After a punishing recession, glimpses of daylight began appearing on the real estate horizon. Inflation slowed and the economy sputtered back to life. It was precisely the whisper of confidence needed for San Francisco businessmen Hamid Moghadam and Douglas Abbey to leave their real estate consulting positions and open up their own firm—an innovative venture that established many of the enduring principles that remain hallmarks of the company to this day. 

Both men arrived at their positions via circuitous routes. After earning his MBA from Stanford in 1980, Moghadam, an Iranian-born MIT grad, whose first job was working as a part-time employee at Homestake Mining Company. Abbey taught elementary school in the Bronx and was a standout at the University of California, Berkeley, where he earned a master’s degree in city planning. Both men’s work caught the attention of business professor John McMahan, who recruited the pair as consultants for his firm, John McMahan & Associates. 

At a time when the commercial real estate industry was rife with questionable practices, McMahan offered something unique: professional real estate consulting services. McMahan’s firm offered expert advice for a fee, not unlike a trusted lawyer or accountant. 

Inspired by the idea of a firm that focused on satisfying the needs of clients, the pair left McMahan to start their own company. 

Exceeding industry expectations, the team supplied clients with richly researched reports that went beyond simple rental advice into hard data on urban trends and demographic shifts, providing context for every piece of real estate advice they offered. 

“We were always thinking about how we could help clients and not necessarily how we could make money,” Moghadam said. “We did OK in the making-money department, but I think it was really by serving customers well. And research was an important part of it.” 

“You need a good piece of real estate on the right corner with the right tenants,” Abbey said. “Yes, that’s all interesting, but you really need to step back and think: Where is the city? What kind of property types are you going to invest in—or not—and why? That was a very valuable tool that from the very beginning was instrumental, I think, to our success.” 

The firm’s work led to larger transactional service contracts, including negotiating new leases and dispossessing old ones. And in 1984, the team forged a strong connection with a lawyer named Bob Burke, the managing partner of one of its clients, and asked him to join the firm as a partner. 

Burke, who had much-needed experience in attracting capital from institutional investors, accepted the offer. Combining the first initials of their surnames, the group rebranded their firm AMB Investments, Inc., a Prologis legacy company, and moved into a small office near the current headquarters at Pier One. The three partners were confident that the unique mix of research, real estate knowledge and investment experience rendered the firm capable of offering advice to any client that came its way.


Like any promising young real estate investment company, Prologis legacy company AMB needed an infusion of capital and trust—an opportunity to earn the business of a well-respected client and then exceed expectations. For us, that game-changing client was the Estate of James Campbell in Hawaii. 

Doug Abbey and Hamid Moghadam, two of AMB’s founders, had worked with Herb Cornuelle, a trustee of the estate, researching how to increase returns on its $1 billion in Hawaiian real estate holdings, which offered extraordinary value on paper but produced few earnings. 

Moghadam and Abbey found a stable revenue stream for trustees by outlining a strategy for trading some of the estate’s island properties for income-producing assets on the mainland via tax-deferred exchanges. When Cornuelle learned that Moghadam and Abbey had struck out on their own, he decided to visit them in San Francisco. The towering 6-foot, 4-inch Ohio native surveyed the converted law-firm space on the 35th floor of the Embarcadero Center, checking to ensure the firm was bona fide. 

“Seems like a real business; you have real offices,” Cornuelle said in his typical laconic style. “Well, then, I already know you are good guys and will do a good job for us. You’re hired. 

With Japanese real estate investors engaged in an acquisitions frenzy, especially in Hawaii, the plan was to sell more of Campbell’s Hawaiian holdings—some $60 million—to the Japanese and redeploy those funds into a broad pool of real estate opportunities in the continental U.S. 

At the time, research was the main job. However, Moghadam, sensing an opportunity to shift the firm’s focus from pure research into investment management, asked Cornuelle for a shot at investing the $60 million in holdings, as well. 

It was a bold move, but it paid off. Within just 90 days, lucrative properties from Seattle to Dallas were acquired on behalf of the estate. 

Over the next several years, AMB invested $400 to $500 million for the Campbell Estate, solidifying a partnership that would continue through 1990. Equally important, the relationship marked a shift in the company’s orientation, from a skilled consulting operation to an investment management company that had the skill and credentials to be a player in the investment management arena.


In the 1980s, Prologis legacy company AMB Property Corporation was a small firm doing its best to break into the big leagues in the real estate industry. That meant long hours, hard work, innovative research—and now and then, a little luck. 

AMB operated out of unused office space leased from a series of San Francisco law firms during the 1980s. The strategy was simple: Keep costs low and the company image professional. In fact, the refined image conveyed by the firm’s leased space helped AMB land its first major client.

In the mid-1980s, AMB was leasing space on the 29th floor of 345 California St. in San Francisco’s business district. The law firm Morrison & Foerster had attorneys in the same building and wanted to expand onto AMB’s floor. 

Morrison & Foerster’s managing partner Mike Liever, a shrewd real estate lawyer, decided to downplay his firm’s need for space, offering AMB the opportunity to buy out its lease. It was hardly a deal. In effect, AMB would be paying Morrison & Foerster to take a space they desperately wanted. 

CEO Hamid Moghadam, no stranger to high-stakes negotiations, playfully gave Liever the answer he deserved. “Mike,” he said, “you need this space. You’re going to end up paying me a lot of money for this.” Moghadam was right. Four months later, the decision to hold out earned dividends. Liever returned, confessing that his firm didn’t just want the space, it needed it. Negotiations ensued, with Morrison & Foerster paying a premium for the office space. 

But in order to make a good-natured point—namely, that this small firm wouldn’t be intimidated by anyone, not even a prestigious law firm—Moghadam added a caveat. In order to close the deal, Liever would have to shine the shoes of the firm’s partners—Douglas Abbey, Hamid Moghadam and Bob Burke—at noon in the building’s lobby. 

Liever, a good sport, agreed, not knowing that San Francisco Chronicle columnist Herb Caen had caught wind of the story and would write up a blurb in the paper on the morning of the big event under the headline “Photo Opportunity.” 

Three hundred people showed up to witness the shine. Liever didn’t disappoint. He bought a professional shoeshine kit and, good to his word, gave the partners’ shoes a worthy polish—throwing in the shoeshine kit as a token of his gratitude during the close of the deal.


AMB invested in office buildings in the mid-1980s, but shifted to industrial properties and shopping centers when its research indicated the market for office buildings was slowing down.

In early 1987, the real estate sector was booming, with office buildings rising at an astounding rate, while valuations climbed right along with them. 

But Prologis legacy company AMB had doubts about how long the upturn might last. Since its founding in 1983, the young company had built a reputation for digging deeper into research and statistics than its competitors. As it examined data about the state of office construction in the United States, it didn’t like what it was seeing. 

It wasn’t easy for any investment company—let alone a small 12-member firm—to go to its investors with dire warnings about the future of the economy. 

From the mid-1970s to mid-1980s, three unique demographic shifts occurred, fueling the need for more office space: shift from blue collar to white collar jobs; a swath of baby boomers had come of age, seeking office jobs; and a new generation of women joined the labor force. 

By 1987, however, research indicated that those trends had lost momentum and were either leveling off or reversing course. 

In many ways, what remained was a simple matter of supply outstripping demand. The recent development boom had doubled the nation’s available office space. Demand was beginning to dwindle, even though some investors continued to seek inflated prices for developing trophy-asset office spaces. 

