Prologis Sets Leasing Record as U.S. Vacancies Decline
Prologis closed out 2025 with record leasing activity and steady revenue growth, signaling resilience in the industrial real estate market even as broader conditions cooled. The logistics giant signed 228 million square feet of leases during the year ? its highest total ever ? and reported fourth-quarter revenue of $2.25 billion, up from $2.2 billion in the same period of 2024, according to its Jan. 21, 2026, earnings report.
Chief Financial Officer Timothy Arndt said on the company?s earnings call that Prologis signed 57 million square feet of leases in the fourth quarter alone. Average occupancy reached 95.3% for the quarter and 95% for the full year, finishing 2025 at 95.8%. Arndt added that the company posted ?strong new leasing and healthy retention of 78%.?
Prologis also reported robust rent growth. Net effective rent change rose 44% in the fourth quarter, contributing about $60 million of annualized net operating income, and more than 50% for the full year, according to Arndt.
Development remained active, with $1.1 billion in new logistics projects launched during the quarter ? nearly half built to suit ? and $3.1 billion started for the full year, 61% of which were build-to-rent projects. Net absorption reached 59 million square feet in the U.S., marking the first time since 2022 that absorption outpaced completions and pushing vacancy down to 7.4%. Market rents declined at their slowest pace since 2023, with several markets showing positive growth.
New CEO Daniel Letter said on the call that Prologis is seeing a wave of industrial consolidation, though not through acquisitions. Instead, companies are streamlining vendor relationships to boost efficiency. ?Our private capital partners are increasingly seeking fewer managers who can deliver consistent performance across geographies and strategies,? Letter said.
Demand was strongest in large-space formats, but occupancy increased across all sizes. E-commerce continued to be a ?meaningful driver,? accounting for roughly 20% of new leasing activity ? the highest share since 2021.
Looking ahead, Letter said Prologis is focusing on strengthening its logistics core while expanding into high-growth sectors such as data centers and energy. ?Data centers and energy are high-return adjacent businesses where our land positions, power access, and customer relationships really give us that edge,? he said. About two-thirds of new project starts projected for 2026 are expected to be in the U.S., an increase of 10% to 15% year-over-year.
Source: GlobeSt/ALM