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What changed in Prologis's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Prologis's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+275 added−293 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-13)

Top changes in Prologis's 2024 10-K

275 paragraphs added · 293 removed · 251 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

76 edited+13 added−18 removed29 unchanged
Biggest changeDespite the competition, our global reach and local market knowledge over the years have given us distinct competitive advantages, including the following: • a portfolio of properties strategically located in markets characterized by large population densities, growing consumption and high barriers to entry, typically near large labor pools and extensive transportation infrastructure, including our Last Touch ® facilities; • the ability to leverage the organizational scale and structure of our 1.2 billion square foot O&M portfolio to provide a single point of contact for our multi-market customers to address their needs through our in-house global Customer Led Solutions Team; • services and solutions offered through Prologis Essentials to assist our customers with their operations and energy and sustainability needs and at the same time enhancing the value of our real estate; 7 Table of Contents • a strategically located, global land bank and redevelopment sites that have the potential to support the development of $40.0 billion of TEI of new logistics space on an O&M basis, including build-to-suit development and redevelopment as industrial properties or other higher use assets; • local teams with the expertise, experience and relationships to lease our properties and deploy capital advantageously, supported by our in-house government and community affairs and entitlement teams; • development of logistics facilities with sustainable design features that meet customer needs for efficient, high-quality buildings while enabling them to make progress on their own sustainability objectives; • relationships and successful track record with current and prospective investors in our strategic capital business that is comprised of 93% perpetual open-ended or long-term ventures and two publicly traded vehicles; • a market intelligence team that allows us to track business conditions in real time, proactively pursue market opportunities and disruptions alike, and develop revenue-generating capabilities to strengthen our operational excellence; • an investment in technology and talent to support our sustainability objectives, including expanding our efforts around renewable energy; • Prologis Ventures, our corporate venture capital group, tracks the leading edge of innovation and technologies within real estate and the supply chain, creating important capabilities that connect Prologis with the C-suites of our customers; and • a strong balance sheet and credit ratings, coupled with significant liquidity, borrowing capacity and long-term fixed debt with low rates.
Biggest changeDespite the competition, our global reach and local market knowledge over the years have given us distinct competitive advantages, including the following: • a portfolio of properties strategically located in markets characterized by large population densities, growing consumption and high barriers to entry, typically near large labor pools and extensive transportation infrastructure, including our Last Touch ® facilities; • the ability to leverage the organizational scale and structure of our 1.3 billion square foot O&M portfolio to provide a single point of contact for our multi-market customers to address their needs through our in-house global Customer Led Solutions Team; • services and solutions offered through Prologis Essentials to assist our customers with their operations and energy and sustainability needs and at the same time enhancing the value of our real estate; • a strategically located, global land bank and redevelopment sites that have the potential to support the development of $41.5 billion of TEI of new logistics space on an O&M basis, including build-to-suit development and redevelopment as industrial properties or data centers; • capabilities to convert properties to data centers in key markets, with total TEI of $0.9 billion on an O&M basis currently under development; • local teams with the expertise, experience and relationships to lease our properties and deploy capital advantageously, supported by our in-house government and community affairs and entitlement teams; • development of logistics facilities with sustainable design features that meet customer needs for efficient, high-quality buildings while enabling them to make progress on their own sustainability goals; • relationships and successful track record with current and prospective investors in our strategic capital business that is comprised of 95% open-ended ventures, long-term ventures and two publicly traded vehicles; • a market intelligence team that allows us to track business conditions in real time, proactively pursue market opportunities and disruptions alike, and develop revenue-generating capabilities; • an investment in technology and talent to support our sustainability objectives, including expanding our efforts around renewable energy; 8 Table of Contents • an internal venture capital group, Prologis Ventures, through which we invest in growth stage companies focused on innovating across the logistics sector; and • a strong balance sheet and credit ratings, coupled with significant liquidity, borrowing capacity and long-term fixed debt with low rates.
While the majority of our properties in the U.S. are wholly owned, we hold a significant ownership interest in properties both in the U.S. and internationally through our investment in the co-investment ventures.
While the majority of our properties in the U.S. are wholly owned, we hold a significant ownership interest in properties both in the U.S. and internationally through our investment in co-investment ventures.
(1) Net effective rent ("NER") is calculated at the beginning of the lease using estimated total cash base rent to be received over the term and annualized and excludes amortization of fair value lease adjustments from acquisitions. Amounts derived in a currency other than the U.S. dollar have been translated using the average rate from the previous twelve months.
(1) Net effective rent ("NER") is calculated at the beginning of the lease using estimated total cash base rent to be received over the term and annualized and excludes fair value lease amortization from acquisitions. Amounts derived in a currency other than the U.S. dollar have been translated using the average rate from the previous twelve months.
The impact of regional or country-specific economic instability, including government shutdowns or other internal trade alliances or agreements could also have a material adverse effect on our business, financial condition or results of operations. See further discussion in Item 1A. Risk Factors. INSURANCE COVERAGE We carry insurance coverage on our properties.
The impact of regional or country-specific economic instability, including government shutdowns or other internal trade alliances or agreements could also have a material adverse effect on our business, financial condition or results of operations. See further discussion in Item 1A. Risk Factors. INSURANCE COVERAGE We carry insurance coverage for our properties.
We provide workplace flexibility with accountability as determined by role. For those employees who work on-site, we have protocols in place to help ensure a safe working environment. We continue to attract and retain talent in the industry through competitive compensation, a robust benefit package, pathways to career advancement, talent recognition and individual development planning.
We provide workplace flexibility with accountability as determined by role. For those employees who work on-site, we have protocols in place to help ensure a safe working environment. We continue to attract and retain talent in the industry through competitive compensation, a robust benefits package, pathways to career advancement, talent recognition and individual development planning.
While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an environmental liability that we believe would have a material adverse effect beyond amounts recorded at December 31, 2023. See further discussion in Item 1A. Risk Factors and Note 16 to the Consolidated Financial Statements in Item 8.
While some of these assessments have led to further investigation and sampling, none of the environmental assessments have revealed an environmental liability that we believe would have a material adverse effect beyond amounts recorded at December 31, 2024. See further discussion in Item 1A. Risk Factors and Note 16 to the Consolidated Financial Statements in Item 8.
Additionally, primary categories are listed in order of the largest percentage of NER for each category type. 9 Table of Contents The following table details our top 25 customers for our consolidated and O&M real estate properties at December 31, 2023 (square feet in millions): Consolidated - Real Estate Segment Owned and Managed Top Customers % of NER Total Occupied Square Feet Top Customers % of NER Total Occupied Square Feet 1.
Additionally, primary categories are listed in order of the largest percentage of NER for each category type. 9 Table of Contents The following table details our top 25 customers for our consolidated and O&M real estate properties at December 31, 2024 (square feet in millions): Consolidated - Real Estate Segment Owned and Managed Top Customers % of NER Total Occupied Square Feet Top Customers % of NER Total Occupied Square Feet 1.
Partnering with the world’s largest institutional investors through co-investment ventures allows us to expand our investment capacity, enhance and diversify our real estate returns and mitigate our exposure to foreign currency movements. Our scale and customer-focused strategy have compelled us to expand the services we provide.
Partnering with many of the world’s largest institutional investors through co-investment ventures allows us to expand our investment capacity, enhance and diversify our real estate returns and mitigate our exposure to foreign currency movements. Our scale and customer-focused strategy have compelled us to expand the services we provide.
THE COMPANY Prologis is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. We own, manage and develop well-located, high-quality logistics facilities in 19 countries across four continents.
THE COMPANY Prologis is the global leader in logistics real estate with a focus on high-barrier, high growth markets. We own, manage and develop well-located, high-quality logistics facilities in 20 countries across four continents.
As properties are completed and leased, we expect to realize the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio. • Strategic Capital Advantages.
As properties are completed and leased, we expect to capture the value creation principally through gains realized through contributions of these properties to unconsolidated co-investment ventures and increases in the NOI of the consolidated portfolio. • Strategic Capital Advantages.
CODE OF ETHICS AND BUSINESS CONDUCT We maintain a Code of Ethics and Business Conduct applicable to our board of directors (the “Board”) and all of our officers and employees, including the principal executive officer, the principal financial officer and the principal accounting officer, and other people performing similar functions.
C ODE OF ETHICS AND BUSINESS CONDUCT We maintain a Code of Ethics and Business Conduct applicable to our board of directors (the “Board”) and all of our officers and employees, including the principal executive officer, the principal financial officer and the principal accounting officer, and other people performing similar functions.
We have also set goals and objectives to support the communities in which we do business and employ strong governance practices. Environmental We develop modern and efficient buildings with state-of-the-art technology to stay ahead of our customers’ needs, advance structural, transportation and energy requirements, and make progress on our own sustainability goals and objectives.
We have also set goals and objectives to support the communities in which we do business and employ strong governance practices. Environmental Sustainability We develop modern and efficient buildings with state-of-the-art technology to stay ahead of our customers’ needs, advance our ability to meet future structural, transportation and energy requirements, and make progress on our own sustainability goals and objectives.
As we look toward the future, we have set sustainability goals and objectives that demonstrate our ambition, create accountability and drive alignment with our business strategy. These goals include the 11 Table of Contents utilization of renewable energy sources, along with sustainable development and redevelopment, that create energy savings and reduce our environmental footprint.
As we look toward the future, we have set sustainability goals and objectives that demonstrate our ambition, create accountability and drive alignment with our business strategy. These goals include the utilization of renewable energy sources, along with sustainable development and redevelopment, that create energy savings and reduce our environmental footprint.
We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during 2023 within the consolidated operating portfolio, the weighted average lease term was 66 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses.
We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. For leases that commenced during 2024 within the consolidated operating portfolio, the weighted average lease term was 64 months. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates and controlling expenses.
Amounts represent our total expected investment (“TEI”) upon stabilization, which includes the estimated cost of development or expansion, including land, construction and leasing costs. Real Estate Segment Rental Operations. Rental operations comprise the largest component of our operating segments and generally contributes 85% to 90% of our consolidated revenues, earnings and FFO.
Amounts represent our total expected investment (“TEI”) upon stabilization, which includes the estimated cost of development or expansion, including land, construction and leasing costs. Real Estate Segment Rental Operations. Rental operations comprise the largest component of our reportable segments and generally contributes 90% to 95% of our consolidated revenues, earnings and FFO.
Successful development and redevelopment efforts provide significant earnings growth as projects are leased, generate income and increase the value of our Real Estate Segment. Generally, we develop properties in the U.S. to hold for the long-term and outside the U.S. for contribution to our unconsolidated co-investment ventures.
Successful development and redevelopment efforts provide significant earnings growth as projects are leased, generate income and increase the value of our Real Estate Segment. Generally, we develop properties in the U.S. to hold for the long term or to contribute to our unconsolidated co-investment venture, and outside the U.S. to contribute to our unconsolidated co-investment ventures.
We mitigate our exposure to foreign currency fluctuations by investing outside the U.S. through co-investment ventures, borrowing in the functional currency of our subsidiaries and utilizing derivative financial instruments. OPERATING SEGMENTS Our business comprises two operating segments: Real Estate (Rental Operations and Development) and Strategic Capital.
We mitigate our exposure to foreign currency fluctuations by investing outside the U.S. through co-investment ventures, borrowing in the functional currency of our subsidiaries and utilizing derivative financial instruments. R EPORTABLE SEGMENTS Our business comprises two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital.
We believe we have a competitive advantage due to (i) the strategic locations of our global land bank and redevelopment sites; (ii) the development expertise of our local teams; (iii) the depth of our customer relationships; (iv) our ability to integrate sustainable design features that provide operational efficiencies for our customers; and (v) our procurement capabilities that allow us to secure high-demand construction materials at lower cost.
We believe we have a competitive advantage due to: (i) the strategic locations of our global land bank and redevelopment sites for the development of future industrial properties or data centers; (ii) the development expertise of our local teams; (iii) the depth of our customer relationships; (iv) our ability to integrate sustainable design features that provide operational efficiencies for our customers; and (v) our procurement capabilities that allow us to secure high-demand construction materials at a lower cost.
Social We are committed to social responsibility and strengthening relationships important to our business through customer partnerships, investor outreach, community involvement, supplier engagement, labor solutions, and DEIB initiatives, as discussed above.
Social Impact We are committed to social responsibility and strengthening relationships important to our business through customer partnerships, investor outreach, community involvement, supplier engagement and labor solutions, as discussed above.
Adjusted G&A expenses is calculated from our Consolidated Financial Statements as G&A Expenses and Strategic Capital Expenses , less expenses under the Prologis Promote Plan (“PPP”) and property-level management expenses for the properties owned by the ventures. • Balance Sheet Strength.
Adjusted G&A expenses is calculated from our 7 Table of Contents Consolidated Financial Statements as G&A Expenses and Strategic Capital Expenses , less expenses under the Prologis Promote Plan (“PPP”) and property-level management expenses for the properties owned by the ventures. • Balance Sheet Strength.
Our most recent employee engagement survey, completed in September 2023, with a participation rate of 92%, indicated that 88% of Prologis employees are engaged based on their positive response to the questions that comprise our engagement driver index. We strive to cultivate a healthy and safe working environment for our employees.
Our most recent employee engagement pulse survey, completed in September 2024, with a participation rate of 92%, indicated that 85% of Prologis employees are engaged based on their positive response to the questions that comprise our engagement driver index. We strive to cultivate a healthy and safe working environment for our employees.
ENVIRONME NTAL MATTERS We are exposed to various environmental risks that may result in unanticipated losses and affect our operating results and financial condition. Either the previous owners or we have conducted environmental reviews on a majority of the properties we have acquired, including land.
ENVIRONMENTAL MATTERS By the nature of our industry, we are exposed to various environmental risks that may result in unanticipated losses and affect our operating results and financial condition. Either the previous owners or we have conducted environmental reviews on a majority of the properties we have acquired, including land.
Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S. Development. Given the scarcity of modern logistics facilities in our target markets, our development business provides the opportunity to build to the evolving requirements of our customers while deepening our market presence.
Substantially all of our consolidated rental revenue, NOI and cash flows from rental operations are generated in the U.S. Development. Our development business provides the opportunity to build modern logistics facilities that address the evolving requirements of our customers while deepening our presence in our target markets.
We believe we can continue to grow NOI and strategic capital revenues organically and through accretive development and acquisition activity while further reducing G&A as a percentage of our investments in real estate.
We believe we can continue to grow NOI and strategic capital revenues organically and through accretive development and acquisition activity while further reducing G&A as a percentage of our investments in real estate. • Staying “Ahead of What’s Next™”.
Effective January 12 Table of Contents 1, 2024, we added our Chief Energy and Sustainability Officer to our management Executive Committee to support alignment between our real estate business and energy and sustainability strategy.
Effective January 1, 2024, we added our Chief Energy and Sustainability Officer to our management Executive Committee to support alignment between our real estate business and energy and sustainability strategy.
Our 1.2 billion square foot portfolio has provided the foundation upon which we have built a platform of solutions to address challenges that our customers face in global fulfillment today. Through Prologis Essentials, we focus on innovative ways to meet our customers’ operations and energy and sustainability needs.
Our 1.3 billion square foot portfolio has provided the foundation upon which we have built a platform of solutions to address challenges that our customers face in global fulfillment today. Through Prologis Essentials, we provide solutions to meet our customers’ operations and energy and sustainability needs.
Our portfolio focuses on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ diverse logistics requirements. 3 Table of Contents The importance of logistics supply chains has increased dramatically to our customers and the global economy.
Our portfolio centers on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ diverse logistics requirements. 3 Table of Contents Logistics supply chains remain essential to our customers and the global economy.
They implement our strategy and create value for our customers and shareholders. We seek to recruit and retain talented employees with varied experiences and viewpoints. The intent is to create an inclusive and diverse culture where each employee can do their best work and drive our collective success.
They implement our strategy and create value for our customers and shareholders. We seek to recruit and retain talented employees with varied experiences and perspectives. The intent is to create an inclusive and high-performing culture where each employee can do their best work and drive our collective success. We are committed to inclusion and diversity.
Customers At December 31, 2023, in our Real Estate Segment representing our consolidated properties, we had more than 4,000 customers occupying 634 million square feet of logistics operating properties (6,700 customers occupying 1.2 billion square feet for our O&M portfolio).
Customers At December 31, 2024, in our Real Estate Segment representing our consolidated properties, we had more than 4,000 customers occupying 646 million square feet of logistics operating properties (6,500 customers occupying 1.3 billion square feet for our O&M portfolio).
For the 2023 year, we committed to: (i) installing 100% LED lighting within our logistics facilities across our O&M operating properties by 2025; (ii) installing 1 gigawatt of solar generation capacity, supported by storage, by 2025; and (iii) obtaining sustainable building certifications for 100% of our eligible new developments and redevelopments.
We have committed to: (i) installing LED lighting within 100% of our eligible new developments and redevelopments and across 80% of our eligible O&M operating properties by 2025; (ii) installing 1 gigawatt of solar generation and storage capacity by 2025 within our O&M portfolio; and (iii) obtaining sustainable building certifications for 100% of our eligible new developments and redevelopments.
Our global risk management team works with our Board to complete regular enterprise-wide risk assessments to ensure proper oversight over real estate, financial and emerging risks across our global organization. We are committed to ensuring that 100% of our employees complete ethics training each year and continued to achieve this commitment in 2023.
Our global risk management team works with our Board to conduct regular enterprise-wide risk assessments to ensure proper oversight over real estate, financial and emerging risks across our global organization. We remain committed to ensuring that 100% of our employees complete ethics training annually, a commitment we continued to achieve in 2024.
For development properties in our O&M portfolio that were approved by our Investment Committee after June 2021 and that reached stabilization during 2023, we certified 39% of our eligible developments and redevelopments with sustainable building certifications and 57% were scheduled for sustainable building certification, totaling 96% of eligible development and redevelopment.
For development properties in our O&M portfolio that were approved by our Investment Committee after June 2021 and that reached stabilization during 2024, we certified 69% of our eligible developments and redevelopments with sustainable building certifications and 31% were scheduled for sustainable building certification, totaling 100% of eligible developments and redevelopments.
Along with this commitment, our employees completed more than 1,800 hours of information technology security, compliance and other ethics training in 2023. Our approach is reinforced by our Code of Ethics and Business Conduct, as described above.
