Prologis Q4 2025 Prologis Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Prologis Inc Earnings Call
And answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note that this conference is being recorded and I will now turn the conference over to Justin mang, senior vice president head of investor relations. Thank you, Justin. You may begin.
Thank you, operator. And good morning everyone. Welcome to our fourth quarter 2025 earnings conference call.
Joining us today are Dan letter CEO. Tim R CFO and Chris caiton managing director.
I'd like to note that this call will contain forward-looking statements within the meaning of the federal Securities laws, including statements regarding our Outlook, expectations and future performance,
These statements are based on current assumptions and our subject to risks and uncertainties that could cause actual results to differ materially.
Please refer to our SEC filings for a discussion of these risks.
we undertake no obligation to update any forward-looking statements,
Additionally, during this call, we will discuss certain Financial measures such as ffo and EBA, that are non-gaap.
And in accordance with Reggie, we have provided a Reconciliation to the most directly comparable, gaap measures in our fourth quarter, earnings press, release and supplemental.
Both are available on our website at www.prologis.com.
And with that, I'll hand the call over to Dan.
Thanks Justin.
Good morning and thank you all for joining us. We delivered a strong fourth quarter and close the year with solid financial and operational momentum driven by disciplined execution, and deep engagement with our customers across our markets.
As we build on this momentum, I want to start by recognizing our teams around the world.
The dedication creativity and customer focus are Central to prologic success.
In a few minutes, Tim will walk you through the details of our results.
Before that, I'd like to share a few observations about the business.
Across conversations, with customers Investors Business partners, and our teams, a consistent team comes through.
For Logistics leadership goes well beyond scale.
It's about how we operate our commitment, to Excellence, the strength of our long-term relationships, and our ability to anticipate. What's next
That mindset defines our culture and continues to guide, how we lead.
Looking ahead. We're building on that foundation with a clear focus on 3 priorities.
First extending our leadership, as a best-in-class operator.
Whether it's using data analytics to drive better decisions.
Deploying site-specific Energy Solutions.
Or advancing Venture initiatives that enhance our platform. Our objective is straightforward.
To continue widening, the mode that differentiates progress.
We do that through unmatched service.
Innovative solutions.
And the mission critical. Reliability, are customers depend on.
Second, capturing, the significant value creation opportunities ahead of us in both Logistics, real estate and data centers.
Our track record in Warehouse development is well established, and we're positioned to deliver the next generation of modern strategically located facilities.
At the same time advantage today is defined by location, power and scale.
With a Growing Power pipeline, deep customer relationships.
And multi-disciplinary expertise, we are well equipped to develop critical infrastructure. Few can match.
We will approach data centers with the same discipline and long-term perspective that is defined our success over time.
and third enhancing shareholder returns through continued, growth in assets, under management,
Our private Capital partners are increasingly seeking fewer managers who can deliver consistent performance across geographies and strategies.
And we are perfectly suited to serve as that partner of choice.
We are developing new vehicles and strategies that build on our track record of performance, transparency, and partnership and we're making strong progress.
as we enter 2026, we do so, from a position of strength and with the Strategic initiatives in place to extend our leadership,
And compound value for our shareholders.
With that, I'll turn the call over to Tim to walk you through our results and Outlook.
Thanks Dan. As mentioned, we are very pleased with our results and closed the year with strong momentum, our teams performed exceptionally well signing 57 million square feet of leases in the quarter and driving occupancy toward 96%, further widening, our outperformance versus the market.
View, that vacancy has peaked and rents are beginning to inflect across many markets.
Momentum extended across the growth areas of our business as well.
Our development platform, particularly in build, the suits continues to outperform, exceeding, expectations and capturing meaningful market share.
In strategic Capital, we form 2, new investment vehicles in the US and China.
In our data center business, the power pipeline continues to grow and we expect a solid year of starts.
Turning to our results. Fourth quarter CFO as a dollar 444 per share, including net promote expense and a dollar 46 per share. Excluding that promote expense finishing the year at the top end of both. Our most recent and inaugural guidance ranges
On an on and manage basis. Average occupancy was 95.3% for the quarter and 95% for the full year with period. End finishing, the year at 95.8%.
Results were driven by strong new Leasing and healthy retention of 78%. And in the US we expanded our outperformance versus the broader Market to 300 basis points reflecting the quality of both our portfolio and operating platform.
Net effective. Rent change was 44% for the quarter contributing approximately dollars of annualized. Noi and driving. Net effective, rent. Change for the year to more than 50%.
Our net effective lease mark-to-market ended at 18% representing, nearly million dollars of embedded. Noi, yet to be realized without any increase in Market rents.
The rate of decline in our lease Mark to Market has slowed considerably and many markets including several in the US and most across latam in Europe are once again seen expansion as Market. Rent, growth begins to outpace portfolio churn.
Finally, same store on why growth was 4.7 on a net effective basis and 5.7 on a cash basis. Each ahead of the midpoint of guidance, and for the full year, net effective, same store growth was 4.8%, hitting the top end of our range.
Turning to Capital deployment, it was another active quarter. We sold approximately 900 million dollars of value, maximized assets, and acquired 625 million at attractive, discounts to replacement costs.
Generating between them a positive 150 basis points, spread and expected irr.
On the development front, we started 1.1 billion dollars in new buildings in the quarter which were all Logistics projects in over 48%, build to suit.
For the year, we started 3.1 billion. Dollars were build the suits represented an impressive. 61%
it's worth re-emphasizing that this success is driven by a deliberate and differentiated strategy matching well-located entitled land, with a strong customer franchise, allowing us to generate attractive returns to spite, the de-risked nature of the projects,
In our energy business, we delivered another strong quarter lifting total installed capacity to 1.1 gigawatts achieving and surpassing our 1 gigawatt goal set 4 years ago.
We will build on this progress adding additional capacity, given the significant untapped potential across the portfolio.
Before turning to market conditions, I'd like to highlight the prologis recently led to creation of an industry snapshot developed in partnership with jll. Cushman and Wakefield, and Colour this collaborative, effort combines, our proprietary research, with timely and transparent brokerage data across 34 us markets. You can find the report in the research section of our website.
Overall we are progressing through the 3 stages of inflection. We outlined last quarter evidence of enduring demand resulting build, an occupancy followed by an inflection in rents.
We are now seeing all 3 at varying stages and paces across our geographies setting up a constructive 2026 fourth quarter, net absorption was 59, million square ft. In the US. A strong finish to the year and further evidence that demand is both visible and building.
Higher absorption levels which exceeded completion for the first time since 2022 resulted in a decline in US, vacancy to 7.4%.
The result is that market rents declined at their slowest rate since 2023 with many markets posting positive growth,
Across our portfolio demand remained, the strongest in large space formats but it's encouraging that occupancy increased across all of our size categories.
the tone of our conversations with customers is increasingly, forward-looking
while uncertainty is always top of Mind, including tariff policy, it is now treated more as a planning assumption rather than an impediment.
% of our new leasing activity over the last year making 2025 its best year since 2021.
Large retailers with significant e-commerce operations, continue to expand and diversify their networks to shorten delivery times and improve efficiency.
Their ongoing Innovation and growth combined with the 3-fold multiplier in the space required for e-commerce, continues to provide a powerful Tailwind for our business.
finally outside of the us, our International markets continue to outperform in Latin America, consumption Trends in both Mexico and Brazil remain, robust, supporting High occupancy and ongoing rent growth Europe delivered, another solid quarter maintaining strong occupancy and posting, its first quarter of positive, rental growth in 2 years
Japan also performed exceptionally well with occupancy above 97% and outperformance relative to the market of nearly 600 basis points together, these results highlight that our Global footprint is not only strategic and valued by our customers, but also a key driver of the diversity and resilience of our platform.
Turning to Capital raising, we achieved 2, important milestones in strategic Capital first. The IPO of the China, AMC, prologis Logistics rate as we call it the seaweed on the Shenzhen. Stock Exchange marking our third publicly listed vehicle
Similar to NPR in Japan and fever palagis in Mexico. The seaweed broadens, our access to Capital diversifies our investor base and strengthens our presence in 1 of the world's most dynamic, logistix, markets.
Second, we added a new vehicle focused on development, Redevelopment and value. Add opportunities, a strategic complement to our open-ended funds focused on stabilized Investments.
In the fourth quarter, we held the anchor closing for the US agility fund. Yet another endorsement of the prologist platform in a competitive Capital raising environment.
We have a deep pipeline of capital raising strategies in various stages of formation for this foundational business line. We look forward to sharing additional updates with you as the year progresses.
Moving on to Data Centers at its core. This business is centered on 4, Pryor, securing build the suit. Lease transactions, delivering, world-class facilities for our customers and harvesting value, through asset sales.
We continue to make clear progress on each front. During the quarter, we expanded our power access to 5.7 gigawatts stabilized, 72, megawatts of projects and sold the state-of-the-art turnkey facility at compelling economics.
In terms of leasing, the demand is exceptional in every megawatt in our pipeline is in some stage of discussion. Including 1.2 gigawatts currently in Loi or pending lease execution.
Our data center, team and capabilities are expanding, and executing at a very high level. And we're extremely excited by the significant value creation opportunity ahead.
Turning the guidance, which I'll review at our share.
We are forecasting average occupancy to range between 94.75 and 95.75% which includes the expectation for a seasonal, drop in occupancy. In the first quarter before rebuilding over the year,
Net effective. Same store growth is forecasted to be in a range of 4.25 to 5.25% and cash in a range of 5.75 to 6.75% with rent, change being the predominant and enduring component of this growth.
Our GNA forecast is for 500 to 520 million and our strategic Capital revenue, forecast calls for 650 to 670 million.
As for deployment, we are forecasting development starts to range between 4 and 5 billion dollars on an owned and managed basis.
As mentioned earlier, we have increased visibility and confidence around new starts in our data center business. So we've included those volumes in this guidance at approximately 40% of the activity.
Acquisitions will range between 1 and 1 and a half billion dollars and our combined contribution and disposition activity, will range between 3 and a quarter and 4 and a quarter billion dollars.
In total, we are establishing our initial Gap earnings guidance. In a range of 370 to 4 dollars per share.
Core ffo, including that promoted expense will range between $6 and $66.20 per share while core excluding that promote expense will range between 605 and 625 per share.
Tim Arndt: We publicly list a vehicle. Similar to NPR in Japan and FIBRA Prologis in Mexico, the C-REIT broadens our access to capital, diversifies our investor base, and strengthens our presence in one of the world's most dynamic logistics markets. Second, we added a new vehicle focused on development, redevelopment, and value-add opportunities, a strategic complement to our open-ended funds focused on stabilized investments. In Q4, we held the anchor closing for the US Agility Fund, yet another endorsement of the Prologis platform in a competitive capital-raising environment. We have a deep pipeline of capital-raising strategies in various stages of formation for this foundational business line. We look forward to sharing additional updates with you as the year progresses.
Tim Arndt: We publicly list a vehicle. Similar to NPR in Japan and FIBRA Prologis in Mexico, the C-REIT broadens our access to capital, diversifies our investor base, and strengthens our presence in one of the world's most dynamic logistics markets. Second, we added a new vehicle focused on development, redevelopment, and value-add opportunities, a strategic complement to our open-ended funds focused on stabilized investments. In Q4, we held the anchor closing for the US Agility Fund, yet another endorsement of the Prologis platform in a competitive capital-raising environment. We have a deep pipeline of capital-raising strategies in various stages of formation for this foundational business line. We look forward to sharing additional updates with you as the year progresses.
Operations, delivering strong operational and financial results.
Similar to NPR in Japan and Fever Pages in Mexico. The seaweed broadens; our access to capital diversifies our investor base and strengthens our presence in one of the world's most dynamic logistics markets.
Equally important, we use the year to strengthen the foundation of our business. By advancing development, entitlements, expanding strategic, capital, and accelerating our progress in data, centers and energy.
As a result, we enter 2026 from a position of strength with operating momentum and a setup that supports durable. Long-term growth
With that, I'll turn the call back to the operator for your questions. Operator.
Second, we added a new vehicle focused on development, redevelopment, and value-add opportunities—a strategic complement to our open-ended funds focused on stabilized investments. In the fourth quarter, we held the anchor closing for the US Agility Fund, yet another endorsement of the Prologis platform in a competitive capital-raising environment.
