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EXHIBIT 99.1

(PROLOGIS LOGO)

PROLOGIS REPORTS THIRD QUARTER RESULTS

Growth in CDFS Business and ProLogis Property Funds Drives Strong Results;
Development Activity Accelerating While Same Store Performance Improves

DENVER — October 28, 2004 — ProLogis (NYSE: PLD), a leading global provider of distribution facilities and services, today reported funds from operations as defined by ProLogis (FFO) of $0.70 per diluted share for the third quarter of 2004, up from $0.30 in the third quarter of 2003. FFO, as adjusted, was $0.71 per diluted share for the third quarter of 2004 (prior to a $0.01 per share charge related to previously announced relocation expenses), up from $0.52 in 2003 (prior to a $0.20 per share temperature-controlled impairment charge and a $0.02 per share charge related to a preferred share redemption). Net earnings per diluted share were $0.42 for the third quarter of 2004, up from a loss of $0.04 for the same period in 2003.

For the nine months ended September 30, 2004, FFO per diluted share was $1.84, compared with $1.39 in 2003. Excluding the charges noted above and a $0.02 per share charge related to the redemption of preferred shares in 2004, year-to-date FFO per diluted share for 2004 was $1.87, compared with $1.61 in 2003. Net earnings per diluted share for the nine months ended September 30, 2004, were $1.08, compared with $0.43 in the comparable period of 2003.

“Third quarter results reflect a continuing improvement in global market fundamentals,” said K. Dane Brooksher, chairman and chief executive officer. “During the quarter, we achieved same store net operating income growth of 0.67% and average same store occupancy gains of 0.76%. Strong leasing in our development pipeline, particularly in Europe, also led to a higher level of Corporate Distribution Facilities Services (CDFS) contributions and third-party dispositions. Due to strong CDFS income for the quarter and improving fundamentals, we are raising the bottom end of our full-year FFO per share guidance, bringing our range to $2.39 to $2.45, before charges related to preferred redemption and the relocation of our IT and corporate accounting functions from El Paso to Denver. Our net earnings per share guidance for 2004 remains unchanged at $1.25 to $1.35. Given the overall improvement in the business, we are establishing initial guidance ranges of $2.55 to $2.65 in FFO per share and $1.40 to $1.60 in net earnings per share for 2005.”

Keystone Merger and Strong CDFS Pipeline Drive Future Growth in Property Fund Income and Fees

Irving F. Lyons, III, vice chairman and chief investment officer, said, “During the quarter, we completed our acquisition of Keystone Property Trust, adding nearly $1.9 billion of bulk distribution facilities to ProLogis’ property fund business. Combined with other CDFS contributions to property funds in the quarter, we now have nearly $8.7 billion of assets under management in funds, supporting future growth in income and management fees.

Mr. Lyons added, “Our development pipeline has accelerated, with year-to-date development starts of over $760 million, significantly above last year’s annual total. This momentum gives us the confidence to increase our guidance for starts for a second time this year, up another $100 million, to a record level of $1.1 to $1.2 billion. Year to date, we have signed nearly 13 million square feet of CDFS leases — greater than our total CDFS leasing for all of 2003 — with repeat customers accounting for more than half of this amount. We now have $957 million of facilities under development, bringing our total CDFS pipeline to more than $1.7 billion to support future CDFS dispositions.”

Distribution Efficiencies Driving Strong Leasing Activity in Asia

Jeffrey H. Schwartz, president of international operations, noted, “Companies in Japan continue to seek modern, more functional space driving build-to-suit activity and leasing in our inventory developments in Tokyo, Osaka and Yokohama. During the quarter, we signed agreements with customers such as Bridgestone Sports and Nippon Express and recently announced a 563,000 build-to-suit with Senko, a major Japanese logistics provider. ProLogis Japan Properties Fund also acquired four facilities in Japan for approximately $76 million that, when combined with contributions in the quarter, bring our Japan fund to over $685 million of properties under management with a development pipeline of another $405 million. In China, we made significant progress in leasing the initial facilities acquired by our joint venture at ProLogis Park Suzhou. In October, we broke ground on our first two facilities and plan to begin development soon on another six facilities at the Park based upon strong demand from global customers, many of which need modern distribution space to serve their customers in this enormous market.”

