Prologis Reports Another Strong Quarter as Tariff Uncertainty Lingers

Prologis is proceeding with deals despite lingering uncertainty surrounding President Donald Trump’s tariffs.

The industrial giant reported core funds from operations (FFO) per diluted share of $1.46, a 9 percent increase from $1.34 during the same period in 2024 and an increase from $1.42 the previous quarter, according to Prologis’ second-quarter earnings report released Wednesday.

In addition, Prologis — which currently owns or has investments in properties and development projects totaling 1.3 billion square feet — recorded revenue during the second quarter of $2.2 billion, compared to $2 billion during the same time last year and $2.1 billion during the first quarter, the report shows.

The firm also reported a second-quarter net income of $569.7 million, down from $859.8 million during the same period in 2024 and from $591.5 million last quarter, according to the report.

Still, Prologis’ earnings were steady considering uncertainty over tariffs and trade policies, as its overall occupancy reached 95.1 percent by the end of the second quarter and its leasing pipeline hit a record of 130 million square feet in recent weeks, Tim Arndt, chief financial officer at Prologis, said during an earnings call Wednesday afternoon.

“The pipeline is promising, even amid some of the subdued decision-making,” Chris Caton, managing director of global strategy and analytics at Prologis, added during the call. “One of the hallmarks here is diversity. We see a good balance and good growth across different deal stages, … different deal types, … [and] across different customer industries.”

On the development front, Prologis initiated more than $900 million of development starts during the quarter, including $300 million of development starts related to its 160-acre planned data center campus in Austin, Texas.

Plus, the industrial giant has nearly 1.1 gigawatts of solar production and storage in operation or under development as of the end of the second quarter, Arndt said.

And while the second quarter proved to be relatively strong for Prologis, it’s still closely monitoring the ever-changing tariffs, as some tenants remain hesitant to sign new deals.

“We’ve been in a condition of constant uncertainty,” Prologis CEO and co-founder Hamid Moghadam said during the earnings call. “It is very, very difficult to predict anything for any length of time, but with every passing day, there’s more water building up behind the dam.

“We’re seeing evidence of this with the largest customers — they just can’t basically go to sleep without taking more space,” Moghadam said. “Their ability to defer is getting reduced with every passing day.”

But Moghadam added that customers will likely begin making decisions again once they see others taking the first step. He credits the fear of missing out, known as FOMO.

“FOMO is a big factor about people’s confidence to move on,” he said. “Generally, I’ve found that people take more comfort in being among other people making the same sort of decision than being somewhat contrary.”

In February, Prologis announced that Moghadam will retire as CEO in January 2026, to be replaced by Dan Letter, the firm’s current president.

Isabelle Durso can be reached at idurso@commercialobserver.com.