How Prologis Conquered The World

When Prologis first tried to buy Segro in March 2024, it was rebuffed in a curt, 75-word letter from the chairman of the British logistics giant, describing its bid as opportunistic and inadequate.

The fact that San Francisco-based Prologis is now about to buy Segro for $19B, swallowing whole its largest European rival, sums up the qualities that have helped Prologis rise to the top of not just the world of logistics but real estate and business more broadly: patience, cold-eyed analysis and determination.

Prologis is a ubiquitous name in real estate. Its assets are valued at $240B, it leases an average of 1M SF every day, and goods representing 3% of global GDP flow through the 1.3B SF of warehouses it owns and manages. It is also a major developer of data centers, planning to spend as much as $87B on construction of the booming property type over the next few years.

How it got to that position is a story of adversity overcome, both corporate and on the part of a CEO who left his family and homeland as a teenager. It combines a deep knowledge of its existing market with a willingness to experiment: It knows what racks its customers want in warehouses and buys them in bulk, but it has also expanded into renewable energy generation and storage and electric vehicle charging.

The Segro deal highlights one of Prologis' most crucial strengths: It has a rare track record of never missing on huge corporate acquisitions, on which it has now spent more than $75B in the past decade.

And each merger has built scale that allows Prologis to throw its weight around even further.

"They can come in and dominate any market that they want to dominate, especially from a development perspective," said Reed Vestal, CEO of industrial developer, investor and brokerage Junction Commercial Real Estate.

Prologis declined to comment for this article.

The modern Prologis was formed by the merger of two companies. AMB was an investment manager founded in 1983 by Hamid Moghadam, along with partners Douglas Abbey and Robert Burke. Security Income Capital was founded in 1991 and changed its name to Prologis in 1998.

Both companies went public in the 1990s, became logistics specialists in the 2000s, expanded globally into Europe and Asia, and raised money from investors through funds they managed, as well as using their own balance sheets.

And both hit the skids in 2008 with the onset of the Global Financial Crisis, with their share prices dropping as much as 90%. Prologis was particularly exposed because it had gone on a speculative development jag before the crash and was left with an overhang of unleased assets as the economy tanked and global consumer spending dropped.

AMB was also hit by a combination of falling asset values and elevated debt. It was the first REIT in that cycle to raise equity from investors to shore up its balance sheet in March 2009, a move that allowed the company to switch from defense to offense, Moghadam told the Leading Voices in Real Estate podcast in 2024.

In 2011, AMB proposed a merger with Prologis — it was the smaller company, with a market capitalization of $6B compared with Prologis' $9B, and had a smaller portfolio, but it was in healthier financial shape. It essentially acquired its larger rival, creating the largest industrial REIT in the world.

In spite of being the driving force behind the deal, AMB knew Prologis had more name recognition with customers, and thus the Prologis name was retained for the combined firm.

"They swallowed their pride, in some ways," Jack Fraker, Newmark president and global head of industrial and logistics capital markets, told Bisnow.

Moghadam and Prologis CEO Walter Rakowich led the combined company as co-CEOs, in the explicit knowledge that Rakowich would soon retire and Moghadam would take sole charge, as happened in 2012.

Moghadam and senior leadership then put in place a template that it would roll out with subsequent acquisitions, picking the best staff from the combined companies to run and manage various regions where there was overlap.

"They went around the nation to find the best-in-class professionals, whether they were Prologis or AMB, in each one of the cities, all the way through the whole platform," Fraker said. "And they were very agnostic."

That quality flows down from the top of the company, Fraker said, starting with Moghadam, who is now executive chairman. AMB alumnus Dan Letter took over as chief executive at the beginning of 2026.

Moghadam's own story is eye-catching. His father was a construction and finance executive in pre-revolutionary Iran, and he would drive his son around the family firm's construction sites in Tehran on weekends because it was the only time you could get around the traffic-clogged city in the 1960s, Moghadam told The Matthews Mentality podcast.

He went to school in Europe in his early teens and then to university in the U.S., starting at the prestigious Massachusetts Institute of Technology at the age of 16. He was set to return home in 1978 but was prevented by the Islamic revolution led by Ayatollah Khomeini beginning to ferment. He went to business school instead, attending Stanford, and started AMB a few years after he left.

"He's a really, really intelligent guy. We could be talking about another industry, and he would have been successful at whatever he was doing," Fraker said. "And he's very granular, so he's very involved in the day-to-day of leasing, what customers are saying. He always asks the right questions."

Deal Spree

Over the last 15 years, Prologis has exploded from a $15B market capitalization to a company valued at $130B because it knows its market very well and has gotten acquisition after acquisition right.

The nature of consumerism has also been a boon to the owners and developers of logistics real estate. Coming out of the financial crisis, Prologis was already focused on being close to the consumer rather than the production economy.

"If it doesn't go into a shipping container, we're not interested in it," Moghadam told Leading Voices.

The health of logistics businesses has been supercharged by the migration of retail to a multichannel business. Only 20% of retail is undertaken online in economies like the U.S. and UK, but that has been enough to create huge new demand for warehouses in the past 20 years.

