ProLogis Hopes Q3 Roll Continues

ProLogis reported third-quarter net earnings of $79.8 million, or $0.42 a share, compared with a loss of $7.4 million in the third quarter of 2003. Walt Rakowich, the chief financial officer who becomes president on Jan. 1, tells GlobeSt.com he expects the strong showing to continue.

"We see a great need for the cost savings and efficiencies we offer in logistics in Japan, China, Europe and North America," Rakowich says. "For example, we're investing $100 million in a new state-of-the-art facility in Japan, in Yokohama, outside of Tokyo, and it already is 92.5% pre-leased--and it doesn't open until June 2006."

Asked if he could see any road bumps in the future, he tells GlobeSt.com. "The only road bump would be a world-wide recession," he answers. "But even if that happened, companies would still want to save money and improve efficiencies, so they would want our service. Of course, it would slow spending initially. But we believe companies invest for all cycles, slow ones as well as growth cycles."

For the nine months of the year, FFO per diluted share was $1.84,compared with $1.39 in 2003, a 32.3% increase. "Third quarter results reflect a continuing improvement in global market fundamentals," says K. Dane Brooksher, chairman and chief executive officer. "During the quarter, we achieved same store net operating income growth of 0.67% and average same store occupancy gains of 0.76%. Strong leasing in ourdevelopment pipeline, particularly in Europe, also led to a higher level of Corporate Distribution Facilities Services contributions and third-party dispositions. Due to strong CDFS income for the quarter and improving fundamentals, we are raising the bottom end of our full-year FFO per share guidance, bringing our range to $2.39 to $2.45, before charges related to preferred redemption and the relocation of our IT and corporate accounting functions from El Paso to Denver."

Jeffrey H. Schwartz, president of international operations, says thatcompanies in Japan, "continue to seek modern, more functional space driving build-to-suit activity and leasing in our inventory developments in Tokyo, Osaka and Yokohama. During the quarter, we signed agreements with customers such as Bridgestone Sports and Nippon Express and recently announced a 563,000 sf build-to-suit with Senko, a major Japanese logistics provider."