Along with this commitment, our employees completed more than 6,400 hours of information technology security, workplace safety, compliance and other ethics training in 2024. Our approach is reinforced by our Code of Ethics and Business Conduct, as described above.
We conduct annual pay equity analyses that cover women and people of color and aim to address differences in compensation not explained by relevant job factors accordingly. 10 Table of Contents The following charts display diversity by levels of seniority of our workforce at December 31, 2023: (1) Managers include employees with manager, director or vice president titles.
We conduct annual pay equity analyses that aim to address differences in compensation not explained by relevant job factors. 10 Table of Contents The following charts display our workforce demographics by levels of seniority at December 31, 2024: (1) Managers include employees with manager, director or vice president titles. Senior leaders include employees with senior vice president or higher titles.
At December 31, 2023, we have contributed in excess of 54,500 hours towards our goal. In addition, we encourage our employees to support our local communities outside of working hours with our Dollars for Doers and other matching gifts programs, through which Prologis donates to eligible charities and non-profit organizations based on employees’ personal volunteer hours or dollar donations.
In addition, we encourage our employees to support their local communities outside of working hours with our Dollars for Doers and other matching gifts programs, through which Prologis donates to eligible charities and non-profit organizations based on employees’ personal volunteer hours or dollar donations.
Strategic Capital Segment Through the Strategic Capital Segment we partner with many of the world’s largest institutional investors through unconsolidated co-investment ventures. The business is capitalized principally through private and public equity of which 93% is either in perpetual open-ended or long-term ventures and two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis in Mexico).
Strategic Capital Segment We partner with many of the world’s largest institutional investors through co-investment ventures. The business is capitalized through private and public equity, that is comprised of 95% open-ended ventures, long-term ventures and two publicly traded vehicles (Nippon Prologis REIT, Inc. in Japan and FIBRA Prologis, which controls Terrafina, also a publicly traded FIBRA in Mexico).
We estimate that our lease mark-to-market is approximately 57% (on an NER basis), which represents the growth rate from in-place rents to current market rents based on our share of the O&M portfolio at December 31, 2023.
We estimate that our share of the lease mark-to-market is approximately 30% (on an NER basis), which represents the amount by which current market rents exceed our in-place rents based on our share of the O&M portfolio at December 31, 2024.
The co-investment ventures provide additional capital from third parties that we can use to grow our company, contribute to self-funding our development activities through the sale of newly developed assets to these vehicles and produce substantial fees for our management of the assets.
The co-investment ventures provide capital from third parties that allows us to grow our O&M portfolio, contribute to self-funding our development activities through the sale or contribution of newly developed assets to these vehicles and produce substantial fees for our management of the assets.
The following table summarizes our total number of employees at December 31, 2023: Geographies U.S. (1) 1,538 Other Americas 173 Europe 605 Asia 258 Total 2,574 (1) This includes employees who were based in the U.S. but also support other geographies.
The following table summarizes our total number of employees at December 31, 2024: Geographies U.S. (1) 1,595 Other Americas 206 Europe 627 Asia 275 Total 2,703 (1) This includes employees who were based in the U.S. but also support other geographies.
Amazon 6.4 34 1. Amazon 5.0 43 2. Home Depot 2.2 15 2. Home Depot 1.5 17 3. FedEx 1.9 8 3. FedEx 1.4 11 4. UPS 1.0 6 4. Geodis 1.3 17 5. Geodis 0.9 6 5. DHL 1.2 13 6. Wal-Mart 0.8 6 6. CEVA Logistics 0.9 13 7. DHL 0.8 4 7. Maersk 0.8 7 8.
Amazon 6.0 34 1. Amazon 4.9 46 2. Home Depot 2.8 17 2. Home Depot 1.8 19 3. FedEx 1.7 7 3. FedEx 1.3 11 4. UPS 1.0 6 4. DHL 1.1 13 5. Geodis 0.9 6 5. Geodis 1.1 15 6. NFI Industries 0.7 4 6. CEVA Logistics 1.0 13 7. DHL 0.7 4 7. GXO 0.8 10 8.
(2) A developed property moves into the operating portfolio when it meets our definition of stabilization, which is the earlier of when a property that was developed has been completed for one year, is contributed to a co-investment venture following completion or is 90% occupied.
NOI from the Strategic Capital Segment is calculated directly from the Consolidated Financial Statements as Strategic Capital Revenues less Strategic Capital Expenses. 5 Table of Contents (2) A developed property moves into the operating portfolio when it meets our definition of stabilization, which is the earlier of when a property that was developed has been completed for one year, is contributed to a co-investment venture following completion or is 90% occupied.
Financial Statements and Supplementary Data. GOVERNME NTAL MATTERS We are exposed to various regulatory requirements, taxes, tariffs, trade wars and laws within the countries in which we operate and unexpected changes in these items may result in unanticipated losses, adverse tax consequences and affect our operating results and financial condition.
GOVERNMENTAL MATTERS Given the global nature of our business, we are subject to various regulatory requirements, tax and other laws as well as exposed to economic and geopolitical matters such as taxes, tariffs, trade wars and laws within the countries in which we operate and unexpected changes in these items may result in unanticipated losses, adverse tax consequences and affect our operating results and financial condition.
FUTURE GROWTH We believe that the quality and scale of our portfolio, our ability to build out our land bank and redevelopment sites, our strategic capital business, the depth of our customer relationships and the strength of our balance sheet are differentiators that allow us to drive growth in revenues, NOI, earnings, FFO and cash flows.
We plan to grow this business and increase revenues by increasing our assets under management in existing or new ventures. 6 Table of Contents FUTURE GROWTH We believe that the quality and scale of our portfolio, our ability to develop our land bank and redevelopment sites, our strategic capital business, the depth of our customer relationships and the strength of our balance sheet are differentiators that allow us to drive growth in revenues, NOI, earnings, FFO and cash flows.
We align our interests with our partners by holding significant ownership interests in our nine unconsolidated co-investment ventures (ranging from 15% to 50%).
We align our interests with our partners by holding significant ownership interests in the co-investment ventures. Nine of the co-investment ventures are unconsolidated entities, and one is consolidated, with our ownership in the co-investment ventures ranging from 15% to 55%.
Mercado Libre 0.3 4 Top 25 Customers 22.4 126 Top 25 Customers 20.5 215 In our Strategic Capital Segment, we view our partners and investors as our customers. At December 31, 2023, we had 154 investors in our private equity ventures, several of which invest in multiple ventures. Our People Our people are the foundation of our business.
Imperial Dade 0.3 2 Top 25 Customers 23.0 132 Top 25 Customers 20.8 221 In our Strategic Capital Segment, we view our partners and investors as our customers. At December 31, 2024, we had 155 investors in our private equity ventures, several of which invest in multiple ventures. Our People Our people are the foundation of our business.
We generate strategic capital revenues or fees from our unconsolidated co-investment ventures, principally through asset management and property management services. Asset management fees are primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services.
Revenue earned from asset management fees is primarily driven by the quarterly valuation of the real estate properties owned by the respective ventures. We earn additional revenues by providing leasing, acquisition, construction management, development and disposition services. The majority of the strategic capital revenues are generated outside the U.S.
We use adjusted G&A expenses as a percentage of the O&M portfolio (based on gross book value) to measure and evaluate the overhead costs associated with the O&M portfolio.
We have scalable systems and infrastructure in place to grow both our consolidated and O&M portfolios with limited incremental G&A expense. We use adjusted G&A expenses as a percentage of the O&M portfolio (based on gross book value) to measure and evaluate the overhead costs associated with the O&M portfolio.
Our Global Presence At December 31, 2023, we owned or had investments in, on a wholly-owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.2 billion square feet across the following geographies: 4 Table of Contents Throughout this discussion, we reflect amounts in the U.S. dollar, our reporting currency.
Moreover, the principles of Environmental, Social, and Governance (“ESG”) are ingrained in our business strategy through our integrated approach to global impact and sustainability, which we believe creates value for our customers, investors, employees, and communities. 4 Table of Contents Our Global Presence At December 31, 2024, we owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 1.3 billion square feet across the following geographies: Throughout this discussion, we reflect amounts in the U.S. dollar, our reporting currency.
Beginning in 2019, we committed to spending 75,000 hours supporting our local communities by 2025. To achieve this goal, we enable our employees to spend 40 working hours a year to volunteer, including at our company-sponsored day of service, where employees around the globe volunteer on projects to help in their local communities.
To achieve this goal, we enable our employees to spend 40 working hours a year to volunteer, including at our company-sponsored day of service where employees around the globe volunteer on projects to help in their local communities. At December 31, 2024, we have contributed approximately 74,300 hours towards our goal.
Providing our employees learning and development through training, educational opportunities and mentorship is critical to our ability to continue to innovate. In 2023, more than 1,600 employees completed more than 13,600 hours of company-provided or company-sponsored learning and development training. We provide opportunities for our employees to share their insights and perspectives on our company and their work experience.
In 2024, more than 1,800 employees completed more than 15,400 hours of company-provided or company-sponsored learning and development training. We provide opportunities for our employees to share their insights and perspectives on our company and their work experience.
Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, the principal financial officer, the principal accounting officer, or other people performing similar functions, and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website.
Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, the principal financial officer, the principal accounting officer, or other people performing similar functions, and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website. 11 Table of Contents GLOBAL IMPACT AND SUSTAINABILITY The principles of ESG are ingrained in our business strategy through our integrated approach to global impact and sustainability, which we believe creates value for our customers, investors, employees and communities.
Proceeds from the disposition of properties, generally through the contribution of newly developed properties to our co-investment ventures and the sales of non-strategic properties to third parties, allow us to recycle capital back into our investment activities.
Proceeds from property dispositions, generally achieved by contributing newly developed properties to our co-investment ventures and selling of non-strategic properties to third parties, enable us to recycle capital back into our ongoing investment activities.
Based on our current estimates, our consolidated land, including options and CLP, has the potential to support the development of $35.7 billion ($40.0 billion on an O&M basis) of TEI of new logistics space. We measure the estimated value creation of a development project as the stabilized value above our TEI.
Based on our current estimates, our consolidated land and other real estate investments, including options and CLPs, have the potential to support the development of $36.9 billion ($41.5 billion on an O&M basis) of TEI of newly developed buildings. We measure the estimated value creation of a development project as the stabilized value above our TEI.
As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise. • Our Scale Drives Efficiency. We have scalable systems and infrastructure in place to grow both our consolidated and O&M portfolios with limited incremental G&A expense.
We continue to maintain low leverage as a percentage of our real estate investments and our market capitalization. As a result of our low leverage, available liquidity and investment capacity in the co-investment ventures, we have significant ability to capitalize on opportunistic value-added investments as they arise. • Our Scale Drives Efficiency.
In 2018, we set a goal to train 25,000 individuals by 2025 by partnering with leading public sector organizations and leveraging digital learning technologies to develop innovative training solutions. At December 31, 2023, under the program, we trained approximately 29,700 individuals towards this goal, resulting in us completing our goal two years early.
In 2018, we set a goal to train 25,000 individuals by 2025 by partnering with leading public sector organizations and leveraging digital learning technologies to develop innovative training solutions. We met this goal in 2023, two years early. Beginning in 2019, we committed to spending 75,000 hours supporting our local communities by 2025.
At December 31, 2023, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $53.1 billion across 507 million square feet. 6 Table of Contents (1) G&A Expenses is a line item in the Consolidated Financial Statements.
We raise capital to support the long-term growth of the co-investment ventures while maintaining our own substantial investments in these vehicles. At December 31, 2024, the gross book value of the operating portfolio held by our nine unconsolidated co-investment ventures was $56.3 billion across 548 million square feet. (1) G&A Expenses is a line item in the Consolidated Financial Statements.
Rent change represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with previous net effective rental rates in that same space. (2) Included in 2022 and 2023 were significant promotes earned in Europe and the U.S, respectively.
Rent change represents the percentage change in net effective rental rates (average rate over the lease term), on new and renewed leases, commenced during the period compared with previous net effective rental rates in that same space. • Rent Growth. We have experienced positive rent growth every quarter since 2013.
Wayfair 0.6 6 8. UPS 0.8 9 9. DSV Panalpina 0.6 2 9. GXO 0.8 10 10. NFI Industries 0.6 3 10. DSV Panalpina 0.8 8 Top 10 Customers 15.8 90 Top 10 Customers 14.5 148 11. Pepsi 0.6 3 11. Kuehne + Nagel 0.6 7 12. Maersk 0.5 3 12. Wal-Mart 0.6 7 13. GXO 0.5 4 13.
Walmart 0.7 6 8. UPS 0.8 9 9. Lululemon 0.7 2 9. Maersk 0.8 7 10. GigaCloud 0.7 3 10. Kuehne + Nagel 0.7 9 Top 10 Customers 15.9 89 Top 10 Customers 14.3 152 11. Pepsi 0.6 4 11. DVS A/S 0.7 8 12. GXO 0.6 4 12. Walmart 0.6 8 13. Wayfair 0.6 6 13.
We believe this demand is driven by three primary factors: (i) customer supply chains re-positioning to address the significant shift to e-commerce and heightened service expectations; (ii) overall consumption and household growth; and (iii) our customers’ desire for more supply chain resiliency. We believe these forces will keep demand strong over the long-term.
We believe this demand is driven by three primary factors: (i) the re-positioning of our customer supply chains to accommodate the shift toward e-commerce and heightened service expectations; (ii) growth in overall consumption and households; and (iii) our customers’ increased focus on building supply chain efficiency.
Competition Real estate ownership is highly fragmented, and we face competition from many owners and operators. Competitively priced logistics space could impact our occupancy rates and have an adverse effect on how much rent we can charge, which in turn could affect our operating results.
Competitively priced logistics space could impact our occupancy rates and have an adverse effect on how much rent we can charge, which in turn could affect our operating results. We face competition regarding our capital deployment activities, including regional, national and global operators and developers. We also face competition from investment managers for institutional capital within our strategic capital business.
We have also invested in facilities located at key transportation hubs on the edge of these major infill and urban areas and gateway distribution facilities that incorporate access to major sea and intermodal ports. 8 Table of Contents Below are the primary categories of goods in our consolidated real estate properties at December 31, 2023: (1) Primary categories do not sum to 100% as the difference is attributable to customers that do not clearly fall into a single category.
Below are the primary categories of goods in our consolidated real estate properties at December 31, 2024: (1) Primary categories do not sum to 100% as the difference is attributable to customers that do not clearly fall into a single category.
The long-term trends of e-commerce adoption and supply chain resiliency continue to drive the need for increased warehouse space to store and distribute goods. This demand has translated into meaningful increases in rents and low vacancy.
Long-term trends, including the growth of e-commerce and modernization of the supply chain, continue to drive demand toward creating supply chain resiliency through leasing additional space to store and distribute goods. This sustained demand has contributed to meaningful rent growth and low vacancy rates in recent years.
Senior leaders include employees with senior vice president or higher titles. We focus on learning and development at every level of the organization. We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company.
We align employees’ goals with our overall strategic direction to create a clear link between individual efforts and the long-term success of the company. We communicate at all levels of the organization throughout the year about company goals and strategic initiatives to ensure awareness and alignment.
Our broad customer base represents a spectrum of international, national, regional and local logistics users who operate in various industries, providing diverse goods to consumers throughout the globe.
Our broad customer base represents a spectrum of international, national, regional and local logistics users who operate across various industries, providing diverse goods to consumers throughout the globe. The strategic location of our global portfolio gives us a unique ability to provide real estate solutions that support our customers' supply chains and help them meet end-consumer delivery expectations.
Over the past nine years we have onboarded six new directors with a breadth of experience, increasing the ethnic, gender and geographical diversity of the Board. The charters of our Board Governance and Nomination Committee and Talent and Compensation Committee provide that such committees have specific oversight over ESG matters and DEIB matters, respectively.
The charters of our Board Governance and Nomination Committee and Talent and Compensation Committee provide that such committees have specific oversight over global impact and sustainability matters and inclusion and diversity matters, respectively.
Governance We strive to promote a culture of uncompromising integrity, including through our governance practices and corporate oversight. Our Board independence and diversity, open communication with our stockholders and a risk management framework that supports our investment and process decisions all serve to mitigate risk and preserve value for our company.
Our Board independence and diversity, open communication with our stockholders and risk management framework that supports our investment and process decisions all serve to mitigate risk and preserve value for our company. 12 Table of Contents Over the past ten years we have onboarded seven new directors with a breadth of experience, increasing the ethnic, gender and geographical diversity of the Board.
We believe our insurance coverage contains policy specifications and insured limits that are customary for similar properties, business activities and markets and we believe our properties are adequately insured. See further discussion in Item 1A. Risk Factors.
Additionally, in 2024 we sponsored a catastrophe bond issuance that provides further insurance coverage through 2027 for potential losses resulting from earthquake risks in the U.S. We believe our insurance coverage contains policy specifications and insured limits that are customary for similar properties, business activities and markets and we believe our properties are adequately insured.
We communicate at all levels of the organization throughout the year about company goals and strategic initiatives to ensure awareness and alignment. We then provide continual feedback to all employees on their performance towards those goals as well as budget for external learning and stretch opportunities to support their growth.
We then provide continual feedback to all employees on their progress towards those goals as well as budget for external learning and stretch opportunities to support their growth. Providing our employees with learning and development opportunities through training, education and mentorship is critical to our continued ability to innovate.
Beginning on January 1, 2024, we modified our LED lighting goal to prioritize installing LED lighting within 100% of our eligible new developments and redevelopments and across 80% of our O&M operating properties by 2025.
In 2024, we installed or were scheduled to install LED lighting within 100% of our eligible new developments and redevelopments and LED lighting across approximately 79% of our eligible logistics facilities (based on square feet) within our O&M operating properties at December 31, 2024.
ZOZO 0.4 5 14. U.S. Government 0.5 2 14. DB Schenker 0.4 6 15. Ryder 0.5 2 15. U.S. Government 0.4 3 16. Berkshire Hathaway 0.5 3 16. Wayfair 0.4 6 17. Lululemon 0.4 2 17. Pepsi 0.4 3 18. Samsung 0.4 3 18. Nippon Express 0.4 4 19. OnTrac 0.4 1 19. Cainiao (Alibaba) 0.4 5 20.
