Logistics warehouse owner Prologis said Tuesday it continued to see strong trends to start the year even as the macroenvironment has begun to cool.

Prologis (NYSE: PLD) reported first-quarter core funds from operations (FFO) of $1.22 per share before the market opened. The result was in line with the consensus estimate and 13 cents higher year over year (y/y). Average occupancy across the portfolio ticked up 60 basis points (bps) to 98% and net effective rent change (over the entire lease term) was more than 30 percentage points higher at 68.8%.

The company’s outlook for 2023 was largely unchanged.

The low end of its full-year core FFO guidance range was raised by 2 cents to $5.42 to $5.50 per share, compared to consensus expectation of $5.50 at the time of the print. It now expects occupancy to range between 97% and 97.5%, a 25-bp increase at the midpoint of the range.

“Given the macroenvironment, we continue to operate our business with a degree of caution,” co-founder and CEO Hamid Moghadam stated in a news release. “We foresee any potential impact on demand as likely to overlap with a deceleration in new deliveries, sustaining momentum with favorable conditions for high occupancy and continued rent growth into 2024.”

Expectations around development stabilizations and starts as well as acquisitions were unchanged.

Prologis ended the quarter with $6.7 billion in liquidity. It issued $3.6 billion of debt during the period and increased its revolving credit line by $1 billion earlier this month. Debt to market capitalization was 19.1%, 100 bps lower than at the end of 2022.

“We are well-positioned to deliver superior growth given our embedded rent upside and proven ability to create value from the build-out of our land bank,” CFO Tim Arndt stated.

The company will host a call at noon Tuesday to discuss these results with analysts. Stay tuned to FreightWaves for continuing coverage of Prologis’ earnings report.

Prologis Ventures is an investor in FreightWaves. 

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