Prologis Q2 2026 Earnings Analysis

More earnings analysis: https://betafinch.com──────────ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, where we take the calls that move markets and make sense of the numbers behind them. I'm Alex.JORDAN: And I'm Jordan. Today we're digging into Prologis — ticker PLD — the industrial and logistics real estate giant, reporting their second quarter of 2026.ALEX: Before we jump in, quick disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.JORDAN: Okay, with that out of the way, Alex, this was a strong quarter for Prologis. Where do we start?ALEX: Let's start with the headline numbers. Core FFO came in at $1.63 per share including promote income, $1.60 without — both ahead of expectations. And because of that strength, they raised full-year guidance: Core FFO now expected between $6.22 and $6.30 per share, and net earnings guidance up to $4.40 to $4.55 per share.JORDAN: And it's not just a beat-and-raise on the bottom line — the operational metrics back it up. Occupancy hit 95.5%, up 20 basis points from Q1. Same-store NOI growth was 6.4% net effective and 8.5% on a cash basis. Those are really healthy numbers for a REIT this size.ALEX: The leasing volume stood out to me the most — 67 million square feet signed in the quarter. CEO Dan Letter called it their fourth record in seven quarters.JORDAN: Right, and it's paired with 66 million square feet of net absorption in the US, the highest since 2022. Vacancy dropped to 7.2%, market rents ticked up about 70 basis points. Management's whole thesis this call was that the industrial market has moved past its "inflection phase" and into what they're calling the next phase of growth.ALEX: There's also a really interesting structural story here beyond just warehouses. Prologis has been building out data centers and energy as parallel growth engines using the same land and customer relationships.JORDAN: Yeah, the numbers there are eye-popping. Their power pipeline is now 5.8 gigawatts — that's more than doubled in two years. Depending on how much of that gets built as basic "powered shell" versus fully finished "turnkey" data centers, that represents somewhere between $17 billion and $87 billion of potential investment.ALEX: Huge range.JORDAN: Huge range, and CEO Dan Letter was upfront on the call that it's genuinely hard to predict where in that range they'll land — it depends on customer preference. But they did share they've now started nearly $4 billion of data center development, all build-to-suit for hyperscale customers, and they sold a 100-megawatt power land parcel this quarter at an 82% margin.ALEX: Which tells you how profitable just the land and power entitlement piece of this business can be, even before construction.JORDAN: Exactly — and CFO Tim Arndt mentioned they see over 10 gigawatts of opportunity over the next decade. It's basically a second growth business layered on top of the core logistics platform.ALEX: On the guidance side, they raised development starts to a range of $5.5 to $6.5 billion, and increased acquisitions guidance too — they bought $1.8 billion of real estate this quarter at roughly a 20% discount to replacement cost.JORDAN: That IRR discipline came up a few times. Management noted underwritten IRRs on acquisitions have beaten IRRs on dispositions by 140 basis points year to date — so they're actively upgrading the portfolio, not just growing for growth's sake.ALEX: Now, one thing listeners should know — there's a corporate development angle hovering over this whole call that management wouldn't discuss.JORDAN: Right, Prologis has made a possible offer for Segro, a UK logistics REIT, under UK takeover rules. Because of regulatory restrictions, they explicitly said they couldn't answer any queThis episode includes AI-generated content.