Tim Arndt: Moving on to data centers, 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. We continue to make clear progress on each front. During the quarter, we expanded our power access to 5.7 gigawatts, stabilized 72 megawatts of projects, and sold a state-of-the-art turnkey facility at compelling economics. In terms of leasing, demand is exceptional, and every megawatt in our pipeline is in some stage of discussion, including 1.2 gigawatts currently in LOI or pending lease execution. Our data center team and capabilities are expanding and executing at a very high level, and we're extremely excited by the significant value creation opportunity ahead.
Moving on to data centers, 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. We continue to make clear progress on each front. During the quarter, we expanded our power access to 5.7 gigawatts, stabilized 72 megawatts of projects, and sold a state-of-the-art turnkey facility at compelling economics. In terms of leasing, demand is exceptional, and every megawatt in our pipeline is in some stage of discussion, including 1.2 gigawatts currently in LOI or pending lease execution. Our data center team and capabilities are expanding and executing at a very high level, and we're extremely excited by the significant value creation opportunity ahead.
We have a deep pipeline of capital-raising strategies in various stages of formation for this foundational business line. We look forward to sharing additional updates with you as the year progresses.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad, a confirmation total indicate that your line is in the question queue. You may press star 2. If you'd like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keys. We ask that you that you please limit yourself to 1 question. Thank you.
1 moment, please let me pull up for questions.
Moving on to Data Centers at its core. This business is centered on four priorities: securing build-to-suit lease transactions, delivering world-class facilities for our customers, and harvesting value through asset sales.
And the first question comes from the line of Blaine heck with Wells Fargo. Please proceed with your question.
We continue to make clear progress on each front. During the quarter, we expanded our power access to 5.7 gigawatts stabilized, 72 megawatts of projects, and sold the state-of-the-art turnkey facility at compelling economics.
Great. Thanks. Good morning everyone. Um Dan, can you speak about any changes in strategic initiatives that may come with your leadership at Pearl Louis and specifically any thoughts around the Strategic Capital side of the business. And when you might expect to add additional strategies including a potential,
In terms of leasing, the demand is exceptional, and every megawatt in our pipeline is in some stage of discussion, including 1.2 gigawatts currently in LOI or pending lease execution.
Data center focused fund, any information on the scope potential time, uh, timing and earnings impact would be really helpful.
Tim Arndt: Turning to guidance, which I'll review at our share, we are forecasting average occupancy to range between 94.75% and 95.75%, which includes the expectation for a seasonal drop in occupancy in Q1 before rebuilding over the year. Net effective same-store growth is forecasted to be in a range of 4.25% to 5.25%, and cash in a range of 5.75% to 6.75%, with rent change being the predominant and enduring component of this growth. Our G&A forecast is for $500 to 520 million, and our strategic capital revenue forecast calls for $650 to 670 million. As for deployment, we are forecasting development starts to range between $4 and 5 billion on an owned and managed basis. As mentioned earlier, we have increased visibility and confidence around new starts in our data center business, so we have included those volumes in this guidance at approximately 40% of the activity.
Turning to guidance, which I'll review at our share, we are forecasting average occupancy to range between 94.75% and 95.75%, which includes the expectation for a seasonal drop in occupancy in Q1 before rebuilding over the year. Net effective same-store growth is forecasted to be in a range of 4.25% to 5.25%, and cash in a range of 5.75% to 6.75%, with rent change being the predominant and enduring component of this growth. Our G&A forecast is for $500 to 520 million, and our strategic capital revenue forecast calls for $650 to 670 million. As for deployment, we are forecasting development starts to range between $4 and 5 billion on an owned and managed basis. As mentioned earlier, we have increased visibility and confidence around new starts in our data center business, so we have included those volumes in this guidance at approximately 40% of the activity.
Our data center, team, and capabilities are expanding and executing at a very high level. We're extremely excited by the significant value creation opportunity ahead.
Turning to the guidance, which I'll review at our share.
Yeah, thanks Blaine. I highlighted our strategy, pretty clearly in my opening remarks here and and you know what what what did I say there?
Uh, first, you know, our focus is, is centered on on compounding, the core Logistics business.
We are forecasting average occupancy to range between 94.75% and 95.75%, which includes the expectation for a seasonal drop in occupancy in the first quarter before rebuilding over the year.
Well, continuing to broaden and strengthen the platform.
Uh, Logistics is and Will Remain the foundation here, serving the consumption centers around the world. Capturing
Net effective same store growth is forecasted to be in a range of 4.25% to 5.25%, and cash in a range of 5.75% to 6.75%, with rent change being the predominant and enduring component of this growth.
The embedded, rent growth and and, and lifting rents as as markets recover and then we'll start leaning more into development where Supply is constrained.
Data centers and energy.
High return adjacent businesses here.
Our G&A forecast is for $500 million to $520 million, and our Strategic Capital revenue forecast calls for $650 million to $670 million.
As for deployment, we are forecasting development starts to range between $4 and $5 billion on an owned and managed basis.
Where our land positions, our power access. And our customer relationships, really give us that that edge. We have a very strong customer franchise.
Uh, and yes, I expect to grow the Strategic capital, A and significantly, both through existing vehicles and and new vehicles.
Tim Arndt: Acquisitions will range between $1 and 1.5 billion, and our combined contribution and disposition activity will range between $3.25 and 4.25 billion. In total, we are establishing our initial GAAP earnings guidance in a range of $3.70 to 4 per share. Core FFO, including net promote income, will range between $6 and 6.20 per share, while Core FFO excluding net promote income will range between $6.05 and 6.25 per share. In closing, 2025 brought unexpected challenges and periods of uncertainty, and we're very pleased with how the company performed throughout the year. Our teams once again demonstrated the strength and resilience of our platform and the discipline of our world-class operations, delivering strong operational and financial results. Equally important, we used the year to strengthen the foundation of our business by advancing development entitlements, expanding Strategic Capital, and accelerating our progress in data centers and energy.
Acquisitions will range between $1 and 1.5 billion, and our combined contribution and disposition activity will range between $3.25 and 4.25 billion. In total, we are establishing our initial GAAP earnings guidance in a range of $3.70 to 4 per share. Core FFO, including net promote income, will range between $6 and 6.20 per share, while Core FFO excluding net promote income will range between $6.05 and 6.25 per share. In closing, 2025 brought unexpected challenges and periods of uncertainty, and we're very pleased with how the company performed throughout the year. Our teams once again demonstrated the strength and resilience of our platform and the discipline of our world-class operations, delivering strong operational and financial results. Equally important, we used the year to strengthen the foundation of our business by advancing development entitlements, expanding Strategic Capital, and accelerating our progress in data centers and energy.
As mentioned earlier, we have increased visibility and confidence around new starts in our data center business. So we've included those volumes in this guidance at approximately 40% of the activity.
Acquisitions will range between 1 and 1 and a half billion dollars and our combined contribution and disposition activity, will range between 3 and a quarter and 4 and a quarter billion dollars.
In total, we are establishing our initial GAAP earnings guidance in a range of $3.70 to $4.00 per share.
Core FFO, including their promote expense, will range between $6.00 and $6.20 per share.
While core FFO, excluding the promote expense, will range between $6.05 and $6.25 per share.
In closing, 2025 brought unexpected challenges and periods of uncertainty. We're very pleased with how the company performed throughout the year. Our teams, once again, demonstrated the strength and resilience of our platform and the discipline of our world-class operations, delivering strong operational and financial results.
And really, you know, at the end of the day, it's it's all about hyper focus on execution for this team but and maybe you want to add on something, on the new vehicles. Yeah. Hey Blaine on the um, on the data center fund and its prospects uh, as you know, over the past weeks and months. Now we've been dialoguing with some of world's larger investors and they are ones who would have interest in co-investing in this business and we we've had a very productive uh, couple of months in that regard. There definitely is a lot of interest such that we see Capital isn't necessarily the constraint here. And what we're really after is determining what capital structure makes sense for this business, that allows us to take full advantage of all the development opportunities in the portfolio, diversifying projects, but growing the AUM that we're talking about here and, um, enhancing it with fee streams, Etc. Driving Roe, I I'd say we're meaningfully through that process at this point. We expect to know more in the coming weeks and months, but it's something at the same time I'll say we're taking care of to get, right.
Tim Arndt: As a result, we enter 2026 from a position of strength, with operating momentum and a setup that supports durable long-term growth. With that, I'll turn the call back to the operator for your questions. Operator?
As a result, we enter 2026 from a position of strength, with operating momentum and a setup that supports durable long-term growth. With that, I'll turn the call back to the operator for your questions. Operator?
Equally important, we use the year to strengthen the foundation of our business by advancing development, entitlements, expanding strategic capital, and accelerating our progress in data centers and energy.
Right, given the scale of the opportunity. So in the meantime the balance sheet has been comfortably carrying out the program that we have, it's been very profitable. So we'll compare these alternatives to that status quo and um as we have more uh more news for you, we will share it out in the coming months.
As a result, we enter 2026 from a position of strength, with operating momentum and a setup that supports durable, long-term growth.
Thank you Blaine operator. Next question.
With that, I'll turn the call back to the operator for your questions. Operator.
Operator: Thank you. We will now be conducting a question-and-answer session. We ask that you please, if you would like to ask a question, press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. We ask that you please limit yourself to one question. Thank you. One moment, please, while we pull for questions. The first question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question.
Operator: Thank you. We will now be conducting a question-and-answer session. We ask that you please, if you would like to ask a question, press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. We ask that you please limit yourself to one question. Thank you. One moment, please, while we pull for questions. The first question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question.
The next question comes from the line of Michael Griffin with evercore, isi, please proceed.
Thank you. We will now be conducting a question and answer session. We ask that you please
If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press *2 if you'd like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question. Thank you.
One moment, please, while I pull up your questions.
Great, thanks. Um, Tim, I appreciated your comments, kind of walking through the puts and takes of, uh, your expectations in 2026 wondering if you can dive a little bit deeper into your assumption around Market, rent growth. And maybe if you're able to kind of quantify it for us, in terms of what your forecasting for the year ahead, it seemed like some markets are hitting an inflection point. You've still got a healthy Market to Market. So is this a scenario where maybe, you know, Market rents are down in the first half of the year and then improve as we get to the second half just maybe you walk us through some commentary right there. That'd be great. Thank you.
Chris Caton: Great. Thanks. Good morning, everyone. Daniel, can you speak about any changes in strategic initiatives that may come with your leadership at Prologis, and specifically any thoughts around the strategic capital side of the business, and when you might expect to add additional strategies, including a potential data center-focused fund? Any information on the scope, potential timing, and earnings impact would be really helpful.
Blaine Heck: Great. Thanks. Good morning, everyone. Daniel, can you speak about any changes in strategic initiatives that may come with your leadership at Prologis, and specifically any thoughts around the strategic capital side of the business, and when you might expect to add additional strategies, including a potential data center-focused fund? Any information on the scope, potential timing, and earnings impact would be really helpful.
And the first question comes from the line of Blaine Hack with Wells Fargo. Please proceed with your question.
Yeah, let me pass that over to Chris.
Daniel Letter: Yeah. Thanks, Blaine. I highlighted our strategy pretty clearly in my opening remarks here. And what did I say there? First, our focus is centered on compounding the core logistics business while continuing to broaden and strengthen the platform. Logistics is and will remain the foundation here, serving the consumption centers around the world, capturing the embedded rent growth and lifting rents as markets recover. And then we'll start leaning more into development where supply is constrained. Data centers and energy, high-return adjacent businesses here, where our land positions, our power access, and our customer relationships really give us that edge. We have a very strong customer franchise. And yes, I expect to grow the strategic capital area significantly, both through existing vehicles and new vehicles. And really, at the end of the day, it's all about hyper-focus on execution for this team.
Daniel Letter: Yeah. Thanks, Blaine. I highlighted our strategy pretty clearly in my opening remarks here. And what did I say there? First, our focus is centered on compounding the core logistics business while continuing to broaden and strengthen the platform. Logistics is and will remain the foundation here, serving the consumption centers around the world, capturing the embedded rent growth and lifting rents as markets recover. And then we'll start leaning more into development where supply is constrained. Data centers and energy, high-return adjacent businesses here, where our land positions, our power access, and our customer relationships really give us that edge. We have a very strong customer franchise. And yes, I expect to grow the strategic capital area significantly, both through existing vehicles and new vehicles. And really, at the end of the day, it's all about hyper-focus on execution for this team.
Specifically, any thoughts around the Strategic Capital side of the business? And when you might expect to add additional strategies, including a potential data center-focused fund—any information on the scope, potential, timing, and earnings impact would be really helpful.
