XML 52 R16.htm IDEA: XBRL DOCUMENT

Unconsolidated Entities

12 Months Ended

Dec. 31, 2022

Equity Method Investments And Joint Ventures [Abstract]

NOTE 5. UNCONSOLIDATED ENTITIES

Summary of Investments

We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with partners and investors and we provide asset management and property management services to these entities, which we refer to as co-investment ventures. These entities may be consolidated or unconsolidated depending on the structure, our partner’s participation and other rights and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, which are related parties and accounted for using the equity method of accounting. See Note 11 for more detail regarding our consolidated investments that are not wholly owned.

We also have investments in other ventures, generally with one partner, which we account for using the equity method. We refer to our investments in both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.

The following table summarizes our investments in and advances to unconsolidated entities at December 31 (in thousands):

	2022		2021
Unconsolidated co-investment ventures	$	8,073,927	$	7,825,455
Other ventures ⁽¹⁾		1,624,971		785,503
Total	$	9,698,898	$	8,610,958

(1)	In 2022, we completed the Duke Transaction and acquired an equity method investment in several other ventures.

Unconsolidated Co-Investment Ventures

The following table summarizes our investments in the individual co-investment ventures at December 31 (dollars in thousands):

	Ownership Percentage						Investment in and Advances to
Co-Investment Venture	2022			2021			2022		2021
Prologis Targeted U.S. Logistics Fund, L.P. (“USLF”)		26.2	%		27.0	%	$	2,397,544	$	2,393,232
FIBRA Prologis ⁽¹⁾		47.9	%		47.3	%		888,710		694,590
Prologis European Logistics Partners (“PELP”) ^{(2) (3)}		50.0	%		50.0	%		1,949,002		2,097,332
Prologis European Logistics Fund (“PELF”) ⁽³⁾		23.8	%		23.8	%		1,837,615		1,605,253
Prologis UK Logistics Venture (“UKLV”)^{(2) (3)}	-				15.0	%		-		9,243
Nippon Prologis REIT, Inc. (“NPR”) ⁽⁴⁾		15.1	%		15.1	%		614,933		684,029
Prologis China Core Logistics Fund, LP (“PCCLF”)		15.5	%		15.3	%		92,863		75,922
Prologis China Logistics Venture I, LP, II, LP and III, LP (“Prologis China Logistics Venture”) ⁽²⁾		15.0	%		15.0	%		111,906		120,283
Prologis Brazil Logistics Venture (“PBLV”) and other joint ventures ⁽²⁾		20.0	%		20.0	%		181,354		145,571
Total							$	8,073,927	$	7,825,455

(1)	At December 31, 2022, we owned 489.1 million units of FIBRA Prologis that had a closing price of Ps 55.83 ($2.88) per unit on the Mexican Stock Exchange. We have granted FIBRA Prologis a right of first refusal with respect to stabilized properties that we plan to sell in Mexico.

(2)	We have one partner in each of these co-investment ventures.

(3)

In December 2021, UKLV sold its operating properties to our unconsolidated co-investment ventures, PELF and PELP, and its land to us and recognized the related gains upon disposition. At December 31, 2021, there was a $9.2 million outstanding receivable balance that was paid in the second quarter of 2022.

(4)

At December 31, 2022, we owned 0.4 million units of NPR that had a closing price of ¥308,500 ($2,339) per share on the Tokyo Stock Exchange. For any properties we develop and plan to sell in Japan, we have committed to offer those properties to NPR if we determine the properties meet NPR’s investment objectives.

At December 31, 2022 and 2021, we had receivables from NPR of $161.4 million and $175.2 million, respectively, related to customer security deposits that originated through a leasing company owned by us that pertain to properties previously contributed to NPR. We have a corresponding payable to NPR’s customers in Other Liabilities. These amounts are repaid to us as the leases turn over.

The amounts recognized in Strategic Capital Revenues and Earnings from Unconsolidated Entities, Net depend on the size, real estate valuations, operations and transactions of the unconsolidated co-investment ventures, the timing of revenues earned through promotes and transactional fees, as well as fluctuations in foreign currency exchange rates and our ownership interest. We recognized Strategic Capital Expenses for direct costs associated with the asset management of these ventures, allocated property-level management and leasing costs for the properties owned by the ventures and compensation expenses under the PPP. For additional discussion on the PPP, see Note 12.

