CEO of Prologis Dan Letter Talks Data Centers, Global Logistics and Shipping

Summary

Podcast Summary: Bloomberg Talks

Episode: CEO of Prologis Dan Letter Talks Data Centers, Global Logistics and Shipping

Date: March 25, 2026
Host: Bloomberg
Guest: Dan Letter, CEO of Prologis

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Episode Overview

This episode of Bloomberg Talks features an in-depth conversation with Dan Letter, CEO of Prologis—the global powerhouse in logistics real estate, operating 1.3 billion square feet across 20 countries. The discussion spans macroeconomic headwinds, the evolution of global logistics, the explosive growth of data centers, adapting to geopolitical instability, and Prologis’ strategic approach to expansion.

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Key Discussion Points & Insights

1. Navigating the Macro Environment

• Addressing Recent Turbulence

  • Dan Letter reflects on how global shocks—including the recent war in Iran—influence Prologis and its clients. He observes that resilience and adaptability are now standard operating procedures for major logistics players.
  • Quote:

    "I think about all the chaos and turbulence our customers have been through going back to Covid six years ago...they've built a lot of endurance. This turbulence is more of a feature of the environment that we're living in today." (Dan Letter, 01:35)

• Customer Resilience & Decision-Making

  • Despite uncertainty, Prologis' customers are not pulling back on long-term commitments.
  • Quote:

    "They make long term decisions, 5, 7, 10 year decisions when they're working with us...really seeing through that noise." (Dan Letter, 02:56)

2. Data Centers: The Next Frontier

• Data Center Demand and Strategy
  • Prologis’ data center business has grown out of its global portfolio. They’re at “full capacity” in terms of negotiations with major tech companies (hyperscalers).
  • Quote:

    "Every megawatt we can deliver over the next three years is in some sort of lease discussion right now." (Dan Letter, 04:00)

  • Prologis currently controls 5.7 gigawatts of power for future data center development—1.8 already secured and 3.9 in advanced stages.
  • Quote:

    "We've secured 1.8 gigawatts and then we have 3.9 gigawatts that we call in advanced stages." (Dan Letter, 05:02)

3. Global Expansion and Power Acquisition

• Geographic Diversification

  • Prologis is seeking power and development opportunities worldwide—Tier 1 and Tier 2 U.S. markets, Europe (the FLAP-D markets), Latin America, and Japan.
  • Quote:

    "We're working around the Tier 1, Tier 2 markets in the United States…FLAP D markets in Europe. And we're starting to see it actually in Latin America and Japan." (Dan Letter, 05:23)

• Minimal Impact of Energy Shocks

  • Logistics real estate is only 3-5% of overall supply chain costs, so even disruptions (LNG, energy inflation) have a limited effect on the company’s strategic outlook.
  • Quote:

    "Our customers need to make these decisions long term and they want to be close to those population centers. So can't necessarily sit back and wait." (Dan Letter, 06:10)

4. Innovation, But Not in Space (Yet)

• On Data Centers in Space
  • When prompted about Elon Musk’s ambitions, Letter quips about sticking to “Earth” for now, highlighting massive terrestrial opportunity.
  • Quote:

    "Mars, Pluto, Earth? Like, I think there's plenty of opportunity for us for the foreseeable future, but maybe ask me in 10 years." (Dan Letter, 06:41)

  • On focus:

    "We have so much opportunity in front of us, we don't need to be thinking about another vector to grow this data center business." (Dan Letter, 07:04)

5. Resilience Against Economic Downturns

• Long-Term Leases and E-Commerce Tailwinds
  • Prologis’ business is insulated by long-term leases, dense positioning near consumption centers, and the sustained rise of e-commerce.
  • Quote:

    "Pre Covid, e-commerce penetration as a percentage of retail sales was in the 17ish percent rate. Now it's like mid 20s...That alone is additional demand on top of that." (Dan Letter, 07:50) "E-commerce, for every dollar retail sales, it needs 3x the warehouse space." (Dan Letter, 08:35)