Yeah, thanks Blaine. I highlighted our strategy, pretty clearly in my opening remarks here and and you know what what what did I say there?
Uh, first, you know, our focus is centered on compounding the core logistics business.
Well, continuing to broaden and strengthen the platform.
Vacancies are poised to improve over the course of the year. Now that already began in the fourth quarter when it absorption outperformed completions and I am anticipate, 26 will play out the same way. New demand is the key variable here and we expect net absorption to approach 200 million square, feet in 26 versus 155. Last year, decline in Supply is helping deliveries are on Pace to be 185 180 million square feet in 20206 down from 200 million square feet last year. So that'll take vacancies, which were at 7.4% at the end of last year towards 7.1 7.2% at the end of this year. And so you're right. Markets are advancing at different rates. Tim described.
Logistics is, and will remain, the foundation here, serving the consumption centers around the world.
Rent demand, improving occupancy levels, beginning to approve across our a greater range of markets and ultimately rents. So we expect positive rank growth in aggregate, to begin to emerge in a more clear way over the course of the year.
Capturing the embedded rent growth and lifting rents as markets recover, and then we'll start leaning more into development where supply is constrained.
Data centers and energy.
Thank you. Michael operator. Next question.
High return adjacent businesses here.
The next question comes from the line of Craig mailman with City, please proceed.
Where our land positions or power access and our customer relationships really give us that edge. We have a very strong customer franchise.
Uh, and yes, I expect to grow the Strategic Capital AUM significantly, both through existing vehicles and new vehicles.
Daniel Letter: Tim, maybe you want to add on something on the new vehicles?
Tim, maybe you want to add on something on the new vehicles?
Tim Arndt: Yeah. Hey, Blaine. On the data center fund and its prospects, as you know, over the past weeks and months now, we've been dialoguing with some of the world's larger investors, and they are ones who would have interest in co-investing in this business. We've had a very productive couple of months in that regard. There definitely is a lot of interest, such that we see capital isn't necessarily the constraint here. What we're really after is determining what capital structure makes sense for this business that allows us to take full advantage of all the development opportunities in the portfolio, diversifying projects, but growing the AUM that we're talking about here and enhancing it with fee streams, etc., driving ROE. I'd say we're meaningfully through that process at this point. We expect to know more in the coming weeks and months.
Tim Arndt: Yeah. Hey, Blaine. On the data center fund and its prospects, as you know, over the past weeks and months now, we've been dialoguing with some of the world's larger investors, and they are ones who would have interest in co-investing in this business. We've had a very productive couple of months in that regard. There definitely is a lot of interest, such that we see capital isn't necessarily the constraint here. What we're really after is determining what capital structure makes sense for this business that allows us to take full advantage of all the development opportunities in the portfolio, diversifying projects, but growing the AUM that we're talking about here and enhancing it with fee streams, etc., driving ROE. I'd say we're meaningfully through that process at this point. We expect to know more in the coming weeks and months.
Hey, good afternoon guys. Um just wanted to hit on the the data center piece real quick. I think Tim you said that you have 1.2 gigawatts in LI or Advanced negotiations. Can you just walk through? Kind of how many projects that would be and how that's reflected in the development, start guide. So I know that you guys for the first time aggregated when
Warehouse and and data center. So give us a sense of like how much of that
Start guidance is Data Centers versus warehouses. And at this point, 2 gigawatts is sort of a near-term opportunity or 27 and 282.
yeah, I I I won't break it down by project for you Craig but um, we have
Tim Arndt: But it's something, at the same time, I'll say we're taking care to get right, given the scale of the opportunity. So in the meantime, the balance sheet's been comfortably carrying out the program that we have. It's been very profitable. So we'll compare these alternatives to that status quo. And as we have more news for you, we will share it out in the coming months. Thank you, Blaine. Operator, next question.
But it's something, at the same time, I'll say we're taking care to get right, given the scale of the opportunity. So in the meantime, the balance sheet's been comfortably carrying out the program that we have. It's been very profitable. So we'll compare these alternatives to that status quo. And as we have more news for you, we will share it out in the coming months.
And really, you know, at the end of the day, it's it's all about hyper focus on execution for this team but and maybe you want to add on something, on the new vehicles. Yeah. Hey Blaine on the um, on the data center fund and its prospects uh, as you know, over the past weeks and months. Now we've been dialoguing with some of world's larger investors and they are ones who would have interest in co-investing in this business and we we've had a very productive uh, couple of months in that regard. There definitely is a lot of interest such that we see Capital isn't necessarily the constraint here. And what we're really after is determining what capital structure makes sense for this business, that allows us to take full advantage of all the development opportunities in the portfolio, diversifying projects, but growing the AUM that we're talking about here and, um, enhancing it with fee streams, Etc. Driving Roe, I I'd say we're meaningfully through that process at this point. We expect to know more in the coming weeks and months, but it's something at the same time. I'll say we're taking care of to get run.
Right, given the scale of the opportunity. So in the meantime, the balance sheet's been comfortably carrying out the program that we have—it's been very profitable.
Thank you, Blaine. Operator, next question.
So we'll compare these alternatives to that status quo, and as we have more news for you, we will share it out in the coming months.
Operator: The next question comes from the line of Michael Griffin with Evercore ISI. Please proceed.
Operator: The next question comes from the line of Michael Griffin with Evercore ISI. Please proceed.
Thank you, Blaine, operator. Next question.
[Analyst] (Evercore ISI): Great. Thanks. Tim, I appreciated your comments, kind of walking through the puts and takes of your expectations in 2026. Wondering if you can dive a little bit deeper into your assumption around market rent growth, and maybe if you're able to kind of quantify it for us in terms of what you're forecasting for the year ahead. It seemed like some markets are hitting an inflection point. You've still got a healthy market-to-market. So is this a scenario where maybe market rents are down in the first half of the year and then improve as we get to the second half? Just maybe walk us through some commentary there. That'd be great. Thank you.
Michael Griffin: Great. Thanks. Tim, I appreciated your comments, kind of walking through the puts and takes of your expectations in 2026. Wondering if you can dive a little bit deeper into your assumption around market rent growth, and maybe if you're able to kind of quantify it for us in terms of what you're forecasting for the year ahead. It seemed like some markets are hitting an inflection point. You've still got a healthy market-to-market. So is this a scenario where maybe market rents are down in the first half of the year and then improve as we get to the second half? Just maybe walk us through some commentary there. That'd be great. Thank you.
The next question comes from the line of Michael Griffin with Evercore ISI. Please proceed.
A a small handful. I'll describe it that way of starts. That feel relatively imminent, given the stage of leasing. I just described them in. Uh, so I expect, you'll see something this quarter and starts and, uh, certainly in the first half, um, maybe maybe a couple there. Um, in the guidance, I described that 40% of our overall owned managed range of 4 to 5 billion dollars. We expect 40% of that roughly to be in data center so you can unpack that and understand the logistics piece. And I think, you know, I I will say I think there's uh we left some opportunity to outperform this in a few few ways uh, both in logistics and in the data centers, on the logistics side. You know, I would say that what you infer their on Logistics starts is still below what a very strong run rate would be for us. Um, we could see that the environment for spec starts continues to improve and that would be a means for um outperformance on those starts and on the data center side.
I would bear in mind that it's not only going to be in a project count, if you will, that we execute on but also format, um, we have a mix that we think about between Powershell and TurnKey and the uh, appetite for. TurnKey projects is quite high from our customers. And if we choose to execute more in that format, the aggregate dollars uh, would rise as well.
Tim Arndt: Yeah. Let me pass that over to Chris.
Tim Arndt: Yeah. Let me pass that over to Chris.
Great, thanks. Um, Tim, I appreciate your comments. Kind of walking through the puts and takes of, uh, your expectations in 2026—wondering if you can dive a little bit deeper into your assumption around market rent growth. And maybe if you're able to kind of quantify it for us, in terms of what you're forecasting for the year ahead. It seemed like some markets are hitting an inflection point. You've still got a healthy mark-to-market, so is this a scenario where maybe, you know, market rents are down in the first half of the year and then improve as we get to the second half? Just maybe you walk us through some commentary there. That'd be great. Thank you.
Chris Caton: Michael, let me give you the full fundamental forecast for 2026 so that you have all the context you need to make that judgment. The key message here is market vacancies are poised to improve over the course of the year. Now, that already began in the fourth quarter when net absorption outperformed completions, and I anticipate 2026 will play out the same way. New demand is the key variable here, and we expect net absorption to approach 200 million sq ft in 2026 versus 155 last year. Decline in supply is helping. Deliveries are on pace to be 185, 180 million sq ft in 2026, down from 200 million sq ft last year. So that'll take vacancies, which were at 7.4% at the end of last year, towards 7.1 to 7.2% at the end of this year. And so you're right, markets are advancing at different rates.
Chris Caton: Michael, let me give you the full fundamental forecast for 2026 so that you have all the context you need to make that judgment. The key message here is market vacancies are poised to improve over the course of the year. Now, that already began in the fourth quarter when net absorption outperformed completions, and I anticipate 2026 will play out the same way. New demand is the key variable here, and we expect net absorption to approach 200 million sq ft in 2026 versus 155 last year. Decline in supply is helping. Deliveries are on pace to be 185, 180 million sq ft in 2026, down from 200 million sq ft last year. So that'll take vacancies, which were at 7.4% at the end of last year, towards 7.1 to 7.2% at the end of this year. And so you're right, markets are advancing at different rates.
Yeah, let me pass that over to Chris.
Let me just pile on here. You know, we've often talked about a wide range of deployment, uh, that we can do throughout the year. We own land in over 70, markets around the world. And as we talked about 42 billion worth of opportunity in that Land Bank of which nearly 40% of that is ready to go. So we can really make a decision in a moment's notice as it relates to starting. So we have a lot of opportunity as as as Tim mentioned.
Thank you, Craig operator. Next question.
The next question comes from the line of Caitlyn Burroughs with Goldman Sachs please proceed.
My call. Let me give you the full fundamental forecast for ’26, so that you have all the context you need to make that judgement. The key message here is market: vacancies are poised to improve over the course of the year. Now, that already began in the fourth quarter when net absorption outperformed completions, and I anticipate ’26 will play out the same way. New demand is the key variable here, and we expect net absorption to approach 200 million square feet in ’26 versus 155 million last year. Decline in supply is helping—deliveries are on pace to be 185 million.
180 million square feet in 2026, down from 100 million square feet last year. So that'll take vacancies, which were at 7.4% at the end of last year.
Chris Caton: Tim described rent demand improving, occupancy levels beginning to improve across a greater range of markets, and ultimately rents. So we expect positive rent growth in aggregate to begin to emerge in a more clear way over the course of the year.
Tim described rent demand improving, occupancy levels beginning to improve across a greater range of markets, and ultimately rents. So we expect positive rent growth in aggregate to begin to emerge in a more clear way over the course of the year.
Towards 7.1–7.2% at the end of this year, and so you're right. Markets are advancing at different rates, as Tim described.
Hi everyone, uh maybe another data center question, so just a year ago on the 4q 2024 call, you guys mentioned that you could reach 10, gigawatts of power in 10 years, I guess. Now we're 1 year later and you're already at almost 6 gigawatts. So I was just wondering if there was any update on that kind of 10 gigawatt, um, Outlook or trajectory and do you think the pace of increase could keep going? Might it slowed down because future increases in power, increasingly more difficult? Or just, how do you expect?
That, um, it's a trend, thanks.
Rent demand is improving, occupancy levels are beginning to improve across our rent, and a greater range of markets and ultimately rents. So, we expect positive rent growth in aggregate to begin to emerge in a more clear way over the course of the year.
Tim Arndt: Thank you, Michael. Operator, next question.
Tim Arndt: Thank you, Michael. Operator, next question.
Kaylin. Uh I I would say, you know, when we talked about the 10, gigawatts of power, we've talked about is just the universe of opportunity that we have.
Operator: The next question comes from the line of Craig Mailman with Citi. Please proceed.
Operator: The next question comes from the line of Craig Mailman with Citi. Please proceed.
Thank you, Michael. Operator, next question.
[Analyst] (Citi): Hey, good afternoon, guys. Just want to hit on the data center piece real quick. I think, Tim, you said that you have 1.2 gigawatts in LOI or advanced negotiations. Can you just walk through kind of how many projects that would be and how that's reflected in the development start guidance? I noticed you guys, for the first time, aggregated warehouse and data centers. So give us a sense of how much of that start guidance is data centers versus warehouses, and if this 1.2 gigawatts is sort of a near-term opportunity or 2027 and 2028 too?