Selected Financial and Operating Information

• Achieved FFO from CDFS transactions of $75.6 million for the quarter, up from $25.1 million in the third quarter of 2003. Year to date, FFO from CDFS transactions was $165.7 million, compared with $85.4 million in 2003, with pre-deferral margins of 18.9% and post-deferral margins of 15.9%.

• Increased average same store occupancies by 0.76% for the quarter, while same store net operating income increased 0.67%, compared with the third quarter of 2003 (an 0.80% increase when straight-lined rents are excluded). Year to date, increased average same store occupancies by 0.93%, while same store net operating income increased 0.04%, compared with the same period in the prior year (a 0.05% increase when straight-lined rents are excluded).

• Recycled $409.9 million of capital through CDFS dispositions and contributions during the quarter and $1.17 billion year to date.

• ProLogis’ share of FFO from property funds was $22.0 million, compared with $18.3 million in the third quarter of 2003, as the lower average ownership interest in ProLogis European Properties Fund was offset by the formation or acquisition of seven new funds in the third quarter. Year to date, ProLogis’ share of FFO from property funds was $56.8 million, compared with $53.6 million in the same period in 2003.

• Grew fee income from property funds to $12.9 million during the quarter, from $11.0 million in the third quarter of the prior year. For the year to date, fee income was $36.1 million, compared with $32.5 million in the same period in 2003.

• Increased total assets owned and under management by 27.5%, to $14.95 billion, from $11.72 billion at December 31, 2003.

Copies of ProLogis’ third quarter 2004 supplemental information will be available from the company’s web site at http://ir.prologis.com or by request at 303-576-2745. The supplemental information also is available on the SEC’s web site at http://www.sec.gov. The related conference call will be available via a live web cast on the company’s web site at http://ir.prologis.com at 10:00 am Eastern Time on Thursday, October 28, 2004. A replay of the web cast will be available on the company’s web site or at www.streetevents.com until November 11, 2004.

ProLogis is a leading provider of distribution facilities and services with 291.0 million square feet (27.0 million square meters) in 1,972 distribution facilities owned, managed and under development in 70 markets in North America, Europe and Asia. ProLogis continues to expand the industry’s first and largest global network of distribution facilities with the objective of building shareholder value. The company expects to achieve this through

ProLogis

Third Quarter 2004
Unaudited Financial Results

Selected Financial Information
(in thousands, except per share amounts)


	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2004 (1)		2003 (2)			% Change			2004 (1)		2003 (2)		% Change
Net Earnings (Loss) Attributable to Common Shares (see pages 2 and 5):
Net Earnings (Loss) attributable to Common Shares	$	79,758	$	(7,379	)		—		$	202,550	$	78,807		157.0	%
Net Earnings (Loss) per diluted Common Share	$	0.42	$	(0.04	)		—		$	1.08	$	0.43		151.2	%
Funds From Operations and Funds From Operations, as adjusted (see pages 3 and 5 and see ProLogis’ definition of Funds From Operations on page 3a):
Funds From Operations attributable to Common Shares	$	133,166	$	55,043			141.9	%	$	347,087	$	255,141		36.0	%
Add back: excess of redemption values over carrying values of preferred shares redeemed (3)		—		3,587			—			4,236		3,587		—
Add back: relocation expenses (4)		2,154		—			—			2,845		—		—
Add back: temperature-controlled distribution investee impairment charge in 2003 (see note 15)		—		38,286			—			—		38,286		—

Funds From Operations attributable to Common Shares, as adjusted	$	135,320	$	96,916			39.6	%	$	354,168	$	297,014		19.2	%