For AMB, it was a particularly sobering finding. At the time, most of the company’s investments were in office buildings, with much of its revenue accrued through the ongoing management of those assets. By telling its investors to move their money out of office buildings, they were putting AMB’s future at risk. It was a courageous move. 

But the numbers didn’t lie, nor did the stock market’s plunge on Black Monday: Oct. 19, 1987. AMB sought safer ground, adopting what it affectionately called its “dingbat” investment strategy. The plan targeted industrial real estate space and neighborhood shopping centers—two real estate sectors that AMB believed would continue to grow, even during a downturn. 

Many of AMB’s clients followed the firm’s advice, shifting their money into industrial and shopping center properties and enjoying solid returns, while others who stayed with office space felt the blow when the bubble burst. 

“I think there are a lot of organizations that see a change coming in the environment but stick their head in the sand, thinking it’s all going to pass over and life is going to be good again,” said Prologis Chairman & CEO Hamid Moghadam. “We didn’t do that. We changed the course of our business away from offices and moved toward people who shared our view of the world and how it was changing.”


AMB and its founders Bob Burke, Hamid Moghadam and Doug Abbey focused on industrial and neighborhood shopping centers for their first fund, AMB Western Properties Fund. Though the strategy was unfamiliar to investors, it worked and brought impressive returns.

By the late 1980s, Prologis legacy company AMB had built a reputation for its advisory work, helping companies find and acquire valuable properties across the Western United States. But as the effects of shifting tax policies took hold (which placed increased importance on institutional capital), the company evolved to meet industry needs by transforming itself into an investment management company. 

Prior to 1986, real estate properties were primarily viewed as tax-reduction vehicles. Instead of looking at yields and returns, investors chose properties based on how many dollars in tax write-offs could be returned for every dollar invested. 

This all changed with the Tax Reform Act of 1986, which effectively blocked many investors from using real estate as a tax shelter. Investors could no longer use passive income losses to offset active income gains, forcing many to rapidly sell off their investments. Capital sources for investments quickly dried up, contributing to a dramatic downturn in the real estate sector. 

As capital would now need to be sourced from institutional investors, the company launched its first fund, the AMB Western Properties Fund, in 1988. It was unlike any other fund available at the time, focusing on industrial and neighborhood shopping centers across seven Western states. 

It was a tough sell. Because the company and strategy were unfamiliar to many investors, it raised only $10 million in its first year. However, as AMB’s investment advice proved prescient during the downturn, institutional investors, including Stanford University and The Kresge Foundation, joined the fund. 

AMB raised more than $75 million over two years—a considerable amount at that time—by emphasizing its extensive experience in the West and providing a fund with low leverage that focused on current returns in a struggling market. In short order, the Western Fund was generating impressive results when compared with the sharp declines being felt elsewhere. 

“So here we were in the early ’90s, and we had a very successful fund that was fully invested and yielding 7%, 8%, 9%,” said Prologis Chairman & CEO Hamid Moghadam. “Everyone else was writing off their real estate and their trophy investments in office buildings and shopping centers, and the headlines were negative. The strategy we had focused on was doing quite well.” 

To further solidify its investment reputation, AMB then accepted “takeover” assignments from large institutions. When a company found it had an underperforming real estate portfolio, AMB was called in to transform troubled properties into profitable ones. 

Those successes led to an investment partnership with CalPERS, one of California’s largest public pension plans. Separate accounts with other large investors, including Ameritech and Southern Company Services, soon followed. 

AMB determined its focus on logistics facilities would be better served by building a national, rather than regional, platform. As a result, it formed the AMB Current Income Fund as a private real estate investment trust (REIT) and quickly raised $400 million. 

“It was an elegant solution that allowed a wide variety of investors—a mixture of endowment, foundations and pension funds—to participate,” Moghadam said. “But we were already thinking ahead. We knew we could someday take AMB public and that a REIT would be the best way to do that.”


After 25 years, the postmodern office building at 505 Montgomery Street in San Francisco’s Financial District still turns heads. Built on a historical site once home to the city’s first speakeasy, the 24-story polished-granite tower features a unique roof and a 98-foot spire echoing that of the Empire State Building. 

Today it’s an architectural icon, a symbol of the San Francisco skyline, but in 1987, it was nothing more than an unfinished eyesore—a halted development, rising just six stories high, in desperate need of a rescue. 

At the time, Prologis legacy company AMB had already identified weaknesses in the office market but kept itself open to the possibility of finding the right development project in its own backyard. 

That opportunity presented itself when Mitsui Fudosan, one of the largest real estate developers in Japan, expressed interest in developing a high-rise in San Francisco. 

AMB’s Craig Severance, who had previously worked with Mitsui Fudosan, reached out to the company with a strategy to reshape the blighted property into a flagship office space. 

AMB quickly negotiated the purchase of the unfinished building, established a development company from scratch, and completed the building on time and within budget. 

“We had never built a high-rise office building before,” said Prologis Chairman & CEO Hamid Moghadam. “This was a big deal for us. It really put us on the map with a very visible building at a time when there weren’t very many large office buildings being constructed.” 

The project, however, didn’t come to fruition without difficulty. Upon completion, AMB and Mitsui Fudosan decided to rent an inflatable 45-foot-tall King Kong and wrap it around the building’s spire as part of a promotional campaign. In order to put King Kong in the spotlight, AMB had to surreptitiously station searchlights atop a competitor’s building site. 

All went well until King Kong’s air pumps failed during the building’s unveiling. Crews were immediately sent to the roof to prevent King Kong from re-creating his famous cinematic fall from the Empire State Building. The successful rescue gave the new building an extra dose of media attention. 

AMB moved into 505 Montgomery Street and called it home for 10 years. 

In 2013, when Prologis launched Nippon Prologis REIT, it selected Yoichiro Hamaoka, a Mitsui manager who worked with AMB on the Montgomery project, to be one of its directors, further solidifying a relationship forged more than two decades earlier.


After making headlines for the successful development of the 505 Montgomery St. office building in San Francisco, it would have been easy to continue chasing high-profile projects. However, internal research indicated that office construction had reached its peak. 

The focus then shifted to sectors of the real estate industry often overlooked by institutional investors at the time: industrial warehouse space and neighborhood shopping centers. 

From the outset, Prologis legacy company AMB opted against investing in regional malls anchored by department stores, a well-consolidated market that demanded too much risk and capital for the growing firm. It focused instead on neighborhood shopping centers anchored with grocery stores and pharmacies. 

Once again, AMB followed the data. Locations were chosen based on population density and household income. The company surveyed areas around these sites to ensure competitors couldn’t build a rival shopping center nearby and analyzed sales numbers from the anchor stores. If they didn’t average $500 to $600 per square foot—high sales at the time—the company didn’t pursue a deal. 

When it came to industrial spaces, AMB started small by identifying properties in areas that offered strong demand with limited supply. The company selectively clustered together conservative $7 million to $20 million, creating portfolios that offered a rare blend of safe and steady appreciation. 

AMB’s prudence paid dividends when a recession hit the United States in 1990, depressing commercial real estate values, on average, by a third. Those who invested in offices and malls saw vacancy rates skyrocket, while AMB’s properties generated reliable cash flow. 

When AMB went public in 1997, the firm sold off its shopping center assets. Because only 3 to 4% of shopping centers met the firm’s strict investment criteria, there was limited opportunity for growth without sacrificing quality. The company decided to focus on industrial real estate, paving the way for further expansion across the nation—and the globe. 