Craig Mailman: Hey, good afternoon, guys. Just want to hit on the data center piece real quick. I think, Tim, you said that you have 1.2 gigawatts in LOI or advanced negotiations. Can you just walk through kind of how many projects that would be and how that's reflected in the development start guidance? I noticed you guys, for the first time, aggregated warehouse and data centers. So give us a sense of how much of that start guidance is data centers versus warehouses, and if this 1.2 gigawatts is sort of a near-term opportunity or 2027 and 2028 too?
The next question comes from the line of Craig Mailman with Citi. Please proceed.
10 gigawatt Pipeline and and there's just a lot behind that that, uh, is for further down the road but uh, no no update further from from that number.
Thank you. Clayton Kaitlin operator. Next question.
Patients, can you just walk through kind of how many projects that would be, and how that's reflected in the development start guide? So I know that you guys, for the first time, aggregated warehouse and data center. So give us a sense of how much of that—
The next question comes from the line of vicram malhoa with mua. Please proceed with your question.
Start guidance is data centers versus warehouses, and if this 1.2 gigawatts is sort of a near-term opportunity, or 27 and 282.
Tim Arndt: Yeah. I won't break it down by project for you, Craig, but we have a small handful, I'll describe it that way, of starts that feel relatively imminent, given the stage of leasing I just described them in. So I expect you'll see something this quarter in starts, and certainly in the first half, maybe a couple there. In the guidance, I described that 40% of our overall owned and managed range of $4 to $5 billion. We expect 40% of that roughly to be in data centers. So you can unpack that and understand the logistics piece. And I think I will say I think we've left some opportunity to outperform this in a few ways, both in logistics and in data centers.
Tim Arndt: Yeah. I won't break it down by project for you, Craig, but we have a small handful, I'll describe it that way, of starts that feel relatively imminent, given the stage of leasing I just described them in. So I expect you'll see something this quarter in starts, and certainly in the first half, maybe a couple there. In the guidance, I described that 40% of our overall owned and managed range of $4 to $5 billion. We expect 40% of that roughly to be in data centers. So you can unpack that and understand the logistics piece. And I think I will say I think we've left some opportunity to outperform this in a few ways, both in logistics and in data centers.
Yeah, I—I want to break it down by project for you, Craig, but, um, we have...
Uh morning. Um, I want to just clarify 2. Things just based on your comments, which seem like we're moving from this in bottoming to an inflection phase. So 1, I guess it's been hard over the last 3 years to predict sort of this inflection and occupancy. So what gives you strength? Uh, as you see this downtick in the first quarter to build
Uh a fair amount of occupancy, to hit your guide and then related to that as you get this, you know, strong core growth. What can you walk through some of the offsets that limit the ffo growth this year. Thanks.
Tim Arndt: On the logistics side, I would say that what you infer there on logistics starts is still below what a very strong run rate would be for us. We could see that the environment for spec starts continues to improve, and that would be a means for outperformance on those starts. And on the data center side, I would bear in mind that it's not only going to be in project count, if you will, that we execute on, but also format. We have a mix that we think about between Power Shell and turnkey, and the appetite for turnkey projects is quite high from our customers. And if we choose to execute more in that format, the aggregate dollars would rise as well.
On the logistics side, I would say that what you infer there on logistics starts is still below what a very strong run rate would be for us. We could see that the environment for spec starts continues to improve, and that would be a means for outperformance on those starts. And on the data center side, I would bear in mind that it's not only going to be in project count, if you will, that we execute on, but also format. We have a mix that we think about between Power Shell and turnkey, and the appetite for turnkey projects is quite high from our customers. And if we choose to execute more in that format, the aggregate dollars would rise as well.
Uh, a small handful. I'll describe it that way of starts that feel relatively imminent, given the stage of leasing. I just described them in. Uh, so I expect, you'll see something this quarter and starts and, uh, certainly in the first half, um, maybe maybe a couple there. Um, in the guidance, I described that 40% of our overall owned and managed range of 4 to 5 billion dollars. We expect 40% of that roughly to be in data center so you can unpack that and understand the logistics piece. And I think, you know, I I will say I think there's uh we've left some opportunity to outperform this in a few few ways both in logistics and in the data centers, on the logistics side. You know, I would say that what you infer their on Logistics starts is still below what a very strong run rate would be for us. Um, we could see that the environment for spec starts continues to improve and that would be a means for um outperformance on those.
Hey, vicram well, look on occupancy. I I think the first thing that is worthy of uh remembering is that the past few years. Now of absorption is what has been the outlier. We've had very low years of uh, annual absorption in our markets. So, even with Chris's forecasts of approaching 200, we'd still call that not fully normal normal or, or robust. So I think that's useful context. Perhaps, uh, the remainder is look, I think our guide is for about 25. Basis points, increase in average. Also maybe not as, uh,
Extreme as you might be, uh, reading into, uh, but finishing the year at 95.8% and building occupancy over the course of the year, uh, to answer your direct question is, what gives us a good amount of confidence in um in the forecast that we have here?
Thank you vicram operator. Next question.
Daniel Letter: Let me just pile on here. We've often talked about a wide range of deployment that we can do throughout the year. We own land in over 70 markets around the world. And as we talked about, $42 billion worth of opportunity in that land bank, of which nearly 40% of that is ready to go. So we can really make a decision at a moment's notice as it relates to starting. So we have a lot of opportunity, as Tim mentioned.
Daniel Letter: Let me just pile on here. We've often talked about a wide range of deployment that we can do throughout the year. We own land in over 70 markets around the world. And as we talked about, $42 billion worth of opportunity in that land bank, of which nearly 40% of that is ready to go. So we can really make a decision at a moment's notice as it relates to starting. So we have a lot of opportunity, as Tim mentioned.
Starts. And on the data center side, I would bear in mind that it's not only going to be in a project count, if you will, that we execute on, but also format. Um, we have a mix that we think about between PowerShell and TurnKey, and the appetite for TurnKey projects is quite high from our customers. And if we choose to execute more in that format, the aggregate dollars would rise as well.
The next question comes from the line of Samir canal with Bank of America, please proceed.
Good morning, everybody. Um, I guess Tim, um, you know, I've been to a nice pickup in, um, in in Europe and Asia. And for Q, I think you talked a little bit about Japan, but maybe can you provide some color on? Kind of the the the the big pick up there in the occupancy and sort of what's driving that? Thanks
Tim Arndt: Thank you, Craig. Operator, next question.
Tim Arndt: Thank you, Craig. Operator, next question.
Let me just pile on here. You know, we've often talked about a wide range of deployment, uh, that we can do throughout the year. We own land in over 70 markets around the world. And as we talked about, $42 billion worth of opportunity in that land bank, of which nearly 40% of that is ready to go. So we can really make a decision at a moment's notice as it relates to starting. So we have a lot of opportunities, as Tim mentioned.
Operator: The next question comes from the line of Caitlin Burrows with Goldman Sachs. Please proceed.
Operator: The next question comes from the line of Caitlin Burrows with Goldman Sachs. Please proceed.
Thank you, Craig. Operator, next question, please.
[Analyst] (Goldman Sachs): Hi, everyone. Maybe another data center question. So just a year ago on the Q4 2024 call, you guys mentioned that you could reach 10 gigawatts of power in 10 years. I guess now we're one year later, and you're already at almost 6 gigawatts. So I was just wondering if there was any update on that kind of 10-gigawatt outlook or trajectory, and do you think the pace of increase could keep going? Might it slow down because future increases in power are increasingly more difficult? Or just how do you expect that to trend? Thanks.
Caitlin Burrows: Hi, everyone. Maybe another data center question. So just a year ago on the Q4 2024 call, you guys mentioned that you could reach 10 gigawatts of power in 10 years. I guess now we're one year later, and you're already at almost 6 gigawatts. So I was just wondering if there was any update on that kind of 10-gigawatt outlook or trajectory, and do you think the pace of increase could keep going? Might it slow down because future increases in power are increasingly more difficult? Or just how do you expect that to trend? Thanks.
The next question comes from the line of Caitlyn Burroughs with Goldman Sachs. Please proceed.
Hey, Samir, I would say, you know, I would look back across. Uh, the year probably 25, the the Europe story, uh, and definitely the Japan story or not new. Uh, we've tried to highlight that a few times, uh, in recent quarters. Uh, occupancies there in the market have been pretty strong, uh, in Europe. At least the Japan is a different story at the market level, but our portfolio in both cases has been uh, quite high and has been that way for for quite a while. Now. Uh, anything you would add Chris know. That's right. I'd say momentum is building, uh, around the world. So X us has has more momentum. Help you demand lower vacancies.
Hi everyone, uh, maybe another data center question. So just a year ago, on the Q4 2024 call, you guys mentioned that you could reach 10 gigawatts of power in 10 years, I guess. Now we're one year later and you're already at almost 6 gigawatts. So I was just wondering if there was any update on that kind of 10 gigawatt outlook or trajectory, and do you think the pace of increase could keep going? Might it slow down because future increases in power are increasingly more?
Thank you, Samir operator. Next question.
Daniel Letter: Caitlin, I would say when we talk about the 10 gigawatts of power, what we talked about is just the universe of opportunity that we have. We own 6,000 buildings adjacent to the world's most dynamic consumption centers. We own or control 14,000 acres of land. And it's really lumpy as to when these sites will be ready, will be energized. And that's why we're updating you as soon as we know what's coming. But I'm very comfortable stating that 10-gigawatt pipeline, and there's just a lot behind that that is further down the road, but no update further from that number.
Daniel Letter: Caitlin, I would say when we talk about the 10 gigawatts of power, what we talked about is just the universe of opportunity that we have. We own 6,000 buildings adjacent to the world's most dynamic consumption centers. We own or control 14,000 acres of land. And it's really lumpy as to when these sites will be ready, will be energized. And that's why we're updating you as soon as we know what's coming. But I'm very comfortable stating that 10-gigawatt pipeline, and there's just a lot behind that that is further down the road, but no update further from that number.
Difficult, or just how do you expect that to trend? Thanks.
The next question comes from the line of Ronald Camden with Morgan Stanley. Please proceed.
Kaylin. Uh, I would say, you know, when we talked about the 10 gigawatts of power, what we talked about is just the universe of opportunity that we have.
We owned 6,000 buildings adjacent to the world's most dynamic consumption centers.
Great. Uh, just had a broader question on Capital deployment, both on the data center and the traditional sort of industrial side. Uh, if you could just walk us through just uh, what what that potential pipeline looks like, in terms of the ramp, and what you need to see uh, to sort of increase the Run rate, uh, specifically on the uh, on the industrial side. Thanks.
Yeah, Ron I'll start maybe Tim will chime in here but you know, as I mentioned we have significant.
We own or control 14,000 acres of land and uh, it's it's really lumpy as to when the the sites will be ready, will be energized. Uh, and that's why we're updating you as soon as we know what's coming. But uh, uh, I'm very comfortable stating that 10 gigawatt of Pipeline and and there's just a lot behind that that, uh, is for further down the road. But uh, no no updates further from from that number.
Tim Arndt: Thank you, Clayton. Caitlin, Operator, next question.
Tim Arndt: Thank you, Clayton. Caitlin, Operator, next question.
Thank you. Clayton Kaitlin, operator. Next question.
Operator: The next question comes from the line of Vikram Malhotra with Mizuho. Please proceed with your question.
Operator: The next question comes from the line of Vikram Malhotra with Mizuho. Please proceed with your question.
[Analyst] (Mizuho): Morning. I want to just clarify two things just based on your comments, which seem like we're moving from this bottoming to an inflection phase. So one, I guess it's been hard over the last three years to predict sort of this inflection in occupancy. So what gives you strength as you see this downtick in Q1 to build a fair amount of occupancy to hit your guide? And then related to that, as you get this strong core growth, can you walk through some of the offsets that limit the FFO growth this year? Thanks.
Vikram Malhotra: Morning. I want to just clarify two things just based on your comments, which seem like we're moving from this bottoming to an inflection phase. So one, I guess it's been hard over the last three years to predict sort of this inflection in occupancy. So what gives you strength as you see this downtick in Q1 to build a fair amount of occupancy to hit your guide? And then related to that, as you get this strong core growth, can you walk through some of the offsets that limit the FFO growth this year? Thanks.
The next question comes from the line of Vicram Malhoa with Mizuho. Please proceed with your question.
