Logistics real estate operator Prologis beat third-quarter estimates Tuesday before the market opened but noted softened demand.
The San Francisco-based company reported core funds from operations (FFO) of $1.30, 5 cents ahead of analysts’ expectations but 43 cents lower year over year (y/y).
“Our results reflect strong execution by our team and the quality of our global portfolio,” said co-founder and CEO Hamid Moghadam. “That said, until there is more stability in the economy, negative customer sentiment will weigh on demand. We remain focused on capturing our embedded lease mark-to-market, building out our land bank into a favorable future supply environment, and partnering with our customers to address their most critical pain points.”
Occupancy across Prologis’ (NYSE: PLD) portfolio was 97.1% in the quarter, 60 basis points lower y/y. It commenced leases on 46.4 million square feet of space, which was a 9% reduction compared to the year-ago period.
Net effective rent change (over the entire lease term) was up more than 24 percentage points to 84%.
Prologis raised the front end of its guidance range by 2 cents to reflect the beat. The new range is $5.58 to $5.60, which brackets the current consensus estimate.
The company will host a call Tuesday at 12 p.m. EDT to discuss third-quarter results.
Table: Prologis’ key performance indicators
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