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New words:
advance, alternatively, ASU, battery, bear, built, CLP, CODM, commercial, conservative, CPP, CTA, delay, event, evident, evolving, FASB, fiscal, flexible, geopolitical, installment, November, original, overnight, paper, par, payout, percentile, produce, ranking, select, short, standby, storage, surety, title, type, uncertainty
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aggregating, agreement, April, assumption, automatically, bargain, complementary, converted, Corporation, detailed, disaster, duke, efficient, ending, exceeded, exchanged, financed, fourth, funded, healthy, highly, impacting, inflationary, insurance, intangible, merger, MSCI, Multiplied, October, partially, PBLV, perpetual, positively, Realty, reconciling, renewable, restated, resulted, season, September, shareholder, storm, swap, transaction, unitholder, unusually, upsized, workforce
Financial report summary
?Management Discussion
- ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- A discussion regarding our financial condition and results of operations for 2022 compared to 2021 is presented below. Information on 2020 is included in graphs only to show year over year trends in our results of operations and operating metrics. Our financial condition for 2020, results of operations for 2020 and 2021 compared to 2020 and details on the acquisitions of Industrial Property Trust Inc. (“IPT” or the “IPT Transaction”) and Liberty Property Trust and Liberty Property Limited Partnership (“Liberty” or the “Liberty Transaction”) referenced throughout this document can be found under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference herein to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 9, 2022, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at www.ir.prologis.com.
- In 2022, our operating results were robust and we ended the year in a solid financial position. Strong demand and low vacancy in the global logistics markets drove increases in market rents throughout the year, which translated into significant rent change on rollover and same-store growth in our O&M portfolio. Our O&M operating portfolio occupancy was 98.2% at December 31, 2022 and rent change on leases commenced during 2022 was 48.0%, on a net effective basis, based on our ownership share. Our 2022 results are representative of the prospects we see for our business despite challenging headwinds from the capital markets, ongoing inflation, steeply rising interest rates and the war and energy crisis in Europe that are all pressuring the global economy. Due to current market conditions, we expect some decline in asset valuations in 2023 and therefore will continue to be disciplined as we evaluate capital deployment activities, including a focus on build-to-suit developments and a pause on contributions into our open-ended funds in the near term. We believe we are well-positioned to organically grow revenues given the increase in market rents over the last several years and our high lease mark-to-market. However, we will be cautious as we manage our business in this uncertain environment.