VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
PRICE: 0 CENTS
Wednesday, December 31, 2025
Prologis, Inc.
PLD · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Prologis is a global logistics real estate REIT focused on high-barrier markets and urban infill/Last Touch distribution. The Real Estate segment (rental operations and development) is supported by scarce locations, portfolio and procurement scale, and an investment-grade cost of capital that helps it fund growth through cycles. The Strategic Capital segment manages co-investment ventures for institutional investors, generating fee income and providing third-party capital that supports portfolio growth and helps self-fund development. Key risks include industrial demand cyclicality, new supply, higher interest rates/cap rates, and competitive pressure from other landlords and investment managers.
Primary segment
Real Estate (Rental Operations and Development)
Market structure
Competitive
Market share
—
HHI: —
Coverage
2 segments · 6 tags
Updated 2025-12-31
Segments
Real Estate (Rental Operations and Development)
Logistics/industrial real estate leasing & development
Revenue
91.8%
Structure
Competitive
Pricing
strong
Share
—
Peers
Strategic Capital (co-investment ventures / investment management)
Logistics real estate investment management (co-investment ventures)
Revenue
8.2%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Moat Claims
Real Estate (Rental Operations and Development)
Logistics/industrial real estate leasing & development
Revenue share implied from FY2024 segment reporting (Note 17; dollars in thousands): Real Estate segment total revenues 7,529,703 vs consolidated total revenues 8,201,610. Source: https://ir.prologis.com/financials/sec-filings/content/0001193125-25-067087/d906428dars.pdf. Market structure marked 'competitive' based on company disclosure that real estate ownership is highly fragmented.
Geographic Natural
Supply
Geographic Natural
Strength
Durability
Confidence
Evidence
Focus on high-barrier, high-demand logistics locations (infill/Last Touch near major cities and transportation infrastructure) that are difficult to replicate at scale.
Erosion risks
- New supply near key corridors reduces scarcity rents
- Demand shock from weaker trade/e-commerce volumes
- Tenant network redesign reduces need for infill footprint
Leading indicators
- Vacancy and delivered supply in core infill submarkets
- Net effective rent change and cash rent change on renewals
- Retention rate and lease mark-to-market
Counterarguments
- Industrial space can be built quickly where land and permits are available; advantages are market-by-market
- Some tenants trade delivery speed for cheaper rent in ex-urban locations
Permits Rights Of Way
Legal
Permits Rights Of Way
Strength
Durability
Confidence
Evidence
Entitlement and permitting capabilities can shorten project timelines in high-barrier markets and reduce execution risk on development/redevelopment.
Erosion risks
- Regulatory changes that speed approvals for competitors
- Community opposition increases delays and costs
Leading indicators
- Average entitlement time and success rate in target markets
- Development starts achieved vs planned starts
Counterarguments
- Well-capitalized local developers can also build strong entitlement capabilities
- Permitting is ultimately controlled by municipalities, limiting any firm advantage
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Large owned-and-managed (O&M) footprint supports lower overhead per unit, procurement advantages, and enterprise-grade service for multi-market tenants.
Erosion risks
- Competitors consolidate and replicate scale benefits
- Technology commoditizes property management processes
Leading indicators
- Adjusted G&A as % of O&M portfolio (or per square foot)
- Development margins and stabilized yields vs peers
- Customer retention and multi-market leasing penetration
Counterarguments
- Local market execution often matters more than global scale
- Scale can increase organizational complexity and slow decisions
Cost Of Capital Advantage
Financial
Cost Of Capital Advantage
Strength
Durability
Confidence
Evidence
Investment-grade credit profile and liquidity can lower funding costs and increase resilience versus smaller landlords/developers, improving bid discipline and cycle survival.
Erosion risks
- Higher interest rates compress investment spreads
- Credit downgrade from leverage increase or asset value decline
Leading indicators
- Credit rating outlook changes
- Net debt / EBITDA and fixed-charge coverage
- Weighted average interest rate on debt and liquidity levels
Counterarguments
- Large private capital pools can also access low-cost financing
- In some markets, local banks may fund smaller players competitively
Long Term Contracts
Demand
Long Term Contracts
Strength
Durability
Confidence
Evidence
Contracted lease cash flows with periodic mark-to-market resets as leases roll; renewal spreads provide a mechanism to capture market rents over time.
