- Prologis plans to bump its 2024 acquisition budget for industrial properties up to $1B–$1.5B, up from $500M–$1B.
- The REIT expects deal activity to keep improving thanks to closed-end funds and distressed sellers seeking exits.
- Prologis deployed $279M for acquisitions in 2Q24 alone, compared to just $5M in Q1, as Q2 net earnings hit $859.8M.
Prologis (PLD), the world’s largest industrial landlord, ramped up its plans for 2024 and now plans to spend $1B to $1.5B on buying properties, as reported by Bisnow. That’s two to three times as much as its earlier projection of $500M to $1B.
Wheelin’ and Dealin’
Prologis CFO Tim Arndt noted that the revised budget was due to improving capital market activity and more completed deals. In 2Q24 alone, Prologis spent $279M on acquisitions, compared to just $5M in Q1 and $166 million in 2Q23.
CEO Hamid Moghadam identified midsized acquisitions in the $100M to $200M range as the current “sweet spot” for deals.
President Dan Letter also mentioned on the REIT’s earnings call that early signs from brokers indicate the industrial market is opening back up again, presenting interesting opportunities globally.
Financial Performance
Prologis reported Q2 net earnings of $859.8M, down from $1.2B in 2Q23, with revenue falling to $2B from $2.45B YoY.
Despite this, the REIT slightly raised the lower end of its 2024 funds from operations guidance, reflecting confidence in its financial health and strategic direction.
Following the earnings report, PLD shares rose 1.4% through Wednesday’s market close, underscoring investor optimism about the company’s expanded acquisition strategy and market outlook.
Positive Outlook
Moghadam expects transaction volumes to keep rising due to ‘ripple effect’ market conditions, including closed-end funds nearing exit timelines, distressed portfolios seeking liquidity, and significant dry powder sitting on the sidelines.
Prologis revised its projected full-year disposition up to $1B to $1.4B, 20% more than its initial forecast. The adjustment followed several asset sales, including a 5 MSF portfolio in the Minneapolis-St. Paul area, where Prologis disposed of most of its Twin Cities holdings.
