REAL ESTATE NEWS

Industrial real estate has long been underwritten on a familiar set of fundamentals—location, access, and rent growth. But a new layer of metrics is reshaping how investors evaluate logistics assets, and it has less to do with proximity to highways than with access to power, infrastructure resilience, and carbon intensity.

Prologis makes that shift explicit in a new report, framing the modern industrial asset less as a warehouse and more as an operating infrastructure asset. As CEO Daniel Letter puts it, "Customers need strategic sites with reliable power, strong local infrastructure and the ability to scale." That requirement is becoming increasingly central as tenants adopt automation, electrification, and more energy-intensive operations.

According to Prologis, sustainability is no longer a side initiative but a baseline expectation across its development pipeline. In 2025, the company either had achieved or was in the process of achieving sustainable building certifications for "100% eligible new logistics real estate development and redevelopment projects." More than a quarter of its global logistics portfolio now carries a sustainability certification, as does 37% of the space leased by its 25 largest customers.

The emphasis on energy is especially telling. By the end of 2025, Prologis had built out 1.1 gigawatts of solar and storage capacity, underscoring how power availability is becoming a competitive differentiator. LED lighting has been installed across 100% of eligible new developments and redevelopments, bringing coverage to 83% of the overall portfolio. Those upgrades are less about optics than about operating efficiency and tenant cost control—factors that increasingly influence leasing decisions.

At the construction level, the company is also adjusting how buildings are put together. More than 250,000 square feet of projects have incorporated mass timber, which can reduce embodied carbon by 40% to 60% compared with steel. Alternative concrete mixes have delivered an additional 15% reduction in embodied carbon. While incremental on a per-project basis, those changes signal a broader recalibration of development standards that could have long-term implications for costs, regulation, and asset positioning.

Looking ahead, Prologis is tying these efforts to specific portfolio targets. The company plans to achieve sustainable building certification across all new developments by 2030 and complete whole-building Life Cycle Assessments for all eligible projects. It is targeting a 30% reduction in embodied carbon intensity at the development portfolio level, expanding renewable energy and storage capacity to 2 gigawatts, and reaching 95% LED lighting coverage globally.

The longer horizon is even more ambitious. Prologis is aiming for net-zero greenhouse gas emissions across its value chain by 2040, with a 90% reduction in Scope 1, 2, and 3 emissions from a 2019 baseline. Because most of those emissions fall into Scope 3, the strategy depends heavily on tenant behavior—specifically, how customers manage and reduce their own energy use within Prologis facilities.

Source: GlobeSt/ALM