Prologis Sees Leasing Surge, Data Centers Fuel Growth Outlook

Prologis Sees Leasing Surge, Data Centers Fuel Growth Outlook Written by MarketBeat September 20, 2026 Add As Preferred Source Share Share Share This Article Link copied to clipboard. Close Image from MarketBeat Media, LLC. Key Points Leasing activity is accelerating: Prologis expects third-quarter lease signings near recent records of 60 million–65 million square feet, supported by improving occupancy, faster customer decisions and a pipeline exceeding 100 million square feet. Data centers are becoming a major growth driver: About 10% of new leasing supports data-center infrastructure, while Prologis has advanced 5.8 gigawatts of power capacity and started roughly $4 billion in data-center build-to-suit projects. Rent-growth potential remains significant: Prologis has a 17% lease mark-to-market gap, representing about $700 million in potential incremental revenue, with further upside if market rents tighten toward replacement costs. Five stocks we like better than Prologis . Could Falling Yields Make REIT Stocks Worth a Second Look? Prologis NYSE: PLD Chief Financial Officer Tim Arndt said the logistics real estate company continues to see improving leasing activity, rising occupancy and positive market rent growth as it moves through the third quarter. Speaking at an investor event moderated by Sarah Cooper, Global Head of Real Estate Equity Sales, Arndt said the operational trends the company has discussed over recent quarters have continued. He pointed to strong leasing volumes, faster customer decision-making, improving occupancy and positive market rent growth as factors supporting development activity and broader value creation. Get Prologis alerts: Sign Up Prologis Q1 2026: Data Centers Steal the Show Arndt said Prologis expects third-quarter lease signings to be in the range of its recent record quarters, which have totaled roughly 60 million to 65 million square feet. While the quarter was not complete, he said the company had seen a strong start and that deals in the agreement stage were moving more quickly through the pipeline. “We are seeing our lease pipeline stay well over 100 million square feet in new inquiries,” Arndt said. Data Center Demand Adds to Leasing Activity 3 Under-the-Radar AI Infrastructure Stocks Powering the Next Buildout About 10% of Prologis’ new leasing is tied to some form of support for the data center build-out, according to Arndt. He said the opportunity should provide a longer-term source of logistics demand because data center infrastructure requires an ecosystem of hardware, chips, mechanical, electrical and plumbing equipment, as well as future repair, maintenance and replacement activity. Prologis has also expanded its own data center development efforts. Arndt said the company has a team of about 75 people focused on the business and has secured or advanced approximately 5.8 gigawatts of power capacity. Of that total, 1.6 gigawatts are secured, while the remainder is in advanced stages. The company has started approximately $4 billion of data center build-to-suit transactions since formally pursuing the opportunity, Arndt said. Prologis generally plans to minimize risk by securing power at attractive costs, beginning vertical construction only after signing leases with high-credit tenants, and selling projects after completion to recycle capital into its core logistics operations. Arndt said Prologis has completed more than $2 billion of data center starts during the first half of the year, filling its guidance bucket for data center starts. The company may also use private equity partnerships for particularly large turnkey development opportunities, while continuing to fund other activity from its balance sheet and through capital recycling. Market Fundamentals and Rent Growth Arndt said U.S. logistics net absorption of 66 million square feet in the second quarter represented a return toward a more productive market pace. He estimated that a healthy annual absorption level would be around 225 million square feet. Earlier weaker absorption reflected tenants working through excess space taken during the early stages of the COVID-19 period, he said. As customers right-size their portfolios, Prologis has seen demand increase, with its portfolio benefiting ahead of the broader market because of its location and quality. The company’s lease mark-to-market, or the difference between in-place rents and market rents, stands at about 17%, which Arndt said represents roughly $700 million of potential incremental revenue as leases roll. He added that replacement-cost rents are approximately another 20% above current market rents, producing a combined rent gap of roughly 38% to 39% when compounded. Arndt said that if markets tighten and replacement-cost rent gaps close as they have in prior real estate cycles, market rent growth could reach the mid-single digits annually for several years. He described that outlook as potentially conservative, depending on inflation, secular