Prologis Leans More Into Data Center Projects, Reports Record Industrial Leasing

The world’s largest industrial landlord opened 2026 with record leasing numbers and a sharper push into data centers, and also raised its expectations for the year.

Prologis signed 66.7 million square feet of leases in the first quarter of this year, including roughly 64 million square feet in its logistics portfolio alone, marking one of the strongest quarters in its history. Average occupancy across Prologis’ extensive portfolio was 95.3 percent, essentially flat year-over-year, while net operating income (NOI) rose 8.8 percent on a cash basis.

“Our lease signings, proposal volume and build-to-suit pipeline point to continued strength in underlying demand,” CEO Dan Letter said on the company’s earnings call Thursday. “March was a very active month for new leasing.”

First-quarter net income reached $980.5 million, up from $592 million in the first quarter of 2025. Core funds from operations hit $1.44 billion, up from $1.36 billion a year earlier, while revenue totaled $2.3 billion, up from $2.14 billion in Q1 2025. Prologis said the gains were driven in part by higher rental income and development gains.

“Our expectation for full-year rent change to approach 40 percent on the net effective basis remains unchanged,” Tim Arndt, chief financial officer at Prologis, said on the earnings call.

Prologis put down $268 million in acquisitions during the first quarter, which is significantly lower than in previous quarters, while also closing $676 million in dispositions. On the development side, the company started $1.78 billion worth of new projects, with more than 80 percent being build-to-suit.

During the quarter, Prologis launched a $1.6 billion build-to-suit joint venture with GIC targeting U.S. logistics developments. 

“Even after delivering record leasing in the quarter, our pipeline has not only replenished, but reached new highs,” Arndt said.

And, after expanding its data center pipeline last year, Prologis also continued scaling its platform, including starting $1.3 billion in build-to-suit data center projects in Q1.

“The depth of customer interest for our data center offerings is significant,” Letter said. “Customer interest in our powered sites is exceptional,” he said, noting the company had letters of intent for projects totaling 1.3 gigawatts.

Despite macro uncertainty, Prologis raised its full-year outlook. The company increased its core FFO guidance to between $6.07 and $6.23 per share, up from a prior range of $6 to $6.20, while boosting its net earnings forecast to between $3.80 and $4.05 per share.

Prologis expects average occupancy between 95 percent and 95.75 percent, and cash same-store NOI growth of 6.25 percent to 7 percent for 2026, both modestly improved from prior guidance. 

Prologis’ capital deployment plans call for $3.5 billion to $4.5 billion in development starts this year, alongside $1 billion to $1.5 billion in acquisitions and $1.75 billion to $2.25 billion in dispositions.

“We are anchored by a portfolio of irreplaceable assets generating durable and growing cash flows,” Arndt concluded.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.