6. Major Joint Ventures and Growth Capacity

• Building with GIC

  • Prologis recently announced a $1.6 billion joint venture with GIC (Singaporean sovereign wealth fund) for build-to-suit warehouses.
  • Development Potential:
    • The company can add $43 billion in logistics buildings on its existing land bank alone (240 million square feet)—an 18% growth without buying more land.
    • Quote:

      "We can build another $43 billion of logistics buildings on our 14,000 acres of land...grow the company 18% without buying another piece of land." (Dan Letter, 09:33)

• Data Center Development Economics

  • Powered shell developments cost $2.5–3 million/megawatt, full turnkey can reach $15 million/megawatt.
  • Rationale for Partnerships:

    "We're looking at diversifying our capital stack there and our partners. Great to have a new partner with GIC here...when we're we're doing that to help build bigger relationships globally." (Dan Letter, 09:35)

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Notable Quotes & Memorable Moments

• On the macro shift in logistics post-COVID:

  "This turbulence is more of a feature of the environment that we're living in today." (Dan Letter, 01:35)

• On the data center gold rush:

  "Every megawatt we can deliver over the next three years is in some sort of lease discussion right now." (Dan Letter, 04:00)

• On data centers in space:

  "Mars, Pluto, Earth? Like, I think there's plenty of opportunity for us for the foreseeable future, but maybe ask me in 10 years." (Dan Letter, 06:41)

• On e-commerce demand:

  "E-commerce, for every dollar retail sales, it needs 3x the warehouse space." (Dan Letter, 08:35)

• On Prologis’ scale and future prospects:

  "We can build another $43 billion of logistics buildings...grow the company 18% without buying another piece of land." (Dan Letter, 09:33)

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Timestamps for Key Segments

• 01:35 – Dan Letter on enduring recent macro shocks
• 02:56 – How Prologis clients make long-term decisions despite turbulence
• 04:00–05:10 – Data center demand, capacity, and power acquisition
• 05:23–06:10 – Global expansion, energy environment impacts
• 06:36–07:19 – Why Prologis isn’t considering space-based data centers
• 07:50–08:50 – Insulation from economic slowdowns, the e-commerce tailwind
• 09:18–09:35 – Details on the GIC joint venture and capacity for growth

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Tone & Final Thoughts

Dan Letter presents an optimistic yet grounded view of Prologis’ prospects amid significant global uncertainty. The conversation balances granular operational detail—lease terms, gigawatts of data center power, JV numbers—with big-picture confidence in the company’s resilience and growth, especially as digital infrastructure and global consumption keep surging. Even the hosts joke about his “optimism,” to which Letter responds with concrete growth metrics.

End note:
Dan’s candor, humor (especially about Martian data centers), and clear emphasis on the long-term, combined with Bloomberg’s probing, make this episode a must-listen for anyone interested in digital infrastructure, real estate, or global supply chains.

Transcript

[IBM Representative]

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[Bloomberg Host]

Bloomberg Audio Studios, podcasts, radio news. Well, we'd like to remind everybody that Amazon, Home Depot, FedEx, UPS, also Giga, Cloud technology are just some of our next guest big customers. We're talking about the $125 billion market cap company. It is a warehouse logistical REIT. It is Prologis that is massive and it owns, develops and manages logistical warehouses for the biggest companies like we just mentioned. And they've got more than a 1.3 billion squ feet in 20 countries. So what a great person to get a view in terms of the macro of what's going on around the world, considering Tim, our backdrop shares up about

[Bloomberg Co-Host]

3% so far this year. We've got Dan Letter with us, CEO of prologis. He joins us here in the studio. Dan, good to see you again. You just took over as CEO, though We've, we've spoken just a few months before that. I want to start with what Carol mentioned in the macro because we are just squarely focused on an increase in oil prices as a result of the war in Iran, what that means for consumers, what it means for business leaders. How are you looking at the macro environment?

[Dan Letter]

Yeah, well, first, thanks for having me. Great to be here with you too. I look at the macro environment right now and I think about all the chaos and turbulence our customers have been through going back to Covid six years ago, the world was shut down right over the course of these six years. Think of all the geopolitical events post Covid, the rate hikes and how that impacted our customers. And I actually look at these customers and I realize they've built a lot of endurance. They actually this turbulence is more of a feature of the environment that we're living in today. And I look back to a conference where we were talking to investors a couple weeks ago, actually right after the weekend of the original Iran bombing. And we were telling our customers, 2026 started really strong. 2025 was our second largest leasing year ever. And we were seeing that go into 2026.

