Prologis Raises 2026 Development and Acquisition Outlook

Prologis raised its 2026 capital deployment outlook even as higher borrowing costs make the broader industrial market more cautious. The company now expects development starts of $5.0 billion to $5.75 billion and acquisitions of $2.1 billion to $2.3 billion on a Prologis-share basis.

The increase follows a quarter in which Prologis signed 60 million square feet of leases and reported average occupancy of 95.1%. Revenue reached $2.39 billion, while core funds from operations totaled $1.55 billion, or $1.60 per diluted share, according to the source report.

Build-to-suit work is doing more of the heavy lifting. Management said its build-to-suit pipeline was 20% to 25% larger than a year earlier and expected those customer-backed projects to represent 55% to 65% of annual starts. That mix matters because committed tenants reduce leasing risk compared with speculative development.

Data center and power-related customers accounted for 17% of U.S. leasing activity in the quarter. Prologis estimates this segment could generate more than 150 million square feet of industrial demand through 2030, but management also warned that hyperscale decisions are large and uneven, so quarterly activity can be volatile.

The raised outlook is constructive for growth, yet it does not remove the rate risk. A further rise in yields could widen bid-ask spreads, slow acquisitions and lower property values. Investors should compare fourth-quarter starts with the revised range and watch whether customer-backed development, rather than speculative building, remains the main source of expansion.