By Liz Young and Nicholas G. Miller

The world's largest owner of industrial real estate says demand for warehouse space is coming back after years of weakness.

Prologis on Wednesday posted fourth-quarter revenue of $2.25 billion, up 2% from a year earlier.

"Customers are making long-term decisions with greater conviction," said Chief Executive Daniel Letter. Letter took over as chief executive of Prologis this month as company founder Hamid Moghadam retired.

Consumer-goods sellers and e-commerce companies are in the market for more space, Letter said in an interview, while companies focused on the housing and automotive sectors are still slow to sign new deals. Letter said Prologis leased 228 million square feet globally in 2025, its highest annual activity since 2021.

Warehouse operators have grappled over the past three years with slow leasing activity coming off a period of frenzied leasing and new development during the pandemic. Real-estate industry experts say a slowdown in new construction over the past few years has more recently helped constrain supply.

The average warehouse vacancy rate across the U.S. remained flat at an 11-year high of 7.1% in the fourth quarter, the second period in the past three years that availability didn't expand, according to commercial real-estate services firm Cushman & Wakefield.

Companies leased about 665 million square feet of warehouse space in the U.S. in 2025, the highest total since 2022, according to Cushman.

Prologis has a portfolio of 1.3 billion square feet of industrial real estate in 20 countries with tenants such as Amazon.com, FedEx and Home Depot. The company has been building more data centers as demand grows for infrastructure to power the artificial-intelligence boom.

Prologis reported consolidated fourth-quarter earnings of $1.49 a share, up from $1.37 in the year-earlier quarter. Core funds from operations were $1.44 a share, in line with analysts' expectations, according to FactSet.

The company guided for 2026 earnings of $3.70 to $4 a share and core funds from operations of $6 to $6.20 a share. Analysts forecast full-year core funds from operations of $6.13 a share.

Shares were down 1% to $128.99 on Wednesday afternoon.

Write to Liz Young at liz.young@wsj.com and Nicholas G. Miller at nicholas.miller@wsj.com

(END) Dow Jones Newswires

January 21, 2026 15:08 ET (20:08 GMT)

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