NFI Industries 0.5 4 14. Ryder 0.6 3 14. Pepsi 0.4 4 15. Maersk 0.5 3 15. GigaCloud 0.4 3 16. DVS A/S 0.5 2 16. Lululemon 0.4 2 17. Western Post 0.5 2 17. Mercado Libre 0.4 5 18. Imperial Dade 0.5 2 18. Ryder 0.4 4 19. Berkshire Hathaway 0.4 3 19. Burlington Stores 0.4 3 20.
Therefore, even if there was no additional market rent growth in the future, we expect our lease renewals to translate into significant increases in future rental income. • Value Creation from Development. The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks.
The global nature of our development program provides a wide landscape of opportunities to pursue based on our judgment of market conditions, opportunities and risks. One of the ways in which we create value is through our focus on sourcing well-located land and redevelopment sites through acquisition opportunities.
We do not have any significant promote opportunities in 2024. • Rent Growth. We expect rents in our markets to continue to increase due to demand and low vacancy. Due to strong market rent growth over the last several years, our in-place leases have considerable upside potential to drive future organic NOI growth.
As a result of several years of increases in market rents, our in-place leases have considerable upside potential to capture these higher rents and to drive future organic NOI growth.
Kellogg 0.4 3 20. NFI Industries 0.4 3 21. Tesla 0.4 1 21. Samsung 0.4 5 22. CEVA Logistics 0.4 3 22. Ryder 0.3 3 23. Uline 0.4 2 23. Tesla 0.3 2 24. Kuehne + Nagel 0.4 2 24. Logisteed 0.3 4 25. Target 0.3 2 25.
CEVA Logistics 0.4 3 20. Samsung 0.4 5 21. The Clorox Company 0.4 3 21. DB Schenker 0.4 6 22. Samsung 0.4 3 22. Wayfair 0.4 6 23. Lasership, Inc. 0.4 1 23. ZOZO 0.4 5 24. Kellanova 0.4 3 24. Nippon Express 0.4 4 25. Tesla 0.3 1 25.
Promote revenues are recognized when earned at the end of the promote period for the specific co-investment ventures. We plan to grow this business and increase revenues by increasing our assets under management in existing or new ventures. The majority of the strategic capital revenues are generated outside the U.S.
Promote revenues are recognized when earned at the end of the promote period for the specific co-investment ventures.
This structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S. 5 Table of Contents This segment produces durable, long-term cash flows and generally contributes 10% to 15% of our consolidated revenues, earnings and FFO, excluding promotes, all while requiring minimal capital other than our investment in the venture.
As the majority of our investments are in unconsolidated co-investment ventures, this structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S. Management of the unconsolidated co-investment ventures comprises our Strategic Capital Segment.
We increased our O&M portfolio significantly in the fourth quarter of 2022 as a result of the acquisition and had minimal increases to G&A expenses. • Staying “Ahead of What’s Next™”. We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale in procurement and innovating through data analytics and digitization efforts.
We are focused on creating value beyond real estate by enhancing our customers’ experience, leveraging our scale in procurement and innovating through data analytics and digitization efforts. This includes investments in early and growth-stage companies that are focused on emerging technologies for the logistics sector through Prologis Ventures, our corporate venture capital group.
Removed
Our teams actively manage our portfolio by providing comprehensive real estate services, including leasing, property management, development, acquisitions and dispositions. We also invest significant capital into new logistics properties through our development activity and third-party acquisitions.
Added
We believe these factors will sustain demand and low vacancy rates over the long term. In the near term, our proprietary metrics reveal renewed activity in customer leasing decisions as we entered 2025 despite the current economic and geopolitical environment. Our teams actively manage our portfolio by providing comprehensive real estate services, including leasing, property management, development, acquisitions and dispositions.
Removed
Finally, our long-standing dedication to Environmental, Social and Governance (“ESG”) practices creates value for our customers, investors, employees and the communities in which we do business. The principles of ESG are an important aspect of our business strategy that we believe delivers a strategic business advantage.
Added
We invest significant capital into new logistics properties through acquisitions and development activity, including both built-to-suit and speculative development and redevelopment of properties into industrial properties and data centers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+1 added−2 removed117 unchanged
Biggest changeThese risks relate to Prologis as well as our investments in consolidated and unconsolidated entities and include among others, (i) risks related to our global operations (ii) risks related to our business; (iii) risks related to financing and capital; and (iv) risks related to income taxes.
Biggest changeThese risks relate to Prologis as well as our investments in consolidated and unconsolidated entities and include among others, (i) risks related to our global operations (ii) risks related to our business; (iii) risks related to financing and capital; and (iv) risks related to income taxes. 13 Table of Contents Risks Related to our Global Operations As a global company, we are subject to social, geopolitical and economic risks associated with conducting business in many countries and our results of operations and financial condition may be materially and adversely affected.
These factors may affect our ability to recover our investment in the properties and result in impairment charges. Our customers may be unable to meet their lease obligations, we may be unable to lease vacant space or renew leases or re-lease space on favorable terms as leases expire.
These factors may affect our ability to recover our investment in the properties and result in impairment charges. Our customers may be unable to meet their lease obligations or we may be unable to lease vacant space, renew leases or re-lease space on favorable terms as leases expire.
Our real estate development and redevelopment strategy is focused on monetizing land and redevelopment sites in the future through development of logistics facilities to hold for long-term investment and for contribution or sale to a co-investment venture or third party, depending on market conditions, our liquidity needs and other factors.
Our real estate development and redevelopment strategy is primarily focused on monetizing land and redevelopment sites in the future through development of logistics facilities to hold for long-term investment and for contribution or sale to a co-investment venture or third party, depending on market conditions, our liquidity needs and other factors.
The real estate development, renovation and redevelopment business includes the following significant risks: • we may not be able to obtain financing for development projects on favorable terms or at all; • we may explore development opportunities that may be abandoned and the related investment impaired; • we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations; • we may incur higher construction costs, due primarily to this inflationary environment, or additional costs related to regulation that exceed our estimates and projects may not be completed, delivered or stabilized as planned due to defects or other issues; • we may not be able to attract third-party investment in new development co-investment ventures or sufficient customer demand for our product; • we may have properties that perform below anticipated levels, producing cash flows below budgeted amounts; • we may seek to sell certain land parcels and not be able to find a third party to acquire such land or the sales price will not allow us to recover our investment, resulting in impairment charges; • we may not be able to lease properties we develop on favorable terms or at all; • we may not be able to capture the anticipated enhanced value created by our value-added properties on expected timetables or at all; 17 Table of Contents • we may experience delays (temporary or permanent) if there is public or government opposition to our activities; and • we may have substantial renovation, new development and redevelopment activities, regardless of their ultimate success, that require a significant amount of management’s time and attention, diverting their attention from our day-to-day operations.
The real estate development, renovation and redevelopment business includes the following significant risks: • we may not be able to obtain financing for development projects on favorable terms or at all; • we may explore development opportunities that may be abandoned and the related investment impaired; • we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations, or sufficient, reliable power for our data centers; • we may incur higher construction costs, due primarily to this inflationary environment, or additional costs related to regulation that 17 Table of Contents exceed our estimates and projects may not be completed, delivered or stabilized as planned due to defects or other issues; • we may not be able to attract third-party investment in new development co-investment ventures or sufficient customer demand for our product; • we may have properties that perform below anticipated levels, producing cash flows below budgeted amounts; • we may seek to sell certain land parcels and not be able to find a third party to acquire such land or the sales price will not allow us to recover our investment, resulting in impairment charges; • we may not be able to lease properties we develop on favorable terms or at all; • we may not be able to capture the anticipated enhanced value created by our value-added properties on expected timetables or at all; • we may experience delays (temporary or permanent) if there is public or government opposition to our activities; and • we may have substantial renovation, new development and redevelopment activities, regardless of their ultimate success, that require a significant amount of management’s time and attention, diverting their attention from our day-to-day operations.
Factors that may affect real estate values and cash flows include: • local conditions, such as oversupply or a reduction in demand; • technological changes, such as reconfiguration of supply chains, autonomous vehicles, robotics, 3D printing or other technologies; • the attractiveness of our properties to potential customers and competition from other available properties; • increasing costs of maintaining, insuring, renovating and making improvements to our properties; • our ability to reposition our properties due to changes in the business and logistics needs of our customers; • our ability to lease the properties at favorable rates and control variable operating costs; and • governmental and environmental regulations and the associated potential liability under, and changes in, environmental, zoning, usage, tax, tariffs and other laws.
Factors that may affect real estate values and cash flows include: • local conditions, such as oversupply or a reduction in demand; • technological changes, such as reconfiguration of supply chains, autonomous vehicles, robotics, 3D printing or other technologies; • the attractiveness of our properties to potential customers and competition from other available properties; • increasing costs of maintaining, insuring, renovating and making improvements to our properties; • our ability to reposition our properties due to changes in the business and logistics needs of our customers; 16 Table of Contents • our ability to lease the properties at favorable rates and control variable operating costs; and • governmental and environmental regulations and the associated potential liability under, and changes in, environmental, zoning, usage, tax, tariffs and other laws.
Third-party security events at vendors, sub-processors, and service providers could also impact our data and operations via unauthorized access to information or disruption of services which may ultimately result in losses. Despite training, detection systems and response procedures, an increase in email attacks (phishing and business email compromise) may create disruption to our business, financial and reputational risk.
Third-party security events at vendors, sub-processors, and service providers could also impact our data and operations through unauthorized access to information or disruption of services which may ultimately result in losses. Despite training, detection systems and response procedures, an increase in email attacks (phishing and business email compromise) may create disruption to our business, financial and reputational risk.
If we experience a loss that is uninsured or that exceeds insured limits with respect to one or more of our properties or if the insurance companies fail to meet their coverage commitments to us in the event of an insured loss, then we could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties and, if there 19 Table of Contents is recourse debt, then we would remain obligated for any mortgage debt or other financial obligations related to the properties.
If we experience a loss that is uninsured or that exceeds insured limits with respect to one or more of our properties or if the insurance companies fail to meet their coverage commitments to us in the event of an insured loss, then we could lose the capital invested in the damaged properties, as well as the anticipated future revenues from those properties and, if there is recourse debt, then we would remain obligated for any mortgage debt or other financial obligations related to the properties.
To the extent there is turmoil in the global financial markets, this turmoil has the potential to adversely affect (i) the value of our properties; (ii) the availability or the terms of financing that we have or may anticipate utilizing; (iii) our ability to make principal and 14 Table of Contents interest payments on, or refinance any outstanding debt when due; and (iv) the ability of our customers to enter into new leasing transactions or satisfy rental payments under existing leases.
To the extent there is turmoil in the global financial markets, this turmoil has the potential to adversely affect: (i) the value of our properties; (ii) the availability or the terms of financing that we have or may anticipate utilizing; (iii) our ability to make principal and interest payments on, or refinance any outstanding debt when due; and (iv) the ability of our customers to enter into new leasing transactions or satisfy rental payments under existing leases.
Although security incidents have had an insignificant financial impact on our operating results, the growing frequency of attempts may lead to increased costs to protect the company and respond to any events, including additional personnel, consultants and protection technologies.
Although security incidents have had an insignificant financial impact on our operating results, the rising frequency of attempts may lead to increased costs to protect the company and respond to any events, including additional personnel, consultants and protection technologies.
Our logistics facilities and the global supply chain are and may continue to be exposed to catastrophic weather events, such as severe storms, fires or floods. If the frequency of extreme weather events increases, our exposure to these events could increase.
Our logistics facilities and the global supply chain are and may continue to be exposed to severe weather events, such as storms or floods. If the frequency of extreme weather events increases, our exposure to these events could increase.
Circumstances and developments related to international operations that could negatively affect us include, but are not limited to, the following factors: • difficulties and costs of staffing and managing international operations in certain geographies, including differing employment practices and labor issues; • local businesses and cultural factors that differ from our domestic standards and practices; • volatility in currencies and currency restrictions, which may prevent the availability of capital or the transfer of profits to the U.S.; 13 Table of Contents • challenges in establishing effective controls and procedures to regulate operations in different geographies and to monitor compliance with applicable regulations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and other similar laws; • changes in regulatory and environmental requirements, taxes, tariffs, trade wars and laws within the countries in which we operate; • the responsibility of complying with multiple and potentially conflicting laws, e.g., with respect to corrupt practices, human rights, employment and licensing; • changes in general economic conditions from inflation, elevated interest rates, regional or country-specific business cycles, supply chain disruptions, economic downturns or recessions and economic instability, including government shutdowns and withdrawals from the European Union or other international trade alliances or agreements; • political instability, uncertainty over property rights, territorial disputes, military conflict, war or expansion of hostilities, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities; • public health crises, such as outbreaks of global pandemics or contagious diseases; • foreign ownership restrictions in operations with the respective countries; and • access to capital may be more restricted, or unavailable on favorable terms or at all in certain locations.
Circumstances and developments related to international operations that could negatively impact us include, but are not limited to, the following factors: • difficulties and costs of staffing and managing international operations in certain geographies, including differing employment practices and labor issues; • local businesses and cultural factors that differ from our domestic standards and practices; • volatility in currencies and currency restrictions, which may prevent the availability of capital or the transfer of profits to the U.S.; • challenges in establishing effective controls and procedures to regulate operations in different geographies and to monitor compliance with applicable regulations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and other similar laws; • changes in regulatory and environmental requirements, taxes, tariffs, trade wars and laws within the countries in which we operate; • the responsibility of complying with multiple and potentially conflicting laws, such as those regarding corrupt practices, human rights, employment and licensing; • changes in general economic conditions due to inflation, elevated interest rates, regional or country-specific business cycles, supply chain disruptions, economic downturns or recessions and economic instability, including government shutdowns and withdrawals from the European Union or other international trade alliances or agreements; • political instability, uncertainty over property rights, territorial disputes, military conflict, war or expansion of hostilities, civil unrest, drug trafficking, political activism or the continuation or escalation of terrorist or gang activities; • public health crises, such as outbreaks of global pandemics or contagious diseases; • foreign ownership restrictions in operations with the respective countries; and • access to capital may be more restricted, or unavailable on favorable terms or at all in certain locations.
If we default under the covenant provisions and are unable to cure the default, refinance the indebtedness or meet payment obligations, our business and financial condition generally and, in particular, the amount of our distributable cash flow could be adversely affected. 20 Table of Contents Adverse changes in our credit ratings could negatively affect our financing activity.
If we default under the covenant provisions and are unable to cure the default, refinance the indebtedness or meet payment obligations, our business and financial condition generally and, in particular, the amount of our distributable cash flow could be adversely affected. Adverse changes in our credit ratings could negatively affect our financing activity.
We cannot predict the extent to which these social, geopolitical and economic risks may impact our business and operating results and that of our co-investment ventures, but their impact may include the following: • existing customers and potential customers of our logistics facilities may be adversely affected by the decrease in economic activity, changes in regulation or disruptions in the supply chain, which in turn could disrupt their business and their ability to enter into new leasing transactions or satisfy rental payments; • government, labor or other restrictions may prevent us from completing the development or leasing of properties currently under development or making our properties ready for our customers to move in; • our ability to recover our investments in real estate assets may be impacted by current market conditions; • increases in material costs as a result of labor shortages and supply chain disruptions may make the development of properties more costly than we originally budgeted or impact transportation routes of our suppliers or our customers; and • our workforce, including our executives, may become ill or have difficulty working remotely, caring for our properties and/or customers creating inefficiencies, delays or disruptions in our business.
We cannot predict the extent to which these social, geopolitical and economic risks may impact our business and operating results and that of our co-investment ventures, but their impact may include the following: • existing customers and potential customers of our logistics facilities may be adversely affected by the decrease in economic activity, changes in regulation or disruptions in the supply chain, which could in turn disrupt their business and affect their ability to enter into new leasing transactions or satisfy rental payments; • government, labor or other restrictions may add new or additional compliance requirements as a developer or prevent us from completing the development or leasing of properties currently under development or making our properties ready for our customers to move in; • our ability to recover our investments in real estate assets may be hindered by current market conditions; • increases in material costs as a result of labor shortages and supply chain disruptions may make the development of properties more costly than we originally budgeted or impact transportation routes of our suppliers or our customers; and • our workforce, including our executives, may become ill or have difficulty working remotely, caring for our properties and/or customers creating inefficiencies, delays or disruptions in our business.
Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying real estate asset for purposes of the REIT asset tests, and any dividend income or gains derived by us from such subsidiary 21 Table of Contents REIT will generally be treated as income that qualifies for purposes of the REIT 95% and 75% gross income tests.
Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying real estate asset for purposes of the REIT asset tests, and any dividend income or gains derived by us from such subsidiary REIT will generally be treated as income that qualifies for purposes of the REIT 95% and 75% gross income tests.
These entities bear their own risks related to trading markets, foreign currency exchange rates and market demand. We have contributed, and may continue to contribute, assets into such vehicles. There is a risk that our managerial relationship may be terminated. We have also made investments in early and growth-stage companies that are focused on emerging technology.
These entities bear their own risks related to trading markets, foreign currency exchange rates and market demand. We have contributed, and may continue to contribute assets into such vehicles. There is a risk that our managerial relationship may be terminated. 18 Table of Contents We have also made investments in early and growth-stage companies that are focused on emerging technology.
A customer may experience a downturn in its business, 16 Table of Contents which may cause the loss of the customer or may weaken its financial condition, resulting in the customer’s failure to make rental payments when due or requiring a restructuring that might reduce cash flow from the lease.
A customer may experience a downturn in its business, which may cause the loss of the customer or may weaken its financial condition, resulting in the customer’s failure to make rental payments when due or requiring a restructuring that might reduce cash flow from the lease.
Any compromise of our security could result in a violation of applicable privacy and other laws, unauthorized access to information of ours and others, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.
Any compromise of our security could result in a violation of applicable privacy and other laws, unauthorized access to information of ours and others, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could negatively impact our business.
These short-term borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
These short-term 20 Table of Contents borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of nondeductible capital expenditures, the creation of reserves or required debt or amortization payments.
As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar.
As a result, we are exposed to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar.
We may increase our investment in the development, renovation and redevelopment business and we expect to complete the build-out and leasing of our current development portfolio. We may also develop, renovate and redevelop properties within existing or newly formed co-investment ventures.
We may increase our investment in the development, renovation and redevelopment business and we expect to complete the build-out and leasing of our current development portfolio. We may also develop, renovate or redevelop properties within existing or newly formed co-investment ventures, or develop and redevelop properties into data centers.
