Troubling Vacancy Trend at Prologis (PLD)

Prologis CEO Hamid Moghadam addressed the leasing challenges at the very top of the company’s first quarter earnings release,

While operating conditions are healthy in the majority of our markets, customers remain focused on controlling costs, which is weighing on decision making and the pace of leasing,

The trend of higher vacancies began in early 2023 as a wave of industrial supply came on the market just as companies began getting concerned about the state of the economy and geopolitical tensions scrambled shipping.

At the company’s investor meeting in January they predicted the across-industrial real estate vacancy could peak around 6%. Since 2019, the Prologis vacancy rate has been ~3.5%.