Prologis Says Warehouse Leasing Rises After U.S. Election Eases Uncertainty

Prologis reports a surge in warehouse leasing following the U.S. election, which helped reduce economic uncertainty

Prologis, the world’s largest industrial developer and landlord, announced a spike in warehouse leasing activity following the U.S. November election, which has improved the company’s outlook for warehouse demand in 2025.

In the fourth quarter, Prologis signed a record-breaking 60 million square feet in leases, with the majority of agreements made after the November 5 election, which alleviated economic uncertainties. This coincided with Donald Trump’s inauguration as the 47th president of the U.S. earlier this month.

The positive leasing momentum has continued into the new year, according to Prologis Chief Financial Officer Tim Arndt, who spoke during the company’s recent earnings call. Prologis

President Dan Letter added, “Post-election, we’ve experienced a boom. For 10 weeks, solid decision-making has unlocked deals that had previously stalled.”

However, logistics operators remain cautious, as they prepare for potential tariffs on imports from Mexico, Canada, and other countries, which President Trump had promised during his campaign. These tariffs could take effect as early as February 1. Prologis executives noted that it is too early to predict the exact impact of these tariffs and trade policies on the company’s logistics customers. They emphasized that demand for warehouse space is primarily driven by e-commerce growth, supply chain modernization, and consumption patterns rather than trade policies.

CEO Hamid Moghadam explained, “Given labor limitations, tariffs will be highly inflationary. We will see more of them, but they should moderate once other political goals are achieved.”

Despite these uncertainties, consumer spending remains strong, with sectors like e-commerce, general goods, electronics, and food and beverage showing resilience, Letter reported.

Delays In Decision-Making

Prologis executives noted that many customers had been postponing lease decisions while awaiting the election outcome. Since 2023, a number of companies hesitated to sign new leases, citing higher borrowing costs and geopolitical concerns, including the uncertainty surrounding the U.S. election. However, this trend reversed in the weeks following the November election.

Arndt mentioned that a slowdown in warehouse construction this year would further strengthen occupancy rates, driving up rents and increasing property values.

“We believe that market vacancy rates are nearing their peak, and rents will rise later this year,” Arndt said.

Prologis reported $2.2 billion in revenue for Q4, a rise from $1.89 billion in the same period of 2023. For the full year, the company’s $8.2 billion in revenue surpassed 2023’s $8.03 billion, fueled in part by the increased development of data centers, a rapidly growing sector in commercial real estate due to the demand for artificial intelligence and cloud-based data storage.

Prologis’ property sales in Q4 totaled over $900 million, including the $440 million sale of a warehouse in Elk Grove Village, Illinois, which was converted into a data center. DigiCo Infrastructure REIT, a subsidiary of HMC Capital, acquired the 189,240-square-foot property.

Source: CoStar