Will Prologis' Expansion Strategy Drive the Next Phase of Its Growth?

Prologis Inc. PLD has been actively banking on its growth opportunities in high-barrier, high-growth markets through strategic acquisitions. The company is in a sweet spot, given the rising e-commerce trends propelling the demand for industrial distribution warehouses.

Per PLD’s September 2025 Investor Presentation, from 24% in 2024, e-commerce penetration is expected to reach 29% in 2028. Moreover, e-commerce space intensity is more than 3X to brick and mortar due to the requirements of higher product variety, greater inventory and reverse logistics.

Customer proximity is valuable as services like same-day delivery are gaining traction. One percent of cost savings in transport and labor results in around 17% increased capacity for rent. Therefore, companies are making immense efforts to improve supply-chain efficiencies, pushing demand for logistics infrastructure and efficient distribution networks. The last-mile properties in high-income urban areas are witnessing solid pricing, occupancy and growth in rentals.

Given Prologis’ solid capacity to offer modern logistics facilities, it is well-positioned to bank on this trend. The company is acquiring assets in areas typically located in large, supply-constrained infill markets in proximity to airports, seaports and ground transportation facilities, which ensures rapid distribution of customers’ products.

From the beginning of the year through Oct. 15, 2025, the company’s share of acquisitions amounted to $1.19 billion. For 2025, the company anticipates acquisitions at Prologis share between $1.25 and $1.50 billion.

How Are Other Industrial REITs Capitalizing on Growth Opportunities?

Terreno Realty Corporation (TRNO) is well-poised to enhance its portfolio in six major coastal U.S. markets, namely New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle and Washington, D.C. These markets display solid demographic trends and witness healthy demand for industrial real estate.

From the beginning of the year through Nov. 4, 2025, the company has acquired assets worth $601.7 million. Acquisitions under contract stand at $82.3 million, and acquisitions under letter of intent stand at $11.4 million.

Stag Industrial (STAG) is driving growth through strategic acquisitions. From the beginning of the year through Oct. 28, 2025, STAG has acquired 1.97 million square feet, with an aggregate value of $212.4 million. During the same period, the company bought out two vacant land parcels for $8.4 million.

PLD’s Price Performance, Valuation and Estimates

Shares of Prologis have risen 20.7% in the past three months compared with the industry’s growth of 3.7%.

From a valuation standpoint, PLD trades at a forward 12-month price-to-FFO of 20.78, above the industry, as well as its one-year median of 18.85. It carries a Value Score of D.

The Zacks Consensus Estimate for PLD’s 2025 funds from operations per share has been revised marginally upward over the past week.

At present, Prologis carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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