FIBRA Prologis

Operating momentum & occupancy outperformance (good) - Period-end occupancy: 96.5%, about +360 bps above the market; up 70 bps vs Q2 (avg occupancy ~95%). - Leasing pace strong: leased ~3.0m sq ft in the quarter; YTD leasing ~9.0m sq ft (~90% of 2026 expirations). - Net effective rent change: ~+36% (supports rent growth on roll/annual bumps). - Management cited improving market demand: net absorption rising, construction starts declining, and construction pipeline down 34% (more balanced market expected).

Demand outlook: absorption growth guide (good with clear forecast) - Leasing activity ~9m sq ft; including Mexico City build-to-suit deliveries, net absorption ~12m sq ft YTD (more than 2x first-half average). - 2026 net absorption forecast: ~30m sq ft, described as just below 2023 peak and ~2x pre-pandemic levels. - Data center leasing is emerging: ~20% of leasing YTD (~6m sq ft) attributed to data center-related customers.

Guidance trimmed for credit-quality impact (bad/surprising negative) - FFO: $97m (+8% vs 2025), $0.057/certificate; AFFO: $76m (-2% YoY) (AFFO drag vs FFO). - Key headwind: higher bad debt reserves from two customers (~~1m sq ft total)—described as isolated/tenant-specific issues (border market + auto-related financial difficulties; one also impacted by tariff situation). - Company action: resolved ~40% of exposure with re-leasing at rents ~50% higher; remaining work continues (timing not fully certain). - Revised outlook: - Period-end occupancy guidance: 96.5%–97.5% (narrowed). - Same-store cash NOI growth: 7%–8% (revised down/up?—company emphasized the change is mainly due to higher bad debt reserves). - FFO per certificate: $0.24–$0.25 (narrowed). - Acquisition guidance: ~$100m (adjusted primarily for timing—permits/utilities and Prologis pipeline conversion taking longer).