Funds From Operations attributable to Common Shares per diluted share	$	0.70	$	0.30			133.3	%	$	1.84	$	1.39		32.4	%
Add back: excess of redemption values over carrying values of preferred shares redeemed (3)		—		0.02			—			0.02		0.02		—
Add back: relocation expenses (4)		0.01		—			—			0.01		—		—
Add back: temperature-controlled distribution investee impairment charge in 2003		—		0.20			—			—		0.20		—

Funds From Operations per diluted Common Share, as adjusted	$	0.71	$	0.52			36.5	%	$	1.87	$	1.61		16.1	%

EBITDA (see pages 4 and 5):
EBITDA	$	213,776	$	164,725			29.8	%	$	582,770	$	498,976		16.8	%
Distributions:
Actual distributions per Common Share (5)	$	0.365	$	0.360			1.4	%	$	1.095	$	1.080		1.4	%


	September 30,		December 31,
	2004 (1)		2003 (2)		% Change
Total Assets, net of accumulated depreciation (see page 6)	$	6,992,876	$	6,367,466		9.8	%

Total Book Assets (see page 10):
Direct investment	$	6,505,336	$	6,259,042
ProLogis’ share of total book assets of unconsolidated investees		2,037,193		1,561,978

Totals	$	8,542,529	$	7,821,020		9.2	%

Market Capitalization (see page 21)	$	11,309,340	$	10,174,471		11.2	%

Assets Owned and Under Management:
Real estate assets owned directly by ProLogis, before depreciation (see page 6)	$	6,075,860	$	5,854,047
Assets owned by ProLogis’ unconsolidated investees:
Real estate assets owned by ProLogis Property Funds, before depreciation (weighted ownership interest of 21.4%) (see page 12)		8,691,698		5,724,640
Real estate assets owned by CDFS Joint Ventures, before depreciation (weighted ownership interest of 50%) (6)		68,516		31,393
Temperature-controlled distribution operations:
Net assets held for sale (see page 13) (1)(7)		107,285		—
Investments in temperature-controlled investees including proportionate share of third party debt (ownership interest of 50% in 2004 and in excess of 99% in 2003) (1)(7)(8)		3,668		113,977

		8,871,167		5,870,010

Totals	$	14,947,027	$	11,724,057		27.5	%

The definition of Funds From Operations is on page 3a and the definition of EBITDA is on page 4.
Footnote references are to pages 8, 8a and 8b.

Supplemental Information Page 1

ProLogis

Third Quarter 2004
Unaudited Financial Results

Consolidated Statements of Earnings (Loss)
(in thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004(1)			2003(2)			2004(1)			2003(2)
Revenues:
Rental income (9)(10)(11)	$	135,504		$	132,642		$	411,089		$	411,369
Property management and other property fund fees (see page 11)		12,931			11,012			36,050			32,449
Development management fees and other CDFS income (6)		373			1,014			2,422			1,609

Total revenues		148,808			144,668			449,561			445,427

Expenses:
Rental expenses (9)(11)		34,598			32,206			106,591			103,774
General and administrative (12)		20,678			16,432			60,381			46,671
Depreciation and amortization (11)		42,730			41,310			127,646			123,410
Relocation expenses (4)		2,154			—			2,845			—
Other expenses		1,201			1,307			3,673			3,006

Total expenses		101,361			91,255			301,136			276,861

Gains on certain dispositions of CDFS business assets, net (6)(13):
Net proceeds from dispositions (13)(14)		281,692			209,007			911,732			733,858
Costs of assets disposed of		227,738			183,924			777,132			648,449

Total gains, net		53,954			25,083			134,600			85,409

Operating Income		101,401			78,496			283,025			253,975
Income from unconsolidated property funds (see page 11)		11,576			4,750			30,529			16,056
Loss from other unconsolidated investees, net (15)		(621	)		(34,201	)		(1,004	)		(26,858	)
Interest expense (16)		(38,287	)		(39,069	)		(115,601	)		(115,856	)
Interest and other income		829			223			2,037			1,199

Earnings before minority interest		74,898			10,199			198,986			128,516
Minority interest		(1,344	)		(1,186	)		(3,811	)		(3,796	)