Erosion risks
- Lease rollover coincides with weaker market rents
- Higher tenant incentives reduce net effective pricing
Leading indicators
- Lease mark-to-market vs in-place rents
- Retention rate and downtime on expirations
- Same-store NOI growth trend
Counterarguments
- Industrial leases are shorter and more cyclical than some property types
- Lease repricing can work against landlords in downturns
Procurement Inertia
Demand
Procurement Inertia
Strength
Durability
Confidence
Evidence
For large multi-market tenants, a scaled landlord offering a single point of contact can reduce search/coordination costs and create stickier relationships.
Erosion risks
- Tenant procurement becomes more price-driven in oversupplied markets
- Major tenants internalize real estate or diversify landlords aggressively
Leading indicators
- Retention rate for top 25 customers
- Share of leasing volume from multi-market accounts
- Net promoter score / customer satisfaction metrics (if disclosed)
Counterarguments
- Landlord choice is still primarily location-and-price driven, limiting relationship effects
- Large tenants can multi-source landlords to maintain leverage
Strategic Capital (co-investment ventures / investment management)
Logistics real estate investment management (co-investment ventures)
Revenue share implied from FY2024 segment reporting (Note 17; dollars in thousands): Strategic Capital segment total revenues 671,907 vs consolidated total revenues 8,201,610. Source: https://ir.prologis.com/financials/sec-filings/content/0001193125-25-067087/d906428dars.pdf.
Reputation Reviews
Demand
Reputation Reviews
Strength
Durability
Confidence
Evidence
Fundraising and retention supported by reputation/track record with large institutional investors and a logistics-specialist platform.
Erosion risks
- Underperformance vs benchmarks reduces fundraising
- Fee compression from competition and investor bargaining power
Leading indicators
- Assets under management (AUM) growth
- New venture launches and capital raised
- Fee revenue excluding promotes
Counterarguments
- Many large global managers can offer logistics strategies and compete on fees
- Investor loyalty may be limited if returns lag peers
Long Term Contracts
Demand
Long Term Contracts
Strength
Durability
Confidence
Evidence
Open-ended and long-term ventures can support recurring fee income and long-duration relationships (with some valuation-linked variability).
Erosion risks
- Property value declines reduce fee bases
- Investor redemptions/outflows from open-ended vehicles
Leading indicators
- Net inflows/outflows in open-ended ventures
- Venture property values and leverage levels
- Promote income volatility
Counterarguments
- Fee income is often tied to valuations and can fall in downturns
- Institutional capital can reallocate rapidly across managers
Cost Of Capital Advantage
Financial
Cost Of Capital Advantage
Strength
Durability
Confidence
Evidence
Third-party capital in co-investment ventures expands buying power and can help self-fund development via asset contributions/sales, while generating management fees.
Erosion risks
- Institutional risk appetite shifts away from real estate
- Higher financing costs reduce attractiveness of levered real estate returns
Leading indicators
- Gross book value / AUM in co-investment ventures
- Capital raising volume and venture leverage
- Fee revenue growth excluding promotes
Counterarguments
- Capital access is not exclusive; investors can fund competing sponsors
- Platform benefits depend on sustained performance and governance alignment
Evidence
strategically located in markets characterized by large population densities... high barriers to entry
Supports the claim that key markets are constrained and location advantages can persist.
infill and Last Touch facilities... located within and adjacent to major cities to ensure same-day delivery
Urban proximity and transport adjacency create scarcity value for time-sensitive distribution.
supported by our... government and community affairs and entitlement teams
Indicates dedicated internal capability for entitlements/approvals.
1.3 billion square foot O&M portfolio... single point of contact for our multi-market customers
Scale enables centralized coverage for customers operating across many markets.
procurement capabilities... secure high-demand construction materials at a lower cost
Suggests unit cost advantages in development/redevelopment through purchasing power.
Showing 5 of 15 sources.
Risks & Indicators
Erosion risks
- New supply near key corridors reduces scarcity rents
- Demand shock from weaker trade/e-commerce volumes
- Tenant network redesign reduces need for infill footprint
- Regulatory changes that speed approvals for competitors
- Community opposition increases delays and costs
- Competitors consolidate and replicate scale benefits
Leading indicators
- Vacancy and delivered supply in core infill submarkets
- Net effective rent change and cash rent change on renewals
- Retention rate and lease mark-to-market
- Average entitlement time and success rate in target markets
- Development starts achieved vs planned starts
- Adjusted G&A as % of O&M portfolio (or per square foot)
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