneath California's Great America amusement park in Santa Clara, bought from Cedar Fair which leased it back with the park expected to close by 2033. Both reflect the same logic: in constrained urban markets the scarce asset is the site, and a declining retail or leisure use can be converted to logistics at a large gain.
Prologis Ventures, the company's venture capital arm, was formed in March 2016 and had invested more than US$250 million in approximately 50 early and growth-stage companies by 2024, principally in logistics technology, automation and energy.
Dan Letter became chief executive on 1 January 2026, with Moghadam moving to executive chairman after more than four decades leading the business and its predecessor.
Business model
Prologis is a real estate investment trust, a structure that exempts a company from corporate income tax provided it distributes the great majority of its taxable income to shareholders and derives most of it from property. This makes REITs income vehicles and constrains their capacity to retain earnings, which is why they raise capital frequently.
The company earns from three activities.
Rental is the core. Prologis owns buildings and leases them, typically on terms of three to ten years with contractual escalations. Because it owns space in constrained locations, and because logistics demand has grown faster than supply in those locations, releasing rents have frequently been far above expiring rents, a gap the company reports and which has been among the largest in any property sector.
Development is where the returns are highest and the risk greatest. Prologis buys land, obtains permissions, builds, lets and either holds the building or sells it into one of its funds. The margin between development cost and stabilised value has historically been substantial, and the activity is what the 2008 experience demonstrated to be dangerous when financing is interrupted.
Strategic capital is the investment management business. Prologis forms funds and joint ventures with institutional investors, principally sovereign wealth funds, pension funds and insurers, contributes buildings to them, retains a share and manages them for fees. This allows the company to own a much larger portfolio than its own balance sheet would support, generates fee income that does not require capital, and gives institutional investors access to a sector they cannot easily assemble themselves. Norges Bank Investment Management, the Government of Singapore Investment Corporation and a considerable number of pension funds have been partners.
A fourth activity has grown recently. Prologis Energy installs solar generation on warehouse roofs, which are among the largest flat surfaces in any city, together with storage and electric vehicle charging. By late 2024 the company was ranked second in the United States for on-site solar generation by the Solar Energy Industries Association. The economics are straightforward: the roofs exist, the tenants use electricity, and the grid connections are valuable in their own right.
Portfolio and markets
Prologis concentrates on what it calls global trade hubs and consumption markets: the areas around major ports, airports and the largest urban populations, where the land available for industrial use is limited by planning restrictions, by competing uses and by physical geography.
Its largest markets include Southern California, particularly the Inland Empire serving the ports of Los Angeles and Long Beach, New Jersey and New York, Chicago, Dallas, Atlanta, the San Francisco Bay Area and Seattle in the United States; Mexico, where the FIBRA Prologis vehicle operates and where nearshoring of manufacturing from Asia has driven very strong demand; the United Kingdom, Netherlands, Germany, France, Spain, Italy, Poland, the Czech Republic, Hungary and Sweden in Europe; and Japan, China, Singapore and South Korea in Asia.
Japan is the second largest market and has been the setting for some of the company's most distinctive buildings. Land scarcity there produced multi-storey warehouses with vehicle ramps to upper floors long before they appeared elsewhere, and Prologis built similar structures in Singapore and China. It began construction of the first multi-storey warehouse in the United States in Seattle in November 2016 and announced another in San Francisco the following month, in both cases because no single-storey site of adequate size existed within the delivery radius the customers required.
Customers include Amazon, which is the largest by a wide margin, together with DHL, FedEx, UPS, Home Depot, Walmart, Geodis, Kuehne and Nagel, and a very large number of third-party logistics providers, manufacturers and retailers. Concentration in any single customer is limited by the number of buildings, though Amazon's share has been large enough that its decision in 2022 to pause warehouse expansion moved the entire sector.
Research
Since 2016 Prologis has published market research, including the quarterly Industrial Business Indicator and the annual Prologis Logistics Rent Index, which have become standard references for the sector because no comparable data source exists.
Its work with Oxford Economics concluded that goods worth approximately US$2.7 trillion passed through its facilities in 2022, equivalent to about 2.8 per cent of global gross domestic product, with an associated economic impact of around US$300 billion.
The research function serves a commercial purpose beyond analysis: it establishes the company as the authority on a sector in which most participants are private and data is scarce, which assists both in raising institutional capital and in the planning arguments the company conducts with local authorities.
Sustainability
Prologis became the first logistics REIT with an approved science-based carbon reduction target in 2018, and in June 2022 the Science Based Targets initiative validated a commitment to reach net zero emissions by 2040.
In 2020 it completed the world's first industrial building to receive Zero Carbon Certification from the International Living Future Institute, at Eindhoven in the Netherlands. In 2024 it built what it described as North America's largest heavy-duty truck charging hub, at Denker Avenue in Torrance, California, powered by a microgrid, addressing the specific problem that electrifying freight requires charging infrastructure at the places where trucks already stop.
The environmental argument for the company is mixed and worth stating in both directions. Logistics buildings are among the more efficient forms of construction, their roofs are an enormous under-used solar resource, and locating distribution close to consumers reduces the distance goods travel. Against that, warehouses consume land, frequently on the edges of cities and sometimes on agricultural or ecologically significant sites, they generate very large volumes of heavy vehicle traffic in the communities around them, with associated air quality and noise effects that fall disproportionately on lower-income areas, and the growth of the sector is a direct function of the growth of consumption and of rapid delivery.
Community opposition to warehouse development has become a significant political issue in several of the company's principal markets, notably the Inland Empire in California, where local authorities have imposed moratoriums and where public health researchers have documented elevated diesel pollution.
Assessment
Prologis is the clearest example of a company that profited from a change in how people buy things without selling anything to them.
The shift to electronic commerce required a physical infrastructure that did not previously exist at the scale needed: buildings close enough to populations for same-day and next-day delivery, large enough for automated handling, and with the power supply and the vehicle access that neither older industrial estates nor retail property could provide. The quantity of space required per unit of online sales is several times that required per unit of store sales, because the goods are handled individually rather than by the pallet.
Prologis positioned itself for this before it happened, through the specific judgement, made at AMB in the 1990s and 2000s, that proximity to consumption was what would matter rather than cheapness of land. The judgement has been vindicated more completely than most strategic bets, because it turned out that the scarce resource is not warehouse space but warehouse space in the right place, and planning systems in every developed country are structured to keep it scarce.
The risks are correspondingly specific. The sector's demand is a function of consumer spending and of inventory policy, both of which are cyclical; the 2022 and 2023 correction, when Amazon paused expansion and retailers worked down the inventory accumulated during the supply disruptions, demonstrated that vacancy can rise quickly. Development requires capital committed in advance, which is what nearly destroyed the ProLogis predecessor in 2008. And interest rates matter more to a REIT than to almost any other kind of company, because property is valued by capitalising income and because the structure requires continuous access to capital markets.
The succession completed in January 2026, after more than forty years under one founder, is the first test of whether the judgement that built the company was institutional or personal.