Earnings before certain net gains and net foreign currency gains (expenses/losses)		73,554			9,013			195,175			124,720
Gains (losses) recognized on dispositions of certain non-CDFS business assets, net		—			(216	)		6,072			3,374
Gain on partial disposition of investment in property fund (17)		—			—			3,328			—
Foreign currency exchange gains (expenses/losses), net (18)		(1,343	)		(1,970	)		9,882			(10,741	)

Earnings before income taxes		72,211			6,827			214,457			117,353

Income taxes:
Current income tax expense (benefit)		12,180			(727	)		18,177			1,869
Deferred income tax expense		2,390			4,380			11,975			9,929

Total income taxes		14,570			3,653			30,152			11,798

Net Earnings from Continuing Operations		57,641			3,174			184,305			105,555
Discontinued Operations:
Income attributable to assets held for sale (7)		3,993			—			10,841			—
Assets disposed of in 2004:
Operating income attributable to assets disposed of (11)		853			126			786			289
Gains (losses) recognized on dispositions, net (11):
Non-CDFS business assets		1,956			—			(887	)		—
CDFS business assets		21,669			—			31,133			—

Total discontinued operations		28,471			126			41,873			289

Net Earnings		86,112			3,300			226,178			105,844
Less preferred share dividends		6,354			7,092			19,392			23,450
Less excess of redemption values over carrying values of preferred shares redeemed (3)		—			3,587			4,236			3,587

Net Earnings (Loss) Attributable to Common Shares	$	79,758		$	(7,379	)	$	202,550		$	78,807

Weighted average Common Shares outstanding — basic		182,213			179,458			181,451			179,023
Weighted average Common Shares outstanding — diluted		192,043			179,458			190,751			181,906
Net Earnings (Loss) per Common Share-Basic:
Continuing operations	$	0.28		$	(0.04	)	$	0.89		$	0.44
Discontinued operations		0.16			—			0.23			—

Net Earnings Attributable to Common Shares-Basic	$	0.44		$	(0.04	)	$	1.12		$	0.44

Net Earnings (Loss) per Common Share-Diluted:
Continuing operations	$	0.27		$	(0.04	)	$	0.86		$	0.43
Discontinued operations		0.15			—			0.22			—

Net Earnings (Loss) Attributable to Common Shares-Diluted	$	0.42		$	(0.04	)	$	1.08		$	0.43

Calculation of Net Earnings (Loss) per Common Share on a Diluted Basis
(in thousands, except per share amounts)


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2004(1)		2003(2)			2004(1)		2003(2)
Basic Net Earnings (Loss) Attributable to Common Shares	$	79,758	$	(7,379	)	$	202,550	$	78,807
Minority interest		1,344		—			3,811		—

Diluted Net Earnings (Loss) Attributable to Common Shares	$	81,102	$	(7,379	)	$	206,361	$	78,807

Weighted average Common Shares outstanding — Basic		182,213		179,458			181,451		179,023
Weighted average effect of conversion of partnership units(a)(b)		5,219		—			4,863		—
Weighted average effect of potentially dilutive instruments(a)(c)		4,611		—			4,437		2,883

Weighted average Common Shares outstanding — Diluted		192,043		179,458			190,751		181,906

Diluted Net Earnings (Loss) per Common Share	$	0.42	$	(0.04	)	$	1.08	$	0.43

(a) All potentially dilutive items are antidilutive when a net loss is recognized for the period.

(b) Weighted average limited partnership units of 4,791,000 for the nine months ended September 30, 2003 were not included in the calculation of diluted net earnings per Common Share as the effect, on an as-converted basis, was antidilutive.

(c) Total weighted average potentially dilutive instruments outstanding were 10,946,392 and 10,255,000 for the three months ended September 30, 2004 and 2003, respectively, and 11,287,185 and 10,525,000 for the nine months ended September 30, 2004 and 2003, respectively.

Footnote references are to pages 8, 8a and 8b.