“A lot of people think real estate is a matter of going out and hitting big home runs,” said Douglas Abbey, co-founder and former head of real estate research at Prologis legacy company AMB. “But over a long period of time, if you can do just a little bit better and work a little bit harder and just generate a little bit better results than the average over a decent interval, you can be successful. And that’s what we really proved.”


During the early 1990s, prevailing wisdom indicated that real estate was—and always would be—a regional business, offering little room for a single company to create a national, let alone global, footprint. Bill Sanders disagreed. 

As the founder of LaSalle Partners (now Jones Lang LaSalle), Sanders built one of the largest real estate companies in the world by focusing on the importance of customer service. By 1991, however, he was ready for a new challenge. Having retired as CEO of LaSalle, Sanders founded a new firm, Security Capital Group, in Santa Fe, N.M., intent on proving he could build a series of publicly traded real estate companies with national reach, each focusing on different real estate sectors. 

Under the umbrella of Security Capital Group, Sanders formed Security Capital Industrial Trust (SCI), a Prologis legacy company, to invest exclusively in industrial real estate. The goal was to build long-standing relationships with distribution companies by moving them into existing buildings or developing new structures to meet their evolving needs. 

As those companies expanded into new markets, SCI hoped to expand along with them, eventually operating coast-to-coast operations that served the largest users of industrial space in the nation. 

Timing was critical. The recession that took hold in the early 1990s sent real estate prices plummeting, providing a unique opportunity to acquire distribution facilities at rock-bottom prices. Sanders quickly gathered a team of real estate consultants, including Tom Wattles, Bob Kritt and Robert Watson, who outlined a strategy for acquiring properties in the southwestern United States and raising capital from institutional investors. 


From day one, Prologis legacy company Security Capital Industrial Trust (SCI) committed itself to changing the relationship between building owners and clients—focusing as much on the needs of customers as on the buildings and warehouses they were occupying. 

During a meeting early in the company’s history, SCI co-founder Robert Watson stressed the importance of language. “We’re not going to use the words ‘landlords’ and ‘tenants’ anymore,” he announced. “We’re going to be ‘owners serving customers.’” To reinforce the idea, a penalty bucket was created. Anyone who let the words “landlord” or “tenant” slip was obliged to make a donation to the jar. 

From its headquarters in the Denver metro area, the company created a strict division between its sales and property management divisions. Market officers were charged with making leases, finding buildings to buy and working with the brokerage community, while a dedicated property management team—nicknamed “the nurturers”—focused exclusively on meeting the needs of the clients, from simplifying the move-in process for new tenants to ensuring the parking lot was devoid of potholes. 

“At that time, property managers weren’t asked to do much more than enforce the lease and ensure the building was still standing. We believed that bar was being set too low,” Watson said. “If you call us and have a problem, we’re not going to open the door and pull out your lease agreement and look and see what clause 38C said. We’re going to say, ‘How can we help you?’ And to that extent we also had maintenance staff—uniformed maintenance staff—in a clean and nice vehicle driving around checking the properties. Nobody else had that.” 

To increase the business SCI conducted with its largest clients, the company developed a standardized lease form that was used throughout the United States. The company also kept the corporate structure small so it could assign familiar faces to valued clients and develop long-term relationships. 

As the company grew larger, it added a development component, constructing buildings for lease on a speculative basis. SCI could build industrial spaces in a short period of time—often in less than a year—for much less capital than an office building or retail mall. These projects allowed SCI to test the market and gain invaluable experience in development. In time, SCI was working with its largest clients on build-to-suit contracts, creating industrial space to meet their specific needs and growth objectives. 

“What I tried to instill in our folks in the field was a sense of ownership,” said Bud Lyons, lead independent director of Prologis. “It’s a matter of execution, and clearly part of that execution is this feeling that it’s your property, and you’re personally responsible for that capital that we deployed in that marketplace.”


In 1991, Prologis legacy company Security Capital Industrial Trust (SCI) had high aspirations. The goal was to raise enough initial capital from institutional investors to gain a foothold in the Southwest, establish relationships with flourishing companies, and follow those clients wherever they might go: across the United States, into Europe and around the globe. 

Founder Bill Sanders outlined a plan for converting SCI into a real estate investment trust (REIT). At the time, it was a bold strategy. In 1960, legislation was passed to help everyday Americans invest in commercial real estate via public REITs, which are traded on exchanges like shares of stock. But throughout their short history, REITs were often seen as relatively exotic forms of ownership and as a result were underutilized. By the late 1980s, they were often being used by struggling companies tapping the public market for capital as a way to remain solvent during troubled times. 

Sanders, however, saw their true worth. In a business that demands capital, turning to the public markets could provide SCI with the funds it needed to pursue its ambitious growth strategy. Instead of offering the markets a troubled company, Sanders offered one built to be a REIT from its inception, complete with a leadership team skilled in running a public company and a detailed plan for large-scale expansion. 

There was a wrinkle in the plan, however. In 1994, Sanders told investment bankers that he wanted to launch a relatively small IPO. His strategy was to establish an initial price and then offer subsequent rights offerings at higher prices, maximizing the amount of capital required for SCI’s growth strategy. 

Investment banks objected to the plan, so SCI raised $35 million itself, with no banks involved. The strategy worked precisely as SCI had hoped it would. After debuting at $11.50, SCI watched as investors aligned themselves with the young firm. 

"We immediately went on the New York Stock Exchange," said former CEO Dane Brooksher. "So we had a market for our stock. We had liquidity, and we then went about continuing to build the platform, and continuing to raise capital through the issuance of equity at ever-higher prices in the market."


If you want to win over an institutional investor, you can’t just talk West Coast holdings. Prologis legacy company AMB recognized that fact early on. 

”What if you go into a meeting and the person said, ‘You know, I’m a little bit light on East Coast,’” said Bob Burke, one of AMB’s three co-founders. “You either put your materials back in your briefcase and walk out, or you say, ‘Oh, East Coast, we do that, too.’” 

The willingness to invest outside of AMB’s initial West Coast comfort zone gave the small company great momentum. And when frequent flyer miles added up, it made sense to trade in travel for a new home on the opposite coast—to use time more efficiently and better serve customers. 

Bob Burke was the man for the job. 

CEO Hamid Moghadam thought Atlanta, Washington or New York were the most logical locations—they were considered the most centrally located cities on the Eastern Seaboard—but the partners figured that if Burke was the one moving, he should choose the city. 

“I’m willing to move to the East Coast,” Burke noted. “I won’t live in New York and I won’t live in Washington, D.C., but I will go to Boston.” 

Upon reflection, it appeared that Boston was the best choice. San Francisco and Boston are similar: Both are densely populated port cities with tech-rich economies. And two of the partners had Massachusetts roots: Moghadam graduated from MIT, Abbey from Amherst College. 

The first Boston office was a small outpost. The company had hired just a few people to start, and then found a group of people preparing to leave an insurance company. 

“We now have offices around the world. We don’t even think about it,” Moghadam said. “But that second office was really a big deal. How were we going to communicate and when were we going to have the investment committee calls? There’s a three-hour time difference. It worked out really well, and Bob was very important to the success of the company.” 

It was also a big deal because it was the springboard for further expansion across the United States and internationally. The company steadily grew in target markets, shifting out of retail to focus on industrial property.



