Prologis CEO denies Amazon, FedEx industrial pullback

REIT slows acquisitions but continues to build for specific tenants

Prologis CEO Hamid Moghadam and CFO Timothy Arndt (Prologis, Getty)
Prologis CEO Hamid Moghadam and CFO Timothy Arndt (Prologis, Getty)

Always read more than the headlines — that’s the advice Prologis CEO Hamid Moghadam and CFO Timothy Arndt gave analysts on a third-quarter earnings call on Wednesday.

The industrial REIT is not facing any major headwinds and has not seen any major pullback from big e-commerce tenants, including Amazon.com and FedEx, Moghadam said on the earnings call.

“We have zero givebacks from Amazon,” he said. “We thought we’d have two, but they continue to take new space from us.”

Amazon has canceled development plans for nearly 10 million square feet of warehouse space across the country, according to various reports. None of that has impacted Prologis, Moghadam said.

Earlier this month, Amazon leased a 345,000-square-foot industrial complex from Prologis, despite pulling back from other locations across the U.S.

Prologis reported $1.15 billion in revenue in the third quarter, up from about $1 billion in the third quarter of 2021. Its profit is also up about 19 percent year-over-year, reaching $914 million in the third quarter.

Despite this growth, the company is cautious of an economic slowdown. It doesn’t plan to halt acquisitions, but will be more selective in terms of deals, Moghadam and Arndt both said.

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“Every start decision is done deal by deal,” Moghadam said on the earnings call. “If the prospects are there, we’ll build it.”

About 60 percent of the Prologis’ development deals right now are build-to-suit projects, meaning Prologis constructs a building for a specific customer.

Moghadam added there’s about a 50-50 chance of a recession — maybe 60-40, he contended, giving his perspective on the overall state of the economy.

Though tenants with more “mature” supply chains are slowing down spending — including Amazon, which has freezed hiring across some divisions — it’s not having an impact on Prologis’ operations, he said.

“There are other headlines coming down the pipe,” said Michael Curless, Prologis’ chief customer officer. “Look beyond them.”

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