Historically, we have satisfied these distribution requirements by making cash distributions to our stockholders, but we may choose to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, our own stock.
Historically, we have satisfied these distribution requirements 21 Table of Contents by making cash distributions to our stockholders, but we may choose to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, our own stock.
We are subject to risks and liabilities in connection with forming and attracting third-party investment in co-investment ventures, investing in new or existing co-investment ventures, and managing properties through co-investment ventures. At December 31, 2023, we had investments in co-investment ventures, both public and private, that owned real estate with a gross book value of approximately $62.9 billion.
We are subject to risks and liabilities in connection with forming and attracting third-party investment in co-investment ventures, investing in new or existing co-investment ventures, and managing properties through co-investment ventures. At December 31, 2024, we had investments in co-investment ventures, both public and private, that owned real estate with a gross book value of approximately $67.3 billion.
We are also subject to the risk that, upon the expiration of leases they may not be renewed by existing customers, the space may not be re-leased to new customers or the terms of renewal or re-leasing (including the cost of required renovations or concessions to customers) may be less favorable to us than current lease terms.
We are also subject to the risk that, upon lease expiration, existing customers may not renew, the space may not be re-leased to new customers or the terms of renewal or re-leasing, including the cost of required renovations or concessions to customers, may be less favorable to us than current lease terms.
Our credit ratings at December 31, 2023 were A and A3 from Standard & Poor's and Moody’s, respectively, each with a stable outlook. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
Our credit ratings at December 31, 2024 were A from Standard & Poor's with a stable outlook and A3 from Moody's with a positive outlook. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may incur additional costs to remedy damages caused by such disruptions.
Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may incur additional costs for remediation caused by such disruptions.
Our operating results and distributable cash flow would be adversely affected if a significant number of our customers were unable to meet their lease obligations. At December 31, 2023, our top 10 customers accounted for 15.8% of our consolidated NER and 14.5% of our O&M NER.
Our operating results and distributable cash flow would be adversely affected if a significant number of our customers were unable to meet their lease obligations. At December 31, 2024, our top 10 customers accounted for 15.9% of our consolidated NER and 14.3% of our O&M NER.
We cannot give any assurance that other such conditions do not exist or may not arise in the future. The impacts of climate change on our real estate properties could adversely affect our ability to lease, develop or sell such properties or to borrow using such properties as collateral.
We cannot give any assurance that other such conditions do not currently exist, may not arise in the future or that we will successfully integrate them into our business. The impacts of climate change on our real estate properties could adversely affect our ability to lease, develop or sell such properties or to borrow using such properties as collateral.
We hold significant real estate investments in international markets where the U.S. dollar is not the functional currency. At December 31, 2023, approximately $10.6 billion or 11.4% of our total consolidated assets were invested in a currency other than the U.S. dollar, principally the British pound sterling, Canadian dollar, euro, and Japanese yen.
We hold significant real estate investments in international markets where the U.S. dollar is not the functional currency. At December 31, 2024, approximately $11.5 billion or 12.1% of our total consolidated assets were invested in a currency other than the U.S. dollar, principally the British pound sterling, Canadian dollar, euro and Japanese yen.
Real estate investments are not as liquid as certain other types of investments and this lack of liquidity may limit our ability to react promptly to changes in economic or other conditions.
Real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to investors. Real estate investments are not as liquid as certain other types of investments and this lack of liquidity may limit our ability to react promptly to changes in economic or other conditions.
For the year ended December 31, 2023, $303.7 million or 5.1% of our total consolidated segment NOI was denominated in a currency other than the U.S. dollar. See Note 17 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information on these amounts.
For the year ended December 31, 2024, $382.7 million or 6.3% of our total consolidated segment NOI was denominated in a currency other than the U.S. dollar. See Note 17 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for more information on these amounts.
Additionally, remediation costs for security events may not be covered by our insurance. Our insurance coverage does not cover all potential losses.
Additionally, remediation costs for security events may not be covered by our insurance. 19 Table of Contents Our insurance coverage does not cover all potential losses.
At December 31, 2023, 30.0% of our consolidated operating properties or $22.7 billion (based on consolidated gross book value, or investment before depreciation) were located in California (Central Valley, San Francisco Bay Area and Southern California markets), which represented 23.2% of the aggregate square footage of our operating properties and 31.7% of our consolidated operating property NOI.
At December 31, 2024, 30.6% of our consolidated operating properties or $24.0 billion (based on consolidated gross book value, or investment before depreciation) were located in California (Central Valley, San Francisco Bay Area and Southern California markets), which represented 23.4% of the aggregate square footage of our operating properties and 31.8% of our consolidated operating property NOI.
Of these markets, no single market contributed more than 10% of our total consolidated investment before depreciation in operating properties, with the exception of New Jersey/New York City at 10.6%. Our operating performance could be adversely affected if conditions become less favorable in any of the markets in which we have a concentration of properties.
Of these markets, no single market contributed more than 10% of our total consolidated investment before depreciation in operating properties. Our operating performance could be adversely affected if conditions become less favorable in any of the markets in which we have a concentration of properties.
Our competitors may offer space at rental rates below current market rates or below the rental rates we currently charge our customers and we may be pressured to reduce our rental rates below those we currently charge to retain customers when leases expire or we may lose potential customers.
Our competitors may offer space at rental rates below current market rates or below what we currently charge, and we may be pressured to reduce our rates to retain customers when leases expire, or risk losing potential customers.
Compliance or failure to comply with regulatory requirements could result in substantial costs. We are required to comply with many regulations in different countries, including (but not limited to) the Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws and regulations.
We are required to comply with many regulations in different countries, including (but not limited to) the Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws and regulations.
Our O&M portfolio, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures, has concentrations of properties in the same markets mentioned above, as well as in markets in Japan and the U.K., and are subject to the economic conditions in those markets. 15 Table of Contents Real estate investments are not as liquid as certain other types of assets, which may reduce economic returns to investors.
Our O&M portfolio, which includes our consolidated properties and properties owned by our unconsolidated co-investment ventures, has concentrations of properties in the same markets mentioned above, as well as in markets in Japan, Mexico, and the U.K., and are subject to the economic conditions in those markets.
In addition, third parties may sue the owner or operator of a site for damages based on personal injury, property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination. 18 Table of Contents Environmental laws in some countries, including the U.S., also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition.
Environmental laws in some countries, including the U.S., also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition.
In addition to California, we also have significant holdings (defined as more than 3% of total consolidated investment before depreciation) in operating properties in certain markets located in Atlanta, Chicago, Dallas/Fort Worth, Houston, Lehigh Valley, New Jersey/New York City, Seattle and South Florida.
Because of the investment we have located in California, a downturn in California’s economy or real estate conditions, including state income tax and property tax laws, could adversely affect our business. 15 Table of Contents In addition to California, we also have significant holdings (defined as more than 3% of total consolidated investment before depreciation) in operating properties in certain markets located in Atlanta, Chicago, Dallas/Fort Worth, Houston, Lehigh Valley, New Jersey/New York City, Seattle and South Florida.
Any prolonged economic downturn, disruption in the financial markets or public health crises may also impact our ability to access capital markets to issue debt or equity securities and to complete real estate transactions at attractive pricing or at all. These items may materially and adversely affect our financial condition, results of operations, cash flows and real estate values.
Any prolonged economic downturn, disruption in the financial markets or public health crises may also impact our ability to access capital markets to issue debt or equity securities and to complete real estate transactions at attractive pricing or at all. 14 Table of Contents Compliance or failure to comply with regulatory requirements could result in substantial costs.
We may also be adversely impacted by transition risks, such as potential impacts to the supply chain as a real estate developer or changes in laws and regulations, such as stricter energy efficiency standards or greenhouse gas regulations for the commercial building sectors.
We may also be adversely impacted by transition risks, such as potential impacts to the supply chain as a real estate developer or changes in laws or regulations, including the need to invest in low-carbon technologies like solar and battery storage, electric vehicle charging, and LED lighting.
During 2023, we generated approximately $632 million or 7.9% of our consolidated revenues from operations outside the U.S.
We conduct a significant portion of our business and employ a substantial number of people outside of the U.S. During 2024, we generated approximately $688 million or 8.4% of our consolidated revenues from operations outside the U.S.
Removed
Risks Related to our Global Operations As a global company, we are subject to social, geopolitical and economic risks of doing business in many countries and our results of operations and financial condition may be materially and adversely affected. We conduct a significant portion of our business and employ a substantial number of people outside of the U.S.
Added
In addition, third parties may sue the owner or operator of a site for damages based on personal injury, property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination.
Removed
Because of the investment we have located in California, a downturn in California’s economy or real estate conditions, including state income tax and property tax laws, could adversely affect our business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed11 unchanged
Biggest changeThe processes implemented by our IT leadership and IRT to oversee and identify cybersecurity risks are based on the Prologis Information Security Policy governed by the NIST Cybersecurity Framework.
Biggest changeThe processes implemented by our IT leadership and IRT to oversee and identify cybersecurity risks are based on the Prologis Information Security Policy governed by the United States National Institute of Standards and Technology Cybersecurity Framework.
Our Chief Technology Officer, who reports directly to our Chief Executive Officer, holds over 25 years of experience in information technology, specifically infrastructure, information security and fraud, and identity solutions at large global companies, and our Vice President of Information Technology (“IT”) Governance, who reports to our Chief Technology Officer, holds 20 years of experience in various information security roles.
Our Chief Technology Officer, who reports directly to our Chief Executive Officer, holds over 25 years of experience in information technology, specifically infrastructure, information security and fraud, and identity solutions at large global companies, and our Vice President of Information Technology (“IT”) Governance, who reports to our Chief Technology Officer, holds over 20 years of experience in various information security roles.
The IRT is tasked with taking appropriate action to safeguard the integrity of our information systems, data and network resources, investigate whether a breach occurred, define disclosures, communicate effectively with key audiences, including the Board as necessary, mitigate cybersecurity incident risks and provide a resolution through our 22 Table of Contents cybersecurity incident communication protocols.
The IRT is tasked with taking appropriate action to safeguard the integrity of our information systems, data and network resources, investigate whether a breach occurred, define disclosures, communicate effectively with key audiences, including the Board as necessary, mitigate cybersecurity incident risks and provide a resolution through our cybersecurity incident communication protocols.

Item 2. Properties

Properties — owned and leased real estate

17 edited+2 added−1 removed6 unchanged
Biggest change(18 markets) (2) 136 11,795 66 166 14,132 Subtotal U.S. 609 73,011 114 734 86,047 Other Americas: Brazil * 57 - 18 994 Canada 10 907 138 10 907 Mexico 1 48 - 48 3,328 Subtotal Other Americas 11 1,012 138 76 5,229 Europe: France 1 58 - 35 3,460 Germany 1 150 - 32 3,395 Netherlands * 15 - 30 3,405 U.K. 2 293 - 32 7,770 Remaining Countries – Europe (8 countries) (2) 4 358 - 101 8,407 Subtotal Europe 8 874 - 230 26,437 Asia: China - - - 49 3,158 Japan 2 164 - 48 7,255 Singapore 1 145 - 1 145 Subtotal Asia 3 309 - 98 10,558 Total operating portfolio (3) 631 75,206 252 1,138 128,271 Value-added properties (4) 3 418 - 4 640 Total operating properties 634 $ 75,624 $ 252 1,142 $ 128,911 Items notated by ‘*’ indicate an amount less than one million that rounds to zero. 24 Table of Contents Consolidated – Investment in Land Consolidated – Development Portfolio Geographies Acres Estimated Build Out Potential (square feet) (5) Current Investment Rentable Square Footage Upon Completion TEI (6) U.S.: Atlanta 510 5 $ 67 1 $ 87 Baltimore/Washington D.C. 96 1 57 * 124 Central PA - - - - - Central Valley 805 14 196 1 63 Chicago 84 1 24 1 184 Dallas/Ft.
Biggest change(18 markets) (2) 160 14,140 64 195 17,077 Subtotal U.S. 620 75,770 153 754 90,734 Other Americas: Brazil * 45 - 19 865 Canada 13 1,202 125 13 1,202 Mexico 1 59 - 66 5,165 Subtotal Other Americas 14 1,306 125 98 7,232 Europe: France 1 57 - 36 3,421 Germany * 13 - 33 3,470 Netherlands * 26 - 30 3,189 U.K. 2 344 - 33 8,069 Remaining Countries – Europe (8 countries) (2) 3 328 - 104 8,328 Subtotal Europe 6 768 - 236 26,477 Asia: China - - - 52 2,934 Japan 3 265 - 51 7,009 Singapore 1 141 - 1 141 Subtotal Asia 4 406 - 104 10,084 Total operating portfolio (3) 644 78,250 278 1,192 134,527 Value-added properties (4) 2 255 - 5 645 Total operating properties 646 $ 78,505 $ 278 1,197 $ 135,172 Items notated by ‘*’ indicate an amount less than one million that rounds to zero. 24 Table of Contents Consolidated – Investment in Land Consolidated – Development Portfolio Geographies Acres Estimated Build Out Potential (square feet) (5) Current Investment Rentable Square Footage Upon Completion TEI (6) U.S.: Atlanta 464 5 $ 53 1 $ 162 Baltimore/Washington D.C. 120 1 62 - - Central Valley 802 13 206 1 68 Chicago 84 1 24 * 63 Dallas/Ft.
These are excluded from 2024 expirations and are reflected at their respective expiration year. 26 Table of Contents CO-INVEST MENT VENTURES Included in our O&M portfolio are consolidated and unconsolidated co-investment ventures that hold investments in real estate properties, primarily logistics facilities, that we also manage. Our unconsolidated co-investment ventures are accounted for under the equity method.
These are excluded from 2025 expirations and are reflected at their respective expiration year. 26 Table of Contents CO-INVEST MENT VENTURES Included in our O&M portfolio are consolidated and unconsolidated co-investment ventures that hold investments in real estate properties, primarily logistics facilities, that we also manage. Our unconsolidated co-investment ventures are accounted for under the equity method.
The following table summarizes our consolidated and unconsolidated co-investment ventures at December 31, 2023 (in millions): Operating Properties Square Feet Gross Book Value Investment in Land Development Portfolio – TEI Consolidated Co-Investment Venture U.S.: Prologis U.S.
The following table summarizes our consolidated and unconsolidated co-investment ventures at December 31, 2024 (in millions): Operating Properties Square Feet Gross Book Value Investment in Land Development Portfolio – TEI Consolidated Co-Investment Venture U.S.: Prologis U.S.
No individual property or market amounted to 10% or more of our consolidated total assets at December 31, 2023, or generated revenue equal to 10% or more of our consolidated total revenues for the year ended December 31, 2023, with the exception of the Southern California market.
No individual property or market amounted to 10% or more of our consolidated total assets at December 31, 2024, or generated revenue equal to 10% or more of our consolidated total revenues for the year ended December 31, 2024, with the exception of the Southern California market.
(4) Value-added properties are properties we have either acquired at a discount and believe we could provide greater returns post-stabilization or properties we expect to repurpose to a higher and better use. (5) Represents the estimated finished square feet available for lease upon completion of a building on existing parcels of land.
(4) Value-added properties are properties we have either acquired at a discount and believe we could provide greater returns post-stabilization or properties we expect to repurpose to higher uses. (5) Represents the estimated finished square feet available for lease upon completion of a building on existing parcels of land.
In addition to the amounts reflected here, we also have $128 million of encumbrances related to two prestabilized properties and one land parcel included in the consolidated portfolio. (2) No remaining market within the U.S. or country within Europe represented more than 2% of the total gross book value of the consolidated and O&M operating properties.
In addition to the amounts reflected here, we also have $41 million of encumbrances related to one land parcel included in the consolidated portfolio. (2) No remaining market within the U.S. or country within Europe represented more than 2% of the total gross book value of the consolidated and O&M operating properties.
At December 31, 2023, we had investments in real estate properties that were expected to be contributed to our unconsolidated co-investment ventures totaling $308 million and aggregating 3 million square feet. See Note 6 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for further information on our Assets Held for Sale or Contribution.
At December 31, 2024, we had investments in real estate properties that were expected to be contributed to our unconsolidated co-investment ventures totaling $226 million and aggregating 2 million square feet. See Note 6 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for further information on our Assets Held for Sale or Contribution.
(6) TEI is based on current projections and is subject to change. As noted in the table below, our current investment in the development portfolio was $4.4 billion, leaving approximately $3.4 billion of additional required investment.
(6) TEI is based on current projections and is subject to change. As noted in the table below, our current investment in the development portfolio was $2.8 billion, leaving approximately $1.9 billion of additional required investment.
At December 31, 2023, based on TEI, approximately 26% of the properties in the development portfolio were completed but not yet stabilized, 48% 25 Table of Contents of the properties were expected to be completed before December 31, 2024, and the remaining properties were expected to be completed before July 2026.
At December 31, 2024, based on TEI, approximately 20% of the properties in the development portfolio were completed but not yet stabilized, 60% of the properties were expected to be completed before December 31, 2025, and the remaining properties were expected to be 25 Table of Contents completed before July 2027.
Logistics Venture (“USLV”) 78 $ 8,167 $ 4 $ - Total 78 $ 8,167 $ 4 $ - Unconsolidated Co-Investment Ventures U.S.: Prologis Targeted U.S.
Logistics Venture (“USLV”) 77 $ 8,279 $ 4 $ - Total 77 $ 8,279 $ 4 $ - Unconsolidated Co-Investment Ventures U.S.: Prologis Targeted U.S.
The following table summarizes our investment in consolidated real estate properties at December 31, 2023 (in millions): Investment Before Depreciation Operating properties, excluding assets held for sale or contribution $ 75,436 Development portfolio, including cost of land 4,367 Land 3,776 Other real estate investments (1) 5,088 Total consolidated real estate properties $ 88,667 (1) Included in other real estate investments were: (i) land parcels we own and lease to third parties; (ii) non-strategic real estate assets, primarily acquired from the Duke Transaction, that we do not intend to operate long term; (iii) non-industrial real estate assets that we intend to redevelop as industrial properties or other higher use assets; and (iv) energy assets.
The following table summarizes our investment in consolidated real estate properties at December 31, 2024 (in millions): Investment Before Depreciation Operating properties, excluding assets held for sale or contribution $ 78,279 Development portfolio, including cost of land 2,829 Land 4,454 Other real estate investments (1) 5,684 Total consolidated real estate properties $ 91,246 (1) Included in other real estate investments were principally: (i) land parcels we own and lease to third parties; (ii) renewable energy assets, including solar panels and electric vehicle chargers, and energy storage systems; (iii) non-strategic real estate assets that we do not intend to operate long term; and (iv) non-industrial real estate assets that we intend to redevelop as industrial properties or data centers.