The following table summarizes the Strategic Capital Revenues we recognized in the Consolidated Statements of Income related to our unconsolidated co-investment ventures for the years ended December 31 (in thousands):

	2022		2021		2020
Recurring fees	$	455,385	$	395,765	$	318,423
Transactional fees		67,048		78,552		65,804
Promote revenue ⁽¹⁾		503,779		77,199		239,268
Total strategic capital revenues from unconsolidated co-investment ventures ⁽²⁾	$	1,026,212	$	551,516	$	623,495

(1)	Includes promote revenue earned primarily from PELF in September 2022 and USLF in June 2020.

(2)	These amounts exclude strategic capital revenues from other ventures.

The following table summarizes the key property information, financial position and operating information of our unconsolidated co-investment ventures on a U.S. GAAP basis (not our proportionate share) and the amounts we recognized in the Consolidated Financial Statements related to these ventures at December 31 and for the years ended December 31 (dollars and square feet in millions):

	U.S.						Other Americas ⁽¹⁾						Europe						Asia						Total
At:	2022			2021			2022			2021			2022 ⁽²⁾			2021			2022			2021			2022			2021
Key property information:
Ventures		1			1			2			2			2			2			3			3			8			8
Operating properties		739			732			260			254			989			818			217			203			2,205			2,007
Square feet		123			122			60			56			219			198			89			82			491			458

Financial position:
Total assets ($)		12,617			11,619			3,744			3,349			22,502			18,373			9,964			10,746			48,827			44,087
Third-party debt ($)		3,468			3,069			919			1,052			5,315			3,737			3,811			4,157			13,513			12,015
Total liabilities ($)		4,143			3,717			1,011			1,116			7,292			5,619			4,279			4,685			16,725			15,137

Our investment balance ($)⁽³⁾		2,398			2,393			1,070			840			3,786			3,712			820			880			8,074			7,825
Our weighted average ownership⁽⁴⁾		26.2	%		27.0	%		41.0	%		40.8	%		31.0	%		30.9	%		15.2	%		15.1	%		27.4	%		26.9	%

	U.S.						Other Americas⁽¹⁾						Europe						Asia						Total
Operating Information:	2022		2021		2020		2022		2021		2020		2022		2021		2020		2022		2021		2020		2022		2021		2020
For the years ended:
Total revenues ($)		1,182		1,039		946		383		321		278		1,424		1,387		1,208		629		653		584		3,618		3,400		3,016
Net earnings ($)		292		312		169		137		120		91		493		1,070		390		114		160		255		1,036		1,662		905

Our earnings from unconsolidated co-investment ventures, net ($)		79		82		46		47		43		34		150		214		121		19		27		39		295		366		240

(1)	PBLV and our other Brazilian joint ventures are combined as one venture for the purpose of this table.

(2)	In September 2022, PELF acquired a real estate portfolio that primarily included 125 industrial operating properties.

(3)

Prologis’ investment balance is presented at our adjusted basis. The difference between our ownership interest of a venture’s equity and our investment balance at December 31, 2022 and 2021, results principally from four types of transactions: (i) deferred gains from the contribution of property to a venture prior to January 1, 2018 ($546.9 million and $559.7 million, respectively); (ii) recording additional costs associated with our investment in the venture ($90.4 million and $96.6 million, respectively); (iii) receivables, principally for fees and promotes ($193.7 million and $149.5 million, respectively); and (iv) customer security deposits retained subsequent to property contributions to NPR, as discussed above.

(4)	Represents our weighted average ownership interest in all unconsolidated co-investment ventures based on each entity’s contribution of total assets before depreciation, net of other liabilities.

Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures

Certain unconsolidated co-investment ventures have equity commitments from us and our venture partners. Our venture partners fulfill their equity commitment with cash. We may fulfill our equity commitment through contributions of properties or cash. The commitments are generally used for the acquisition or development of properties but may be used for the repayment of debt or other general uses. The venture may obtain financing for the acquisition of properties and therefore the acquisition price of additional investments that the venture could make may be more than the equity commitment. Depending on market conditions, the investment objectives of the ventures, our liquidity needs and other factors, we may make additional contributions of properties or additional cash investments in these ventures.

At December 31, 2022, our outstanding equity commitments were $287.6 million, principally for Prologis China Logistics Venture. The equity commitments expire from 2023 to 2028 if they have not been previously called. Typically, equity commitments are used for future development and acquisitions in the unconsolidated co-investment ventures.