Prologis’ Damon Austin Can Take You Through the Data Center Boom

When Prologis, the world’s largest industrial landlord, promoted Damon Austin from global head of customer development to chief development officer in December 2025 — the promotion took effect New Year’s Day — the company was bestowing upon him a fairly substantial task.

Prologis owns roughly 6,000 buildings throughout 20 countries. That’s around 1.3 billion square feet of warehouses all told, according to CoStar. The company’s revenue totaled around $4.52 billion in the last half of 2025 alone, and its recent fourth-quarter earnings call noted that Prologis signed 228 million square feet of new leases in 2025. The company also reported $4.4 billion in property sales for the year, $1.15 billion in acquisitions, and $8.79 billion in revenue, up from $8.2 billion in 2024. 

Given this marked dominance in the world of industrial property, the company is perfectly positioned to capitalize on the current exploding demand for data centers, and it is not wasting this opportunity as it prepares to spend around $2 billion a year on investments in the sector.

Austin joined Prologis in 2015 after stints at Trammell Crow Company and Lehman Brothers, and has worked in several roles for Prologis, including overseeing investment and development activity in the West. Today he is tasked with exploding the company’s successful metrics to even higher levels, as the world’s AI boom makes data centers a crucial necessity for the corporate path forward.

Commercial Observer spoke to the Marin County, Calif.-based Austin late last month about his new role, and the various ways Prologis will dive deeper into the data center ecosystem in 2026. 

This interview has been edited for length and clarity.

Commercial Observer: What are your main duties and responsibilities at the company? 

Damon Austin: I’m responsible for helping lead our investment and development strategy and our construction and development teams. I have a specific focus on looking after our build-to-suit strategy, which is when we build customized facilities for the largest occupiers. That’s helping our biggest customers — Amazon, FedEx, UPS or Home Depot on the logistics side, and the largest tech companies, hyperscalers like Google, Microsoft, Amazon and Meta on the data center side — expand their portfolios programmatically.

Have you had any significant mentors throughout your career?

I’ve only had three jobs in my adult life, and I’ve been at Prologis for the last 11 years. At each step along the way, I’ve always gravitated toward having at least one senior business mentor. I always tried to be proactive and volunteer for assignments even when I didn’t yet know how to do the work. I’ve found that by putting myself out there, demonstrating determination and grit and a can-do attitude, it always led to finding a mentor who trusted me enough to keep pushing and challenging me. 

My first manager at Prologis, Kim Snyder [president of the U.S. West Region for Prologis], taught me that the best real estate development deals rarely come prepackaged off the shelf. They’re forged in deep relationships, take creative structuring, and require diverse stakeholder alignment. 

He taught me that to be most effective, I needed to be equally fluent with financiers, construction crews, customers, city officials, attorneys and even with my opponents!

How much of Prologis’ focus is on the data center side?

We’ve been in the data center business for the better part of 25 years, but there has been a much more intentional focus for us over the last five. Because it’s a newer business for us and we’re rapidly growing our market share, pipeline, teams and capabilities in this space, it’s taking a disproportionate amount of our team’s capital, time and resources. So, lately, it’s probably been at least half of my time.

How all-encompassing are Prologis’ data center enterprises? Are you operational at every stage, from development and construction to sales, operations and facility management?

We see our highest value-add for our customers on the development side. Prologis has that history in customized, build-to-suit facilities, as do I. So it’s a matter of taking that history, and the success of what we built in logistics, and translating that to the data center ecosystem. 

We asked our customers — the hyperscalers — what they need from us to succeed in the data center space, and they told us. They need access to our land bank, particularly our infill land bank in places that are severely land- and supply-constrained. They need access to our power. And they need our build expertise, because these companies are trying to scale so rapidly. We’re building our business around those needs.

Given how fast this segment is growing, is the challenge Prologis now faces similar to what the company has faced on the logistics side over the years?

No. I think there are other analogs, such as what we saw 10 or 15 years ago with the rapid expansion of e-commerce, when it was becoming part of everyday dialog and we saw the rapid expansion of same-day and two-day delivery. There are a lot of analogs there regarding urgency, and a high degree of focus on execution capabilities and risk. 

We’ve learned an awful lot from the explosion of logistics over the last 15 years, in particular the explosion of e-commerce, that is directly translatable to what we’re doing today with data centers.

Finding land for data centers can be quite a challenge. What kind of land does Prologis already have in its land bank, how do you go about finding it, and how much more do you need?

That’s a big part of our secret sauce. When we talk to our customers, one of the things they get so excited about is the scale we bring to bear. 