Dollars and square feet in the following tables are in millions: Consolidated Operating Properties O&M Geographies Rentable Square Footage Gross Book Value Encumbrances (1) Rentable Square Footage Gross Book Value U.S.: Atlanta 46 $ 3,876 $ - 52 $ 4,358 Baltimore/Washington D.C. 14 2,143 - 18 2,549 Central PA 18 1,545 - 20 1,783 Central Valley 21 1,824 - 23 1,969 Chicago 56 5,193 - 72 6,747 Dallas/Ft.
Dollars and square feet in the following tables are in millions: Consolidated Operating Properties O&M Geographies Rentable Square Footage Gross Book Value Encumbrances (1) Rentable Square Footage Gross Book Value U.S.: Atlanta 45 $ 3,792 $ - 52 $ 4,399 Baltimore/Washington D.C. 14 1,988 - 18 2,625 Central Valley 21 1,841 - 23 1,990 Chicago 54 5,166 - 70 6,753 Dallas/Ft.
Energy assets include solar panels, battery storage and mobility solutions. LEASE EXPIRATIONS We generally lease our properties on a long-term basis (the average term for leases commenced, including new leases and renewals, in 2023 was 66 months).
LEASE EXPIRATIONS We generally lease our properties on a long-term basis (the weighted average term for leases commenced, including new leases and renewals, in 2024 was 64 months).
The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place at December 31, 2023 (dollars and square feet in millions): NER Occupied Square Feet Dollars % of Total Dollars Per Square Foot 2024 (1) 62 $ 416 8.5 % $ 6.71 2025 80 551 11.3 % 6.89 2026 92 670 13.7 % 7.28 2027 95 749 15.3 % 7.88 2028 81 734 15.0 % 9.06 2029 58 511 10.4 % 8.81 2030 36 296 6.1 % 8.22 2031 26 197 4.0 % 7.58 2032 31 244 5.0 % 7.87 2033 22 203 4.2 % 9.23 Thereafter 29 319 6.5 % 11.00 612 $ 4,890 100.0 % $ 7.99 Month to month 4 Total consolidated 616 (1) We have signed leases that were due to expire in 2024, totaling 25 million square feet in our consolidated portfolio (3.3% of total NER).
The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place at December 31, 2024 (dollars and square feet in millions): NER Occupied Square Feet Dollars % of Total Dollars Per Square Foot 2025 (1) 58 $ 430 8.0 % $ 7.41 2026 95 715 13.3 % 7.53 2027 101 820 15.3 % 8.12 2028 85 775 14.5 % 9.12 2029 78 744 13.9 % 9.54 2030 57 536 10.0 % 9.40 2031 31 252 4.7 % 8.13 2032 32 262 4.9 % 8.19 2033 22 213 4.0 % 9.68 2034 17 179 3.3 % 10.53 Thereafter 35 437 8.1 % 12.49 611 $ 5,363 100.0 % $ 8.78 Month to month 4 Total consolidated 615 (1) We have signed leases that were due to expire in 2025, totaling 28 million square feet in our consolidated portfolio (3.4% of total NER).
Logistics Fund (“USLF”) 126 $ 13,162 $ 14 $ - Other Americas: FIBRA Prologis 47 3,284 2 - Prologis Brazil Logistics Venture ("PBLV") and other joint ventures 18 936 33 109 Subtotal Other Americas 65 4,220 35 109 Europe: Prologis European Logistics Fund (“PELF”) 164 18,786 7 54 Prologis European Logistics Partners (“PELP”) 59 6,868 86 43 Subtotal Europe 223 25,654 93 97 Asia: Nippon Prologis REIT (“NPR”) 43 6,601 - - Prologis Japan Core Logistics Fund ("PJLF") 2 491 - - Prologis China Core Logistics Fund (“PCCLF”) 30 2,246 - - Prologis China Logistics Venture 19 912 13 418 Subtotal Asia 94 10,250 13 418 Total 508 $ 53,286 $ 155 $ 624 For more information regarding our unconsolidated and consolidated co-investment ventures, see Notes 5 and 11 to the Consolidated Financial Statements in Item 8.
Logistics Fund (“USLF”) 134 $ 15,004 $ 55 $ - Other Americas: FIBRA Prologis 66 5,170 19 - Prologis Brazil Logistics Venture ("PBLV") and other joint ventures 19 820 11 182 Subtotal Other Americas 85 5,990 30 182 Europe: Prologis European Logistics Fund (“PELF”) 169 18,779 7 12 Prologis European Logistics Partners (“PELP”) 63 7,217 82 88 Subtotal Europe 232 25,996 89 100 Asia: Nippon Prologis REIT (“NPR”) 45 6,215 - - Prologis Japan Core Logistics Fund ("PJLF") 3 529 - - Prologis China Core Logistics Fund (“PCCLF”) 30 2,210 - - Prologis China Logistics Venture 22 724 10 198 Subtotal Asia 100 9,678 10 198 Total 551 $ 56,668 $ 184 $ 480 For more information regarding our unconsolidated and consolidated co-investment ventures, see Notes 5 and 11 to the Consolidated Financial Statements in Item 8.
Worth 386 6 130 2 320 Houston 443 6 149 - - Lehigh Valley 105 1 38 1 176 New Jersey/New York City 183 3 337 1 295 San Francisco Bay Area 70 1 111 2 500 Seattle 97 1 54 1 171 South Florida 100 1 96 1 231 Southern California 505 9 577 5 1,106 Remaining Markets – U.S.
Worth 392 6 139 1 119 Houston 428 6 165 - - Lehigh Valley 105 1 38 - - New Jersey/New York City 168 2 364 1 286 San Francisco Bay Area 56 1 95 1 215 Seattle 61 1 54 * 76 South Florida 100 1 111 1 167 Southern California 586 11 743 1 185 Remaining Markets – U.S.
Worth 46 3,817 - 53 4,420 Houston 32 3,277 - 38 3,810 Lehigh Valley 31 4,065 - 35 4,431 New Jersey/New York City 45 7,982 5 54 9,408 San Francisco Bay Area 22 3,503 20 27 4,185 Seattle 17 2,748 - 25 3,634 South Florida 22 3,983 14 29 5,008 Southern California 103 17,260 9 122 19,613 Remaining Markets – U.S.
Worth 51 4,637 - 60 5,510 Houston 32 3,327 - 38 3,872 Lehigh Valley 32 4,082 - 37 4,662 New Jersey/New York City 43 7,750 3 54 9,639 San Francisco Bay Area 23 3,883 20 28 4,574 Seattle 17 2,848 - 25 3,748 South Florida 22 3,993 59 29 5,183 Southern California 106 18,323 7 125 20,702 Remaining Markets – U.S.
Removed
(18 markets) 2,178 31 653 7 2,026 Subtotal U.S. 5,562 80 2,489 23 5,283 Other Americas: Brazil 419 9 72 - - Canada 239 4 408 2 460 Mexico 748 13 238 3 231 Subtotal Other Americas 1,406 26 718 5 691 Europe: France 168 3 136 - - Germany 38 1 30 1 126 Netherlands 23 1 15 * 62 U.K. 284 5 228 2 495 Remaining Countries – Europe (8 countries) 674 13 124 4 406 Subtotal Europe 1,187 23 533 7 1,089 Asia: Japan 42 3 36 5 712 Subtotal Asia 42 3 36 5 712 Total land and development portfolio 8,197 132 $ 3,776 40 $ 7,775 Items notated by ‘*’ indicate an amount less than one million that rounds to zero.
Added
(13 markets) 2,284 34 814 4 1,483 Subtotal U.S. 5,650 83 2,868 11 2,824 Other Americas: Brazil 605 13 211 - - Canada 272 5 442 2 292 Mexico 662 12 224 3 344 Subtotal Other Americas 1,539 30 877 5 636 Europe: France 181 4 132 * 21 Germany 33 1 21 * 46 Netherlands 55 1 52 1 172 U.K. 311 6 233 1 331 Remaining Countries – Europe (7 countries) 654 12 122 3 183 Subtotal Europe 1,234 24 560 5 753 Asia: Japan 89 5 95 3 465 India 196 5 54 * 28 Subtotal Asia 285 10 149 3 493 Total land and development portfolio 8,708 147 $ 4,454 24 $ 4,706 Items notated by ‘*’ indicate an amount less than one million that rounds to zero.
Added
This includes the development of data centers with an aggregate TEI of $0.9 billion, on a consolidated basis.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed2 unchanged
Biggest changeSALES OF UNREGISTERED SECURITIES During 2023, we issued 0.8 million shares of common stock of Prologis, Inc. in connection with the redemption of common units of Prologis, L.P. in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof.
Biggest changeSALES OF UNREGISTERED SECURITIES During 2024, we issued 1.4 million shares of common stock of Prologis, Inc. in connection with the redemption of common units of Prologis, L.P. in reliance on the exemption from registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof. 28 Table of Contents PURCHAS ES OF EQUITY SECURITIES During 2024, we did not purchase any common stock of Prologis, Inc. in connection with our share purchase program.
PREFERRED STOCK DIVIDENDS At December 31, 2023, we had 1.3 million shares of Series Q preferred stock outstanding with a liquidation preference of $50 per share that will be redeemable at our option on or after November 13, 2026. Dividends payable per share were $4.27 for the year ended December 31, 2023.
PREFERRED STOCK DIVIDENDS At December 31, 2024, we had 1.3 million shares of Series Q preferred stock outstanding with a liquidation preference of $50 per share that will be redeemable at our option on or after November 13, 2026. Dividends payable per share were $4.27 for the year ended December 31, 2024.
The graph assumes an initial investment of $100 in our common stock and each of the indices on December 31, 2018, and, as required by the SEC, the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance.
The graph assumes an initial investment of $100 in our common stock and each of the indices on December 31, 2019, and, as required by the SEC, the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance.
Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION AND HOLDERS Our common stock is listed on the NYSE under the symbol “PLD.” 27 Table of Contents Stock Performance Graph The following line graph compares the change in Prologis, Inc. cumulative total stockholder’s return on shares of its common stock from December 31, 2018, to the cumulative total return of the S&P 500 Stock Index and the Financial Times and Stock Exchange NAREIT Equity REITs Index from December 31, 2018, to December 31, 2023.
Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities MARKET INFORMATION AND HOLDERS Our common stock is listed on the NYSE under the symbol “PLD.” 27 Table of Contents Stock Performance Graph The following line graph compares the change in Prologis, Inc. cumulative total stockholder’s return on shares of its common stock from December 31, 2019, to the cumulative total return of the S&P 500 Stock Index and the Financial Times and Stock Exchange NAREIT Equity REITs Index from December 31, 2019, to December 31, 2024.
Financial Statements and Supplementary Data. 28 Table of Contents OTHER STOCKHOLDER MATTERS Common Stock Plans Further information relative to our equity compensation plans will be provided in our 2023 Proxy Statement or in an amendment filed on Form 10-K/A.
OTHER STOCKHOLDER MATTERS Common Stock Plans Further information relative to our equity compensation plans will be provided in our 2025 Proxy Statement or in an amendment filed on Form 10-K/A.
PURCHAS ES OF EQUITY SECURITIES During 2023, we did not purchase any common stock of Prologis, Inc. in connection with our share purchase program. S ECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS For information regarding securities authorized for issuance under our equity compensation plans, see Notes 9 and 12 to the Consolidated Financial Statements in Item 8.
S ECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS For information regarding securities authorized for issuance under our equity compensation plans, see Notes 9 and 12 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+8 added−20 removed68 unchanged
Biggest changeOur financing activities during the year included the following: • On April 5, 2023, we amended and restated our 2021 global senior credit facility (the "2021 Global Facility") as the 2023 Global Facility, increasing its borrowing capacity to $3.0 billion and extended the initial maturity date to June 2027. • On August 25, 2023, we amended and restated the Japanese yen revolver, increasing its borrowing capacity for total commitments of ¥58.5 billion ($414 million at December 31, 2023) and extended the initial maturity date to August 2027. 29 Table of Contents • In the third quarter of 2023, we entered into Chinese renminbi term loans totaling CN¥1.7 billion ($239 million) with an issuance date weighted average interest rate of 3.5% maturing between September 2024 to 2026. • We issued senior notes of $5.4 billion (principal in millions): Aggregate Principal Issuance Date Weighted Average Issuance Date Borrowing Currency USD (1) Interest Rate Years Maturity Dates January € 1,250 $ 1,354 4.1% 13.8 January 2030 – 2043 March $ 1,200 $ 1,200 4.9% 17.7 June 2033 – 2053 May € 750 $ 809 4.6% 10.0 May 2033 June $ 2,000 $ 2,000 5.1% 13.2 June 2028 – 2053 Total $ 5,363 4.7% 13.9 (1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date.
Biggest changeAt any point in time, we are required to maintain available commitments under our credit facilities in an amount at least equal to the CPNs outstanding. • We issued senior notes of $4.2 billion (principal in millions): Aggregate Principal Issuance Date Weighted Average Issuance Date Borrowing Currency USD (1) Interest Rate Years Maturity Dates January $ 1,250 $ 1,250 5.1% 17.3 March 2034 – 2054 February CN¥ 1,500 $ 211 3.5% 3.0 February 2027 March C$ 550 $ 405 4.7% 5.0 March 2029 May € 550 $ 592 4.0% 10.0 May 2034 May £ 350 $ 439 5.6% 16.0 May 2040 July $ 1,100 $ 1,100 5.1% 17.5 January 2035 – March 2054 September CN¥ 1,350 $ 190 3.3% 5.0 September 2029 Total $ 4,187 4.8% 13.7 (1) The exchange rate used to calculate into U.S. dollars was the spot rate at the settlement date of each issuance.
Development margins fluctuate depending on several factors including cost of capital, changes in capitalization rates that are used to estimate value at completion, location and type of development, such as build-to-suit development.
Development margins fluctuate depending on several factors including cost of capital, changes in capitalization rates that are used to estimate value at completion and location and type of development, such as build-to-suit development.
We believe the drivers of property NOI for the consolidated portfolio are generally the same for the properties owned by the ventures in which we invest and therefore we evaluate 35 Table of Contents the same store metrics of the O&M portfolio based on Prologis’ ownership in the properties (“Prologis Share”).
We believe the drivers of property NOI for 35 Table of Contents the consolidated portfolio are generally the same for the properties owned by the ventures in which we invest and therefore we evaluate the same store metrics of the O&M portfolio based on Prologis’ ownership in the properties (“Prologis Share”).
As a result, only line items labeled “Prologis Share of Same Store Property NOI” are comparable period over period. (3) We further remove certain noncash items (straight-line rent and amortization of fair value lease adjustments) included in the financial statements prepared in accordance with U.S. GAAP to reflect a Same Store Property NOI – Cash measure.
As a result, only line items labeled “Prologis Share of Same Store Property NOI” are comparable period over period. (3) We further remove certain noncash items (straight-line rent and fair value lease amortization) included in the financial statements prepared in accordance with U.S. GAAP to reflect a Same Store Property NOI – Cash measure.
We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties’ share of our consolidated co-investment ventures.
We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties’ share of our consolidated ventures.
These items have both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook. We calculate our FFO measures, as defined below, based on our proportionate ownership share of both our unconsolidated and consolidated ventures.
These items have both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook. We calculate our FFO measures, as defined below, based on our proportionate ownership share of both our unconsolidated entities and consolidated ventures.
At a property-level, we allocate the fair value to the components, which include building, land, improvements, and intangible assets or liabilities related to acquired leases. The most significant portion of the allocation is to building and land and requires the use of market based estimates and assumptions.
At a property level, we allocate the fair value to the components, which include buildings, land, improvements, and intangible assets or liabilities related to acquired leases. The most significant portion of the allocation is to building and land and requires the use of market based estimates and assumptions.
We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our FFO measures to remove the noncontrolling interests share of the applicable reconciling items based on our average ownership percentage for the applicable periods.
We reflect our share for consolidated ventures in which we do not own 100% of the equity by adjusting our FFO measures to remove the noncontrolling interests share of the applicable adjusting items based on our average ownership percentage for the applicable periods.
Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties and other transactional activity including foreign currency exchange rates and timing of promotes.
Revenues associated with the Strategic Capital Segment fluctuate because of changes in the size of the portfolios through acquisitions and dispositions, the fair value of the properties, timing of promotes, foreign currency exchange rates and other transactional activity.
Of the significant accounting policies discussed in Note 2 to the Consolidated Financial Statements, those presented below have been identified by us as meeting the criteria to be considered critical accounting policies as they relate to our financial condition at December 31, 2023, and 2022 and our operating results for the three-year period ended December 31, 2023.
Of the significant accounting policies discussed in Note 2 to the Consolidated Financial Statements, those presented below have been identified by us as meeting the criteria to be considered critical accounting policies as they relate to our financial condition at December 31, 2024, and 2023 and our operating results for the three-year period ended December 31, 2024.
Loan-to-value, a non-GAAP measure, was calculated as the percentage of total third-party debt to the gross book value of real estate for each venture and weighted based on the cumulative gross book value of all unconsolidated co-investment ventures. At December 31, 2023, we did not guarantee any third-party debt of the unconsolidated co-investment ventures.
Loan-to-value, a non-GAAP measure, was calculated as the percentage of total third-party debt to the gross book value of real estate for each venture and weighted based on the cumulative gross book value of all unconsolidated co-investment ventures. At December 31, 2024, we did not guarantee any third-party debt of the unconsolidated co-investment ventures.
RESULTS OF OP ERATIONS We evaluate our business operations based on the NOI of our two operating segments: Real Estate (Rental Operations and Development) and Strategic Capital. NOI by segment is a non-GAAP performance measure that is calculated using revenues and expenses directly from our financial statements.
RESULTS OF OP ERATIONS We evaluate our business operations based on the NOI of our two reportable segments: Real Estate (Rental Operations and Development) and Strategic Capital. NOI by segment is a non-GAAP performance measure that is calculated using revenues and expenses directly from our financial statements.
We define our same store population for the three months ended December 31, 2023 as the properties in our O&M operating portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures at January 1, 2022 and owned throughout the same three-month period in both 2022 and 2023.