One of the advantages of building the first national industrial real estate company in the United States was the depth of relationships that Prologis legacy company SCI formed with clients. Whereas a typical real estate company might be relegated to speaking with regional real estate managers, the conversations between SCI and its clients often took place with CEOs, CFOs and other corporate leaders. 

During the mid-1990s, many conversations involved Mexico, specifically about capitalizing on the North American Free Trade Agreement (NAFTA) and the burgeoning maquiladora program. The program allowed companies to import materials duty free into Mexico, process them and then export them for distribution. 

Many executives wanted to lease space in Mexico but found a shortage of high-quality warehouse spaces. SCI, with its roots in the Southwest, saw entry into Mexico as the first step toward becoming a global company. 

SCI focused on developing new facilities in border cities, like Juarez and Tijuana, due to a high percentage of English-speaking workers and short commutes over the border to monitor construction. 

With the headquarters of its Mexico operations in Monterrey, SCI assembled a team that blended talent from its own ranks with local partners in Mexico. 

“We believed that if we brought a few high-quality people into the international locations, it could really help to propel the business,” said Ed Nekritz, Prologis chief legal officer and general counsel. “We wanted to ensure that the teams on the ground, who ultimately were running it day to day, were fully part of our company’s culture and way of doing things.” 

By building Class-A distribution centers that could easily be converted into manufacturing facilities, the company expanded its client base. When customers signed a lease, they were allowed to convert the space into a manufacturing plant as long as they changed it back into a distribution space when the lease expired. 

“Mexico was the perfect place for us to dip our toes into the water,” said Walt Rakowich, then the senior vice president and director of the mid-Atlantic region. “It truly turned out to be a home run. We made a lot of money, and over time, it provided us the confidence to expand our reach even further.”


On paper, expanding into the cold storage business looked like an ideal growth strategy for Prologis legacy company SCI during the expansion-crazed 1990s. 

Intent on redefining itself more broadly as a logistics company rather than a real estate company, SCI had investigated different areas for expansion and chose cold storage as its best option. Cold storage—which involves operating refrigerated warehouses and shipping frozen or chilled products—was a niche industry that exhibited potential for growth. 

The cold storage business relied on two of SCI’s greatest strengths: an understanding of real estate and experience in management of distribution centers. It also aligned with the company’s commitment to serve national customers. 

In 1997, SCI began acquiring cold storage businesses across the United States, in Canada and around the globe. It purchased whole operations, complete with the facilities, trucks and employees needed to store and transport products such as frozen vegetables and microwave dinners. 

Within two years, however, it was clear that the cold storage business presented challenges far different from those of the industrial real estate business. Dealing with weather issues, monitoring crop yields and supervising a fleet of trucks proved to be beyond the company’s core competency and began to erode profits. 

“By our peak, we had invested $1 billion,” said Walt Rakowich, then the senior vice president and director of the mid-Atlantic region. “It was never more than 10% of our business, but it caused 90% of our headaches.” 

Knowing that losses were inevitable, company leaders went to the board and advocated for a quick and decisive exit. The board agreed and SCI went about extracting as much value as possible from the real estate, in part by selling excess land around warehouses. It also identified facilities in large markets that could be sold for a premium, including a site in the United Kingdom that the London Olympic Committee needed so badly it bought the site above market price. 

By dividing the sale of its cold storage business into about a dozen different transactions, SCI was able to avoid major financial damage, absorbing only $100 million in losses on a venture that had ballooned to over $1 billion. 

“The lesson learned at the end of the day was for us to stick to our knitting,” Rakowich said. “We needed to stick to what we did best, our core competency. Following that simple principle served us very well thereafter.”


By the late 1990s, Europe was functioning as a truly common market, with national borders and tax policies no longer hindering continental trade. However, when it came to logistics, the Union, in many respects, was European in name only. Most companies and real estate developers still ran their businesses on a country-by-country basis. That was all the invitation Prologis needed. 

Prologis crossed the Atlantic and brought its business to the EU in 1997, opening its first office at Amsterdam’s Schiphol Airport. “They were still very focused on, if you’re French, you’re doing French development. If you’re German, you’re doing German,” said former Prologis CEO Dane Brooksher. “We were now offering the opportunity to deal with us throughout Europe, and that provided them with a significant advantage.” 

With the lifting of trade restrictions, Lyon, France, was suddenly a major logistics hub for France, Germany, the Netherlands and Spain, according to Robert Watson, former CEO of Prologis European Properties. Clients were clamoring for logistics solutions in Europe that were on par with what was offered stateside. 

There’s no question that the company’s experience in operating nationwide in the United States provided a first-mover advantage in Europe. To be a lasting success in Europe, Prologis had to embrace national cultures while maintaining a continental strategy. This meant establishing local offices led and managed by local teams, an approach few U.S.-domiciled companies employed. 

Now, thanks in large part to Prologis’ leadership, European business not only has a common market, it has a common language: logistics real estate.


In the 1990s, AMB was already one of the leading real estate investment management firms in the United States. By 1997, it managed more than $4 billion in institutional assets via individual relationships and private equity funds, which focused on distribution facilities and neighborhood shopping centers.

AMB’s management, however, wanted to respond more quickly to acquisition opportunities when they arose. By going public and converting into a REIT, AMB would also have the ability to access public equity.

When AMB pitched its idea to five different investment banks, all agreed it would be a prudent move. Convincing AMB’s current private base of the advantages of REITs, however, would prove a more challenging task. Many of the company’s clients were unfamiliar with the model.

“The process of the IPO itself was probably the most exciting time in the history of AMB,” said AMB co-founder Douglas Abbey. “Everybody in the company was engaged, working with our investors with whom we had longstanding relationships, and helping them to understand that this was a good idea and they should participate.”

By converting into a REIT structure, investors could buy or sell shares of AMB and invest in its co-investment vehicles. In addition to having greater liquidity, investors would also enjoy increased alignment with AMB, which could now operate the business as a single platform based on shareholder input.

“We wanted to ensure our partners had options. That was really important,” said Prologis Chairman & CEO Hamid Moghadam, a co-founder of AMB. “We told them, ‘You can participate in the REIT or stay invested with us in whatever vehicle you’re in. If you’re a separate account, you can continue to have your separate account. Or you can sell prior to the formation of the REIT. To the extent we can find other people to buy up your interest, you can get immediate liquidity.’”

When AMB held a vote on the proposal at its shareholders meeting in 1997, more than 90% of the company’s investors agreed to participate in the formation of the REIT. On Nov. 20, 1997, the REIT completed its initial public offering at $21 per share.

“It was evolving our business model only because it was a better way of doing business,” Moghadam said.


Following its successful IPO in 1994, Prologis legacy company Security Capital Industrial Trust (SCI) ramped up its national expansion efforts by moving into the Midwest and mid-Atlantic, buying high-quality assets at steeply discounted prices. 

It was a buyer’s market. SCI pushed eastward with speed and precision, buying land and buildings for cents on the dollar. 

SCI built its reputation in the Southern United States, but its customers were gravitating toward larger, more established markets. So SCI followed them, careful to target properties in one of three areas: high-volume import/export markets; manufacturing areas with well-established distribution channels; and distribution hubs close to large population areas. 

“We would go into cities and buy masses of assets so that the companies that were in those facilities—our customers—could expand as well as consolidate with us, moving from building to building within a submarket,” said former CEO Walt Rakowich. 

SCI’s goal was to reach critical mass in each market, owning enough properties so it could meet all of its customers’ distribution needs. If, for instance, a company signed a lease for an 80,000 square foot building and found that its inventory needs had increased, SCI wanted to be able to immediately offer them a larger or more suitable space. 