Moghadam said he and his colleagues were early believers in the future of e-commerce, selling out of shopping centers in the late 1990s and early 2000s to focus on logistics. That doesn't mean Prologis has always stepped perfectly. When given the chance to invest in a startup in the sector, the company chose Webvan, a now-defunct grocery delivery company set up by Borders founder Louis Borders, rather than Amazon.

With a shored-up balance sheet, Prologis went on a remarkable acquisition spree. In 2015, it bought KTR Capital Partners for $5.9B. It snapped up listed REIT DCT Trust for $8.5B in 2018, Industrial Property Trust for $4B in 2019 and Liberty Property Trust in 2020 for $13B. In 2022, it struck the biggest deal of the lot, buying Duke Realty, one of its largest U.S. rivals, for $26B.

Not many deals from 2022 look good today, given the way rates have risen and economies have slowed. But Prologis shares have since risen by more than a third.

"I think they've just been very disciplined about finding who to buy," Ekaterina Avdonina, CEO and co-founder of Mirastar, a European logistics investment and development platform backed by KKR, told Bisnow.

"The first question is, 'How complementary is it to the existing business?' They probably spend more time answering that question rather than just going on the merits of, 'Oh, this looks cheap or attractive' or, 'Is there a special situation here.'"

The Segro acquisition is an example of this discipline. When the company was rebuffed in 2024, it didn't go out and buy another European platform because money was burning a hole in its pocket. It spent two years working to get the business it wanted.

"We start every acquisition working from the basis that scale is a negative, unless it can be proved otherwise," Moghadam told Leading Voices.

The added complexity of more assets and more people means deals need to be truly complementary to be worth doing, he said.

That being said, Prologis clearly benefits from its massive size. It paid for Duke using its shares, something few companies can do, so it didn't have to use cash or take on more debt. About three-quarters of the $19B being paid for Segro will come from Prologis stock.

Then there is the benefit of scale and the company's capital structure in fields like development.

Prologis can pay slightly more for a site than other developers, Junction's Vestal said, because it has the ability to hold the completed asset on its balance sheet or sell it to one of the funds it manages — funds that provide a source of fee income. The firm manages commingled vehicles as well as joint ventures with global investors like Norges Bank Investment Management. It can underwrite deals at a slightly lower yield on cost than typical merchant developers because it has a guaranteed exit on completion.

Its portfolio also gives it in-depth market knowledge about where rents are going and pricing power when building speculatively or negotiating renewal leases.

"That means they're not quite playing hardball, but they don't have to give away the shop either," Fraker said.

All real estate firms talk about giving customers what they need, but Prologis has put its money where its mouth is, creating a division called Prologis Essentials that bulk-buys items like racking and forklift trucks for its tenants to buy or rent, meaning they can move into properties quicker and more cheaply. Smaller customers in particular can benefit from the economies of scale Prologis can achieve.

It also offers customers a type of lease called Clear Lease, which means customers don't pay for repairs when they move out as they would with a standard net lease. That costs Prologis money but engenders goodwill and makes life easier for tenants. All of that goes toward keeping tenants in buildings and income ticking up.

Getting its core business right has allowed the company to push into adjacent areas.

"A lot of the innovation lies in how diversified they are," Mirastar's Avdonina said. "They're not a pure-play industrial logistics operator, developer or manager."

The company set up a venture capital arm a decade ago and has invested $300M in more than 50 companies in fields including renewable power generation, battery storage and electric vehicle charging. It then rolled out those technologies across its portfolio.

Prologis now has the second-largest rooftop solar power generation portfolio in the U.S., which generates about 1.4 gigawatts of power a year. Some of that can be sold back to electricity grids, but much of it is used to charge the delivery fleets of customers, particularly smaller last-mile delivery vans. As those fleets continue to switch from gas and diesel to electric, that service will be more and more in demand, the company said in a recent presentation.

And then there was the early push into data centers. The developer has been in the sector for more than 20 years but has ramped up since the pandemic, undertaking a review of its business and identifying where it has the power secured to attract data center customers. About 75 of its 2,800 staff are pure data center professionals, and it has 175 in-house energy professionals.

"Imitation is the greatest form of flattery, and every other major industrial real estate owner in the nation is doing the same sort of comprehensive surveys of their properties around the country," Fraker said.

The firm has created a 5.8 GW data center pipeline totaling about 30 projects, which could cost between $17B and $87B to build out, depending on whether Prologis builds them as powered shells or fully fleshes them out into turnkey facilities.

While those projects account for less than 1% of its total portfolio value today, it will be a huge area of growth for the company going forward. It tends to develop data centers with its own balance sheet and then sell, but the firm said it is beginning to think about creating funds around the assets in the future.

"While this opportunity has been years in the making, we believe we're still in the early innings," Letter told analysts in its Q2 2026 earnings call.

In terms of the future, there is the Segro acquisition to complete and an integration process to undertake, identifying and rewarding the best staff from the two companies.

And at about 10% of the portfolio, China and India offer room for growth, primed as they are for increasing consumer spending from a growing middle class. The firm is expanding into the Middle East.

But there is also growth to come in the U.S. As the company outlined in its most recent analyst conference calls, rents are starting to rise again after a period of stagnation, with limited new supply and demand starting to increase.

"It's clear we're entering the next phase of growth, where logistics, data centers and energy increasingly reinforce one another," Letter said.