Supplemental Information Page 2

ProLogis

Third Quarter 2004
Unaudited Financial Results

Consolidated Statements of Funds From Operations
(in thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004 (1)			2003 (2)			2004 (1)			2003 (2)
Revenues:
Rental income (9)(10)	$	136,406		$	133,043		$	412,436		$	412,406
Property management and other property fund fees (see page 11)		12,931			11,012			36,050			32,449
Development management fees and other CDFS income (6)		373			1,014			2,422			1,609

Total revenues		149,710			145,069			450,908			446,464

Expenses:
Rental expenses (9)		34,644			32,413			106,965			104,319
General and administrative (12)		20,678			16,432			60,381			46,671
Depreciation of non-real estate assets		1,978			1,941			5,962			6,002
Relocation expenses (4)		2,154			—			2,845			—
Other expenses		1,201			1,307			3,673			3,006

Total expenses		60,655			52,093			179,826			159,998

Gains on dispositions of CDFS business assets, net (6)(11)(13):
Net proceeds from dispositions (13)(14)		400,675			209,007			1,144,287			733,858
Cost of assets disposed of		325,052			183,924			978,554			648,449

Total gains, net		75,623			25,083			165,733			85,409

		164,678			118,059			436,815			371,875
Income from unconsolidated property funds (see page 11)		21,951			18,257			56,850			53,625
Income (loss) from other unconsolidated investees, net (15)		467			(30,448	)		867			(20,790	)
Interest expense (16)		(38,287	)		(39,069	)		(115,601	)		(115,856	)
Interest and other income		829			223			2,037			1,199
Gain on partial disposition of investment in property fund (17)		—			—			3,164			—
Foreign currency exchange expenses/losses, net (18)		(459	)		(841	)		(1,787	)		(2,210	)
Current income tax expense benefit (expense)		(12,180	)		727			(18,177	)		(1,869	)

		(27,679	)		(51,151	)		(72,647	)		(85,901	)

Funds From Operations before assets held for sale		136,999			66,908			364,168			285,974
Funds From Operations attributable to assets held for sale (7)		3,865			—			10,358			—

Funds From Operations		140,864			66,908			374,526			285,974
Less preferred share dividends		6,354			7,092			19,392			23,450
Less excess of redemption values over carrying values of preferred shares redeemed (3)		—			3,587			4,236			3,587
Less minority interest		1,344			1,186			3,811			3,796

Funds From Operations Attributable to Common Shares	$	133,166		$	55,043		$	347,087		$	255,141

Weighted average Common Shares outstanding — basic		182,213			179,458			181,451			179,023
Weighted average Common Shares outstanding — diluted		192,043			187,461			190,751			186,697
Funds From Operations per Common Share:
Basic	$	0.73		$	0.31		$	1.91		$	1.43

Diluted	$	0.70		$	0.30		$	1.84		$	1.39

Calculation of Funds From Operations per Common Share on a Diluted Basis
(in thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2004 (1)		2003 (2)		2004 (1)		2003 (2)
Basic Funds From Operations Attributable to Common Shares	$	133,166	$	55,043	$	347,087	$	255,141
Minority interest		1,344		1,186		3,811		3,796

Diluted Funds From Operations Attributable to Common Shares	$	134,510	$	56,229	$	350,898	$	258,937

Weighted average Common Shares outstanding — Basic		182,213		179,458		181,451		179,023
Weighted average limited partnership units as if converted		5,219		4,791		4,863		4,791
Incremental effect of potentially dilutive instruments (a)		4,611		3,212		4,437		2,883

Weighted average Common Shares outstanding — Diluted		192,043		187,461		190,751		186,697

Diluted Funds From Operations per Common Share	$	0.70	$	0.30	$	1.84	$	1.39

(a) Total weighted average potentially dilutive instruments outstanding were 10,946,392 and 10,255,000 for the three months ended September 30, 2004 and 2003, respectively, and 11,287,185 and 10,525,000 for the nine months ended September 30, 2004 and 2003, respectively.

See ProLogis’ Consolidated Statements of Earnings (Loss) on Page 2 and the Reconciliations of Net Earnings (Loss) to Funds From Operations on Page 5.