We define our same store population for the three months ended December 31, 2024 as the properties in our O&M operating portfolio, including the property NOI for both consolidated properties and properties owned by the unconsolidated co-investment ventures, at January 1, 2023 and owned throughout the same three-month period in both 2023 and 2024.
Certain of our ventures also have credit facilities, or unencumbered properties, both of which may be used to obtain funds. 42 Table of Contents Dividend and Distribution Requirements Our dividend policy on our common stock is to distribute a percentage of our cash flow to ensure that we will meet the dividend requirements of the IRC, relative to maintaining our REIT status, while still allowing us to retain cash to fund our capital deployment and other investment activities.
Certain of our ventures also have credit facilities, or unencumbered properties, both of which may be used to obtain funds. 42 Table of Contents Dividend and Distribution Requirements Our dividend policy on our common stock is to distribute a percentage of our cash flow to ensure that we will meet the dividend requirements of the Internal Revenue Code ("IRC"), relative to maintaining our REIT status, while still allowing us to retain cash to fund our capital deployment and other investment activities.
Our financial condition for 2021, results of operations for 2021, and 2022 compared to 2021 and details on the acquisition of Duke Realty Corporation and Duke Realty Limited Partnership (collectively "Duke" or the "Duke Transaction") is referenced throughout this document and can be found under Item 7.
Our financial condition for 2022, results of operations for 2022, and 2023 compared to 2022 and details on the acquisition of Duke Realty Corporation and Duke Realty Limited Partnership (collectively "Duke" or the "Duke Transaction") is referenced throughout this document and can be found under Item 7.
A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. At December 31, 2023, we were in compliance with all of our financial debt covenants.
A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. At December 31, 2024, we were in compliance with all of our financial debt covenants.
A discussion regarding our financial condition and results of operations for 2023 compared to 2022 is presented below. Information on 2021 is included in graphs only to show year over year trends in our results of operations and operating metrics.
A discussion regarding our financial condition and results of operations for 2024 compared to 2023 is presented below. Information on 2022 is included in graphs only to show year over year trends in our results of operations and operating metrics.
The same store population excludes properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period (January 1, 2022) and properties acquired or disposed of to third parties during the period.
The same store population excludes properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period (January 1, 2023) and properties acquired or disposed of to third parties during the period.
See Note 8 to the Consolidated Financial Statements for further information on this activity. • Cash paid for income taxes, net of refunds. We paid income taxes, net of refunds, of $149 million and $130 million in 2023 and 2022, respectively. See Note 13 to the Consolidated Financial Statements for further information on this activity.
See Note 8 to the Consolidated Financial Statements for further information on this activity. • Cash paid for income taxes, net of refunds. We paid income taxes, net of refunds, of $130 million and $149 million in 2024 and 2023, respectively. See Note 13 to the Consolidated Financial Statements for further information on this activity.
The use of different assumptions to value the acquired properties and allocate the most significant portion of the property value between the building and land could affect the depreciation expense we recognize over the estimated remaining useful life. 43 Table of Contents Recoverability of Real Estate Assets We assess the carrying values of our respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable.
For acquisitions of a significant portfolio of properties, the use of different assumptions to value the acquired properties and allocate the most significant portion of the property value between the building and land could affect the depreciation expense we recognize over the estimated remaining useful life. 43 Table of Contents Recoverability of Real Estate Assets We assess the carrying values of our respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable.
We issued $5.4 billion of senior notes during 2023 and $3.3 billion during 2022, with a weighted average interest rate of 4.7% and 2.3%, respectively, at the issuance date. See Note 8 to the Consolidated Financial Statements and the Liquidity and Capital Resources section below, for further discussion of our debt and borrowing costs.
We issued $4.2 billion of senior notes during 2024 and $5.4 billion during 2023, with a weighted average interest rate of 4.8% and 4.7%, respectively, at the issuance date. See Note 8 to the Consolidated Financial Statements and the Liquidity and Capital Resources section below, for further discussion of our debt and borrowing costs.
On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense. (2) We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties.
On consolidation, these amounts are eliminated and the actual costs of providing property management and leasing services are recognized as part of our consolidated rental expense. 36 Table of Contents (2) We include the Property NOI for the same store portfolio for both consolidated properties and properties owned by the co-investment ventures based on our investment in the underlying properties.
At December 31, 2023, our Series Q preferred stock had an annual dividend rate of 8.54% per share and the dividends are payable quarterly in arrears.
At December 31, 2024, our Series Q preferred stock had an annual dividend rate of 8.54% per share and the dividends are payable quarterly in arrears.
Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. The following table summarizes the remaining equity commitments at December 31, 2023 (in millions): Equity Commitments (1) Prologis Venture Partners Total Expiration Date Prologis Targeted U.S.
Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. The following table summarizes the remaining equity commitments at December 31, 2024 (dollars in millions): Equity Commitments (1) Prologis Venture Partners Total Expiration Date Prologis Targeted U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 14, 2023, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at www.ir.prologis.com.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 13, 2024, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at ir.prologis.com .
We evaluate the performance of the operating properties we own and manage using a “same store” analysis to ensure that the population of properties in this analysis is consistent from period to period, allowing us and investors to analyze our ongoing business operations.
We evaluate the performance of the operating properties we own and manage using a “same store” analysis because the population of properties in this analysis is consistent from period to period, allowing us and investors to analyze our ongoing business operations.
We recognized equity-based, noncash compensation expenses of $268 million and $175 million in 2023 and 2022, respectively, which were recorded to Rental Expenses in the Real Estate Segment, Strategic Capital Expenses in the Strategic Capital Segment and G&A Expenses in the Consolidated Statements of Income. • Operating distributions from unconsolidated entities.
We recognized equity-based, noncash compensation expenses of $232 million and $268 million in 2024 and 2023, respectively, which were recorded to Rental Expenses in the Real Estate Segment, Strategic Capital Expenses in the Strategic Capital Segment and G&A Expenses in the Consolidated Statements of Income. • Operating distributions from unconsolidated entities.
The earnings we recognize can be impacted by: (i) the size, rental rates and occupancy of the portfolio of properties owned by each venture; (ii) gains or losses from the dispositions of properties and extinguishment of debt; (iii) our ownership interest in each venture; (iv) other variances in revenues and expenses of each venture; and (v) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars.
The earnings we recognize can be impacted by: (i) the size, rental rates and occupancy of the portfolio of properties owned by each venture; (ii) interest expense based on the size and terms of the debt; (iii) gains or losses from the dispositions of properties, impairments and extinguishment of debt; (iv) our ownership interest in each venture; (v) other variances in revenues and expenses of each venture; and (vi) fluctuations in foreign currency exchange rates used to translate our share of net earnings to U.S. dollars.
The Class A common limited partnership units (“Class A Units”) in the OP are entitled to a quarterly distribution equal to $0.64665 per unit so long as the common units receive a quarterly distribution of at least $0.40 per unit. We paid a quarterly cash distribution of $0.64665 per Class A Unit in 2023 and 2022.
The Class A common limited partnerships units (“Class A Units”) in the OP are entitled to a quarterly distribution equal to $0.64665 per unit so long as the common units receive a quarterly distribution of at least $0.40 per unit. We paid a quarterly cash distribution of $0.64665 per Class A Unit in 2024 and 2023.
For additional information on our development portfolio at December 31, 2023, see Item 2. Properties. 32 Table of Contents Capital Expenditures We capitalize costs incurred in improving and leasing our operating properties as part of the investment basis or within Other Assets in the Consolidated Balance Sheets.
Our investment in the development portfolio was $2.8 billion at December 31, 2024. For additional information on our development portfolio at December 31, 2024, see Item 2. Properties. 32 Table of Contents Capital Expenditures We capitalize costs incurred in improving and leasing our operating properties as part of the investment basis or within Other Assets in the Consolidated Balance Sheets.
In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures’ underlying Property 36 Table of Contents NOI for the same store portfolio and apply our ownership percentage at December 31, 2023 to the Property NOI for both periods, including the properties contributed during the period.
In order to calculate our share of Same Store Property NOI from the co-investment ventures in which we own less than 100%, we use the co-investment ventures’ underlying Property NOI for the same store portfolio and apply our ownership percentage at December 31, 2024 to the Property NOI for both periods, including the properties contributed during the period.
Value-added properties are properties we have either acquired at a discount and believe we could provide greater returns post-stabilization or properties we expect to repurpose to a higher and better use.
Value-added properties are properties we have either acquired at a discount and believe we could provide greater returns post-stabilization or properties we expect to repurpose to higher uses.
Under the IRC, REITs may be subject to certain federal income and excise taxes on undistributed taxable income. We paid quarterly cash dividends of $0.87 and $0.79 per common share in 2023 and 2022, respectively.
Under the IRC, REITs may be subject to certain federal income and excise taxes on undistributed taxable income. We paid quarterly cash dividends of $0.96 and $0.87 per common share in 2024 and 2023, respectively.
In 2023 and 2022, we experienced a significant increase in net effective rent change due to increasing market rents. (2) Turnover costs include external leasing commissions and tenant improvements and represent the obligations incurred in connection with the lease commencement for leases greater than one year.
During all three years, we experienced a significant increase in net effective rent change due to increasing market rents. (2) Turnover costs include external leasing commissions and tenant improvements and represent the obligations incurred in connection with the lease commencement for leases greater than one year.
Net Earnings Attributable to Noncontrolling Interests This amount represents the third-party investors’ share of the earnings generated in consolidated entities in which we do not own 100% of the equity, reduced by the third-party share of fees or promotes payable to us and earned during the period.
Net Earnings Attributable to Noncontrolling Interests Net earnings attributable to noncontrolling interests represents the third-party investors’ share of the earnings generated in consolidated entities in which we do not own 100% of the equity, reduced by the third-party share of fees or promotes we earned during the period.
We reflect our share of our FFO measures for unconsolidated ventures by applying our average ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis.
We reflect our share of our FFO measures for unconsolidated entities by applying our average ownership percentage for the period to the applicable adjusting items on an entity-by-entity basis.
Other Components of Income (Expense) Earnings from Unconsolidated Entities, Net We recognized net earnings from unconsolidated entities, which are accounted for using the equity method, of $307 million and $311 million during 2023 and 2022, respectively.
Other Components of Income (Expense) Earnings from Unconsolidated Entities, Net We recognized net earnings from unconsolidated entities, which are generally accounted for using the equity method, of $354 million and $307 million during 2024 and 2023, respectively.
Our credit ratings at December 31, 2023 were A and A3 from Standard & Poor's and Moody’s, respectively, each with a stable outlook. These ratings allow us to borrow at an advantageous interest rate.
Our credit ratings at December 31, 2024, were A from Standard & Poor's with a stable outlook and A3 from Moody's with a positive outlook. These ratings allow us to borrow at an advantageous interest rate.
We received $680 million and $410 million of distributions as a return on our investment from the cash flows generated from the operations of our unconsolidated entities in 2023 and 2022, respectively. • Cash paid for interest, net of amounts capitalized. We paid interest, net of amounts capitalized, of $457 million and $234 million in 2023 and 2022, respectively.
We received $562 million and $680 million of distributions as a return on our investment from the cash flows generated from the operations of our unconsolidated entities in 2024 and 2023, respectively. • Cash paid for interest, net of amounts capitalized. We paid interest, net of amounts capitalized, of $711 million and $457 million in 2024 and 2023, respectively.
We had net earnings attributable to noncontrolling interests of $194 million and $191 million in 2023 and 2022, respectively. Included in these amounts were $77 million and $92 million in 2023 and 2022, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.
We had net earnings attributable to noncontrolling interests of $216 million and $194 million in 2024 and 2023, respectively. Included in these amounts were $93 million and $77 million in 2024 and 2023, respectively, of net earnings attributable to the common limited partnership unitholders of Prologis, L.P.
See the Results of Operations section above for further explanation of our Real Estate Segment. The revenues from this segment include noncash adjustments for straight-lined rents and amortization of above and below market leases of $613 million and $268 million for 2023 and 2022, respectively.
See the Results of Operations section above for further explanation of our Real Estate Segment. The revenues from this segment include noncash adjustments for straight-lined rents and amortization of above and below market leases of $645 million and $613 million in 2024 and 2023, respectively. • Strategic Capital Segment.
The following table summarizes our income tax expense (benefit) (in millions): 2023 2022 Current income tax expense (benefit): Income tax expense $ 165 $ 130 Income tax expense on dispositions 39 13 Income tax benefit on dispositions related to acquired tax liabilities (11 ) (21 ) Total current income tax expense 193 122 Deferred income tax expense (benefit): Income tax expense 18 13 Total deferred income tax expense 18 13 Total income tax expense $ 211 $ 135 Our income taxes are discussed in more detail in Note 13 to the Consolidated Financial Statements.
The following table summarizes our income tax expense (benefit) (in millions): 2024 2023 Current income tax expense (benefit): Income tax expense $ 116 $ 165 Income tax expense on dispositions 30 39 Income tax benefit on dispositions related to acquired tax liabilities - (11 ) Total current income tax expense 146 193 Deferred income tax expense: Income tax expense 21 18 Total deferred income tax expense 21 18 Total income tax expense $ 167 $ 211 Our income taxes are discussed in more detail in Note 13 to the Consolidated Financial Statements.
Below are the components of Strategic Capital Segment NOI derived directly from the line items in the Consolidated Financial Statements (in millions): 2023 2022 Strategic capital revenues $ 1,200 $ 1,040 Strategic capital expenses (385 ) (304 ) Strategic Capital Segment – NOI $ 815 $ 736 Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI (in millions): U.S.
Below are the components of Strategic Capital Segment NOI derived directly from the line items in the Consolidated Financial Statements (in millions): 2024 2023 Strategic capital revenues $ 672 $ 1,200 Strategic capital expenses (292 ) (385 ) Strategic Capital Segment – NOI $ 380 $ 815 Below is additional detail of our Strategic Capital Segment revenues, expenses and NOI (in millions): U.S.
Near-Term Principal Cash Sources and Uses In addition to dividends and distributions, we expect our primary cash needs will consist of the following: • completion of the development and leasing of the properties in our consolidated development portfolio (at December 31, 2023, 130 properties in our development portfolio were 37.9% leased with a current investment of $4.4 billion and a TEI of $7.8 billion when completed and leased, leaving $3.4 billion of estimated additional required investment); • development of new properties that we may hold for long-term investment or subsequently contribute to unconsolidated co-investment ventures, including the acquisition of land; • the acquisition of other real estate investments that we acquire with the intention of redeveloping into industrial properties; • capital expenditures and leasing costs on properties in our operating portfolio; • investments in energy assets such as solar panels, battery storage and mobility solutions to serve our customers; • repayment of debt and scheduled principal payments of $531 million in 2024; • additional investments in current and future unconsolidated co-investment ventures and other ventures; and • the acquisition of operating properties or portfolios of operating properties (depending on market and other conditions) for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our unconsolidated entities).
Near-Term Principal Cash Sources and Uses In addition to dividends and distributions, we expect our primary cash needs will consist of the following: • completion of the development and leasing of the properties in our consolidated development portfolio (at December 31, 2024, 85 properties in our development portfolio were 31.9% leased with a current investment of $2.8 billion and a TEI of $4.7 billion when completed and leased, leaving $1.9 billion of estimated additional required investment); • development of new properties that we may hold for long-term investment or subsequently contribute to unconsolidated co-investment ventures or sell to third parties, including the acquisition of land; • the acquisition of other real estate investments that we acquire with the intention of redeveloping into industrial properties and data centers; • capital expenditures and leasing costs on properties in our operating portfolio; • investments in renewable energy, energy storage and mobility infrastructure to serve our customers and achieve our sustainability goals; • repayment of debt and scheduled principal payments of $514 million in 2025; • additional investments in current and future co-investment ventures and other ventures; and • the acquisition of operating properties or portfolios of operating properties (depending on market and other conditions), for direct, long-term investment in our consolidated portfolio (this might include acquisitions from our unconsolidated entities).
Other Comprehensive Income (Loss) The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements in 2023 and 2022 was the currency translation adjustment derived from changes in exchange rates during both periods principally on our net investments in real estate outside the U.S. and the borrowings we issue in the functional currencies of the countries where we invest.
See Note 11 to the Consolidated Financial Statements for further information on our noncontrolling interests. 38 Table of Contents Other Comprehensive Income (Loss) The key driver of changes in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Financial Statements in 2024 and 2023 was the currency translation adjustment derived from changes in exchange rates during both periods principally on our net investments in real estate outside the U.S. and the borrowings we issue in the functional currencies of the countries where we invest.
Cash used in investing activities is principally driven by our capital deployment activities of investing in real estate development, acquisitions and capital expenditures as discussed above. This activity includes real estate portfolios, land for future development, operating properties and other real estate assets.
Cash used in investing activities is principally driven by our capital deployment activities of investing in real estate development, acquisitions and capital expenditures as discussed above. This activity includes land for future development, operating properties, other real estate assets and real estate portfolios, such as the $3.1 billion portfolio acquired in the second quarter of 2023.
Certain of our ventures do not have third-party debt and are therefore excluded. This debt is non-recourse to Prologis and other investors in the co-investment ventures and bears interest as follows at December 31, 2023 (dollars in millions): Total Debt (1) Weighted Average Interest Rate Gross Book Value of Real Estate (1) Ownership % Prologis Targeted U.S.
This debt is non-recourse to Prologis and other investors in the co-investment ventures and bears interest as follows at December 31, 2024 (dollars in millions): Total Debt (1) Weighted Average Interest Rate Gross Book Value of Real Estate (1) Ownership % Prologis Targeted U.S.
(2) We calculate the weighted average stabilized yield as estimated NOI assuming stabilized occupancy divided by TEI. (3) Estimated weighted average margin is calculated on development properties as estimated value creation, less estimated closing costs and taxes, if any, on properties expected to be sold or contributed, divided by TEI.
(2) Estimated weighted average margin is calculated on development properties as estimated value creation, less estimated closing costs and taxes, if any, on properties expected to be sold or contributed, divided by TEI.
We expect to fund our cash needs principally from the following sources (subject to market conditions): • net cash flow from property operations; • fees earned for services performed on behalf of co-investment ventures; • distributions received from co-investment ventures; • proceeds from the contribution of properties to current or future co-investment ventures; • proceeds from the disposition of properties or other investments to third parties; • available unrestricted cash balances ($530 million at December 31, 2023); • borrowing capacity under our current credit facility arrangements that allow us to borrow on a short-term basis, with original maturities ranging from overnight to three months ($5.5 billion available at December 31, 2023); and • proceeds from the issuance of debt.