When we talk about our land, I think about that in two different ways. We have 1.3 billion square feet of buildings in the most supply-constrained markets across the globe, which include all of the major Tier 1 data center markets. Those buildings can absolutely be transformed into data centers — essentially, turning them into land. So, a big part of our land bank will be taking down older logistics facilities and starting new data centers from scratch in those locations. That’s part of our heritage, what we call our higher and better use business. 

Additionally, we own or control another 14,000 acres of land that is also in Tier 1 and Tier 2 data center markets, and is very attractive to our customer base. So, when we meet with the hyperscalers, they’re looking at both our existing asset base and our land bank, and trying to figure out where the best fit is for their growth ambitions.

Are you seeing a decrease in logistics demand that allows you to do all this? And, if not, how are you freeing up these logistics centers to convert them?

We have a ton of conviction and confidence in our logistics business. We built a best-in-class portfolio. But any time we have an opportunity to more than double or triple the value of one of our assets by thinking about what it could be in a higher and better use conversion, that’s just being smart with our portfolio and making sure we’re value optimizing. 

In the past, we might have taken a logistics property and transitioned it to an office park, a life science asset or a multifamily asset. Today, the most direct way to add that incremental value optimization is when we can marry our assets with power that’s going to be in the data center ecosystem.

From Prologis’ perspective, given the current AI explosion, is data center demand seemingly infinite?

Our customers, the largest occupiers out there, tell us that they see their demand coming from a couple different places. There’s a huge embedded demand from the organic growth of traditional cloud uses. Those are the things we utilize every day, from social media to streaming to online banking, all the traditional cloud enterprises. 

But, over these last few years, we’ve also introduced artificial intelligence, both through large language model training and now increasingly with inference and the agentic nature of putting these AI applications to work. One of the things we hear from our customers is that sometimes people think of AI as a separate business line these hyperscalers might utilize. But AI is not a business line for them. AI is increasingly embedded in every single product they offer. It’s a layer that goes on top of every piece of technology, every application, and every new business line. So there’s a tremendous amount of tailwind. 

I think we’re going to continue to see a lot of demand in this space for an awfully long time. There are a lot of natural governors to new supply in this space, including the availability of power and land. Right now, we’re seeing demand far outpace supply, and I think we’ll continue to see that for many years to come.

You are also the chair of the company’s investment committee. How would you describe general investor sentiment toward data centers first, and then also toward Prologis’ other endeavors in comparison?

We’ve spent a lot of time developing our capital thesis for investing in data centers over these last five years or so, and we’re getting increasingly comfortable with digital infrastructure as part of our investment capabilities and portfolio. Increasingly, we’re hearing from our investors and analysts that they see it as a really good complement to our logistics business, and I would say that’s true for a couple reasons. For one, the type of deals we’re putting together in the data center business typically come with the very best credit profiles on the planet, and very long lease durations. So these turn into really good cash-flowing assets that are highly durable and really stable for us, and work really well for Prologis, our REIT format, and our investors.

Our investment committee wants to see continued investment and growth in both of our core businesses. Right now, part of what they like about the data center ecosystem is that we are able to create a more outsized return — a little more excess value creation. Also, the universe of investors and end users for this space is rapidly expanding, whether that’s private equity, pension funds, insurance investors or data center-  and infrastructure-specific investors. There’s a widening pool of long-term capital in the data center space which brings a lot of liquidity to this profile, and gives developers like us a lot of confidence to continue to build and develop.

In talking about the hyperscalers, give me an example — whether for a new client or a renewal — of the type of deal that gets negotiated and what that negotiating process is like, since you are talking about such long lease lengths and large amounts of space and energy.

These are incredibly complex deals with a lot of stakeholders. There’s the hyperscaler and the developer, but there’s also the local utility that’s providing the power. There’s a supply chain to manage, because these facilities aren’t just four walls and a roof. They have a lot of critical mechanical and electrical equipment that has a long tail for delivery. So you’re really building a fairly complex mousetrap, and it’s a lot to bring together. Anybody doing their first deal with a hyperscale customer better buckle up, because it’s going to be a long haul. 

Where we’re able to bring our expertise and relationships with customers to bear is in how we’ve already gone through that exercise, so we already have supplier relationships, and we have all this long-lead equipment in our procurement queue. We know the best contractors, vendors and suppliers in the industry, and, now, we’ve got four leases with the biggest hyperscale customers. That allows us to be much more dynamic, and focus on the real estate and the execution rather than on focusing on the micro-nuances of negotiating a net new deal.

There’s a lot of talk about the potential for an AI bubble. What is Prologis’ take on that? What would the company face if the AI bubble were to burst, and how is Prologis guarding against that?

The demand from the hyperscalers is not something we’re concerned about right now. As I mentioned earlier, AI is embedded in every single thing they do. We’re just at the beginning stages of these companies really building out that AI infrastructure, and it’s so new that we see really good demand signals for many years to come. 

