Item 2. Properties

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Item 2. Properties

GEOGRAPHIC DISTRIBUTION

We predominately invest in logistics facilities. Our properties are typically used for distribution, storage, packaging, assembly and light manufacturing of consumer products. The vast majority of our operating properties are used by our customers for retail and online fulfillment and business-to-business transactions.

The following tables provide details of our consolidated operating properties, investment in land and development portfolio and our O&M portfolio. The O&M portfolio includes the properties we consolidate and the properties owned by our unconsolidated co-investment ventures reflected at 100% of the amount included in the ventures’ financial statements as calculated on a GAAP basis, not our proportionate share.

Included in the operating property information below for our consolidated operating properties are 382 buildings owned primarily by one co-investment venture that we consolidate but of which we own less than 100% of the equity. No individual property or market amounted to 10% or more of our consolidated total assets at December 31, 2019, or generated revenue equal to 10% or more of our consolidated total revenues for the year ended December 31, 2019, with the exception of the Southern California market. Dollars and square feet in the following tables are in millions:

	Consolidated Operating Properties						O&M
Geographies	Rentable Square Footage		Gross Book Value		Encumbrances (1)		Rentable Square Footage		Gross Book Value
U.S.:
Atlanta		22	$	1,319	$	14		25	$	1,488
Baltimore/Washington D.C.		6		674		13		10		1,044
Central and Eastern Pennsylvania		18		1,282		-		20		1,501
Central Valley		15		1,046		10		16		1,159
Chicago		37		2,848		9		47		3,648
Dallas/Fort Worth		25		1,574		8		32		2,091
Houston		12		1,025		10		19		1,528
New Jersey/New York City		27		2,827		45		35		3,853
San Francisco Bay Area		19		2,600		25		23		3,070
Seattle		13		1,793	*			20		2,457
South Florida		11		1,315		29		16		1,856
Southern California		68		7,318		18		86		9,338
Remaining Markets – U.S. (16 markets) (2)		64		3,970		42		85		5,360
Subtotal U.S.		337		29,591		223		434		38,393
Other Americas:
Brazil		-		-		-		10		627
Canada		10		866		150		10		866
Mexico		4		258		-		39		2,356
Subtotal Other Americas		14		1,124		150		59		3,849
Europe:
France		1		67		-		31		2,486
Germany		1		78		-		24		2,021
Netherlands		-		-		-		22		1,990
U.K.	*			69		-		25		3,733
Remaining Countries – Europe (8 countries) (3)		3		141		-		78		5,566
Subtotal Europe		5		355		-		180		15,796
Asia:
China	*			10		-		27		1,993
Japan		2		275		157		34		6,255
Singapore		1		141		-		1		141
Subtotal Asia		3		426		157		62		8,389
Total operating portfolio (4)		359		31,496		530		735		66,427
Value-added properties (5)		3		397		-		5		565
Total operating properties		362	$	31,893	$	530		740	$	66,992

Items notated by ‘*’ indicate an amount less than one million that rounds to zero.

	Consolidated – Investment in Land						Consolidated – Development Portfolio
Geographies	Acres		Estimated Build Out Potential (square feet) (6)		Current Investment		Rentable Square Footage Upon Completion		TEI (7)
U.S.:
Atlanta		203		2	$	23	*		$	15
Baltimore/Washington D.C.		-		-		-	*			10
Central and Eastern Pennsylvania		29	*			8		-		-
Central Valley		948		19		145		2		148
Chicago		100		2		13		1		72
Dallas/Fort Worth		8		1		2		1		91
Houston		177		3		33	*			13
New Jersey/New York City		20	*			11		1		105
San Francisco Bay Area		13	*		*			1		200
Seattle		9	*			14		1		71
South Florida		70		1		61	*			48
Southern California		79		1		74		2		232
Remaining Markets – U.S. (16 markets)		385		7		100		8		744
Subtotal U.S.		2,041		36		484		17		1,749
Other Americas:
Brazil		196		4		20		-		-
Canada		167		3		88		1		49
Mexico		449		8		83		1		87
Subtotal Other Americas		812		15		191		2		136
Europe:
France		230		4		28		1		86
Germany		36		1		20		1		114
Netherlands		10	*			9		2		157
U.K.		138		2		86		2		354
Remaining Countries – Europe (8 countries)		1,066		22		181		5		355
Subtotal Europe		1,480		29		324		11		1,066
Asia:
Japan		78		4		103		6		1,019
Subtotal Asia		78		4		103		6		1,019
Total land and development portfolio		4,411		84	$	1,102		36	$	3,970

Items notated by ‘*’ indicate an amount less than one million that rounds to zero.

(1)

Certain of our consolidated properties are pledged as security under secured mortgage debt and assessment bonds. For purposes of this table, the total principal balance of a debt issuance that is secured by a pool of properties is allocated among the properties in the pool based on each property’s investment balance. In addition to the amounts reflected here, we also have $38 million of encumbrances related to one prestabilized property and one property under development not included in consolidated operating properties.

(2)	No remaining market within the U.S. represented more than 2% of the total gross book value of the consolidated operating properties.

(3)	No remaining country within Europe represented more than 2% of the total gross book value of the O&M operating properties.