By 1998, high retention rates signaled the strategy was working, and SCI officially changed its name to ProLogis, now Prologis. 

In order to move toward greater efficiencies of scale, Prologis proposed a merger with San Francisco-based Meridian Industrial Trust, which held high-quality positions in Los Angeles, Dallas and Chicago. 

It was an ideal merger candidate. More than 98% of Meridian’s assets were located in Prologis’ target markets. Upon completion of the transaction in March 1999, the company achieved a leading position in Atlanta, Dallas/Fort Worth and San Francisco, as well as one of the leading positions in Chicago, Cincinnati/Columbus/Indianapolis and Los Angeles. 

The acquisition increased Prologis’ total market capitalization to $6.4 billion. A subsequent merger with Keystone Property Trust in 2004 further strengthened Prologis’ position on the East Coast, this time in New Jersey, Eastern Pennsylvania and Miami, bringing its total distribution facilities operating and under development to more than 286 million square feet in 71 markets in 14 countries. 

“There wasn’t a specific meeting where we said we have to be the biggest global company in the real estate space,” said Ed Nekritz, chief legal officer and general counsel for Prologis. “It evolved. As opportunities emerged, we expanded our footprint into other cities. It was about creating scale. Once we created scale, we could put people on the ground, and once we had people on the ground, we really started to develop what we called the ‘Prologis operating system,’ and became a market leader in those cities.”


In the late 1990s, institutional investors used investment managers to gain real estate exposure. This was legacy Prologis company AMB’s specialty. But following the company’s IPO in November 1997, their strategy, business model, and approach to investment management took an innovative turn. 

Flush with new capital, AMB wanted to be more than an advisor. With a built up balance sheet, they were going to be a partner. And with the experience of a 50/50 joint venture – with Erie Insurance Company – under their belt shortly after the IPO, AMB was ready to move into co-investment funds. 

“We were ahead of the industry in respect to the use of private capital in the business,” said Hamid Moghadam, founder and former CEO of AMB. 

They didn’t ask investors to bankroll future investments. They offered to be a co-investor by contributing the company’s money. What further distinguished their offerings from other real estate funds was the amount of co-investment they contributed. During the early 1990s, it was not unusual for sponsors to put in 3% or 4% of equity into a fund. AMB flipped the concept on its head and dedicated 20% to 50%. 

“Investors gravitated to the funds because we put real money in the game,” said Guy Jaquier, former CEO of Prologis Private Capital. “Investors knew it was in our interest to work hard and take a prudent approach to acquisitions and operations.” 

The company’s first fund was AMB Institutional Alliance Fund I, which closed in 1999. Through a combination of third party capital, AMB’s 20% investment, and leverage, the fund had investment capacity of $420 million. This represented the first time institutional investors partnered with a public REIT. 

Today, with a fully-integrated strategic capital business, Prologis leverages its global platform to provide investors the opportunity to make investments with specific geographic and risk profiles.


During the dot-com boom of the late 1990s, investors shifted away from the stability of REITs in search of Internet stocks that seemed capable of doubling or tripling overnight. Legacy company AMB’s focus remained on conducting sound research, especially on the potential effects of e-commerce on the real estate market. 

Demographic research revealed that the retail sector was lurching toward unsustainable levels, as well—with the amount of retail space per capita moving from 7 or 8 square feet per person to 22 or 23 square feet per person. 

The big-box phenomenon had mushroomed. Across the country, shopping centers were popping up as retail anchors rushed to open up as many new stores as possible, regardless of demand. Projecting that a rise in e-commerce transactions would erode retail sales over the next decade, Prologis legacy company AMB decided to divest its retail holdings and focus on industrial real estate. 

Over the course of nine months, starting in 1999, AMB sold $1 billion in real estate assets to institutional investors, reallocating funds into warehouse spaces well positioned to accommodate the growing needs of e-commerce companies, while reserving $5 million to invest in a startup online grocer called Webvan. 

AMB invested in the venture based in part on its need for warehouse space, which allowed the firm to develop three cutting-edge buildings for the company as it worked to expand into major markets across the country. But soon after Webvan’s successful IPO in 1999, the dot-com bubble burst. Struggling to gain market share during the downturn, Webvan was ultimately forced to close its doors in 2001. 

The promising startup’s demise—often attributed by industry experts to an overly aggressive expansion strategy—made headlines. In the long run, the buildings AMB bought and developed for Webvan yielded tens of millions of dollars in profits for us. 

The experts were early in their predictions regarding the impact of e-commerce: AMB’s research indicates that the Internet now accounts for 10 to 15% of business formerly done at shopping centers. This shift has led to an increased need for precisely the kind of warehouses in the company’s portfolios. 

“I’m actually proud of our decision. We’re never afraid to think on our own, and we were never afraid to change our business model, even at a time when we were very successful,” said Prologis Chairman & CEO Hamid Moghadam. “In fact, I would say the ability to see changes in the environment and the courage to do something about them is a mark of this company, has been a mark of this company over time and is something I hope will never change.”


On Sept. 7, 1999, Prologis legacy company AMB began construction on the company’s $42 million renovation of the city’s old Pier 1 building. It would prove to be a historic moment, not only laying the foundation for the conversion of Pier 1 into the company’s new headquarters but sparking a dramatic renaissance for the city’s waterfront district.

At the time, Pier 1 was underutilized, serving as a poorly ventilated parking shed for downtown commuters, but Prologis Chairman & CEO Hamid Moghadam saw the building as something more—a symbol capable of bridging the city’s maritime history and its dynamic high-tech future.

During its golden age, Pier 1 served as a bustling sugar depot for San Francisco’s thriving international shipping operations. Ships delivered bales of raw sugar to the warehouse, where longshoremen loaded them onto freight cars with destinations in the Midwest and East Coast. The introduction of large cargo containers in the 1960s, however, rendered Pier 1’s tightly configured warehouse obsolete, and it slowly fell into disuse.

The Loma Prieta earthquake of 1989 caused further damage, and a mangled stretch of the Embarcadero highway cast a depressing shadow over the pier and served as a barrier between downtown and the waterfront. Although state officials dismantled the highway in 1991 and spent the next six years ironing out a waterfront renovation plan, redevelopment moved slowly until Prologis stepped in with a plan that met the needs of community groups, government officials and private business alike.

In conjunction with the Port of San Francisco, Prologis devised a $42 million plan to preserve the landmark’s historic single-story design while modernizing its interior. The company’s plan called for a portion of the building to be converted into commercial office space with a bench-lined public promenade wrapping around the building’s façade, offering local pedestrians and employees alike the opportunity to enjoy stunning views of the bay and the city.

In May 1998, Prologis officially won the contract for construction. Pier 1 was the first building to be restored as part of the waterfront plan, and Prologis had to gain the approval of more than 20 different federal, state and city regulators. It moved quickly through these proceedings, which usually take two to three years, in just 14 months.

Adapting a historic landmark for commercial use was a new and critical challenge for Prologis, but the company worked closely with architects to create a balance between old and new, infusing the space with a modern industrial feel while preserving its industrial beginnings.

First, new pilings and bracing systems were planted under the building to protect it against potential earthquakes—one of the first to be seismically retrofitted. Then Prologis oversaw the addition of a floating mezzanine level for its offices, complete with oversized windows to bathe the space in natural light. In homage to the building’s industrial past, brass railroad-like strips run along the length of the pier, and historical photos and artifacts appear throughout the building.

