Logistics warehouse operator Prologis reported another quarter of record lease signings, prompting it to raise earnings guidance for a second time this year.
The San Francisco-based real estate investment trust’s second-quarter results came in ahead of analysts’ forecasts Thursday before the market opened
Prologis (NYSE: PLD) reported consolidated revenue of $2.43 billion, which was 11% higher year over year and ahead of a $2.16 billion consensus estimate. Core funds from operations (FFO) of $1.63 per share were 17 cents higher y/y and 8 cents better than analysts’ expectations. “We believe the business is entering its next phase of growth,” said CEO Dan Letter in a news release. “Customer demand is broadening, and our opportunity set is expanding as logistics, digital infrastructure and energy needs increasingly intersect.” Lease signings covering 67 million square feet of space outpaced the prior record set in the first quarter. Leases commenced totaled 61.7 million square feet, up 21% y/y.
Average occupancy improved 10 basis points y/y to 95%, which was 30 bps lower sequentially. Net effective rent change on Prologis’ portfolio of multiyear leases was 36.9% in the quarter, near the company’s goal of 40% for full-year 2026. Core FFO is now forecast to a range of $6.22 to $6.30 per share, a 2% increase at the midpoint.