(4)

Included in our consolidated operating properties are properties that we consider to be held for contribution and are presented within Assets Held for Sale or Contribution in the Consolidated Balance Sheets. We include these properties in our operating portfolio as they are expected to be contributed to our co-investment ventures and remain in our O&M operating portfolio. At December 31, 2019, we had investments in real estate properties that were expected to be contributed to our unconsolidated co-investment ventures totaling $605 million and aggregating 8 million square feet. See Note 6 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for further information on our Assets Held for Sale or Contribution.

(5)	Value-added properties are properties we have either acquired at a discount and believe we could provide greater returns post-stabilization or properties we expect to repurpose to a higher and better use.

(6)	Represents the estimated finished square feet available for lease upon completion of a building on existing parcels of land.

(7)

TEI is based on current projections and is subject to change. As noted in the table below, our current investment was $1.9 billion, leaving approximately $2.1 billion of additional required investment. At December 31, 2019, based on TEI, approximately 23% of the properties in the development portfolio were already completed but not yet stabilized and approximately 64% of the properties under development in the development portfolio were expected to be completed by December 31, 2020. The remainder of our properties under development were expected to be completed before December 2021.

The following table summarizes our investment in consolidated real estate properties at December 31, 2019 (in millions):

	Investment Before Depreciation
Operating properties, excluding assets held for sale or contribution	$	31,288
Development portfolio, including cost of land		1,868
Land		1,102
Other real estate investments (1)		966
Total consolidated real estate properties	$	35,224

(1)

Included in other real estate investments were: (i) non-logistics real estate; (ii) land parcels that are ground leased to third parties; (iii) our corporate headquarters; (iv) costs related to future development projects, including purchase options on land; (v) earnest money deposits associated with potential acquisitions; and (vi) infrastructure costs related to projects we are developing on behalf of others.

LEASE EXPIRATIONS

We generally lease our properties on a long-term basis (the average term for leases commenced in 2019 was 66 months). The following table summarizes the lease expirations of our consolidated operating portfolio for leases in place at December 31, 2019 (dollars and square feet in millions):


					NER
	Number of Leases		Occupied Square Feet		Dollars		% of Total			Dollars Per Square Foot (1)
2020		635		36	$	210		10.0	%	$	5.83
2021		800		54		299		14.2	%		5.54
2022		749		56		321		15.3	%		5.73
2023		618		46		276		13.1	%		6.00
2024		609		47		298		14.2	%		6.34
2025		219		24		154		7.3	%		6.42
2026		120		19		118		5.6	%		6.21
2027		95		13		80		3.8	%		6.15
2028		70		12		82		3.9	%		6.83
2029		89		17		119		5.7	%		7.00
Thereafter		62		19		144		6.9	%		7.58
		4,066		343	$	2,101		100.0	%	$	6.13
Month to month		69		3
Total consolidated		4,135		346

(1)	Dollars per square foot was calculated by dividing NER by the occupied square feet of the lease.

CO-INVESTMENT VENTURES

Included in our O&M portfolio are consolidated and unconsolidated co-investment ventures that hold investments in real estate properties, primarily logistics facilities that we also manage. Our unconsolidated co-investment ventures are accounted for under the equity method. The amounts included for the unconsolidated ventures are reflected at 100% of the amount included in the ventures’ financial statements as calculated on a GAAP basis, not our proportionate share. The following table summarizes our consolidated and unconsolidated co-investment ventures at December 31, 2019 (in millions):

	Operating Properties
	Square Feet		Gross Book Value		Investment in Land		Development Portfolio – TEI
Consolidated Co-Investment Venture
U.S.:
Prologis U.S. Logistics Venture (“USLV”)		65	$	6,142	$	12	$	76
Total		65	$	6,142	$	12	$	76

Unconsolidated Co-Investment Ventures
U.S.:
Prologis Targeted U.S. Logistics Fund (“USLF”)		99	$	8,920	$	-	$	-
Other Americas:
FIBRA Prologis		35		2,102		6		6
Prologis Brazil Logistics Venture ("PBLV") and other joint ventures		10		627		116		64
Subtotal Other Americas		45		2,729		122		70
Europe:
Prologis European Logistics Fund (“PELF”)		120		10,838		6		44
Prologis European Logistics Partners Sàrl (“PELP”)		52		3,972		23		33
Prologis UK Logistics Venture (“UKLV”)		4		677		102		122
Subtotal Europe		176		15,487		131		199
Asia:
Nippon Prologis REIT (“NPR”)		32		5,980		-		-
Prologis China Core Logistics Fund (“PCCLF”) (1)		21		1,741		-		8
Prologis China Logistics Venture (1)		5		242		30		1,223
Subtotal Asia		58		7,963		30		1,231
Total		378	$	35,099	$	283	$	1,500

(1)

In December 2019, we formed PCCLF, an unconsolidated co-investment venture investing in properties in China, with eight partners. At that time, we and our existing partner in Prologis China Logistics Venture I, LP received equity interests in PCCLF for the contribution of the existing portfolio of assets consisting of 79 properties totaling 22 million square feet. The seven new partners contributed cash, which was used to redeem a portion of our existing partner’s investment in PCCLF. We maintained our ownership percentage in these assets subsequent to the contribution and therefore did not recognize a gain.

For more information regarding our unconsolidated and consolidated co-investment ventures, see Notes 5 and 11 to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data.

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