Upon completion of the project in 2001, Prologis became the anchor tenant of the building’s 151,000 square feet of Class-A office space, and subleased the remaining space in the pier. Prologis settled into an office-free environment, in which all employees—including the CEO and other executives—work in an open space. This was intended to create a culture of collaboration and teamwork.

The company’s transformation of Pier 1 sparked the first building boom in San Francisco’s waterfront in decades, as a variety of new projects, including the renovation of Fisherman’s Wharf and the construction of AT&T; Park, transformed the city’s 7.5 miles of shoreline.

“Everybody who has been to the pier sees what it is,” said Douglas Abbey, co-founder of AMB. “And I think it’s been a great thing for the company. Where else in the world could you go to work and be able to go out on this beautiful pier and have a conversation with somebody, a business conversation, a personal conversation, looking at that view? We are so fortunate.”


It proved an opportune moment to enter the Japan market. At the time, most of the country’s warehouses were relics from World War II, outmoded facilities owned by Japanese companies struggling to stay afloat through the economic stagnation that started in the late 1980s.

To free up capital, many of those companies decided to sell their facilities and move toward a leasing model, creating a window of opportunity for Prologis to develop Class-A facilities.

After acquiring land and assembling a local team under the direction of Mike Yamada, Prologis set out to create the logistics real estate sector in Japan. Constructing distribution facilities in Japan, however, offered unique challenges. With land in cities like Tokyo and Osaka in such short supply, Prologis deviated from its tradition of constructing flat, rectangular buildings in favor of multistory structures.

These facilities were designed with state-of-the art seismic isolation systems to protect them from earthquakes, and were engineered to allow trucks to drive up to different floors, similar to a parking garage. Prologis leased out individual floors to different companies to maximize returns.

The new structures attracted such a steady flow of domestic and international clients that occupancy rates on Prologis buildings rarely dip below 92%. By 2013, Prologis had built more than 44% of all the Class-A logistics facilities in Japan to date.

“Our type of business didn’t really exist in Japan,” said Ed Nekritz, chief legal officer and general counsel for Prologis. “There was no such thing as a modern distribution or logistics facility. Now, when you drive down the major thoroughfares of Tokyo, you can see how the Prologis buildings compare with the old standard rickety warehouses. They are really amazing.”


With its operations spreading across the globe, the company realized by 2003 that expansion into China had become a strategic imperative. If the firm was committed to serving large multinational companies, it had to be on the ground where its customers were operating.

At the time, China’s economy was growing at an average rate of more than 10% per year, fueling a rise in demand for new products and services by the country’s growing middle and upper classes. In turn, international companies were flocking to China, only to find antiquated warehouses built by regional developers. Immediately, the question for Prologis was not whether the company should make the move, but how.

“We had to be in China,” said Ed Nekritz, chief legal officer and general counsel for Prologis. “We looked at the opportunity with the potential economic growth and a consumer society developing for the first time, and we knew we had to make a move.”

Early on, the importance of building relationships was stressed by the leadership team. Because land can’t be purchased in China—only leased or “purchased as a lease” in long-term blocks—Prologis sent its top executives to discuss its plans with government officials.

Prologis targeted major cities, including Suzhou in Eastern China and Shenzhen just north of Hong Kong, stressing the importance of logistics facilities in strengthening the city’s underdeveloped distribution facilities.

“They were having trouble moving goods within the country,” said former Prologis CEO Dane Brooksher. “We were one of the solutions. They’re OK after they move the goods to the ports, but they’ve got manufacturing facilities throughout China and the infrastructure is not as good as it was in other developed countries. With our expertise, we were very well received.”

From 2003 to 2008, Prologis expanded into 17 cities throughout China, investing more than $1 billion. Meanwhile, Prologis legacy company AMB followed Prologis’ lead, but instead focused on the four major regions in China: Shanghai, Beijing, Guangzhou and the Chengdu-Chongqing market in the West.

“We always thought of China as a long-term strategy,” Brooksher said. “We knew the profits associated with that investment would probably be realized a little bit longer down the road. We wanted to build a lasting business with a lasting platform and presence.”


Despite its reach across the United States and its continued overseas expansion, Prologis still felt it was underrepresented in one vital market: California.

Knowing the ports of Long Beach and Los Angeles handled 40% of all shipments entering the United States, Denver-based Prologis turned its attention toward a strategic combination. Its focus was on one of the oldest—and most respected—industrial developers in California: Catellus Development Corp.

A storied company with roots in the construction of the transcontinental railroad in the 1800s, Catellus owned six times more buildable land in California than Prologis. Its impressive portfolio of high-quality industrial spaces was primarily in California but also reached Colorado and Chicago, where Prologis wanted to expand. 


When legacy Prologis went public in 1994, it debuted on the New York Stock Exchange at $11.50 a share. By 2007, the company’s stock was approaching $75 per share.

But in the spring of 2008, the real estate market began showing signs of weakness. For the first time in years, institutional investors expressed reluctance to make large capital investments. Prologis’ development activities didn’t slow, causing some in the company to voice concerns over its rising debt obligations.

Those worries were magnified when the global financial firm Lehman Brothers filed for bankruptcy on Sept. 15, 2008, causing a sudden and drastic downturn in the markets, especially for publicly traded real estate companies.

“We were a highly leveraged company that had a lot of speculative development and land with a lot of short-term debt that was coming due,” said former CEO Walt Rakowich. “That is why our stock price tumbled to $2 per share in one year. I think there was a crisis of confidence in the company, not just about where we stood, but about where we were going.”

The turning point for Prologis came during an investors meeting in November 2008. Standing in front of more than 400 of the most influential people in the investment community, CFO Bill Sullivan said, “I don’t want you to trust us, I just want you to watch us.” When Rakowich, who was appointed CEO only a week prior to the meeting, rose to the podium, he repeated the line—“don’t trust us, watch us”—and then set out to cut Prologis’ debt by $2 billion in 14 months. 

“I was cheering for Prologis during the financial downturn, because I was seeing what was happening to the banks,” said Hamid Moghadam, then the CEO of AMB, who was busy engineering AMB’s turnaround at the same time. “I didn’t want that to happen to the real estate business, so I ended up being a really big Prologis fan even before our merger.”

Intent on quickly stabilizing the company, the leadership team determined they would sell the $1 billion China portfolio. Rakowich and his team found a buyer in the Government of Singapore. Then, a month later, a window of opportunity to raise equity opened up, and Prologis took it.

“We called the investment bankers on a Friday afternoon,” Sullivan said. “We worked about 22 hours a day for the next three or four days and issued about $1.5 billion of equity on Tuesday of the following week. It was an absolute home run. It opened up the equity markets not only for us, but for other people as well, and it absolutely paved the way.”

Although the equity was issued at $6.60 a share, below Prologis’ $8-per-share trading price, the move impressed the company’s bondholders and bought Prologis enough time to meet its lofty goals. As the company’s stock price continued to recover in 2010, Prologis issued more equity, and stability returned.

“It wasn’t one thing we did; it was a series of good decisions we made as a team, all of which stabilized the company and moved the stock in the right direction,” Rakowich said. “Put it all together, and ultimately, with a little bit of luck, a lot of hard work, and a lot of humility, we got through it. By the end of 2010, we were a strong company again.”


