Summary
Prologis is a global industrial REIT that owns and manages space for warehouses, manufacturing, distribution, and large-scale storage. PLD has become the world’s largest industrial REIT by focusing on business-to-business fulfillment and e-commerce. As of the end of 2023, the company’s portfolio included 5,613 buildings with 1.2 billion square feet of space. The REIT has a presence in 19 countries. About 70% of the portfolio is in the U.S., with 20% in Europe, 5% in Mexico, and 5% in Asia. About 86% of current NOI comes from U.S. assets. The company’s top tenants are Amazon, Home Depot, and FedEx, with Amazon accounting for about 5% of rental revenue. PLD partners with other companies in joint ventures to reduce risk, and its ownership share of total square footage is about 65%. About one-fifth of properties have at least 500,000 square feet of space. PLD has faced pressure from an oversupply of warehouse space due to slowing sales at online retailers. In response, the company has focused on customized facilities. In 1Q23, all new development projects were customized and 99% of total units were leased or in negotiations. As of 4Q23, about 55% of new developments were built-to-suit. Management estimates that the weighted-average stabilized yield of new assets was about 6.3% in 2023. The company has about 2,500 employees and a market cap of 118 billion. It is ranked in the top 100 of the S&P 500 as measured by market cap.
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