We expect to fund our cash needs principally from the following sources (subject to market conditions): • net cash flow from property operations; • fees earned for services performed on behalf of co-investment ventures; • distributions received from co-investment ventures; • proceeds from the contribution of properties to current or future co-investment ventures; • proceeds from the disposition of properties or other investments to third parties; 39 Table of Contents • available unrestricted cash balances ($1.3 billion at December 31, 2024); • borrowing capacity under our current credit facility arrangements that allows us to borrow on a short-term basis, with maturities generally ranging from overnight to three months ($6.1 billion available at December 31, 2024), including our commercial paper program that we established in the first quarter of 2024; and • proceeds from the issuance of debt.
G&A Expenses G&A expenses were $390 million and $331 million for 2023 and 2022, respectively. G&A expenses increased in 2023 as compared to 2022, principally due to inflationary increases, the expansion of Prologis Essentials and higher compensation expenses based on our performance. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.
G&A Expenses G&A expenses were $419 million and $390 million for 2024 and 2023, respectively. G&A expenses increased in 2024 as compared to 2023, principally due to inflationary increases and higher compensation expenses. We capitalize certain internal costs that are incremental and directly related to our development and building improvement activities.
We incurred $390 million and $331 million of G&A expenses in 2023 and 2022, respectively.
We incurred $419 million and $390 million of G&A expenses in 2024 and 2023, respectively.
To 45 Table of Contents assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP as follows (in millions): 2023 2022 Reconciliation of net earnings attributable to common stockholders to FFO measures: Net earnings attributable to common stockholders $ 3,053 $ 3,359 Add (deduct) NAREIT defined adjustments: Real estate related depreciation and amortization 2,434 1,763 Gains on other dispositions of investments in real estate, net of taxes (158 ) (595 ) Reconciling items related to noncontrolling interests (38 ) (13 ) Our share of reconciling items included in earnings related to unconsolidated entities 455 363 NAREIT defined FFO attributable to common stockholders/unitholders 5,746 4,877 Add (deduct) our modified adjustments: Unrealized foreign currency, derivative and other losses (gains), net 18 (85 ) Deferred income tax expense 18 13 Current income tax benefit on dispositions related to acquired tax liabilities (11 ) (21 ) Our share of reconciling items included in earnings related to unconsolidated entities (11 ) (42 ) FFO, as modified by Prologis attributable to common stockholders/unitholders 5,760 4,742 Adjustments to arrive at Core FFO: Gains on dispositions of development properties and land, net (462 ) (598 ) Current income tax expense on dispositions 36 18 Losses (gains) on early extinguishment of debt, net (3 ) 20 Reconciling items related to noncontrolling interests 9 5 Our share of reconciling items included in earnings related to unconsolidated entities (6 ) 1 Core FFO attributable to common stockholders/unitholders $ 5,334 $ 4,188
To 45 Table of Contents assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP as follows (in millions): 2024 2023 Reconciliation of net earnings attributable to common stockholders to FFO measures: Net earnings attributable to common stockholders $ 3,726 $ 3,053 Add (deduct) NAREIT defined adjustments: Real estate related depreciation and amortization 2,504 2,434 Gains on other dispositions of investments in real estate, net of taxes (excluding development properties and land) (899 ) (158 ) Adjustments related to noncontrolling interests (31 ) (38 ) Our proportionate share of adjustments related to unconsolidated entities 495 455 NAREIT defined FFO attributable to common stockholders/unitholders 5,795 5,746 Add (deduct) our modified adjustments: Unrealized foreign currency, derivative and other losses (gains), net (68 ) 18 Deferred income tax expense (benefit) 21 18 Current income tax benefit on dispositions related to acquired tax liabilities - (11 ) Our proportionate share of adjustments related to unconsolidated entities (7 ) (11 ) FFO, as modified by Prologis attributable to common stockholders/unitholders 5,741 5,760 Adjustments to arrive at Core FFO: Gains on dispositions of development properties and land, net (414 ) (462 ) Current income tax expense on dispositions 25 36 Losses (gains) on early extinguishment of debt, net (1 ) (3 ) Adjustments related to noncontrolling interests 6 9 Our proportionate share of adjustments related to unconsolidated entities (52 ) (6 ) Core FFO attributable to common stockholders/unitholders $ 5,305 $ 5,334
Upon settlement of these transactions, we recognize realized gains or losses. 37 Table of Contents The following table details our foreign currency and derivative gains, net included in earnings (in millions): 2023 2022 Realized foreign currency and derivative gains, net: Gains on the settlement of undesignated derivatives $ 60 $ 145 Gains on the settlement of transactions with third parties 1 1 Total realized foreign currency and derivative gains, net 61 146 Unrealized foreign currency and derivative gains (losses), net: Gains (losses) on the change in fair value of undesignated derivatives and unhedged debt (81 ) 83 Gains on remeasurement of certain assets and liabilities 10 9 Total unrealized foreign currency and derivative gains (losses), net (71 ) 92 Total foreign currency and derivative gains (losses), net $ (10 ) $ 238 See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 15 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions.
The following table details our foreign currency and derivative gains (losses), net included in earnings (in millions): 2024 2023 Realized foreign currency and derivative gains, net: Gains on the settlement of undesignated derivatives $ 53 $ 60 Gains on the settlement of transactions with third parties 1 1 Total realized foreign currency and derivative gains, net 54 61 Unrealized foreign currency and derivative gains (losses), net: Gains (losses) on the change in fair value of undesignated derivatives and unhedged debt 87 (81 ) Gains (losses) on remeasurement of certain assets and liabilities (20 ) 10 Total unrealized foreign currency and derivative gains (losses), net 67 (71 ) Total foreign currency and derivative gains (losses), net $ 121 $ (10 ) See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 15 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions.
The following table summarizes capitalized G&A (in millions): 2023 2022 Building and land development activities $ 123 $ 107 Operating building improvements and other 52 45 Total capitalized G&A expenses $ 175 $ 152 Capitalized compensation and related costs as a percent of total 23.8 % 22.7 % Depreciation and Amortization Expenses Depreciation and amortization expenses were $2.5 billion and $1.8 billion in 2023 and 2022, respectively.
The following table summarizes capitalized G&A (in millions): 2024 2023 Building and land development activities $ 133 $ 123 Operating building improvements and other 56 52 Total capitalized G&A expenses $ 189 $ 175 Capitalized compensation and related costs as a percent of total 24.4 % 23.8 % Depreciation and Amortization Expenses Depreciation and amortization expenses were $2.6 billion and $2.5 billion in 2024 and 2023, respectively.
Cash Flow Summary The following table summarizes our cash flow activity (in millions): 2023 2022 Net cash provided by operating activities $ 5,373 $ 4,126 Net cash used in investing activities $ (6,419 ) $ (4,499 ) Net cash provided by financing activities $ 1,320 $ 116 Net increase (decrease) in cash and cash equivalents, including the effect of foreign currency exchange rates on cash $ 252 $ (278 ) 40 Table of Contents Operating Activities Cash provided by and used in operating activities, exclusive of changes in receivables and payables, was impacted by the following significant activities: • Real Estate Segment.
See the Cash Flow Summary below for more information about our investment activity in our co-investment ventures. 40 Table of Contents Cash Flow Summary The following table summarizes our cash flow activity (in millions): 2024 2023 Net cash provided by (used in) operating activities $ 4,912 $ 5,373 Net cash provided by (used in) investing activities $ (3,099 ) $ (6,419 ) Net cash provided by (used in) financing activities $ (1,000 ) $ 1,320 Net increase (decrease) in cash and cash equivalents, including the effect of foreign currency exchange rates on cash $ 788 $ 252 Operating Activities Cash provided by and used in operating activities, exclusive of changes in receivables and payables, was impacted by the following significant activities: • Real Estate Segment.
We allocate the costs of our property management and leasing functions to the Real Estate Segment through Rental Expenses and the Strategic Capital Segment through Strategic Capital Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios.
We allocate the costs of our property management and 30 Table of Contents leasing functions to the Real Estate Segment through Rental Expenses and the Strategic Capital Segment through Strategic Capital Expenses, both in the Consolidated Financial Statements, based on the square footage of the relative portfolios. In addition, this segment is impacted by our development, acquisition and disposition activities.
Our credit facilities support our cash needs for development and acquisition activities on a short-term basis. The original maturity of our borrowings under the credit facilities ranges from overnight to three months.
Our credit facilities and our commercial paper support our cash needs for development and acquisition activities on a short-term basis. The maturities of the borrowings under the credit facilities and the notes under the commercial paper program generally range from overnight to three months.
See below for information on our O&M operating portfolio at December 31 (square feet in millions): 2023 2022 Number of Properties Square Feet Percentage Occupied Number of Properties Square Feet Percentage Occupied Consolidated 2,957 631 97.6 % 2,812 595 98.3 % Unconsolidated 2,242 507 97.5 % 2,177 488 98.1 % Total 5,199 1,138 97.6 % 4,989 1,083 98.2 % Below are the key leasing metrics of our O&M operating portfolio.
See below for information on our O&M operating portfolio at December 31 (square feet in millions): 2024 2023 Number of Properties Square Feet Percentage Occupied Number of Properties Square Feet Percentage Occupied Consolidated 2,981 644 95.4% 2,957 631 97.6% Unconsolidated 2,423 548 96.6% 2,242 507 97.5% Total 5,404 1,192 95.9% 5,199 1,138 97.6% Below are the key leasing metrics of our O&M operating portfolio.
Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements (in millions): 2023 2022 Real estate segment: Rental revenues $ 6,819 $ 4,913 Development management and other revenues 5 21 Rental expenses (1,625 ) (1,206 ) Other expenses (54 ) (40 ) Real Estate Segment – NOI 5,145 3,688 Strategic capital segment: Strategic capital revenues 1,200 1,040 Strategic capital expenses (385 ) (304 ) Strategic Capital Segment – NOI 815 736 General and administrative expenses (390 ) (331 ) Depreciation and amortization expenses (2,485 ) (1,813 ) Operating income before gains on real estate transactions, net 3,085 2,280 Gains on dispositions of development properties and land, net 462 598 Gains on other dispositions of investments in real estate, net 161 589 Operating income $ 3,708 $ 3,467 See Note 17 to the Consolidated Financial Statements for more information on our segments and a reconciliation of each business segment’s NOI to Operating Income and Earnings Before Income Taxes.
Below is our NOI by segment per the Consolidated Financial Statements and a reconciliation of NOI by segment to Operating Income per the Consolidated Financial Statements (in millions): 2024 2023 Real estate segment: Rental revenues $ 7,515 $ 6,819 Development management and other revenues 14 5 Rental expenses (1,765 ) (1,625 ) Other expenses (47 ) (54 ) Real Estate Segment – NOI 5,717 5,145 Strategic capital segment: Strategic capital revenues 672 1,200 Strategic capital expenses (292 ) (385 ) Strategic Capital Segment – NOI 380 815 General and administrative expenses (419 ) (390 ) Depreciation and amortization expenses (2,580 ) (2,485 ) Operating income before gains on real estate transactions, net 3,098 3,085 Gains on dispositions of development properties and land, net 414 462 Gains on other dispositions of investments in real estate, net 904 161 Operating income $ 4,416 $ 3,708 See Note 17 to the Consolidated Financial Statements for more information on our segments and a reconciliation of each reportable segment’s NOI to Operating Income and Earnings Before Income Taxes.
(3) We calculate changes in NOI from development completions period over period by comparing the change in NOI generated on the pool of developments that completed on or after January 1, 2022 through December 31, 2023.
See below for key metrics on rent change on rollover and occupancy. (2) We calculate changes in NOI from development completions period over period by comparing the change in NOI generated on the pool of developments that completed on or after January 1, 2023 through December 31, 2024.
(5) We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture.
(3) Transactional fees include leasing commissions and acquisition, disposition, development and other fees. 33 Table of Contents (4) We generally earn promote revenue directly from third-party investors in the co-investment ventures based on the cumulative returns of the venture over a three-year period or the stabilization of individual development projects owned by the venture.
Real Estate Segment This operating segment principally includes rental revenue and rental expenses recognized from our consolidated properties.
Real Estate Segment This reportable segment principally includes rental revenue and rental expenses recognized from our consolidated properties. This segment also includes the operating results of our renewable energy assets.
(4) The change is principally due to higher insurance costs from a greater number of weather-related events and increases in the cost of our property management and leasing functions in 2023.
(4) The change is primarily due to higher insurance costs from a greater number of weather-related events in 2023.
The following is a reconciliation of our consolidated rental revenues, rental expenses and property NOI for each quarter in 2023 and 2022 to the full year, as included in the Consolidated Statements of Income and within Note 19 to the Consolidated Financial Statements and to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in millions): Three Months Ended March 31, June 30, September 30, December 31, Full Year 2023 Rental revenues $ 1,634 $ 1,652 $ 1,777 $ 1,756 $ 6,819 Rental expenses (413 ) (388 ) (416 ) (408 ) (1,625 ) Property NOI $ 1,221 $ 1,264 $ 1,361 $ 1,348 $ 5,194 2022 Rental revenues $ 1,077 $ 1,093 $ 1,152 $ 1,591 $ 4,913 Rental expenses (276 ) (270 ) (285 ) (375 ) (1,206 ) Property NOI $ 801 $ 823 $ 867 $ 1,216 $ 3,707 Three Months Ended December 31, 2023 2022 % Change Reconciliation of Consolidated Property NOI to Same Store Property NOI measures: Rental revenues $ 1,756 $ 1,591 Rental expenses (408 ) (375 ) Consolidated Property NOI $ 1,348 $ 1,216 Adjustments to derive same store results: Property NOI from consolidated properties not included in same store portfolio and other adjustments (1) (501 ) (432 ) Property NOI from unconsolidated co-investment ventures included in same store portfolio (1)(2) 714 671 Third parties' share of Property NOI from properties included in same store portfolio (1)(2) (575 ) (540 ) Prologis Share of Same Store Property NOI – Net Effective (2) $ 986 $ 915 7.8 % Consolidated properties straight-line rent and fair value lease adjustments included in same store portfolio (3) (17 ) (20 ) Unconsolidated co-investment ventures straight-line rent and fair value lease adjustments included in same store portfolio (3) (7 ) (12 ) Third parties' share of straight-line rent and fair value lease adjustments included in same store portfolio (2)(3) 6 9 Prologis Share of Same Store Property NOI – Cash (2)(3) $ 968 $ 892 8.5 % (1) We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period and properties acquired or disposed of to third parties during the period.
The following is a reconciliation of our consolidated rental revenues, rental expenses and property NOI for each quarter in 2024 and 2023 to the full year, as included in the Consolidated Statements of Income and within Note 19 to the Consolidated Financial Statements and to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in millions): Three Months Ended March 31, June 30, September 30, December 31, Full Year 2024 Rental revenues $ 1,828 $ 1,852 $ 1,897 $ 1,938 $ 7,515 Rental expenses (454 ) (445 ) (427 ) (439 ) (1,765 ) Property NOI $ 1,374 $ 1,407 $ 1,470 $ 1,499 $ 5,750 2023 Rental revenues $ 1,634 $ 1,652 $ 1,777 $ 1,756 $ 6,819 Rental expenses (413 ) (388 ) (416 ) (408 ) (1,625 ) Property NOI $ 1,221 $ 1,264 $ 1,361 $ 1,348 $ 5,194 Three Months Ended December 31, 2024 2023 % Change Reconciliation of Consolidated Property NOI to Same Store Property NOI measures: Rental revenues $ 1,938 $ 1,756 Rental expenses (439 ) (408 ) Consolidated Property NOI $ 1,499 $ 1,348 Adjustments to derive same store results: Property NOI from consolidated properties not included in same store portfolio and other adjustments (1) (263 ) (174 ) Property NOI from unconsolidated co-investment ventures included in same store portfolio (1)(2) 807 753 Third parties' share of Property NOI from properties included in same store portfolio (1)(2) (641 ) (612 ) Prologis Share of Same Store Property NOI – Net Effective (2) $ 1,402 $ 1,315 6.6 % Consolidated properties straight-line rent and fair value lease amortization included in same store portfolio (3) (116 ) (113 ) Unconsolidated co-investment ventures straight-line rent and fair value lease amortization included in same store portfolio (3) (17 ) (11 ) Third parties' share of straight-line rent and fair value lease amortization included in same store portfolio (2)(3) 11 9 Prologis Share of Same Store Property NOI – Cash (2)(3) $ 1,280 $ 1,200 6.7 % (1) We exclude properties held for sale to third parties, along with development properties that were not stabilized at the beginning of the period and properties acquired or disposed of to third parties during the period.
See Note 15 to the Consolidated Financial Statements for further information on our derivative transactions. Financing Activities Cash provided by and used in financing activities is principally driven by proceeds from and payments on credit facilities and other debt, along with dividends paid on common and preferred stock and noncontrolling interest contributions and distributions.
Financing Activities Cash provided by and used in financing activities is principally driven by proceeds from and payments on credit facilities, commercial paper and other debt, along with dividends paid on common and preferred stock and noncontrolling interest contributions and distributions.
MANAGEMENT’S OVERVIEW Summary of 2023 Our operating results were strong in 2023. Market rents continued to grow in most of the global logistics markets, which along with our existing lease mark-to-market, drove significant rent change on rollover and same-store growth in our O&M portfolio.
MANAGEMENT’S OVERVIEW Summary of 2024 Our operating results were strong in 2024, despite the softening of rents and occupancy in our global logistics markets. Due to increases in market rents over the last several years, our existing lease mark-to-market continued to drive rent change on rollover and same-store growth in our O&M portfolio.
Included in these amounts were distributions from venture activities including proceeds from property sales, debt refinancing and the redemption of our investment in certain unconsolidated entities. Included in 2023 was also the redemption of our interest in an unconsolidated office joint venture.
Included in these 41 Table of Contents amounts were distributions from venture activities, including proceeds from property sales, debt refinancing and the redemption of our investment in certain unconsolidated entities. • Net proceeds from (payments on) the settlement of net investment hedges.
