Logistics warehouse operator Prologis is seeing a demand bump, reporting a record number of leases in the second quarter and raising its full-year outlook, according to FreightWaves.
Record Leasing and Revenue Beat
Prologis (NYSE: PLD) reported second-quarter consolidated revenue of $2.43 billion, which was 11% higher year over year and better than the $2.16 billion consensus estimate, according to FreightWaves. Core funds from operations (FFO) of $1.63 per share were 17 cents higher year over year and 8 cents better than analysts’ forecasts.
Second-quarter lease signings for 67 million square feet of space marked a fresh high for the fourth time in the past seven quarters. Leases commenced in the quarter totaled 61.7 million square feet, up 21% year over year. Average occupancy of 95% was 10 basis points higher year over year but 30 basis points lower sequentially. Occupancy ended the quarter at 95.5%.
| Metric | Q2 2026 | Year-Over-Year Change | Consensus / Target |
|---|---|---|---|
| Revenue | $2.43B | +11% | $2.16B estimate |
| Core FFO per share | $1.63 | +17 cents | $1.55 estimate |
| Lease signings | 67M sq ft | New record | – |
| Leases commenced | 61.7M sq ft | +21% | – |
| Occupancy (avg) | 95% | +10 bps | – |
| Occupancy (end) | 95.5% | – | – |
| Net effective rent change | 36.9% | – | Full-year goal 40% |
Market Conditions and Rent Growth
Net effective rent change on Prologis’ portfolio of multiyear leases was 36.9% in the quarter, near the company’s full-year goal of 40%, according to FreightWaves. That change drove $16 million in incremental net operating income. Lease mark-to-market (resetting in-place rents to current market rents) was estimated at 17%, or $800 million in future net operating income.
Management said net absorption—leased space less the amount of space vacated—was 66 million square feet in the U.S. during the quarter, the highest since 2022. The Prologis portfolio outperformed the U.S. market, which carried a 7.2% vacancy rate in the period, according to FreightWaves.
Prologis is forecasting total net absorption to equal 220 million square feet (including 195 million in completions) this year, allowing for market-wide occupancy to improve 30 basis points. It said U.S. rents increased 70 basis points during the quarter but it expects rent growth to outpace inflation in tight markets like Texas, the Southeast, the Midwest and the San Francisco Bay Area.
Outlook and Strategic Moves
Core FFO is now forecast to a range of $6.22 to $6.30 per share, a 2% increase at the midpoint, according to FreightWaves. The guide assumes average occupancy of 95.25% to 95.75% (25 basis points higher on the low end of the range) and development starts between $4.5 billion and $5.5 billion (a $1-billion increase at both ends of the range). Development projects also include new data center construction, but the increased outlook is largely due to demand for logistics properties.
Development starts totaled $1.6 billion in the second quarter, with half of the activity tied to logistics properties.
Prologis didn’t comment on its £12.6 billion ($16.6 billion) takeover bid for London-based logistics warehouse operator Segro, which was rejected last month, according to FreightWaves. Shares of PLD were up 3.2% at 2:08 p.m. EDT on Thursday compared to the S&P 500, which was down 0.5%.
For freight forwarders and logistics operators, the demand bump signals a tightening market for warehouse space with rising rents and high occupancy. Prologis’ record leasing and raised guidance indicate that logistics real estate remains a critical constraint in supply chains. Companies should expect higher storage costs and limited availability in key U.S. markets like Texas, the Southeast, the Midwest, and the San Francisco Bay Area, where rent growth is expected to outpace inflation. The rejected Segro bid may open the door for other consolidation moves in European warehouse markets, but Prologis remains focused on U.S. logistics properties to capture the demand from e-commerce and inventory restocking.
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