[Bloomberg Host]

Does that continue? There's a lot that's happened. Like it's just I think kind of shocking. And we talk about this so much. No one expected some of the things that have come at us, Dan, in 2026. So since that, that was just a few weeks ago or a month ago or so, that update and that you were talking with, like is that optimism still there and is your outlook on 2026 still the same?

[Dan Letter]

So what we see at this time is customers don't necessarily pull back. I look back to last year at this time, we had expressed a little caution that led into what was Liberation day. Right. And you see customers just look around and see what's going on and then lean in. They make long term decisions, 5, 7, 10 year decisions when they're working with us.

[Bloomberg Host]

Right.

[Dan Letter]

And so they're really kind of seeing through that noise. And when you look at these decisions they're making, it's really only to 5% of the overall cost of the supply chain.

[Bloomberg Host]

So no people who were maybe going to sign a contract that backed out or anything like that?

[Dan Letter]

Well, we hadn't seen that. And it's really just a matter of they digest it and then they. It comes in different forms. Maybe you end up seeing some short term leasing or. But certainly no pullback.

[Bloomberg Co-Host]

What about when it comes specifically to data centers? Because last time we talked with you about the data center activity you're seeing and in that time a lot has happened. We've heard from different companies. Microsoft is renting a Texas data center that was dropped by Oracle and OpenAI. Are you seeing any signs of weakness or slowdown or changing trends when it comes to the data center business?

[Dan Letter]

So our data center business was really born from our higher and better use business. When you have 6,000 buildings, 14,000 acres of land, close to 78% of the world GDP, that is where the next wave of the economy is. That's where data centers need to be. And we have deep relationships with these hyperscalers. We have a fortress of a balance sheet and every megawatt we can deliver over the next three years is in some sort of lease discussion right now. And we have 5.7 gigawatts of power that we control or are in its advanced stage.

[Bloomberg Co-Host]

Meaning you're at full capacity in terms of negotiations.

[Dan Letter]

Right now we're at full capacity.

[Bloomberg Co-Host]

So nobody else could come to you right now and say we're interested in the next few years and you have an option for them?

[Dan Letter]

No, that's not the case. Just the next three years of power that we can deliver. These hyperscalers, these major data center users, are heavily focused on near term power and we're focused on delivering power much longer beyond that. And so we're certainly in discussions beyond that first, that next three years. And that's where this 5.7 gigawatts of power will come in.

[Bloomberg Host]

So that's the power you've secured.

[Dan Letter]

Right, so we've secured 1.8 gigawatts and then we have 3.9 gigawatts that we call in the advanced stages, which means it's a year or two behind.

[Bloomberg Host]

Okay.

[Dan Letter]

But again, think of the universe of opportunities we have behind that 5.7 you have, which is just the size of our platform.

[Bloomberg Host]

All right, so then I'm going to say, are you looking to secure even more power?

[Dan Letter]

Absolutely. We are working. And remember, we're a global company. As you said, we're in 20 countries. And so we're working around the Tier 1, Tier 2 markets in the United States. We work around the flap D markets in Europe. And we're starting to see it actually in Latin America and Japan as well.

[Bloomberg Host]

So has anything changed because of the war or is really everybody kind of looking through this? Because we talk about an energy environment? You know, we've talked a lot about LNG specifically because Qatar has lost about 30% of their capacity and that's going to take three to five years to build. There's going to be a floor where energy prices are higher. And so I'm just curious, has any of that impacted you guys in terms of how you think about outlook build spend costs?

[Dan Letter]

Well, as it relates to logistics, real estate, again, it's 3 to 5% of the overall costs.

[Bloomberg Host]

Okay.

[Dan Letter]

And our customers need to make these decisions long term and they want to be close to those population centers. So can't necessarily sit back and wait.