Number of opportunities. Uh good news is, we saw uh this real estate cycle continued in in the fourth quarter as as uh as Chris mentioned in his prior remarks, we're we're seeing uh, s really starting to see a better activity and really all size ranges. It's not just the big box story or at least fourth quarter wasn't just a big box story.
So we can watch these markets literally by the week and months and and make decisions on the Fly and and and ramp accordingly.
Uh, good morning. Um, I want to just clarify 2. Things just based on your comments, which seem like we're moving from this in bottoming to an inflection phase. So 1, I guess it's been hard over the last 3 years to predict sort of this inflection and occupancy. So what gives you strength? Uh, as you see this downtick in the first quarter to build
Yeah, I would, I would only say that that's precisely right and, and Ron, and maybe I would to give a different context. It really is built up. Uh, we buy week and investment committee as teams are deciding conditions in their respective markets are appropriate. It's, it's not something that we govern, uh, top down.
Tim Arndt: Hey, Vikram. Well, look, on occupancy, I think the first thing that is worthy of remembering is that the past few years now of absorption is what has been the outlier. We've had very low years of annual absorption in our markets. So even with Chris's forecast of approaching 200, we'd still call that not fully normal, normal, or robust. So I think that's useful context, perhaps. The remainder is, look, I think our guide is for about 25 basis points increase in average. Also, maybe not as extreme as you might be reading into. But finishing the year at 95.8% and building occupancy over the course of the year, to answer your direct question, is what gives us a good amount of confidence in the forecast that we have here. Thank you, Vikram. Operator, next question.
Tim Arndt: Hey, Vikram. Well, look, on occupancy, I think the first thing that is worthy of remembering is that the past few years now of absorption is what has been the outlier. We've had very low years of annual absorption in our markets. So even with Chris's forecast of approaching 200, we'd still call that not fully normal, normal, or robust. So I think that's useful context, perhaps. The remainder is, look, I think our guide is for about 25 basis points increase in average. Also, maybe not as extreme as you might be reading into. But finishing the year at 95.8% and building occupancy over the course of the year, to answer your direct question, is what gives us a good amount of confidence in the forecast that we have here. Thank you, Vikram. Operator, next question.
Uh, a fair amount of occupancy to hit your guide, and then related to that, as you get this, you know, strong core growth, can you walk through some of the offsets that limit the FFO growth this year? Thanks.
Thank you, Ron. Operator next question.
The next question comes from the line of Nick Tillman with beard please proceed.
Mark to Market upside but then replacement cost rents, I guess as we look at the bank Land Bank overall. What what percentage of that bank do you think's in the money when it comes to new construction, like barring or if the demand is there, like how, what percentage of that would you say is in the money at this point? Um, on on new starts here?
So I think that's useful context. Perhaps, uh, the remainder is—look, I think our guide is for about a 25 basis points increase on average—also maybe not as, uh, extreme as you might be, uh, reading into. But finishing the year at 95.8% in building occupancy over the course of the year, uh, to answer your direct question, is what gives us a good amount of confidence in, um, in the forecast that we have here.
Operator: The next question comes from the line of Samir Khanal with Bank of America. Please proceed.
Operator: The next question comes from the line of Samir Khanal with Bank of America. Please proceed.
Thank you, Vicram operator. Next question.
[Analyst] (Mizuho): Good morning, everybody. I guess, Tim, occupancy had a nice pickup in Europe and Asia in Q4. I think you talked a little bit about Japan, but maybe can you provide some color on kind of the big pickup there in occupancy and sort of what's driving that? Thanks.
Samir Khanal: Good morning, everybody. I guess, Tim, occupancy had a nice pickup in Europe and Asia in Q4. I think you talked a little bit about Japan, but maybe can you provide some color on kind of the big pickup there in occupancy and sort of what's driving that? Thanks.
The next question comes from the line of Samir Canal with Bank of America. Please proceed.
Good morning, everybody. Um, I guess Tim um, you know, occupancy had a nice pickup in, um, in in Europe and Asia. And for Q I I think you talked a little bit about Japan, but maybe can you provide some color on? Kind of the, the, the big pick up there and I can sort of what's driving that. Thanks.
Well, I'll take the second part and Dan can pick up the, the geographic mix, maybe. After I it's a it's a challenging question on pack the way you're phrasing it. I guess what I would tell you is that we evaluate the evaluation of uh the land bank, uh every quarter and we continually um read out to you, how we see that presently, we see that around 110%, fair market value to, to book value. So that is going to be a mix of um of projects that are more deeply in the money than others. But uh I can only provide you the information on that aggregate basis.
Tim Arndt: Hey, Samir, I would say I would look back across the year, probably 2025. The Europe story and definitely the Japan story are not new. We've tried to highlight that a few times in recent quarters. Occupancies there in the market have been pretty strong in Europe, at least. Japan is a different story at the market level. But our portfolio, in both cases, has been quite high and has been that way for quite a while now. Anything you would add, Chris?
Tim Arndt: Hey, Samir, I would say I would look back across the year, probably 2025. The Europe story and definitely the Japan story are not new. We've tried to highlight that a few times in recent quarters. Occupancies there in the market have been pretty strong in Europe, at least. Japan is a different story at the market level. But our portfolio, in both cases, has been quite high and has been that way for quite a while now. Anything you would add, Chris?
Chris Caton: No, that's right. I'd say momentum's building around the world. So XUS has more momentum, healthy demand, lower vacancies.
Chris Caton: No, that's right. I'd say momentum's building around the world. So XUS has more momentum, healthy demand, lower vacancies.
And as it relates to geographies about 2/3 of the starts. We're assuming for the year on the logistics side or on the US for 2026, that's that's up, uh, about 10, 15%, uh, year-over-year, and then we're we're seeing uh, strong markets and and and Latin America between South Paulo between Mexico. I'd say not the Border markets in Mexico but Mexico City. And and uh and and then if you go over to Europe we're seeing uh we'll see some starts in Germany.
Hey, Samir, I would say, you know, I would look back across, uh, the year—probably '25—the Europe story, uh, and definitely the Japan story are not new. Uh, we've tried to highlight that a few times, uh, in recent quarters. Uh, occupancies there in the market have been pretty strong, uh, in Europe at least. Japan is a different story at the market level, but our portfolio in both cases has been, uh, quite high and has been that way for quite a while now. Uh, anything you would add, Chris?
Netherlands, northern Europe, mostly
Thank you, Nick. Operator next question.
No, that's right. I'd say momentum is building around the world, so XUS has more momentum. That helps you demand lower vacancies.
Tim Arndt: Thank you, Samir. Operator, next question.
Tim Arndt: Thank you, Samir. Operator, next question.
Operator: The next question comes from the line of Ronald Kamdem with Morgan Stanley. Please proceed.
Operator: The next question comes from the line of Ronald Kamdem with Morgan Stanley. Please proceed.
Thank you, Samir, operator. Next question.
The next question comes from the line of Vince tabone with Green Street. Please proceed with your question.
[Analyst] (Morgan Stanley): Great. Just had a broader question on capital deployment, both on the data center and the traditional sort of industrial side. If you could just walk us through just what that potential pipeline looks like in terms of the ramp and what you need to see to sort of increase the run rate, specifically on the industrial side. Thanks.
Ronald Kamdem: Great. Just had a broader question on capital deployment, both on the data center and the traditional sort of industrial side. If you could just walk us through just what that potential pipeline looks like in terms of the ramp and what you need to see to sort of increase the run rate, specifically on the industrial side. Thanks.
The next question comes from the line of Ronald Camden with Morgan Stanley. Please proceed.
Hi, good morning. Um, I have a few more questions on the data center opportunity on the 1.2 gigawatt. You mentioned or under Loi. Would those be mostly powered shell or TurnKey? I'm, I'm just trying to get a sense of the, you know, total investment for that power.
Great. Uh, just had a broader question on capital deployment, both on the data center and the traditional sort of industrial side. Uh, if you could just walk us through just, uh, what that potential pipeline looks like, in terms of the ramp, and what you need to see, uh, to sort of increase the run rate, uh, specifically on the, uh, on the industrial side. Thanks.
Daniel Letter: Yeah, Ron, I'll start. Maybe Tim will chime in here. But as I mentioned, we have a significant number of opportunities. Good news is we saw this real estate cycle continue in the fourth quarter. As Chris mentioned in his prior remarks, we're really starting to see better activity in really all size ranges. It's not just a big box story, or at least fourth quarter wasn't just a big box story. So we can watch these markets literally by the week and month and make decisions on the fly and ramp accordingly.
Daniel Letter: Yeah, Ron, I'll start. Maybe Tim will chime in here. But as I mentioned, we have a significant number of opportunities. Good news is we saw this real estate cycle continue in the fourth quarter. As Chris mentioned in his prior remarks, we're really starting to see better activity in really all size ranges. It's not just a big box story, or at least fourth quarter wasn't just a big box story. So we can watch these markets literally by the week and month and make decisions on the fly and ramp accordingly.
Yeah, Ron, I'll start—maybe Tim will chime in here—but, you know, as I mentioned, we have significant.
And then could you also clarify, just what exactly it means to be kind of an advanced stages of procurement for power? I mean, it's just everything we hear is just taking longer and longer to get power from the utility. So I'm curious like, how far out that stuff that's in advanced stages may take before, you know, power could be delivered like is it? You know, because you have commitments with that power, but it may be, you know, 3 to 5 years, if not more, until it's actually delivered, just trying to get a sense of
both those points.
Number of opportunities. Uh, good news is, we saw, uh, this real estate cycle continued in the fourth quarter as
As uh, as Chris mentioned, in his prior remarks, we're seeing uh, really starting to see a better activity and really all size ranges. It's not just the big box story or at least fourth quarter wasn't just a big box story.
Tim Arndt: Yeah, I would only say that that's precisely right. And, Ron, maybe I would give a different context. It really is built up week by week at Investment Committee, as teams are deciding conditions in their respective markets are appropriate. It's not something that we govern top-down. Thank you, Ron. Operator, next question.
Tim Arndt: Yeah, I would only say that that's precisely right. And, Ron, maybe I would give a different context. It really is built up week by week at Investment Committee, as teams are deciding conditions in their respective markets are appropriate. It's not something that we govern top-down. Thank you, Ron. Operator, next question.
So we can watch these markets literally by the week and months, and make decisions on the fly and ramp accordingly.
Hey, Vince. I would, I'm going to answer your, uh, first question in a more generic way that we think of the program. Overall, as likely being on the order of 60 to 70%, um, powered shell and having some amount in our forecast, reserved for full TurnKey. Um, the the deals that are in, uh, the near future are still working through, uh, those discussions and we've seen, uh, it may be surprising, but we've seen even in late stages or mid builds.
Yeah, I would, I would only say that that's precisely right and and Ron and maybe I would to give a different context. It really is built up, uh, week by week and investment committee as teams are deciding conditions in their respective markets are appropriate. It's it's not something that we govern, uh, top down.
Uh, customers decide to transition from powered shell to full TurnKey. So that's why it's a little squishy right now. But to widen you out to think about the entire uh, initiative, think about 60 to 70% power shell.
Operator: The next question comes from the line of Nick Thillman with Baird. Please proceed.
Operator: The next question comes from the line of Nick Thillman with Baird. Please proceed.
Thank you, Ron. Operator, next question.
Tim Arndt: Hey, good morning. Maybe touching still on the development starts on the industrial side. Is it fair to assume that you still have a little bit more bias ex-US in that market? And then as we think of the land bank overall, you guys have alluded to the mark-to-market upside, but then replacement costs, rents. I guess as we look at the land bank overall, what percentage of that bank do you think is in the money when it comes to new construction, barring if the demand is there? What percentage of that would you say is in the money at this point on new starts here?
Nick Thillman: Hey, good morning. Maybe touching still on the development starts on the industrial side. Is it fair to assume that you still have a little bit more bias ex-US in that market? And then as we think of the land bank overall, you guys have alluded to the mark-to-market upside, but then replacement costs, rents. I guess as we look at the land bank overall, what percentage of that bank do you think is in the money when it comes to new construction, barring if the demand is there? What percentage of that would you say is in the money at this point on new starts here?
The next question comes from the line of Nick Tillman with Baird. Please proceed.
And Vince to your question around. What defines Advanced stages with secured? Uh, Advanced stages. It it's the point when a project has a preliminary utility agreement
It's that really signals progress towards like a firm power, uh, agreement. Uh it's it's really just pending the final design and construction with the utility.