Interest Expense The following table details our net interest expense (dollars in millions): 2023 2022 Gross interest expense $ 683 $ 345 Amortization of debt discount and debt issuance costs, net 75 24 Capitalized amounts (117 ) (60 ) Net interest expense $ 641 $ 309 Weighted average effective interest rate during the year 2.8 % 1.8 % Interest expense increased in 2023, as compared to 2022, principally due to the financing of acquisition and development activity through the issuance of senior notes in 2023, the assumption of $4.2 billion of debt in the Duke Transaction which was marked to fair value in October 2022 and higher interest rates on new issuances and our credit facilities.
Interest Expense The following table details our net interest expense (dollars in millions): 2024 2023 Gross interest expense $ 893 $ 683 Amortization of debt discount and debt issuance costs, net 79 75 Capitalized amounts (108 ) (117 ) Net interest expense $ 864 $ 641 Weighted average effective interest rate during the year 3.1 % 2.8 % Interest expense increased in 2024, as compared to 2023, principally due to the issuance of senior notes to finance our acquisition and development activities with higher interest rates on new issuances in both years.
We may also fund our cash needs from the issuance of equity securities, subject to market conditions, and through the sale of a portion of our investments in co-investment ventures. 39 Table of Contents Debt The following table summarizes information about our consolidated debt by currency at December 31 (dollars in millions): 2023 2022 Weighted Average Interest Rate Amount Outstanding % of Total Weighted Average Interest Rate Amount Outstanding % of Total British pound sterling 2.1 % $ 1,300 4.5 % 2.1 % $ 1,228 5.1 % Canadian dollar 5.0 % 830 2.9 % 4.5 % 815 3.4 % Chinese renminbi 3.7 % 242 0.8 % - - - Euro 2.0 % 10,084 34.8 % 1.3 % 7,991 33.5 % Japanese yen 1.0 % 3,086 10.6 % 1.0 % 3,308 13.9 % U.S. dollar 4.1 % 13,459 46.4 % 3.6 % 10,534 44.1 % Total debt (1) 3.0 % $ 29,001 100.0 % 2.5 % $ 23,876 100.0 % (1) The weighted average remaining maturity for total debt outstanding at both December 31, 2023 and 2022 was 9 years.
Debt The following table summarizes information about our consolidated debt by currency at December 31 (dollars in millions): 2024 2023 Weighted Average Interest Rate Amount Outstanding % of Total Weighted Average Interest Rate Amount Outstanding % of Total British pound sterling 3.1% $ 1,715 5.6 % 2.1% $ 1,300 4.5 % Canadian dollar 4.7% 1,262 4.1 % 5.0% 830 2.9 % Chinese renminbi 3.6% 633 2.0 % 3.7% 242 0.8 % Euro 2.1% 9,900 32.1 % 2.0% 10,084 34.8 % Japanese yen 1.1% 2,911 9.4 % 1.0% 3,086 10.6 % U.S. dollar 4.1% 14,458 46.8 % 4.1% 13,459 46.4 % Total debt (1) 3.1% $ 30,879 100.0 % 3.0% $ 29,001 100.0 % (1) The weighted average remaining maturity for total debt outstanding at both December 31, 2024 and 2023 was 9 years.
See Note 4 in the Consolidated Financial Statements for further information on this transaction. 41 Table of Contents • Net proceeds from (payments on) the settlement of net investment hedges. We received net proceeds of $35 million and $56 million for the settlement of net investment hedges in 2023 and 2022, respectively.
We received net proceeds of $13 million and $35 million for the settlement of net investment hedges in 2024 and 2023, respectively. See Note 15 to the Consolidated Financial Statements for further information on our derivative transactions.
Up to 40% of the third-party portion of the promote earned by us from the co-investment ventures is paid to our employees as a combination of cash and stock-based awards pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested.
This award is issued as a combination of cash and equity-based awards, pursuant to the terms of the PPP and expensed through Strategic Capital Expenses in the Consolidated Statements of Income, as vested. For promotes earned prior to January 2024, up to 40% of the third-party portion of promotes earned was awarded to certain employees.
(1) Other Americas Europe Asia (2) Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Strategic capital revenues ($) Recurring fees (3) 171 178 50 45 163 167 76 78 460 468 Transactional fees (4) 21 22 7 6 18 20 19 19 65 67 Promote revenue (5) 641 15 33 32 1 458 - - 675 505 Total strategic capital revenues ($) 833 215 90 83 182 645 95 97 1,200 1,040 Strategic capital expenses ($) (5) (204 ) (155 ) (27 ) (20 ) (103 ) (87 ) (51 ) (42 ) (385 ) (304 ) Strategic Capital Segment - NOI ($) 629 60 63 63 79 558 44 55 815 736 (1) The U.S. expenses include compensation and personnel costs for employees who are based in the U.S. but also support other geographies.
(1) Other Americas Europe Asia Total 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Strategic capital revenues ($) Recurring fees (2) 168 171 60 50 170 163 74 76 472 460 Transactional fees (3) 17 21 7 7 24 18 13 19 61 65 Promote revenue (4) 112 641 25 33 1 1 1 - 139 675 Total strategic capital revenues ($) 297 833 92 90 195 182 88 95 672 1,200 Strategic capital expenses ($) (4) (155 ) (204 ) (21 ) (27 ) (76 ) (103 ) (40 ) (51 ) (292 ) (385 ) Strategic Capital Segment – NOI ($) 142 629 71 63 119 79 48 44 380 815 (1) The U.S. expenses include compensation and personnel costs for employees who are based in the U.S. but also support other geographies.
Gains on Real Estate Transactions, Net Gains on the disposition of development properties and land were $462 million and $598 million for 2023 and 2022, respectively, primarily from the contribution of properties we developed to our unconsolidated co-investment ventures in Europe, Japan and Mexico 34 Table of Contents for both years.
The $95 million change in depreciation and amortization expenses in 2024 compared to 2023, was impacted by the following items (in millions): Gains on Real Estate Transactions, Net Gains on the disposition of development properties and land were $414 million and $462 million for 2024 and 2023, respectively, primarily from the contribution of properties we developed to unconsolidated co-investment ventures in the U.S., Mexico and Europe in 2024 and in Europe, Japan and Mexico in 2023.
At December 31, 2023, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before July 2026 with a TEI of $7.8 billion and was 37.9% leased. Our investment in the development portfolio was $4.4 billion at December 31, 2023 leaving $3.4 billion remaining to be spent.
At December 31, 2024, the consolidated development portfolio, including properties under development and pre-stabilized properties, was expected to be completed before July 2027 with a TEI of $4.7 billion and was 31.9% leased. This includes the development of data centers with an aggregate TEI of $0.9 billion, on a consolidated basis.
Logistics Fund $ 250 $ 361 $ 611 2024 – 2026 (2) Prologis Brazil Logistics Venture 45 180 225 2026 Prologis European Logistics Fund - 51 51 2026 (2) Prologis Japan Core Logistics Fund 100 516 616 2033 Prologis China Logistics Venture 212 1,200 1,412 2024 – 2028 Total $ 607 $ 2,308 $ 2,915 (1) The equity commitments for the co-investment ventures that operate in a different functional currency than the U.S. dollar were calculated using the foreign currency exchange rate at December 31, 2023.
Logistics Fund $ - $ 94 $ 94 2027 (2) Prologis Brazil Logistics Venture 33 134 167 2026 Prologis European Logistics Fund - 29 29 2027 (2) Prologis Japan Core Logistics Fund 84 429 513 2033 Prologis China Logistics Venture 186 1,057 1,243 2025 – 2028 Total $ 303 $ 1,743 $ 2,046 (1) The equity commitments for the co-investment ventures that operate in a different functional currency than the U.S. dollar were calculated using the foreign currency exchange rate at December 31, 2024.
Our repurchase of and payments on debt and proceeds from the issuance of debt consisted of the following activity (in millions): 2023 2022 (1) Repurchase of and payments on debt (including extinguishment costs) Regularly scheduled debt principal payments and payments at maturity $ 30 $ 914 Secured mortgage debt 153 328 Senior notes 89 3 Term loans - 136 Total $ 272 $ 1,381 Proceeds from the issuance of debt Secured mortgage debt $ 120 $ 331 Senior notes 5,323 3,256 Term loans 312 529 Total $ 5,755 $ 4,116 (1) We completed the Duke Transaction in 2022 and assumed $4.2 billion of debt.
Our repurchase of and payments on debt and proceeds from the issuance of debt consisted of the following activity (in millions): 2024 2023 Repurchase of and payments on debt (including extinguishment costs) Regularly scheduled debt principal payments and payments at maturity $ 330 $ 30 Secured mortgage debt 89 153 Senior notes - 89 Term loans 500 - Total $ 919 $ 272 Proceeds from the issuance of debt Secured mortgage debt $ 7 $ 120 Senior notes 4,149 5,323 Term loans 350 312 Total $ 4,506 $ 5,755 Unconsolidated Co-Investment Venture Debt We had investments in and advances to our unconsolidated co-investment ventures of $9.3 billion at December 31, 2024.
See Note 4 to the Consolidated Financial Statements for further information on these activities, including the $3.1 billion real estate portfolio we acquired in the U.S. in the second quarter of 2023. In addition, the following significant transactions also impacted our cash used in and provided by investing activities: • Duke Transaction, net of cash acquired .
See Note 4 to the Consolidated Financial Statements for further information on these activities. In addition, the following significant transactions also impacted our cash used in and provided by investing activities: • Investments in and advances to our unconsolidated entities.
We may use derivative financial instruments to manage foreign currency exchange rate risk related to our earnings. We recognize the change in fair value of the undesignated derivative contracts in unrealized gains and losses.
We recognize the remeasurement and settlement of the translation adjustment on the unhedged portion of the debt and accrued interest in unrealized gains or losses. We may use derivative financial 37 Table of Contents instruments to manage foreign currency exchange rate risk related to our earnings.
In addition, we use derivative financial instruments, such as foreign currency contracts to manage foreign currency exchange rate risk related to our foreign investments and interest rate contracts to manage interest rate risk, that when designated the change in fair value is included in AOCI/L . 38 Table of Contents See Note 2 to the Consolidated Financial Statements for more information about our foreign currency and derivative financial instrument policies and Note 15 to the Consolidated Financial Statements for more information about our derivative and nonderivative transactions and other comprehensive income (loss).
These borrowings serve as a natural hedge of our foreign investments. In addition, we use derivative financial instruments, such as foreign currency contracts to manage foreign currency exchange rate risk related to our foreign investments and interest rate contracts to manage interest rate risk, that when designated the change in fair value is included in AOCI/L .
Development Activity The following table summarizes consolidated development activity (dollars and square feet in millions): 2023 2022 Starts: Number of new development buildings during the period 55 91 Square feet 13 31 TEI (1) $ 3,361 $ 4,679 Percentage of build-to-suits based on TEI 54.0 % 39.1 % Stabilizations: Number of development buildings stabilized during the period 61 69 Square feet 22 22 TEI $ 3,058 $ 2,772 Percentage of build-to-suits based on TEI 44.0 % 38.9 % Weighted average stabilized yield (2) 6.3 % 6.2 % Estimated value at completion $ 3,974 $ 4,294 Estimated weighted average margin (3) 30.0 % 54.9 % Estimated value creation $ 916 $ 1,522 (1) Included in TEI for 2023 was incremental spend of $161 million related to a development start that was previously reported.
Development Activity The following table summarizes consolidated development activity (dollars and square feet in millions): 2024 2023 Starts: Number of new development buildings started during the period 26 55 Square feet 7 13 TEI $ 1,235 $ 3,361 Percentage of build-to-suits based on TEI 28.6 % 54.0 % Stabilizations: Number of development buildings stabilized during the period 72 61 Square feet 24 22 TEI $ 4,130 $ 3,058 Percentage of build-to-suits based on TEI 32.7 % 44.0 % Weighted average stabilized yield (1) 6.2 % 6.3 % Estimated value at completion $ 4,923 $ 3,974 Estimated weighted average margin (2) 19.2 % 30.0 % Estimated value creation $ 793 $ 916 (1) We calculate the weighted average stabilized yield as estimated NOI assuming stabilized occupancy divided by TEI.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest change(2) The weighted average interest rates represent the effective interest rates (including amortization of debt issuance costs and noncash premiums and discounts) at December 31, 2023 for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.
Biggest changeThe following table summarizes the future repayment of debt and scheduled principal payments at December 31, 2024 (dollars in millions): 2025 2026 2027 2028 Thereafter Total Fair Value Fixed rate debt $ 261 $ 1,469 $ 1,948 $ 2,552 $ 23,936 $ 30,166 $ 27,330 Weighted average interest rate (1) 3.4 % 3.4 % 2.3 % 3.3 % 3.2 % 3.2 % Variable rate debt Credit facilities $ - $ 163 $ 62 $ - $ - $ 225 $ 225 Secured mortgage debt 45 - - - - 45 44 Senior notes - - - - - - - Term loans 209 542 - 64 199 1,014 1,012 Total variable rate debt $ 254 $ 705 $ 62 $ 64 $ 199 $ 1,284 $ 1,281 (1) The weighted average interest rates represent the effective interest rates (including amortization of debt issuance costs and noncash premiums and discounts) at December 31, 2024 for the debt outstanding and include the impact of designated interest rate swaps, which effectively fix the interest rate on certain variable rate debt.
Although the impact to net earnings is mitigated through higher translated U.S. dollar earnings from these currencies, a weakening of the U.S. dollar against these currencies by 10% could result in a $162 million cash payment on settlement of these contracts. 46 Table of Contents Interest Rate Risk We are also exposed to the impact of interest rate changes on future earnings and cash flows.
Although the impact to net earnings is mitigated through higher translated U.S. dollar earnings from these currencies, a weakening of the U.S. dollar against these currencies by 10% could result in a $145 million cash payment on settlement of these contracts. 46 Table of Contents Interest Rate Risk We are also exposed to the impact of interest rate changes on future earnings and cash flows.
At December 31, 2023, after consideration of our ability to borrow in the foreign currencies in which we invest and also derivative and nonderivative financial instruments as discussed in Note 15 to the Consolidated Financial Statements, we had minimal net equity denominated in a currency other than the U.S. dollar.
At December 31, 2024, after consideration of our ability to borrow in the foreign currencies in which we invest and also derivative and nonderivative financial instruments as discussed in Note 15 to the Consolidated Financial Statements, we had minimal net equity denominated in a currency other than the U.S. dollar.
Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 10% adverse change in foreign currency exchange rates or interest rates at December 31, 2023. The results of the sensitivity analysis are summarized in the following sections. The sensitivity analysis is of limited predictive value.
Our sensitivity analysis estimates the exposure to market risk sensitive instruments assuming a hypothetical 10% adverse change in foreign currency exchange rates or interest rates at December 31, 2024. The results of the sensitivity analysis are summarized in the following sections. The sensitivity analysis is of limited predictive value.
At December 31, 2023, we had foreign currency contracts denominated principally in British pound sterling, Canadian dollar, euro and Japanese yen, with an aggregate notional amount of $1.6 billion.
At December 31, 2024, we had foreign currency contracts denominated principally in British pound sterling, Canadian dollar, euro and Japanese yen, with an aggregate notional amount of $1.5 billion.
To mitigate that risk, we generally borrow with fixed rate debt and we may use derivative instruments to fix the interest rate on our variable rate debt. At December 31, 2023, $26.9 billion of our debt bore interest at fixed rates and therefore the fair value of these instruments was affected by changes in market interest rates.
To mitigate that risk, we generally borrow with fixed rate debt, and we may use derivative instruments to fix the interest rate on our variable rate debt. At December 31, 2024, $30.2 billion of our debt bore interest at fixed rates and therefore the fair value of these instruments was affected by changes in market interest rates.
At December 31, 2023, the weighted average effective interest rate on our variable rate debt was 3.6%, which was calculated using an average balance on our credit facilities throughout the year and our other variable rate debt balances at December 31, 2023. Changes in interest rates can cause interest expense to fluctuate on our variable rate debt.
At December 31, 2024, the weighted average effective interest rate on our variable rate debt was 2.9%, which was calculated using an average balance on our credit facilities throughout the year and our other variable rate debt balances at December 31, 2024. Changes in interest rates can cause interest expense to fluctuate on our variable rate debt.
For the year ended December 31, 2023, $546 million or 6.8% of our total consolidated revenue was denominated in foreign currencies. We enter into foreign currency contracts that we do not designate, such as forwards, to reduce the impact from fluctuations in foreign currency associated with the translation of the future earnings of our international subsidiaries.
For the year ended December 31, 2024, $602 million or 7.3% of our total consolidated revenue was denominated in foreign currencies. We enter into foreign currency contracts that we do not designate, such as forwards, to reduce the impact from fluctuations in foreign currency associated with the translation of the future earnings of our international subsidiaries.
On the basis of our sensitivity analysis, a 10% increase in interest rates on our average outstanding variable rate debt balances would result in additional annual interest expense of $8 million for the year ended December 31, 2023, which equates to a change in interest rates of 36 basis points on our average outstanding variable rate debt balances and 3 basis points on our average total debt portfolio balances.
On the basis of our sensitivity analysis, a 10% increase in interest rates on our average outstanding variable rate debt balances would result in additional annual interest expense of $5 million for the year ended December 31, 2024, which equates to a change in interest rates of 29 basis points on our average outstanding variable rate debt balances and 1 basis point on our average total debt balances.
At December 31, 2023, $2.7 billion of our debt bore interest at variable rates.
At December 31, 2024, $1.3 billion of our debt bore interest at variable rates.
Removed
The following table summarizes the future repayment of debt and scheduled principal payments at December 31, 2023 (dollars in millions): 2024 2025 2026 2027 Thereafter Total Fair Value Fixed rate debt (1) $ 365 $ 176 $ 1,463 $ 1,796 $ 23,090 $ 26,890 $ 24,096 Weighted average interest rate (2) 2.0 % 3.2 % 3.3 % 2.0 % 2.9 % 2.8 % Variable rate debt Credit facilities $ - $ - $ 355 $ 624 $ - $ 979 $ 979 Secured mortgage debt - 38 - - - 38 38 Senior notes 166 - - - - 166 166 Term loans - 726 601 - 177 1,504 1,503 Total variable rate debt $ 166 $ 764 $ 956 $ 624 $ 177 $ 2,687 $ 2,686 (1) At December 31, 2023, we had one interest rate swap agreement to fix €150 million ($156 million) of our floating rate euro senior notes which is included in fixed rate debt.

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