Prologis logs record leasing, $4B in data center starts

Prologis, the largest industrial landlord in the country, just posted the fourth record leasing quarter in seven, and it has already committed more to data centers this year than it planned to for all of 2026. For developers, the earnings line up as a read on two beats at once: warehouse demand is firming, and data centers are quietly taking over the pipeline of the firm best positioned to build them.

Why it matters

When Prologis leases at a record pace, it is a demand signal the whole industrial market trades on. But the more consequential shift is where its development dollars are going. The company started $4 billion of data centers in the first half alone, surpassing its full-year guidance, a sign that hyperscaler demand is outbidding traditional logistics for land, power and capital. Developers competing for the same power-served sites are now competing with a landlord that owns the land, the grid relationships and the balance sheet.

The numbers

Core funds from operations hit $1.56 billion, up from $1.4 billion a year earlier, on $2.43 billion of revenue. Net income nearly doubled to $1.06 billion. Q2 leasing reached 67 million square feet against 66 million square feet of U.S. net absorption, with U.S. vacancy at 7.2 percent. Development remains active: $1.8 billion of real estate acquired and $1.6 billion of new starts in the quarter. The single largest project is an $800 million, 260-megawatt build-to-suit data center campus.

The bottleneck, tellingly, is not money. “The approvals and entitlements continue to be a growing issue, and is certainly a meaningful barrier to supply,” said CEO Dan Letter, an entitlement brake that mirrors what our data-center coverage has flagged all cycle.

What’s next

Read the $4 billion figure as a floor, not a ceiling. If a landlord of Prologis’s scale is redirecting starts toward data centers midyear, the smaller industrial developer’s edge shifts to entitled, power-served land that a hyperscaler cannot wait years to permit. Watch whether firming absorption pulls speculative warehouse starts off the sidelines, or whether power-constrained markets keep funneling capital into the national data center race instead.