Hey good morning. Maybe touching still on the development starts on the industrial side. Um, is it fair to assume that you're still have a little bit more bias xus in that market? And then as we think of the land bank, overall, you guys have alluded to the mark to Market upside. But then replacement costs rents. I guess as we look at the bank, Land Bank overall, what what percentage of that bank do you think is in the money when it comes to new construction, like barring or if the demand is there, like, how, what percentage of that would you say is in the money at this point? Um, on on new starts here?
Chris Caton: Well, I'll take the second part, and Dan can pick up the geographic mix maybe after. It's a challenging question to unpack the way you're phrasing it. I guess what I would tell you is that we evaluate the valuation of the land bank every quarter, and we continually read out to you how we see that. Presently, we see that around 110% fair market value to book value. So that is going to be a mix of projects that are more deeply in the money than others, but I can only provide you the information on that aggregate basis.
Tim Arndt: Well, I'll take the second part, and Dan can pick up the geographic mix maybe after. It's a challenging question to unpack the way you're phrasing it. I guess what I would tell you is that we evaluate the valuation of the land bank every quarter, and we continually read out to you how we see that. Presently, we see that around 110% fair market value to book value. So that is going to be a mix of projects that are more deeply in the money than others, but I can only provide you the information on that aggregate basis.
Uh, there's significant Capital that's been outdated, at that point. And, and it's definitely a defined path to securing that from Power. Uh, that often happens after many 12, 18, 24 months of negotiations with these utilities and then it typically takes another year to 2, to get to that secured stage and then we we consider secured power. Is when the the data center project has a binding agreement through the form of an energy service agreement with the utility. And that's guaranteed, power delivery, and committing to build that necessary infrastructure.
Thank You. Vince operator next question.
The next question comes from the line of Michael Goldsmith with UBS, please proceed.
Daniel Letter: As it relates to geographies, about 2/3 of the starts that we're assuming for the year on the logistics side are in the US for 2026. That's up about 10% to 15% year over year. We're seeing strong markets in Latin America between São Paulo, between Mexico. I'd say not the border markets of Mexico, but Mexico City. If you go over to Europe, we'll see some starts in Germany, Netherlands, and Northern Europe mostly.
Daniel Letter: As it relates to geographies, about 2/3 of the starts that we're assuming for the year on the logistics side are in the US for 2026. That's up about 10% to 15% year over year. We're seeing strong markets in Latin America between São Paulo, between Mexico. I'd say not the border markets of Mexico, but Mexico City. If you go over to Europe, we'll see some starts in Germany, Netherlands, and Northern Europe mostly.
Well, I'll take the second part and Dan can pick up the, the geographic mix, maybe. After I it's a it's a challenging question on pack, the way you're phrasing. I guess what I would tell you is that we evaluate the valuation of uh the land bank, uh, every quarter and we continually um, read out to you, how we see that presently, we see that around 110%, fair market value to, to book value. So that is going to be a mix of um of projects that are more deeply in the money than others. But uh I can only provide you the information on that aggregate basis.
Tim Arndt: Thank you, Nick. Operator, next question.
Tim Arndt: Thank you, Nick. Operator, next question.
I'd say not the border markets of Mexico, but Mexico City, and then if you go over to Europe, we're seeing, uh, we'll see some starts in Germany, Netherlands, northern Europe, mostly.
Thank you, Nick. Operator, next question.
Operator: The next question comes from the line of Vince Tabone with Green Street. Please proceed with your question.
Operator: The next question comes from the line of Vince Tabone with Green Street. Please proceed with your question.
Daniel Letter: Hi, good morning. I have a few more questions on the data center opportunity. On the 1.2 gigawatts you mentioned are under LOI, would those be mostly Power Shell or turnkey? I'm just trying to get a sense of the total investment for that power. And then could you also clarify just what exactly it means to be kind of in advanced stages of procurement for power? I mean, it's just everything we hear is it's taking longer and longer to get power from the utilities. So I'm curious how far out that stuff that's in advanced stages may take before power could be delivered. Because you do have commitments for that power, but it may be three to five years, if not more, until it's actually delivered. Just trying to get a sense of both those points.
Vince Tibone: Hi, good morning. I have a few more questions on the data center opportunity. On the 1.2 gigawatts you mentioned are under LOI, would those be mostly Power Shell or turnkey? I'm just trying to get a sense of the total investment for that power. And then could you also clarify just what exactly it means to be kind of in advanced stages of procurement for power? I mean, it's just everything we hear is it's taking longer and longer to get power from the utilities. So I'm curious how far out that stuff that's in advanced stages may take before power could be delivered. Because you do have commitments for that power, but it may be three to five years, if not more, until it's actually delivered. Just trying to get a sense of both those points.
The next question comes from the line of Vince Tabone with Green Street. Please proceed with your question.
Hey, Michael. Uh, it's Tim on on your first question. I would think of it more as Matt, to be honest. Uh, we're just getting to earnings per share ffo per share, here, that's quite a quite a high number crossing over 6 dollars now. And if you just think of variability in percentage terms, um the the penny range that we provide uh need needs to move with that growth and widens out it's just just natural.
And Michael, it's Chris on, Southern California grade pickup. There is been a tone shift in Southern California, worth discussing. So look let's acknowledge
Southern California's, dentist off market and Market, vacancies are elevated their
Hi, good morning. Um, I have a few more questions on the data center opportunity on on the 1.2 gigawatt. You mentioned are under Loi, would those be mostly powered shell or TurnKey? I'm, I'm just trying to get a sense of the, you know, total investment for that power. And then could you also, clarify, just what exactly it means to be kind of in advanced stages of procurement, for power? I mean, it's just everything we hear is is taking longer and longer to get power from the utilities. So, I'm curious like how far out that stuff that's in advanced stages may take before, you know, power could be delivered, like is it? You know, because you have commitments with that power, but it may be, you know, 3 to 5 years, if not more, until it's actually delivered, just trying to get a sense of
Tim Arndt: Hey, Vince, I'm going to answer your first question in a more generic way that we think of the program overall as likely being on the order of 60% to 70% Power Shell and having some amount in our forecast reserved for full turnkey. The deals that are in the near future are still working through those discussions. It may be surprising, but we've seen even in late stages or mid-build, customers decide to transition from Power Shell to full turnkey. That's why it's a little squishy right now. To widen you out to think about the entire initiative, think about 60% to 70% Power Shell.
Tim Arndt: Hey, Vince, I'm going to answer your first question in a more generic way that we think of the program overall as likely being on the order of 60% to 70% Power Shell and having some amount in our forecast reserved for full turnkey. The deals that are in the near future are still working through those discussions. It may be surprising, but we've seen even in late stages or mid-build, customers decide to transition from Power Shell to full turnkey. That's why it's a little squishy right now. To widen you out to think about the entire initiative, think about 60% to 70% Power Shell.
what both those points.
But there is a new Direction in customer customer demand and it's giving us confidence in the call that we've been consistent in making in terms of the opportunity for cyclical recovery to emerge. But I'm specifically looking at is in the back half of the year. And so both in the third and fourth quarters, gross absorption and net absorption went in a different direction and an improved Direction. Customers are engaging earlier and renewals, there's broader discussion of new lease requirements, across all submarkets from a wider range of customers.
Hey, Vince. I would, I'm going to answer your, uh, first question in a more generic way that we think of the program. Overall, as likely being on the order of 60 to 70%, um, powered shell and having some amount in our forecast, reserved for full TurnKey. Um, the the deals that are in
And as it relates to submarkets, we often get asked that question. And there is still some nuances, we pass as we approach. This inflection point. Inland Empire is is clearly outperforming Los Angeles. There's great uh improving net absorption in that geography class A over Class. B is outperforming that's a positive for our portfolio and in fact there are a couple of pockets where there are some scarcity and and healthy customer demand that's that's leading to firming and improving pricing. So I'm thinking really big box in Inland Empire putting it together, the cyclist progression, progressing, in short term, weakness is dissipating.
Daniel Letter: And Vince, to your question around what defines advanced stages, what's secured advanced stages, it's the point when a project has a preliminary utility agreement. That really signals progress towards a firm power agreement. It's really just pending the final design and construction with the utility. There's significant capital that's been outlaid at that point, and it's definitely a defined path to securing that firm power. That often happens after maybe 12, 18, 24 months of negotiations with these utilities. And then it typically takes another one to two to get to that secured stage. And then we consider secured power as when the data center project has a binding agreement through the form of an energy service agreement with the utility, and that's guaranteeing power delivery and committing to build that necessary infrastructure.
Daniel Letter: And Vince, to your question around what defines advanced stages, what's secured advanced stages, it's the point when a project has a preliminary utility agreement. That really signals progress towards a firm power agreement. It's really just pending the final design and construction with the utility. There's significant capital that's been outlaid at that point, and it's definitely a defined path to securing that firm power. That often happens after maybe 12, 18, 24 months of negotiations with these utilities. And then it typically takes another one to two to get to that secured stage. And then we consider secured power as when the data center project has a binding agreement through the form of an energy service agreement with the utility, and that's guaranteeing power delivery and committing to build that necessary infrastructure.
In, uh, the near future are still working through, uh, those discussions and we've seen uh, it may be surprising, but we've seen even in late stages or mid build, uh, customers decide to transition from powered shell to full TurnKey. So, that's why it's a little squishy right now. But to widen you out to think about the entire, uh, initiative, think about 60 to 70% power shell.
Thank you. Michael operator. Next question.
The next question comes from the line of Mike Mueller with JP Morgan. Please proceed with your question.
And Vince, to your question around what defines advanced stages with 'secured'—advanced stages, it's the point when a project has a preliminary utility agreement.
Yeah. Hi thanks. Um, do you have a fun contribution expectations for 26, reflect just ongoing development activities for warehouses or does it Factory in any contributions for uh, the new vehicles?
It's that really signals progress towards like a firm power, uh, agreement. Uh it's it's really just pending the final design and construction with the utility.
Uh, the only thing included in the contribution guidance is um, well well that we contemplate for the year. Is that the agility fund that I mentioned in my prepared remarks, uh, before it starts some of the development activity, it will undertake in the year. It will take some contributions of land from prologis, uh, marked up to fair value. Is the way that will operate and that is reflected in the guidance.
Thank you. Michael operator. Next question.
The next question comes from the line of Nicholas ulo with Scotia Bank. Please proceed.
Tim Arndt: Thank you, Vince. Operator, next question.
Tim Arndt: Thank you, Vince. Operator, next question.
Uh, there's significant capital that's been out later at that point, and it's definitely a defined path to securing that from power. Uh, that often happens after many—12, 18, 24 months—of negotiations with these utilities, and then it typically takes another year or two to get to that secured stage. And then we consider secured power as when the data center project has a binding agreement through the form of an energy service agreement with the utility. And that's guaranteed power delivery, and committing to build that necessary infrastructure.
Operator: The next question comes from the line of Michael Goldsmith with UBS. Please proceed.
Operator: The next question comes from the line of Michael Goldsmith with UBS. Please proceed.
Thank you, Vince. Operator, next question.
The next question comes from the line of Michael Goldsmith with UBS. Please proceed.
[Analyst] (UBS): Good morning. Thanks a lot for taking my question. Despite what was a particularly volatile year in 2025, you still ended up at the high end of your initial core FFO promote guidance, which suggests stability in the algorithm, but the spread for the outlook in 2026 is even wider. So is there anything that would add more sensitivity or a wider range of outcomes this year? And then as well, Southern California lease percentage picked up 140 basis points. So if you could touch on the health of that market, that would be appreciated.
Michael Goldsmith: Good morning. Thanks a lot for taking my question. Despite what was a particularly volatile year in 2025, you still ended up at the high end of your initial core FFO promote guidance, which suggests stability in the algorithm, but the spread for the outlook in 2026 is even wider. So is there anything that would add more sensitivity or a wider range of outcomes this year? And then as well, Southern California lease percentage picked up 140 basis points. So if you could touch on the health of that market, that would be appreciated.
Oh, thanks. Uh, Tim, uh, in terms of the guidance on, uh, same store growth this year. I was hoping you could just unpack that a little bit. Um, in terms of the, you know, acceleration same store growth this year, is that, is that just being driven by, you know, easier occupancy comps, or are you also expecting, you know, some improvement in in um, uh, Market to Market that you can capture?
yeah, it's going to be, um,
Tim Arndt: Hey, Michael, it's Tim. On your first question, I would think of it more as math, to be honest. We're just getting to earnings per share, FFO per share here. That's quite a high number, crossing over $6 now. And if you just think of variability in percentage terms, the penny range that we provide needs to move with that growth, and widens out. It's just natural.
