Jeffrey Schw artz, Chairman & CEO*
Revenues Fiscal Year 2007: $6.4 Billion
Areas of Specialization: Development, Ownership/Investment
Number of Offices: 125
Number of Employees: 1,500
*The informat ion in this entr
Schwartz’s term as chairma
from his post earlier this mo2y reflects 2007 results and Jeffrey
n and CEO. Schwartz stepped down
nth. (See News Wrap, page 10.)
FOUNDED IN 1991, PROLOGIS IS ONE OF THE WORLD’S
largest owners, managers and developers of distribution facilities. And since going public in 1994, the firm has gone from
having $400 million in assets under management in nine US
states to a $40.4-billion portfolio that spans 542.3 million sf in
2,884 buildings. Like many public real estate firms, the Denver-based REIT is taking steps to maintain its stability, but it still
tallies more than 4,900 customers in 132 markets across North
America, Asia and Europe.
The company is also coming off of a very active and profitable
2007. Over the course of the year, ProLogis grew its FFO by nearly
25%, and its net earnings per diluted share by 18.7%, thanks to
solid rent growth, high occupancy levels and its fee business.
On the investment management side, it formed three new
property fun ds in the US, Mexico and Europe; closed on its first
acquisition for its South Korea vehicle; and repositioned
another fund. Through its funds, ProLogis secured equity commitments with which it could grow its assets under management
from $19 billion at year-end 2007 to more than $33 billion by
2010. And with two successful convertible debt offerings, the REIT raised in excess of $2.4 billion,
strengthening its financial position.
Continuing globalization and the reconfiguration of supply chains have resulted in an increased
need for distribution space in major markets, asserts the firm. “The persistent lack of modern distribution facilities throughout Europe and Asia creates opportunities to deepen our presence in existing
markets, while the breadth of our international operations enables us to deploy capital in those markets exhibiting the strongest demand for new space,” said Schwartz in the firm’s ’07 annual report.
The REIT kicked off $4.1 billion of new development last year, “supported by the strength of
global demand in existing markets and our expansion into major new logistics areas.” The company entered the Middle East with a development in Dubai and started work in South Korea and
in new, high-growth markets in China, Japan, Central Europe and Mexico.
In Europe, ProLogis bought the industrial business of its biggest competitor, Parkridge, and
invested in that firm’s retail and mixed-use business. Meanwhile, it made headway on the global
retail and mixed-use front through its joint venture with Catellus Development Group in the US,
and its retail development JV to build Wal-Mart centers in China.
The REIT’s total corporate distribution facilities pipeline reached $7.6 billion at year-end. The
$3.7-billion worth of properties that were completed were 62.2% leased as the year drew to a
close, according to the firm.
In announcing the firm’s third-quarter 2008 earnings report, Schwartz stated, “customers are
deferring decisions while assessing the impact of current market conditions on their businesses.
Additionally, development margins have come under pressure due to rising cap rates, and we
expect this trend to persist into early 2009. Our first and foremost objective in these turbulent times
is to preserve our balance sheet strength and maintain financial flexibility. Our investment strategy
over the near term will be governed by extremely conservative capital deployment.”