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Prologis Powers Into AI Era With $8B Data Center Expansion
The company is converting warehouse space to support AI and power infrastructure.
Jordan B.
October 06, 2025
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Good morning. As demand for AI infrastructure skyrockets, Prologis is making a bold pivot beyond warehouses. The logistics giant is investing $8B to build data centers and secure energy from every source—solar, nuclear, and everything in between.
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🎙️This week on No Cap: Heitman’s Brian Pieracci explains why alternatives like self-storage and senior housing are outperforming traditional CRE and reshaping what “core” really means.
Market Snapshot
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Beyond Warehouses
Prologis Powers Into AI Era With $8B Data Center Expansion
The industrial real estate giant is shifting beyond warehouses, pouring billions into data centers and chasing energy from every possible source.
Warehouse to data hubs: Prologis is making a multibillion-dollar pivot from logistics to digital infrastructure, investing $8B to build 20 data centers—scaling to 100—to support the AI and cloud economy. CEO Hamid Moghadam calls it a shift from real estate to infrastructure.
Energy from all sources: CEO Hamid Moghadam says meeting AI’s massive power needs requires tapping everything from nuclear to natural gas to solar. Prologis is already a top consumer of electricity, with 3.4 gigawatts of capacity in its pipeline. It’s also expanding rooftop solar projects across its 1.3B SF warehouse network, including 45 new installations in Illinois.
Logistics meets digital: Real estate as With over 6,000 global buildings, Prologis is eyeing conversions of existing warehouses into data centers and power hubs. CFO Tim Arndt called this portfolio “a rich palette for value creation,” noting the structural similarities between logistics facilities and data centers.
Energy as security: The data center boom is being cast as a national security issue. U.S. Interior Secretary Doug Burgum called for faster energy permitting to “win the AI arms race” with China, while experts point to nuclear power as key to meeting the nonstop demands of tech giants like Amazon, Google, and Microsoft.
➥ THE TAKEAWAY
Big picture: Prologis isn’t just building warehouses anymore—it’s positioning itself as a critical player in the AI economy’s energy-hungry backbone. The REIT’s bet suggests the future of industrial real estate will look less like storage space and more like digital factories powered by an “all of the above” energy strategy.
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✍️ Editor’s Picks
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Wealth titan: Global real estate is now valued at $393.3T—outstripping equities, debt, and gold—with the U.S. and China leading the market.
Cautious optimism: Deloitte’s 2026 CRE outlook sees recovery slowed by volatility, but new capital, selective lending, and digital growth keep opportunities alive.
Distress watch: CMBS delinquencies dipped in September, but office remains troubled as easing rates and strong issuance create selective opportunities.
Tax repeal: Florida ended its commercial lease tax, saving tenants $900M a year and boosting business growth.
Confidence dip: Consumer sentiment fell to its lowest since April as inflation fears and weak job outlooks weigh on households.
Data gaps: With federal stats facing delays and cuts, CRE leaders are turning to state sources, private data, and local insights to keep decisions grounded.
Game changer: Rising investment in women’s pro sports is fueling new training facilities and stadiums, sparking real estate and community growth.
🏘️ MULTIFAMILY
Investor freeze: L.A.’s multifamily pipeline is stalling as taxes, regulations, and wage pressures push investors and developers away.
New chapter: Ex-MRP exec John Begert joined Trinsic to lead Mid-Atlantic growth, starting with a Herndon office buy eyed for redevelopment.
Hudson rising: S3 Capital lent $255M for Maxal’s $1B Edgewater project, starting with a 25-story, 381-unit tower and new ferry link to Manhattan.
High rise deal: KBS sold the 286-unit Park Central Apartments in Raleigh’s North Hills for $132.5M to Fairfield Residential, marking a strong ROI.
🏭 Industrial
Data expansion: Brookfield-backed Centersquare bought 10 data centers valued at $1B, expanding its portfolio to 80 facilities.
Foam fortune: Future Foam paid $145M for its Fullerton facility, triple its 2022 price and the priciest OC industrial deal of 2025.
Capital boost: Store Capital raised $625M through its largest securitized notes deal, 39% above target, to fuel net-lease growth.
Dollar deal: Dollar Tree acquired a 1.3M SF warehouse at Park303 near Phoenix for $147M, its first regional distribution hub there.
🏬 RETAIL
Flight debut: Nike’s Jordan Brand will open its first U.S. World of Flight store Oct. 10 in Philadelphia.
Table stakes: Houston restaurateurs want landlords to curb rent hikes and be more transparent, stressing restaurants add lasting value to projects.
Retail split: Off-price chains are capturing budget-conscious shoppers while luxury brands hold affluent buyers, leaving mid-tier retailers squeezed in a bifurcated market.
Deal of the day: CenterCal Properties and DRA Advisors bought the 870K SF Long Beach Towne Center for $145M.
🏢 OFFICE
Tech tenants: AI firms are rapidly boosting their NYC office footprint, leasing nearly 500K SF this year, already outpacing 2024.
Arena vision: San Jose bought a $13.5M downtown lot to redevelop into a convention or arena-anchored mixed-use hub.
Patient focus: Software firm Courier Health has signed a full-floor lease for over 15,000 SF at 135 Madison Ave. in Manhattan’s Plaza District.
🏨 HOSPITALITY
Loan limbo: Miami Beach’s Hotel Breakwater defaulted on its $28M loan for the third time amid weak cash flow and legal woes.
Rockstar real estate: Jon Bon Jovi’s Nashville bar is for sale at $130M with a 20-year leaseback.
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📈 CHART OF THE DAY
U.S. rents fell 0.8% year-over-year in September, marking continued softness from oversupply, with Sun Belt markets leading declines while San Francisco posted the fastest growth.
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