The world’s largest industrial developer and landlord set an annual record for leasing, bolstering the firm’s expectations for accelerating warehouse demand around the country.
Prologis signed 228 million square feet of warehouse leases in 2025, including 57 million square feet of deals in the fourth quarter that pushed the firm’s average occupancy to nearly 95%. More leasing helped push revenue to $2.25 billion in the quarter from $2.2 billion a year earlier.
Demand, occupancy and rents at Prologis warehouses turned a corner in the final quarter of the year, driven by improved warehouse leasing in such markets as Southern California, the firm’s largest market at 556 buildings with a total of 127 million square feet owned and managed.
“Improved customer sentiment, together with better-than-expected market conditions, reinforces our view that vacancy has peaked and rents are beginning to inflect across many markets,” Dan Letter told analysts Wednesday in his first earnings call as Prologis CEO after Hamid Moghadam stepped down on Jan. 1.
A 615,000-square-foot lease last month by Amazon, Prologis’ largest customer, helped push deal volume in Los Angeles to a record 42 million square feet in 2025 — slightly past 2021 levels, when the COVID-19 pandemic prompted consumers to place a record number of delivery orders, according to CoStar.
The record year for Prologis and Los Angeles comes as the nation's pool of logistics properties ended 2025 with strong gains in demand after sluggishness for two-thirds of the year, according to Juan Arias, CoStar’s national director of industrial analytics.
“In fact, the U.S. logistics property segment saw over 49 million square feet of net absorption, the net change in occupancy, just in the fourth quarter. That’s more than the 39 million square feet absorbed over the first three quarters of the year," Arias said in a recent report.
Data center expansion
The San Francisco-based firm also increased the power pipeline for its data center projects to 5.7 gigawatts in the quarter, up from the 5.2 gigawatts of capacity at the end of the prior quarter.
Projects with another 1.2 gigawatts are in advanced negotiations. Data centers are expected to make up 40% of the firm’s planned $4 billion to $5 billion in development starts this year, Prologis said.
“In terms of leasing, demand is exceptional, and every megawatt in our pipeline is in some stage of discussion,” Chief Financial Officer Tim Arndt told analysts. “At its core, this business is centered on four priorities: procuring power, securing build-to-suit lease transactions, delivering world-class facilities for our customers and harvesting value through asset sales.”
The firm’s data center projects are dispersed across top- and second-tier U.S. and European cities, Arndt said.
In the U.S., its projects are in Northern Virginia, California’s Silicon Valley, Chicago, New Jersey, Dallas and Portland, Oregon, with other project sites in Austin, Texas; Las Vegas; Phoenix; Salt Lake City; Boston and Denver.
The firm’s European holdings include properties in Amsterdam, London, Paris, Dublin and Berlin, as well as Frankfurt, Germany.
The firm is looking at launching new investment vehicles for data centers in coming months, executives said.