PLD

Framing note. PLD is frequently described as "an industrial REIT" or "a logistics company." Both are incomplete. REIT is a legal/tax structure; logistics was the historical tenant mix. The underlying business is landowner — specifically, a landowner in scarce tier-1 metros with pre-secured utility relationships. That distinction matters because the thesis of this brief rests on the data center conversion arm, which uses the same underlying asset (powered, entitled land) for a different, higher-margin tenant class. The AI Factory scores PLD on its L25 (Own the Real Estate) exposure via the data center arm; the logistics core is off-layer and provides rate-sensitivity context plus a $800M embedded NOI cushion but is not the thesis driver.

Stand in any major metro — Los Angeles, Dallas, New York, London, Tokyo — and look at the massive warehouse parks anchoring highways, feeding e-commerce and port logistics. Those are Prologis buildings. The company owns ~1.2 billion square feet of logistics real estate across six continents, 6,000 buildings adjacent to the world's most dynamic consumption centers, and controls 14,000 acres of land with approximately $42 billion of embedded development opportunity — nearly 40% of it ready-to-go.

What changed structurally in 2024–2025: the company pivoted from "logistics landlord with data center optionality" to "logistics landlord running a real data center platform." The $25B data center arm, led by Chris Curtis (Compass Datacenters co-founder), crossed measurable thresholds in 2025. Installed capacity reached 1.1 GW — surpassing the original 1 GW four-year goal. Secured power capacity expanded to 5.7 GW. 72 MW of projects stabilized, a state-of-the-art turnkey facility sold at compelling economics, and every megawatt in the pipeline is in some stage of customer discussion — with 1.2 GW currently in LOI or pending lease execution. The land bank for data centers spans Northern Virginia, Silicon Valley, Chicago, New Jersey, Dallas, Portland, Austin, Las Vegas, Phoenix, Salt Lake City, Boston, Denver in the US, and Amsterdam, London, Paris, Frankfurt, Dublin, Madrid, Milan, and Berlin in Europe.

The logistics core, meanwhile, is inflecting out of its multi-year trough. Q4 2025 delivered 57 million square feet of leasing, occupancy rebuilt to 95.8%, net effective rent change of 44% for the quarter drove annualized NOI up $60M, and embedded mark-to-market on the existing book sits at 18% — roughly $800 million of NOI yet to be realized without a single increase in market rents. Management now sees US vacancy falling from 7.4% toward 7.1–7.2% by year-end 2026, with net absorption approaching 200M sq ft vs. 155M in 2025 and deliveries declining to 180–185M. In CFO Tim Arndt's words, vacancy has peaked and rents are beginning to inflect across many markets.

2026 guidance: core FFO $6.00–$6.20/share, development starts $4–5B (40% data center), same-store NOI growth of 4.25–5.25% net effective. The data center fund vehicle — the single biggest 2026 structural catalyst — is "meaningfully through" investor negotiations and expected in coming weeks and months.