Shortly before the merger between AMB and legacy Prologis, executives from the two companies gathered for a team meeting in California. The purpose was to develop the vision, mission and core values for the new Prologis.

Before the meeting, executives were given a homework assignment. They received a list of 40 different values and were told to pick five they wanted the new company to embody.

For almost two decades, AMB and Prologis had been fierce competitors, each trying to wrestle market share away from the other. But when the two teams came together to discuss their goals, they discovered unanimity in their vision for the future.

“It was really interesting,” said retired Prologis Chief Human Resources Officer Nancy Hemmenway. “Of the 10 members on the team, every person picked the word ‘integrity.’ The next word everybody picked was ‘excellence.’”

From these discussions emerged the acronym IMPACT—integrity, mentorship, passion, accountability, courage and teamwork—a set of values that guides Prologis today.

Along with these core values, the team established the company vision: “Enduring excellence in global real estate.” With that vision came a mission to become the leading global real estate company as measured by customer service, employee engagement and financial strength.

The mission took the guiding principles of both legacy companies and forged them into something built to be resilient far into the future, regardless of economic climate.

“It was really important that we create a narrative for the new Prologis and not something that was repurposed from the old AMB or Prologis,” said Prologis Chairman & CEO Hamid Moghadam. “If our collective legacy, is that we built something that’s around 50 years from now and it’s still regarded in a very positive way, that would be the definition of success for me.”


In 2001 and 2005, members of the management teams of Prologis and AMB had engaged in several strategic discussions regarding a potential merger, but these talks ultimately did not result in an agreement.

The fall of 2010 turned out to be the right time to revisit the idea.

Following a meeting with AMB’s board of directors, AMB CEO Hamid Moghadam and Prologis Chief Financial Officer Bill Sullivan started talking informally about whether the Prologis team would be receptive to merger discussions.

Those talks progressed in November 2010, when Moghadam and Prologis CEO Walt Rakowich agreed to meet for dinner. In hopes of not being discovered – a problem that could lead to merger speculation in the market – they chose a restaurant in sleepy Napa Valley, just north of San Francisco. Unexpectedly, another guest in the restaurant approached the two CEOs.

“He was a prominent investor in both AMB and Prologis,” said Moghadam. “He jokingly asked if we were meeting to discuss a potential merger, and we thought our cover was blown.”

But the conversation with the investor was brief and Moghadam and Rakowich continued with their discussion.

To realize the financial and strategic benefits of such a transaction, both sides knew they must first address governance and operational considerations. 


The Prologis European Properties (PEPR) fund was formed in 1999 as an externally managed, closed-ended, real estate investment fund and listed on public exchanges in 2006. The fund, of which the assets were principally developed by Prologis, represented more than half of the company’s properties in Europe, making it one of the leading European portfolios, and one of the company’s prized platforms.

In early 2011, as AMB and legacy company Prologis entered the final stages of their $14 billion merger, members the new company’s executive team reached out to PEPR shareholders to discuss the best way of concluding PEPR for all parties involved. The new company’s goal was to equitably buy out shares, take the fund private, and possibly sell some of its assets.

But a competitor had other plans. Perceiving Prologis to be in a moment of weakness, the competitor attempted to aggressively acquire PEPR away from Prologis. In April, Prologis received an offer at a discount to the portfolio’s net asset value.

“In a way, the challenges associated with PEPR were the best things that could have happened to our company,” said Prologis CEO Hamid Moghadam, “because it galvanized the two management teams during the merger to accomplish something very significant.”

In late April 2011, Prologis countered and made a good faith offer in cash for all units of PEPR at 6.10 euros per share and then increased its offer to 6.20 euros for all shareholders in early May. By late May, the company announced the shareholdings of institutional investors and successfully completed its tender. 

By September 2012, Prologis delisted PEPR from the Luxembourg and Amsterdam stock exchanges, assuming full control of the €2.8 billion portfolio of 210 distribution facilities covering 48.4 million square feet in 11 European countries.

“We believed that Europe had as much, if not more, upside than the United States in terms of our development program over time,” said former Prologis CEO Walt Rakowich. “In Europe, you have a bigger population and much more population density than in the U.S., but it’s harder to develop in some areas because the political climate is more complicated; so when you have built an asset, you feel good about its long-term value."


On Sept. 10, 2012, Prologis signed an agreement with Rakuten, one of Japan’s leading online retailers, to build an 810,000 square foot facility in Osaka, Japan, reinforcing the company’s commitment to building customized large-scale urban logistics facilities for its e-commerce customers.

For many online shoppers, speed of delivery has become as vital as cost savings, and in 2012, the need to achieve next-day and same-day delivery grew more vital for e-commerce retailers. As a result, they now require vast distribution spaces near large cities—areas where Prologis has focused its development efforts for more than two decades.

“E-commerce is going to be here for a long time,” said Prologis Chairman & CEO Hamid Moghadam. “It’s going to be a big driver of our business, maybe 20% to 25% of our business, over time. Prologis has been an active developer for e-commerce tenants going back to the late ’90s.”

Starting in the early 2000s, increasing numbers of traditional brick-and-mortar retailers launched e-commerce divisions only to find they needed different logistics buildings in order to fulfill online orders. One facility is required to move pallets to stores, and another to move small, individual packages to homes and businesses. Having acquired land near big cities, airports and major highways, Prologis partners with many of the world’s largest companies to create dedicated e-commerce facilities.

Many of the facilities are “high throughput” distribution centers, which allow products to be quickly loaded off one truck and onto another to ensure fast delivery. Due to the sheer volume of products being moved, large floor plans and multiple docking stations are necessary. More parking and bigger access lanes help trucks and trailers maneuver in and out more efficiently. 

Prologis’ e-commerce commitment is more than a domestic strategy; it is a global initiative. In South America, Asia and Europe, Prologis has built expansive, dedicated e-commerce facilities, positioning the company as the global leader in e-commerce logistics development.

“E-commerce facilities are now becoming the new shopping centers,” Moghadam said. “In places such as Mexico, Brazil, China, with less developed retail infrastructure, this is happening faster. It’s similar to when cellphones jumped over the landline business. E-commerce is important. It’s going to be here for a long time.”


On March 11, 2011, the largest earthquake to shake Japan in 140 years rattled the northeast corner of the island, generating a tsunami that devastated the area surrounding Sendai, where the Prologis Parc Iwanuma I facility is located.

As 33-foot-high waves rose from the ocean, sweeping away cars, trucks, bridges and roads, the 36 employees of Parc Iwanuma climbed to safety on the roof of the facility. Because of the earthquake-protection measures that are part of the facility’s design, the building stood its ground as many neighboring structures suffered catastrophic damage. Only the first floor of the complex flooded, allowing employees to wait out the storm over the weekend in their second-floor offices.

Cellphone service wasn’t available, but employees were able to communicate by email and via a satellite phone system set up for emergencies. Prologis construction management and property management teams immediately fanned out across northern Japan, working with clients to preserve their employees’ safety, offer support and keep distribution networks operational as aftershocks rippled across the area. Remarkably, none of the company’s other buildings in Japan suffered structural damage, and with the exception of Parc Iwanuma I, all remained operational.

Within two days of the tsunami, the Prologis facilities in Tokyo and Osaka were back up and running. The heavily damaged property in Sendai was restored within only three weeks. 

Because Prologis was one of the few companies left in the region with functional distribution space, it leased space to local relief organizations through the company’s “Space for Good” program, which provides warehouse space to nonprofits or charities for free or reduced rates. To help survivors of the tragedy, Prologis also raised $240,000 through associate donations, the company’s employee match program, and a one-time contribution from the Prologis Foundation.