Tim Arndt: Hey, Michael, it's Tim. On your first question, I would think of it more as math, to be honest. We're just getting to earnings per share, FFO per share here. That's quite a high number, crossing over $6 now. And if you just think of variability in percentage terms, the penny range that we provide needs to move with that growth, and widens out. It's just natural.
Good morning. Thanks a lot for taking my question. Uh, despite what has was a particularly volatile year in 2025, you still ended up at the high end of your initial core ffo like, promote guidance, which suggests stability in the algorithm but the spread for the Outlook in 2026 is even wider. So is there anything that would add more sensitivity or a wide range of outcomes this year? And then as well as Southern California leads percentage, uh picked up 140 base points. So if you could touch on the help of that market, could that be appreciated?
Chris Caton: And Michael, it's Chris. On Southern California, great pickup. There has been a tone shift in Southern California worth discussing. So look, let's acknowledge Southern California has been a soft market, and market vacancies are elevated there. But there is a new direction in customer demand, and it's giving us confidence in the call that we've been consistent in making in terms of the opportunity for cyclical recovery to emerge. What I'm specifically looking at is in the back half of the year, and so both in Q3 and Q4, gross absorption and net absorption went in a different direction and an improved direction. Customers are engaging earlier in renewals. There's broader discussion of new lease requirements across all submarkets from a wider range of customers.
Chris Caton: And Michael, it's Chris. On Southern California, great pickup. There has been a tone shift in Southern California worth discussing. So look, let's acknowledge Southern California has been a soft market, and market vacancies are elevated there. But there is a new direction in customer demand, and it's giving us confidence in the call that we've been consistent in making in terms of the opportunity for cyclical recovery to emerge. What I'm specifically looking at is in the back half of the year, and so both in Q3 and Q4, gross absorption and net absorption went in a different direction and an improved direction. Customers are engaging earlier in renewals. There's broader discussion of new lease requirements across all submarkets from a wider range of customers.
Hey, Michael. Uh, it's Tim on on your first question. I would think of it more as Matt, to be honest. Uh, we're just getting to earnings per share ffo per share, here, that's quite a quite a high number crossing over 6 dollars now. And if you just think of variability in percentage terms, um the the penny range that we provide uh need needs to move with that growth and widens out it's just just natural.
Let's let's, let's break it apart, on the rent, change piece or the mark to Market. As you mentioned, that will be a decreasing Factor as we're going to change amounts. Uh, get a little bit more, uh, normalized. We had 50% rent, change in 2025, as I mentioned, and you can unpack and infer by looking through. The supplemental will be in the high 30s or, uh, roughly 40% in, uh, 2026 as you evaluate Market, rents, uh, for our discussion of where they sit in their, in our lease, Mark to Market. So so that'll be a smaller contributor long way of saying occupancy drag U will be a little bit less 1 of the predominant. Factors is just lighter. Fdla really uh from the Duke acquisition. Um, that does have a long tail. I'll say that is still dragging uh, net effective, same store growth by 75 to 100%.
And Michael, it's Chris in Southern California at grade pickup. There has been a tone shift in Southern California, worth discussing. So look, let's acknowledge
Basis points, uh, and it'll be with us for a few more years. But, um, it does slowly reduce over time,
Southern California's dentist off market and market vacancies are elevated.
Thank you, Nick. Operator next question.
The next question comes from the line of Todd Thomas with keybanc capital markets, please proceed.
Chris Caton: And as it relates to submarkets, we often get asked that question, and there is still some nuance as we approach this inflection point. Inland Empire is clearly outperforming Los Angeles. There's great improving net absorption in that geography. Class A over Class B is outperforming. That's a positive for our portfolio. And in fact, there are a couple of pockets where there's some scarcity and healthy customer demand that's leading to firming and improving pricing. So I'm thinking really big box Inland Empire. Putting it together, the cycle is progressing, and short-term weakness is dissipating.
And as it relates to submarkets, we often get asked that question, and there is still some nuance as we approach this inflection point. Inland Empire is clearly outperforming Los Angeles. There's great improving net absorption in that geography. Class A over Class B is outperforming. That's a positive for our portfolio. And in fact, there are a couple of pockets where there's some scarcity and healthy customer demand that's leading to firming and improving pricing. So I'm thinking really big box Inland Empire. Putting it together, the cycle is progressing, and short-term weakness is dissipating.
But there is a new direction in customer demand, and it's giving us confidence in the call that we've been consistent in making in terms of the opportunity for cyclical recovery to emerge. What I'm specifically looking at is in the back half of the year. And so, both in the third and fourth quarters, gross absorption and net absorption went in a different direction—and an improved direction. Customers are engaging earlier in renewals, there's broader discussion of new lease requirements across all submarkets from a wider range of customers.
Impact of that drag within the 26 guidance. And whether you expect that to begin alleviating is 27 approaches.
Tim Arndt: Thank you, Michael. Operator, next question.
Tim Arndt: Thank you, Michael. Operator, next question.
As we approach this inflection point Inland Empire is is clearly outperforming Los Angeles. There's great uh improving net absorption in that geography class A over Class. B is outperforming that's a positive for our portfolio and in fact there are a couple of pockets where there's some scarcity and and healthy customer demand that's that's leading to firming and improving pricing. So I'm thinking really big box in Inland Empire putting it together. The cycle is progression progressing and short-term, weakness is participating.
Operator: The next question comes from the line of Mike Mueller with JP Morgan. Please proceed with your question.
Operator: The next question comes from the line of Mike Mueller with JP Morgan. Please proceed with your question.
Thank you, Michael. Operator, next question.
[Analyst] (JP Morgan): Yeah, hi. Thanks. Do your fund contribution expectations for 2026 reflect just ongoing development activities for warehouses, or does it factor in any contributions for the new vehicles?
Michael Mueller: Yeah, hi. Thanks. Do your fund contribution expectations for 2026 reflect just ongoing development activities for warehouses, or does it factor in any contributions for the new vehicles?
The next question comes from the line of Mike Mueller with J.P. Morgan. Please proceed with your question.
Yeah, hi, thanks. Um, do you have a 'fun contribution' expectations for '26, reflect just ongoing development activities for warehouses, or does it factor in any contributions for, uh, the new vehicles?
Tim Arndt: The only thing included in the contribution guidance is, well, that we contemplate for the year, is that the agility fund that I mentioned in my prepared remarks, before it starts some of the development activity it will undertake in the year, it will take some contributions of land from Prologis marked up to fair value, is the way that will operate, and that is reflected in the guidance. Thank you, Michael. Operator, next question.
Tim Arndt: The only thing included in the contribution guidance is, well, that we contemplate for the year, is that the agility fund that I mentioned in my prepared remarks, before it starts some of the development activity it will undertake in the year, it will take some contributions of land from Prologis marked up to fair value, is the way that will operate, and that is reflected in the guidance. Thank you, Michael. Operator, next question.
Yes, pal. I think the best disclosure on this is present in the sub, uh, with regard to the, the pipeline overall and we do dmarc what years of stabilization the projects of fall into? We don't provide It Out by quarter. Uh, that's just a lot of detail for 1, but, you know, in the speculative side that's going to be subject to win. Leasing is, is being achieved. Um, perhaps just to help you. If you wanted to unpack, you know, some breadcrumbs from, uh, prior year starts which we give you quarterly. I'll say, our spec business is typically leasing up between 7 and 9 months. Uh, long-term average would be 7, uh, recent years have been a little bit, uh, a little bit longer. Uh, I expect to see that tighten as market conditions do and then build the suits, of course, come online immediately at that project, completion.
Thank you, Todd operator. Next question.
The next question comes from the line of Brendan Lynch with Barclays. Please proceed.
Great. Thank you for taking my question another follow up in the data center side. Um can you discuss the 5 plus gigawatts of power that you have access to?
The only thing included in the contribution guidance is, well, that we contemplate for the year—is the Agility Fund that I mentioned in my prepared remarks. Before it starts some of the development activity it will undertake in the year, it will take some contributions of land from Prologis, marked up to fair value. That is the way that will operate, and that is reflected in the guidance.
Operator: The next question comes from the line of Nicholas Yulico with Scotiabank. Please proceed.
Operator: The next question comes from the line of Nicholas Yulico with Scotiabank. Please proceed.
Thank you, Michael. Operator, next question.
how fragmented that power is dispersed, either geographically or uh even conceivably by asset and where the largest blocks are that you have
[Analyst] (Morgan Stanley): Oh, thanks. Tim, in terms of the guidance on same-store growth this year, I was hoping you could just unpack that a little bit. In terms of the acceleration, same-store growth this year, is that just being driven by easier occupancy comps, or are you also expecting some improvement in mark-to-market that you can capture?
Nicholas Yulico: Oh, thanks. Tim, in terms of the guidance on same-store growth this year, I was hoping you could just unpack that a little bit. In terms of the acceleration, same-store growth this year, is that just being driven by easier occupancy comps, or are you also expecting some improvement in mark-to-market that you can capture?
The next question comes from the line of Nicholas Ulo with Scotiabank. Please proceed.
Yeah, sure. So our our land and and the, the powered, uh, the power bank, if you will, it is a distributed across Tier 1 and tier 2 markets across the US and Europe. Uh, that's Northern Virginia, that's uh, Silicon Valley. Chicago New Jersey Dallas.
Oh, thanks. Uh, Tim, in terms of the guidance on, uh, same-store growth this year, I was hoping you could just unpack that a little bit. Um, in terms of the, you know, acceleration in same-store growth this year, is that— is that just being driven by, you know, easier occupancy comps, or are you also expecting, you know, some improvement in, in, um, uh, mark-to-market that you can capture?
Tim Arndt: Yeah, it's going to be. Let's break it apart. On the rent change piece or the mark-to-market, as you mentioned, that will be a decreasing factor as rent change amounts get a little bit more normalized. We had 50% rent change in 2025, as I mentioned, and you can unpack and infer by looking through the supplemental will be in the high 30s or roughly 40% in 2026 as you evaluate market rents per our discussion of where they sit in our lease mark-to-market. So that'll be a smaller contributor, long way of saying occupancy drag will be a little bit less. One of the predominant factors is just lighter FDLA, really, from the Duke acquisition. That does have a long tail. I'll say that is still dragging net effective same-store growth by 75 to 100 basis points.
Tim Arndt: Yeah, it's going to be. Let's break it apart. On the rent change piece or the mark-to-market, as you mentioned, that will be a decreasing factor as rent change amounts get a little bit more normalized. We had 50% rent change in 2025, as I mentioned, and you can unpack and infer by looking through the supplemental will be in the high 30s or roughly 40% in 2026 as you evaluate market rents per our discussion of where they sit in our lease mark-to-market. So that'll be a smaller contributor, long way of saying occupancy drag will be a little bit less. One of the predominant factors is just lighter FDLA, really, from the Duke acquisition. That does have a long tail. I'll say that is still dragging net effective same-store growth by 75 to 100 basis points.
Yeah, it's going to be, um,
Portland in the, in the US is Tier 1. It's it's the flap D markets, literally, we've got Amsterdam, London, Paris Frankfurt. Dublin, uh, that we're working and then tier 2. We've got a number of sites as well. Austin, Las Vegas, Phoenix.
Salt, Lake City, Boston Denver, and then, uh, and then Madrid Milan and Berlin in in
In Europe. So very dispersed, a wide range of opportunities here.
Thank you. Brendan operator next question.
Our final question comes from the line of John Kim with BMO Capital markets, please proceed.
Tim Arndt: It'll be with us for a few more years, but it does slowly reduce over time. Thank you, Nick. Operator, next question.
It'll be with us for a few more years, but it does slowly reduce over time.
Let's let's, let's break it apart, on the rent, change piece or the mark to Market. As you mentioned, that will be a decreasing Factor as we're going to change amounts. Uh, get a little bit more, uh, normalized. We had 50% rent, change in 2025, as I mentioned, and you can unpack and infer by looking through. The supplemental will be in the high 30s or, uh, roughly 40% in, uh, 2026 as you evaluate Market rents, uh, per our discussion of where they sit in their, in our lease Mark to Market. So so that'll be a smaller contributor long way of saying occupancy drag U will be a little bit less 1 of the predominant. Factors is just lighter. Fdla really uh from the Duke acquisition. Um, that does have a long tail. I'll say that is still dragging uh, net effective, same store growth by 75 to 100%.
Tim Arndt: Thank you, Nick. Operator, next question.
Basis points, uh, and it'll be with us for a few more years. But, um, it does slowly reduce over time.
