Prologis Q4 FFO Meets Estimates, Rental Revenues Rise Y/Y

Prologis, Inc. PLD reported fourth-quarter 2025 core funds from operations (FFO) per share of $1.44, meeting the Zacks Consensus Estimate. This compares unfavorably with the year-ago quarter’s figure of $1.50.

The quarterly results reflect a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor.

Prologis generated rental revenues of $2.09 billion, missing the Zacks Consensus Estimate of $2.17 billion. However, the figure increased from the $1.94 billion reported in the year-ago period. Total revenues were $2.25 billion, up from the year-ago quarter’s $2.2 billion.

For 2025, the company reported core FFO per share of $5.81, up 4.5% from the previous year. Moreover, the figure came in line with the Zacks Consensus Estimate. Rental revenues of $8.16 billion increased 8.6% year over year but missed the consensus mark of $8.38 billion.

PLD's Q4 in Detail

In the fourth quarter, 43.8 million square feet of leases commenced in the company’s owned and managed portfolio. The retention level was 77.7% in the quarter.

The average occupancy level in Prologis’ owned and managed portfolio was 95.3% in the fourth quarter, up from the prior quarter’s 94.8% but down from the year-ago period’s 95.6%.

Prologis’ share of net effective rent change was 43.8% in the October-December quarter. In the reported quarter, the cash rent change was 27.3%. Cash same-store net operating income (NOI) grew 5.7% compared to 5.2% in the previous quarter.

The company’s share of building acquisitions amounted to $516.8 million, with a weighted average stabilized cap rate (excluding other real estate) of 5.2% in the fourth quarter. Development stabilization aggregated $539 million, with 37.5% being built to suit, while development starts totaled $1.02 billion, with 47.9% being built to suit. PLD’s total dispositions and contributions were $1.89 billion, with a weighted average stabilized cap rate (excluding land and other real estate) of 5%.

However, during the reported quarter, interest expenses jumped 12.2% on a year-over-year basis to $260.5 million.

PLD's Liquidity

Prologis exited the fourth quarter of 2025 with cash and cash equivalents of $1.15 billion, down from $1.19 billion at the end of the third quarter of 2025. Total liquidity amounted to $7.6 billion at the end of the quarter.

Debt, as a percentage of the total market capitalization, was 24.6% as of Dec. 31, 2025. The company's weighted average interest rate on its share of the total debt was 3.3%, with a weighted average term of 8.2 years.

Prologis and its co-investment ventures issued an aggregate of $3 billion of debt in the reported quarter at a weighted average interest rate of 3.1% and a weighted average term of 7.2 years.

2026 Guidance by PLD

Prologis provided its 2026 core FFO per share guidance in the range of $6.00-$6.20. The Zacks Consensus Estimate for the same is currently pegged at $6.11.

The company expects average occupancy to be between 94.75% and 95.75%. Cash same-store NOI (Prologis share) is projected in the range of 5.75-6.75%.

The company has issued its outlook for capital deployment (Prologis share) on development starts of $3.00-$4.00 billion. Spending on acquisitions is projected to be $1.00 billion-$1.50 billion. Dispositions are estimated at $1.75-$2.25 billion.

Prologis currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Prologis, Inc. Price, Consensus and EPS Surprise

Prologis, Inc. price-consensus-eps-surprise-chart | Prologis, Inc. Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of other REITs, such as Healthpeak Properties, Inc. DOC and Essex Property Trust ESS, which are slated to report on Feb. 2 and Feb. 4, respectively.

The Zacks Consensus Estimate for Healthpeak’s fourth-quarter 2025 FFO per share is pegged at $1.83, which implies a 1.1% year-over-year increase.

The Zacks Consensus Estimate for Essex’s fourth-quarter 2025 FFO per share is pegged at $15.97, which suggests a year-over-year jump of 2.4%.

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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