Prologis raises 2026 acquisition and development guidance after 60 million-square-foot leasing quarter

Prologis raised its 2026 acquisition guidance to between $2.1 billion and $2.3 billion and its development outlook to $5 billion to $5.75 billion, as reported by Commercial Observer. The San Francisco REIT had previously guided to $1.5 billion to $2 billion for acquisitions and $4.5 billion to $5.5 billion for development.

Chief Executive Dan Letter said the company signed 60 million square feet of leases during the quarter. Average occupancy improved to 95.1 percent from 94.8 percent a year earlier.

Prologis acquired about $702 million of real estate in the third quarter, Chief Financial Officer Tim Arndt said. That was down from $1.12 billion in the second quarter but above the $48 million it bought in the same quarter of 2025.

Prologis started about $1 billion of projects during the third quarter, bringing year-to-date starts to nearly $5 billion.

Letter said rents required to justify new speculative projects now sit 27 percent above market rents, a gap that should slow new construction and support longer-term rent growth. "We think the recent move in rates will slow transaction activity and could put some pressure on values," he said. "Our bar for allocating capital was already high, and in response we've raised it even further."

Third-quarter revenue came to $2.39 billion, down from $2.43 billion in the second quarter and up from $2.21 billion a year earlier. Core funds from operations totaled $1.55 billion, or $1.60 per diluted share, against $1.56 billion in the second quarter and $1.43 billion a year ago. Net income attributable to common shareholders was $816 million, versus $1.06 billion sequentially and $763 million in the year-earlier quarter.

Letter said build-to-suit projects should account for 55 to 65 percent of construction starts this year, with the pipeline 20 to 25 percent larger than a year ago. Arndt attributed the raised development outlook to what he called a "very high" fourth quarter of build-to-suit logistics projects. "We expect to have a pretty big quarter in the fourth quarter here in build-to-suit," Letter said.

In August, Brookfield and CPP agreed to take LXP Industrial private for $5 billion across 108 U.S. properties, and a Prologis-Browning joint venture sold a 1.1 million-square-foot Subaru hub to LaSalle that same month. As this publication reported, the REIT bought 69 acres beside a rail hub under construction in Chicago.