The definition of Funds From Operations is on page 3a.
Footnote references are to pages 8, 8a and 8b.

Supplemental Information Page 3

ProLogis

Third Quarter 2004
Unaudited Financial Results

ProLogis’ Definition of Funds From Operations

ProLogis’ Definition of Funds From Operations

Funds From Operations is a non-GAAP measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to Funds From Operations is Net Earnings. Although NAREIT has published a definition of Funds From Operations, modifications to the NAREIT calculation of Funds From Operations are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business. Funds From Operations, as defined by ProLogis, is presented as a supplemental financial measure. Funds From Operations is not used by ProLogis as, nor should it be considered to be, an alternative to Net Earnings computed under GAAP as an indicator of ProLogis’ operating performance or as an alternative to cash from operating activities computed under GAAP as an indicator of ProLogis’ ability to fund its cash needs.

Funds From Operations is not meant to represent a comprehensive system of financial reporting and does not present, nor does ProLogis intend it to present, a complete picture of its financial condition and operating performance. ProLogis believes that GAAP Net Earnings remains the primary measure of performance and that Funds From Operations is only meaningful when it is used in conjunction with GAAP Net Earnings. Further, ProLogis believes that its consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of its financial condition and its operating performance.

NAREIT’s Funds From Operations measure adjusts GAAP Net Earnings to exclude historical cost depreciation and gains and losses from the sales of previously depreciated properties. ProLogis agrees that these two NAREIT adjustments are useful to investors for the following reasons:

(a) historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on Funds From Operations “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of Funds From Operations reflects the fact that real estate, as an asset class, generally appreciates over time and that the depreciation charges required by GAAP do not reflect the underlying economic realities.

(b) REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate. The exclusion, in NAREIT’s definition of Funds From Operations, of gains and losses from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activities and assists in comparing those operating results between periods.

At the same time that NAREIT created and defined its Funds From Operations concept for the REIT industry, it also recognized that “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” ProLogis believes that financial analysts, potential investors and shareholders who review its operating results are best served by a defined Funds From Operations measure that includes other adjustments to GAAP Net Earnings in addition to those included in the NAREIT defined measure of Funds From Operations.

The ProLogis Defined Funds From Operations measure excludes the following items from GAAP Net Earnings that are not excluded in the NAREIT Defined Funds From Operations measure: (i) deferred income tax benefits and deferred income tax expenses recognized by ProLogis’ taxable subsidiaries; (ii) certain foreign currency exchange gains and losses resulting from certain debt transactions between ProLogis and its foreign consolidated subsidiaries and its foreign unconsolidated investees; (iii) foreign currency exchange gains and losses from the remeasurement (based on current foreign currency exchange rates) of certain third party debt of ProLogis’ foreign consolidated subsidiaries and its foreign unconsolidated investees; and (iv) mark-to-market adjustments associated with derivative financial instruments utilized to manage ProLogis’ foreign currency risks. Funds From Operations of ProLogis’ unconsolidated investees is calculated on the same basis as ProLogis.

The items that ProLogis excludes from GAAP Net Earnings, while not infrequent or unusual, are subject to significant fluctuations from period to period that cause both positive and negative effects on ProLogis’ results of operations, in inconsistent and unpredictable directions. Most importantly, the economics underlying the items that ProLogis excludes from GAAP Net Earnings are not the primary drivers in management’s decision-making process and capital investment decisions. Period to period fluctuations in these items can be driven by accounting for short-term factors that are not relevant to long-term investment decisions, long-term capital structures or to long-term tax planning and tax structuring decisions. Accordingly, ProLogis believes that investors are best served if the information that is made available to them allows them to align their analysis and evaluation of ProLogis’ operating results along the same lines that ProLogis’ management uses in planning and executing its business strategy.

