13.

Noncontrolling Interests

Operating Partnership

We report noncontrolling interests related to several entities we consolidate but do not own 100% of the common equity. These entities include three real estate partnerships that have issued limited partnership units to third parties. Depending on the specific partnership agreements, these limited partnership units are exchangeable into shares of our common stock (or cash), generally at a rate of one share of common stock to one unit. We evaluated the noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock at the option of the issuer to determine whether temporary or permanent equity classification on the balance sheet is appropriate, including the requirement to settle in unregistered shares, and determined that these units meet the requirements to qualify for presentation as permanent equity. We also consolidate several entities in which we do not own 100% and the units of the entity are not exchangeable into our common stock.

If we contribute a property to a consolidated co-investment venture, the property is still reflected in our Consolidated Financial Statements, but due to our ownership of less than 100%, there is an increase in noncontrolling interest related to the contributed properties, which represents the cash we receive from our partners.

REIT

The noncontrolling interest of the REIT includes the noncontrolling interests presented in the Operating Partnership, as well as the common limited partnership units in the Operating Partnership that are not owned by the REIT. As of December 31, 2012, the REIT owned 99.59% of the common partnership units of the Operating Partnership.

The following is a summary of the noncontrolling interest and the consolidated entity’s total investment in real estate and debt at December 31 (dollars in thousands):


	Our Ownership Percentage				Noncontrolling Interest				Total Investment In Real Estate				Debt
	2012		2011		2012		2011		2012		2011		2012		2011
Partnerships with exchangeable units (1)		various		various	$	44,476	$	11,173	$	826,605	$	827,263	$	-	$	26,417
Prologis Institutional Alliance Fund II (2)		28.2 %		24.1 %		280,751		324,721		571,668		624,318		178,778		220,625
Mexico Fondo Logistico (AFORES) (3)		20.0 %		20.0 %		157,843		118,580		388,960		312,914		214,084		177,000
Brazil Fund (4)		50.0 %		50.0 %		66,494		53,186		-		-		-		-
Prologis AMS (5)		38.6 %		38.6 %		59,631		83,897		160,649		211,627		63,749		77,041
PEPR (6)		100.0 %		93.7 %		-		106,759		-		4,047,329		-		1,699,587
Other consolidated entities		various		various		43,930		36,906		404,825		620,052		62,061		70,140

Operating Partnership noncontrolling interests						653,125		735,222		2,352,707		6,643,503		518,672		2,270,810
Limited partners in the Operating Partnership (7)						51,194		58,613		-		-		-		-

REIT noncontrolling interests					$	704,319	$	793,835	$	2,352,707	$	6,643,503	$	518,672	$	2,270,810

(1)

At December 31, 2012 and 2011, there were 1,173,571 and 1,302,238 limited partnership units, respectively, that were exchangeable into an equal number of shares of the REIT’s common stock. In 2012, 16,926 limited partnership units were redeemed for cash and 111,741 limited partnership units were redeemed for an equal number of common shares. In 2011, no outstanding limited partnership units were redeemed. The majority of the outstanding limited partnership units are entitled to quarterly cash distributions equal to the quarterly dividends paid on our common stock. In 2012, we recorded an additional purchase accounting adjustment of $32.8 million associated with the Merger.

(2)	In the second quarter of 2012, we purchased an additional interest in this venture from one of our partners for $14.1 million that increased our ownership to 28.2%.

(3)

In the second quarter of 2012, we contributed four properties aggregating 0.8 million square feet to this entity for $40.6 million. As this entity is consolidated, we did not record a gain on this transaction. Also in 2012, this entity purchased two properties from third parties aggregating 0.4 million square feet. As a result of these transactions, the noncontrolling interests increased $39.8 million, which is primarily due to our partners’ investment in cash.

(4)

We have a 50% ownership interest in and consolidate the Brazil Fund that in turn has investments in several joint ventures that are accounted for on the equity method. The Brazil Fund’s assets are investments in unconsolidated entities of $152.2 million. For additional information on our unconsolidated investment see Note 6.

(5)	In 2012, we recorded additional purchase accounting adjustments of $22.7 million associated with the Merger.

(6)

In June 2012, the unitholders of PEPR passed a resolution to wind-up the entity, pursuant to which we opted for in-kind distribution of assets with responsibility for all liabilities of PEPR. In September 2012, PEPR completed its delisting from two European stock exchanges, completed a distribution to the remaining common and preferred unitholders, and we acquired the remaining assets and liabilities.

(7)

At December 31, 2012 and December 31, 2011, 1,893,266 and 2,058,730 units were associated with the common limited partners in the Operating Partnership and were exchangeable into an equal number of shares of the REIT’s common stock. During 2012, 165,464 units were redeemed for cash for $5.8 million. The majority of the outstanding limited partnership units are entitled to quarterly cash distributions equal to the quarterly distributions paid on our common stock.