On Feb. 22, 2012, the company honored the efforts of its Japan team during a ceremony in Denver. Mike Yamada, president of Prologis Japan, received the inaugural IMPACT award, a distinction that recognizes an employee or group of employees who demonstrate the company’s shared values of integrity, mentorship, passion, accountability, courage and teamwork (IMPACT).

It was a reminder of what Senior Property Manager Ji Kang Lee said after the earthquake, when he finally had a moment to reflect on the team’s efforts. “Our focus was to support our customers,” he said. “We did whatever we could to help.”


On Feb. 14, 2013, after a ceremonial bell-ringing by Prologis executives, Nippon Prologis REIT (NPR) debuted on the Tokyo Stock Exchange, providing international investors with an innovative new vehicle for investing in Class-A Japanese logistics properties.

The launch of NPR signals a continuing commitment to the development of new logistics facilities across Japan, an initiative that started more than 12 years earlier.

“Throughout the downturn, we kept our best people, our development pipeline and land bank intact,” said Gary Anderson, CEO of Prologis Europe and Asia. “We have always been committed to Japan, which is what set the foundation for the creation of Nippon Prologis REIT.”

Viewing NPR as a long-term ownership vehicle, Prologis agreed to take 15% ownership of the J-REIT instead of the traditional 1 to 7% interest.

Fueled by a strong ownership position and the quality of development in the pipeline, Nippon Prologis surged 24% in its first day of trading. Just four months later, it enjoyed a successful secondary offering.

“It’s been a tremendous success thus far,” said Anderson. “We have tried to create the bellwether J-REIT that others can look to and learn from with respect to corporate governance, transparency, high-quality assets, a wonderful pipeline and excellent sponsorship. I think it really is shaping the landscape for all J-REITs on a go-forward basis.”


Following the 2011 merger between AMB and Prologis, executives established a comprehensive plan that would guide the new company for its first 10 quarters. The plan outlined Prologis’ intent to streamline all elements of the company and position it for long-term sustainable growth.

The five priorities of the plan included realigning the portfolio; improving the utilization of assets; streamlining the Private Capital business; strengthening the company’s financial position; and building a highly effective and efficient global organization.

By the end of the second quarter of 2013, Prologis had delivered on its objectives, more than two quarters ahead of schedule.

Key accomplishments included: the completion of $10.2 billion of dispositions and contributions; increasing the allocation of its properties to global markets from 79% to 85%; streamlining the number of Private Capital entities from 22 to 15; reducing look-through leverage from 50% to 36%; achieving $115 million in merger synergies; and building a corporate culture of accountability and empowerment.

“The beauty of this organization and the secret sauce is its people,” said Prologis board member Bud Lyons. “It always has been. We’ve got the best of the best. We’ve got the best breed of individuals in this business in this company today, and armed with our ability to attract capital, and the platform that we’ve got globally, the future is unbelievably bright for this company.”

With the completion of its 10-quarter plan, the company was simplified and had a strong foundation for sustainable growth in the coming years. 

In mid-2013, the company established a clear road map for growth with a focus on priorities: first, to capitalize on rental recovery; second, to realize the potential of its land bank by putting it to work; and third, to use its scale and customer relationships to grow earnings.

“Although Prologis is four times the size of its next competitor, this is just the first inning of this global opportunity,” said Chairman & CEO Hamid Moghadam. “We are by far the dominant player in this space, but this could be a trillion-dollar business over time, because we are in the business of enabling the supply chain. Today, everything needs to get made somewhere and shipped somewhere else. Everything.”


In 2006, Prologis legacy company AMB conducted a preliminary study for entry into Brazil and discovered a deep need for logistic facilities. At the time, the population of Brazil was 180 million, making it the most populous country in South America. São Paulo and Rio de Janeiro were vertical cities with thriving economies that boasted an impressive array of modern office and residential buildings.

When it came to logistics, however, Brazil’s industrial spaces were archaic. Flimsy canopies and thin metal walls offered little protection against the elements. Too many columns within the structures made it difficult to maneuver products in and out. And rudimentary security systems invited crime.

With little competition, the decision to enter the Brazilian market was relatively easy. Breaking into the Brazilian market, however, proved more daunting.

The first hurdle was land acquisition. In Brazil, much of the land is owned by families and individuals who are interested in equity partnerships rather than cash payments.

“There have been periods where inflation has been 100%, so landowners don’t want cash, they want a stake in the development,” said Gene Reilly, Prologis CEO, the Americas. “Credibility is extremely important. When these sellers look across the table, they want to do a deal with someone they can trust.”

To help navigate the market and ensure the facilities were built to international standards, Prologis legacy company AMB created a 50/50 joint venture partnership with Cyrela Commercial Properties, one of the largest developers in Brazil.

These buildings, built on a speculative basis without a single lease in place before construction, boasted amenities unseen in the region, from high-tech security systems and concrete walls to improved docking stations and expansive parking areas. Upon completion, lease requests from domestic as well as international companies poured in—many from companies wanting to lease spaces 500,000 square feet and larger.

Prologis has built and developed several million square feet of space, and all buildings that were constructed on spec were fully leased upon completion. Although São Paulo is home to more than 11 million people, it contains only 50 million square feet of logistics space, providing extensive opportunities for future development.

“We’re really proud of what we’ve done, but what’s more exciting is our potential,” Reilly said. “We’ve got an unbelievable land bank in a market where it’s hard to find land. I think we have five years of building as fast as we possibly can—maybe 10 years. It’s definitely the future.”


As the manager of the largest pension fund in the world, Norges Bank Investment Management (NBIM) of Norway has built a reputation for prudence in acquiring real estate properties. In an effort to diversify its portfolio into logistics, NBIM partnered with Prologis to assemble an impressive portfolio of logistics properties in Europe.

As Europe began to rebound in 2012 from its recent downturn, NBIM turned its attention to acquiring prime European logistics properties. At the time, Prologis was committed to recapitalizing its European portfolio following the acquisition of 100% interest in its European-based ProLogis European Properties fund. For both sides, it was an opportune time to form a partnership.

After just four months of discussions, the company arrived at a deal, a 50/50 joint venture with NBIM called Prologis European Logistics Partners Sàrl (PELP). PELP originated as a $3 billion pan-European logistics portfolio, which included 195 Class-A buildings in 11 countries. A subsequent acquisition by PELP in July 2013 added 11 more facilities to the portfolio for a total of 206 properties.

“Getting all this done, where you have to negotiate documents, control, decision-making authority and dispute resolutions, is a massive undertaking that both parties were able to commit to,” said Guy Jaquier, former CEO of Prologis Private Capital. “When we were in negotiations, we felt our goals and objectives were aligned and that we could be successful long-term partners. This was a significant milestone for Prologis.” 

The new partnership—which has an initial term of 15 years with the option to extend it for additional 15-year intervals—allows Prologis to keep control of the portfolio and earn management, leasing and incentive fees. NBIM, in turn, gets the diversity and safety it sought with a best-in-class operator managing its portfolio.

“This transaction really moved the whole market perception with respect to European logistics,” Jaquier said. “People read that a very sophisticated global investor had just invested in a $3 billion portfolio, and it rang the bell for other investors to take a look at Europe and our other co-investments. Today there is high demand for our sector and our product. We believe it has been a turning point for the entire European market.”