Operator: The next question comes from the line of Todd Thomas with KeyBank Capital Markets. Please proceed.
Operator: The next question comes from the line of Todd Thomas with KeyBank Capital Markets. Please proceed.
Thank you for squeezing me in um wanted to follow up on what's Incorporated in same store guidance. In terms of the occupancy growth of US versus International markets. Will that International uh, outperformance continue and also what you're expecting from solar contribution given there wasn't much contribution last year, but we're 1 year closer to a billion dollar Essentials Revenue Target um that you're expecting by 2030.
Thank you, Nick. Operator, next question.
[Analyst] (KeyBank Capital Markets): Hi, thanks. I wanted to go back to the capital deployment, ask about something at a little bit of a higher level. You previously talked about deployment drag in 2026, just given lighter levels of starts in 2024 and 2025, which has impacted FFO growth to some extent in the near term. Can you talk about the cadence of stabilizations during the year and comment on whether you see that accelerating or increasing as the year progresses? I'm just wondering if you can talk about the magnitude and impact of that drag within the 2026 guidance and whether you expect that to begin alleviating as 2027 approaches.
Todd Thomas: Hi, thanks. I wanted to go back to the capital deployment, ask about something at a little bit of a higher level. You previously talked about deployment drag in 2026, just given lighter levels of starts in 2024 and 2025, which has impacted FFO growth to some extent in the near term. Can you talk about the cadence of stabilizations during the year and comment on whether you see that accelerating or increasing as the year progresses? I'm just wondering if you can talk about the magnitude and impact of that drag within the 2026 guidance and whether you expect that to begin alleviating as 2027 approaches.
The next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed.
Yeah, John the occupancy gains, uh, that I would see in same store relatively dispersed across our geographies. There's um, more weight coming out of the US. Generally, of course, but the levels of improvement. Um, even even at the market level, as we think about Chris's, uh, absorption our, um,
Uh, kind of uniform and basis point terms between uh, those geographies, um, solar revenues. Um, I'm glad you highlight, it is, uh,
Tim Arndt: Yeah, Todd, I think the best disclosure on this is present in the sub with regard to the pipeline overall, and we do demark what years of stabilization the projects fall into. We don't provide it out by quarter. That's just a lot of detail for one, but on the speculative side, that's going to be subject to when leasing is being achieved. Perhaps just to help you, if you wanted to unpack some breadcrumbs from prior year starts, which we give you quarterly, I'll tell you our spec business is typically leasing up between seven and nine months. Long-term average would be seven. Recent years have been a little bit longer. I expect to see that tighten as market conditions do. And then Build-to-Suits, of course, come online immediately at project completion. Thank you, Todd. Operator, next question.
Tim Arndt: Yeah, Todd, I think the best disclosure on this is present in the sub with regard to the pipeline overall, and we do demark what years of stabilization the projects fall into. We don't provide it out by quarter. That's just a lot of detail for one, but on the speculative side, that's going to be subject to when leasing is being achieved. Perhaps just to help you, if you wanted to unpack some breadcrumbs from prior year starts, which we give you quarterly, I'll tell you our spec business is typically leasing up between seven and nine months. Long-term average would be seven. Recent years have been a little bit longer. I expect to see that tighten as market conditions do. And then Build-to-Suits, of course, come online immediately at project completion.
Hi, thanks. Uh, I wanted to go back to the capital deployment, um, and ask about something at a little bit of a higher level. You previously talked about the deployment drag in ‘26, just giving lighter levels of starts in ‘24 and ‘25, which has impacted FFO growth to some extent in the near term. Can you talk about the cadence of stabilization during the year and comment on whether you see that accelerating or increasing as the year progresses? I'm just wondering if you can talk about the magnitude and impact of that drag within the ‘26 guidance, and whether you expect that to begin alleviating as ‘27 approaches.
It is in noi. Uh, we're very proud to have uh surpassed that 1 gigawatt goal, by the way, I like to to mention again. Um the growth you see there while impressive on its own is just at a nominal level to be frank, that it kind of pales uh in comparison to the 67 billion dollars of noi. From from from rental uh operations we have now that that will continue to
Grow from here and become a much more meaningful contributor in future years.
This. Now, concludes our question and answer session, and I would like to turn the floor back over to management for any closing comments.
Yeah, pad I think the best disclosure on this is presence in the sub uh, with regard to the, the pipeline overall and we do dmarc. What year is the stabilization of the projects of fall into. We don't provide It Out by quarter. Uh, that's just a lot of detail for 1, but, you know, in the speculative side that's going to be subject to, when leasing is, is being achieved, um, perhaps just to help you. If you wanted to unpack, you know, some breadcrumbs from, uh, prior year starts which we give you quarterly. Let's say our spec business is typically leasing up between 7 and 9 months.
Uh, thank you for joining us today. We appreciate your interest in the company. We look forward to connecting throughout the quarter or during next quarter's call.
Take care.
And ladies and gentlemen, the thank you for your participation that does conclude today's teleconference, please disconnect your lines and have a wonderful day.
Thank you, Todd. Operator, next question.
Uh, long-term average would be 7. Uh, recent years have been a little bit, uh, a little bit longer. Uh, I expect to see that tighten as market conditions do, and then build-to-suits, of course, come online immediately at that project completion.
Operator: The next question comes from the line of Brendan Lynch with Barclays. Please proceed.
Operator: The next question comes from the line of Brendan Lynch with Barclays. Please proceed.
Thank you, Todd operator. Next question.
[Analyst] (Barclays): Great. Thank you for taking my question. Another follow-up on the data center side. Can you discuss the five-plus gigawatts of power that you have access to and how fragmented that power is dispersed either geographically or even conceivably by asset and where the largest blocks are that you have?
Brendan Lynch: Great. Thank you for taking my question. Another follow-up on the data center side. Can you discuss the five-plus gigawatts of power that you have access to and how fragmented that power is dispersed either geographically or even conceivably by asset and where the largest blocks are that you have?
The next question comes from the line of Brendan Lynch with Barclays. Please proceed.
Great, thank you for taking my question. Another follow-up on the data center side: can you discuss the 5-plus gigawatts of power that you have access to?
Geographically or, uh, even conceivably by asset, and where the largest blocks are that you have.
Daniel Letter: Yeah, sure. So our land and the power bank, if you will, it is distributed across tier one and tier two markets across the US and Europe. That's Northern Virginia, that's Silicon Valley, Chicago, New Jersey, Dallas, Portland. In the US, it's tier one. It's the FLAP-D markets. Literally, we've got Amsterdam, London, Paris, Frankfurt, Dublin that we're working. And then tier two, we've got a number of sites as well: Austin, Las Vegas, Phoenix, Salt Lake City, Boston, Denver, and then Madrid, Milan, and Berlin in Europe. So very dispersed, a wide range of opportunities here.
Daniel Letter: Yeah, sure. So our land and the power bank, if you will, it is distributed across tier one and tier two markets across the US and Europe. That's Northern Virginia, that's Silicon Valley, Chicago, New Jersey, Dallas, Portland. In the US, it's tier one. It's the FLAP-D markets. Literally, we've got Amsterdam, London, Paris, Frankfurt, Dublin that we're working. And then tier two, we've got a number of sites as well: Austin, Las Vegas, Phoenix, Salt Lake City, Boston, Denver, and then Madrid, Milan, and Berlin in Europe. So very dispersed, a wide range of opportunities here.
Yeah, sure. So our our land and and the the powered uh the power bank, if you will, it is a distributed across Tier 1 and tier 2 markets across the US and Europe.
That's Northern Virginia. That's Silicon Valley. Chicago, New Jersey, Dallas.
Portland in the, in the US is Tier 1. It's it's the flap D markets, literally, we've got Amsterdam, London, Paris Frankfurt. Dublin, uh, that we're working and then tier 2. We've got a number of sites as well. Austin, Las Vegas, Phoenix, Salt, Lake City, Boston, Denver, and then, uh, and then Madrid Milan and Berlin in in
Tim Arndt: Thank you, Brendan. Operator, next question.
Tim Arndt: Thank you, Brendan. Operator, next question.
In Europe, it's very dispersed—a wide range of opportunities here.
Operator: Our final question comes from the line of John Kim with BMO Capital Markets. Please proceed.
Operator: Our final question comes from the line of John Kim with BMO Capital Markets. Please proceed.
Thank you, Brendan. Operator, next question.
[Analyst] (BMO Capital Markets): Thank you for squeezing me in. Wanted to follow up on what's incorporated in same-store guidance in terms of the occupancy growth of US versus international markets. Will that international outperformance continue? And also, what you're expecting from solar contribution, given there wasn't much contribution last year, but we're one year closer to the billion-dollar essentials revenue target that you're expecting by 2030.
John Kim: Thank you for squeezing me in. Wanted to follow up on what's incorporated in same-store guidance in terms of the occupancy growth of US versus international markets. Will that international outperformance continue? And also, what you're expecting from solar contribution, given there wasn't much contribution last year, but we're one year closer to the billion-dollar essentials revenue target that you're expecting by 2030.
Our final question comes from the line of John Kim with BMO Capital Markets. Please proceed.
Thank you for squeezing me in. Wanted to follow up on what's incorporated in same-store guidance in terms of the occupancy growth of U.S. versus international markets. Will that international outperformance continue, and also, what you're expecting from solar contribution, given there wasn't much contribution last year but we're one year closer to a $1 billion Essentials revenue target.
Tim Arndt: Yeah, John. The occupancy gains that I would see in same-store are relatively dispersed across our geographies. There's more weight coming out of the US, generally, of course, but the levels of improvement, even at the market level, as we think about Chris's absorption, are kind of uniform in basis point terms between those geographies. Solar revenues, I'm glad you highlight. It is in NOI. We're very proud to have surpassed that one gigawatt goal, by the way, I like to mention again. The growth you see there, while impressive on its own, is just at a nominal level, to be frank, that it kind of pales in comparison to the $6 to 7 billion of NOI from rental operations we have now, but that will continue to grow from here and become a much more meaningful contributor in future years.
Tim Arndt: Yeah, John. The occupancy gains that I would see in same-store are relatively dispersed across our geographies. There's more weight coming out of the US, generally, of course, but the levels of improvement, even at the market level, as we think about Chris's absorption, are kind of uniform in basis point terms between those geographies. Solar revenues, I'm glad you highlight. It is in NOI. We're very proud to have surpassed that one gigawatt goal, by the way, I like to mention again. The growth you see there, while impressive on its own, is just at a nominal level, to be frank, that it kind of pales in comparison to the $6 to 7 billion of NOI from rental operations we have now, but that will continue to grow from here and become a much more meaningful contributor in future years.
Um, that you're expecting by 2030.
Yeah, John the occupancy gains, uh, that I would see in same store, relatively dispersed across our geographies, there's um, more weights coming out of the US. Generally, of course, but the levels of improvement. Um, even even at the market level, as we think about Chris's, uh, absorption, our um, uh, kind of uniform and basis point terms between uh, those geographies, um, solar revenues. Um, I'm glad you highlight it is. Uh, it is in noi. Uh, we're very proud to have uh, surpassed that 1, gigawatt goal, by the way, I like to to mention again, um, the growth, you see there, while impressive on its own is just at a nominal level to be frank, that it kind of pales uh in comparison to the 67 billion dollars of noi, from from from rental uh operations we have now. But that will continue to
Grow from here and become a much more meaningful contributor in future years.
Operator: This now concludes our question and answer session, and I would like to turn the floor back over to management for any closing comments.
Operator: This now concludes our question and answer session, and I would like to turn the floor back over to management for any closing comments.
Daniel Letter: Thank you for joining us today. We appreciate your interest in the company. We look forward to connecting throughout the quarter or during next quarter's call. Take care.
Daniel Letter: Thank you for joining us today. We appreciate your interest in the company. We look forward to connecting throughout the quarter or during next quarter's call. Take care.
This now concludes our question-and-answer session, and I would like to turn the floor back over to management for any closing comments.
Uh, thank you for joining us today. We appreciate your interest in the company. We look forward to connecting throughout the quarter or during next quarter's call.
Take care.
Operator: Ladies and gentlemen, thank you for your participation. That does conclude today's teleconference. Please disconnect your lines and have a wonderful day.
Operator: Ladies and gentlemen, thank you for your participation. That does conclude today's teleconference. Please disconnect your lines and have a wonderful day.
And ladies and gentlemen, thank you for your participation. That does conclude today's teleconference. Please disconnect your line and have a wonderful day.