And there are so many governors to new supply that it’s hard to put a data center into production. The power queues are so long to bring in energized sites. Getting the actual asset, the real estate, is so difficult that we’re not even getting close to keeping up with the demand. There’s obviously a lot of capital flowing into this space as well. So we really don’t see signals that give us a lot of concern about a bubble. 

We’re in great shape even if there were to be a market correction, because everything we’re doing is coming in that build-to-suit format with long-term leases and really durable lease covenants. We’re not putting a lot of risk or capital on the table that isn’t covered by a durable rental income stream from our customers. We don’t really see a lot of downside for Prologis here.

How significant is Prologis’ investment in data center development, and what is the company’s forecast on that for the years to come?

We have been talking on our earnings calls lately about the power bank we’ve been able to secure. When we think about investment capability, a lot of it ties back to how much power we have today. Once we have power and the entitlements for a site, customers are immediately attracted to those opportunities. Virtually every site we have that’s entitled — ready to go for a data center and energized — has a customer associated with it for these next few years. We’ve got more than 5 gigawatts of power — 5.7, to be exact — that is either secured or in a bucket. We’ve got infrastructure being built, long-lead-time equipment being built, and system design in place, so that is power we feel really good about our capability to deploy. 

We’ve got $7 billion to $8 billion in expected investment over these next few years. It’s very easy for us to see ourselves deploying close to $2 billion a year or more into data center developments.

Given the immense power requirements of all this, a lot of communities around the country are not thrilled about data centers coming their way. How is Prologis addressing that, and how are you negotiating to have this much power?

This is turning into an increasingly big part of the conversation with customers, municipalities, utilities and communities. The truth is, we as a nation — and as a system of utilities — have a lot of work to do to modernize and upgrade our utility system. There’s a lot of investment going in right now for new generation, new transmission and new distribution, and we’re trying to make sure as developers that we’re doing our part to pay for that infrastructure — to make sure that we’re building as responsibly as we can on a project level and on a community basis. 

We’ve been doing this for a long time, and we really pride ourselves on the way we engage those communities. We’re having open community dialogue. We’re talking about creating local benefits in the form of jobs and infrastructure improvements. We really want to engage, because data centers in digital infrastructure are such a critical part of powering modern life, from schools to hospitals to emergency services to all the innovations coming from our technological world. We really want to support that, but we also want to do it in a way that gives communities a sense that we are a responsible stakeholder.

At what point does the company estimate that the data center investments will turn into sizable profits given the current level of expense?

We’ve already built a lot of conviction that we’ve got a very profitable business here. To better understand the investor market and liquidity profile of these assets, we’ve taken a couple of these to market already and we’ve sold two data centers, one in the Chicago area and one in Texas. We were able to demonstrate robust profitability on those sales. We have a growing base of investors that are interested in this space, and we have a very clear sense of valuation. 

And, because we’re building really durable income streams with such high-credit entities, we’ve got a lot of conviction that we’re building a really good risk-adjusted profit spread here.

To clarify, Prologis is both managing some data centers and leasing them to the hyperscalers, and developing others with the end game of selling them off?

It’s been an evolution for us, as we’ve started expanding our ambitions in this space. When we started, we were taking a bit more of a merchant mentality, thinking about building, leasing and stabilizing these assets and then monetizing them — taking them to market and reinvesting that capital into our core business. 

Over these last few years, we’ve gotten more comfortable with the product type we’re building, we’ve developed more familiarity and deeper relationships with the customer base, and we’ve built more conviction around the capital markets. As a result, we’re spending a lot of time thinking about a longer-term portfolio here.

What can you tell me about the data center fund the company is developing?

Right now, with a lot of our logistics business, we have investments on our balance sheet, and we also have a lot of investments in what we call our strategic capital vehicles. Those are our large funds that bring in a variety of other investors interested in our space. We’ve got a couple of flagship funds in countries around the world. 

So, when we think about the data center business, we think it would be smart to think about a similar fund-related construct there, bringing in third-party investors and also keeping Prologis capital significantly invested there. That allows us to think about leveraging our capital more effectively, growing and scaling more rapidly, and managing these very expensive assets with a deep concentration of capital. As we think about the size and opportunity set within our portfolio, we want to do that really responsibly, and grow that in a way that is a perfect complement for the logistics business. We think a strategic capital fund-related enterprise could be the right vehicle to do exactly that. 

We’re fairly early in the process of exploring that, but that’s something we’re increasingly building conviction about that it’s the right way to inventory these assets for the long run.

Larry Getlen can be reached at lgetlen@commercialobserver.com.