[Bloomberg Host]

Can I just throw one thing out there? This could be a little wacky, but it's Elon. And so that's kind of wacky. But we've talked this week, right, about data centers in space. Is that something you are thinking about and how that might impact you guys? Because you obviously are doing this on Mother Earth. And I'm just wondering, is that just something that

[Dan Letter]

we're going to stick to these 20 countries that we're focused on?

[Bloomberg Host]

No.

[Dan Letter]

Mars, Pluto, Earth? Like, I think there's plenty of opportunity for us for the foreseeable future, but maybe ask me in 10 years.

[Bloomberg Host]

Okay, yeah.

[Bloomberg Co-Host]

I mean, but to Carol's point, why, you know, with that getting so much discussion right now, why are you just focused on terrestrial? I mean, I know it would have sound crazy, sounded crazy a year ago to be talking about this, but this is something that, you know, a lot of people think is the future of these data centers.

[Dan Letter]

Well, we do this business 100% on a build to suit basis. So we have leases in place before we put a shovel in the ground. And we have so much opportunity in front of us, we don't need to be thinking about another vector to grow this data center business.

[Bloomberg Host]

Yeah, that's pretty fascinating. What would change your mind though in terms, would it have to be an economic slowdown which some have talked about depending on when this war ends or even if we start, if we see inflationary pressures continue and whether there's demand destruction that slows down, essentially the global economy, a lot has to fall into place, as you know. Is that what would maybe change your outlook or again, because everything's locked in place. If the economy slows down, what kind of impact might that have on you guys? Or it doesn't matter because you've already kind of signed things and are moving ahead because it's longer term.

[Dan Letter]

When I think about our core business, if you think of the building blocks for our core business is 70% of the US GDP is consumption. Our buildings are close to the major population centers in the United States. So on top of that, there's the E commerce secular demand driver. We've been talking about E commerce for a long time. Pre Covid, E Commerce penetration as a percentage retail sales was in the 17ish percent rate. Now it's like mid 20s. We see that growing another 75 to 100 basis points a year through the end of the decade. That alone is additional demand on top of that. So there's a big tailwind for our growth.

[Bloomberg Host]

So. But if there was an economic slowdown, that could be a problem.

[Dan Letter]

Well.

[Bloomberg Host]

Or would that not even impact? That's what I'm trying to say.

[Dan Letter]

One thing I forgot to mention is E Commerce, for every dollar retail sales, it needs 3x the warehouse space. Because think of all the activities that happen in the brick and mortar and the returns happen there. There's the stock in the back.

[Bloomberg Host]

Yeah.

[Dan Letter]

And then with E Commerce there's been that proliferation of SKUs and all of us, we're looking for speed and we're looking for choice. Right. And so that's been a big driver in. And you may see flat retail sales, but you'll see E Commerce penetration. That's still good. E Commerce penetration is great news for logistics, real estate.

[Bloomberg Co-Host]

On that I'm interested in the joint venture that you guys announced last week $1.6 billion JV with GIC to build, to build to suit warehouse development. Why partner with gic? Why not do this solo?

[Dan Letter]

What we've long been developing on our balance sheet. But now look at our development business. We can build $43 billion more of logistics space in our land bank alone. Not buying any more land. On top of that we have this data center business.

[Bloomberg Host]

Wait, say that one more time. That's tremendous.

[Dan Letter]

So 40, we have 230 billion worth of AUM today at the end of last quarter. We can build another 43 billion of logistics buildings on our 14,000 acres of land. That's 240 million square feet. We can grow the company 18% without buying another piece of land. Then we have this data center business. Think about it from a megawatt perspective. If you build a powered shell that's on the continuum, powered shell over here, that's about two and a half to $3 million a megawatt. You go out this side of the continuum and that's a turnkey. That's everything. Soup to nuts built out, that's 15 million a megawatt. So think about how big that data center development could be. So we're looking at diversifying our capital stack there and our partners. Great to have a new partner with GIC here. They want a piece of this development business. And when we're we're doing that to help build bigger relationships globally.

[Bloomberg Host]

It's a shame you're not optimistic. Dan. Come back soon.

[Dan Letter]

Thanks for having me.

[Bloomberg Host]

Really appreciate it. Dan Letter CEO of prologis so there's

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