Real estate is a capital-intensive business. Investors’ analyses of the performance of real estate companies tend to be centered on understanding the asset value created by real estate investment decisions and understanding current operating returns that are being generated by those same investment decisions. The adjustments to GAAP Net Earnings that are included in arriving at the ProLogis Defined Funds From Operations measure are helpful to management in making real estate investment decisions and evaluating its current operating performance. ProLogis believes that these adjustments are also helpful to industry analysts, potential investors and shareholders in their understanding and evaluation of ProLogis’ performance on the key measures of net asset value and current operating returns generated on real estate investments.

While ProLogis believes that its defined Funds From Operations measure is an important supplemental measure, neither NAREIT’s nor ProLogis’ measure of Funds From Operations should be used alone because they exclude significant economic components of GAAP Net Earnings and are, therefore, limited as an analytical tool. Some of these limitations are:

—Depreciation and amortization of real estate assets are economic costs that are excluded from Funds From Operations. Funds From Operations is limited as it does not reflect the cash requirements that may be necessary for future replacements of the real estate assets. Further, the amortization of capital expenditures and leasing costs necessary to maintain the operating performance of distribution properties are not reflected in Funds From Operations.

—Gains or losses from property dispositions represent changes in the value of the disposed properties. Funds From Operations, by excluding these gains and losses, does not capture realized changes in the value of disposed properties arising from changes in market conditions.

—The deferred income tax benefits and expenses that are excluded from ProLogis’ Defined Funds From Operations measure result from the creation of a deferred income tax asset or liability that may have to be settled at some future point. ProLogis’ Defined Funds From Operations measure does not currently reflect any income or expense that may result from such settlement.

—The foreign currency exchange gains and losses that are excluded from ProLogis’ Defined Funds From Operations measure are generally recognized based on movements in foreign currency exchange rates through a specific point in time. The ultimate settlement of ProLogis’ foreign currency-denominated net assets is indefinite as to timing and amount. ProLogis’ Funds From Operations measure is limited in that it does not reflect the current period changes in these net assets that result from periodic foreign currency exchange rate movements.

ProLogis compensates for these limitations by using its Funds From Operations measure only in conjunction with GAAP Net Earnings. To further compensate, ProLogis always reconciles its Funds From Operations measure to GAAP Net Earnings in its financial reports. Additionally, ProLogis provides investors with its complete financial statements prepared under GAAP, its definition of Funds From Operations which includes a discussion of the limitations of using ProLogis’ non-GAAP measure and a reconciliation of ProLogis’ GAAP measure (Net Earnings) to its non-GAAP measure (Funds From Operations as defined by ProLogis) so that investors can appropriately incorporate this ProLogis measure and its limitations into their analyses.

Supplemental Information Page 3a

ProLogis

Third Quarter 2004
Unaudited Financial Results

Consolidated Statements of EBITDA
(in thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004 (1)			2003 (2)			2004 (1)			2003 (2)
Revenues:
Rental income (9)(10)	$	136,406		$	133,043		$	412,436		$	412,406
Property management and other property fund fees (see page 11)		12,931			11,012			36,050			32,449
Development management fees and other CDFS income (6)		373			1,014			2,422			1,609

		149,710			145,069			450,908			446,464

Expenses:
Rental expenses (9)		34,644			32,413			106,965			104,319
General and administrative (12)		20,678			16,432			60,381			46,671
Relocation expenses (4)		1,491			—			1,917			—
Other expenses		1,201			1,307			3,673			3,006

		58,014			50,152			172,936			153,996

Gains on dispositions of CDFS business assets, net (6)(11)(13)(14)		82,869			30,778			196,139			97,925

		174,565			125,695			474,111			390,393
Income from unconsolidated property funds (see page 11)		34,950			31,507			95,179			91,334
Income from other unconsolidated investees, net (15)		676			9,327			1,586			22,056
Interest and other income		829			223			2,037			1,199
Gain on partial disposition of investment in property fund (17)		—			—			3,164			—
Foreign currency exchange expenses/losses, net (18)		(459	)		(841	)		(1,787	)		(2,210	)
EBITDA attributable to assets held for sale (7)		4,559			—			12,291			—

EBITDA before minority interest		215,120			165,911			586,581			502,772
Less minority interest		1,344			1,186			3,811			3,796

EBITDA	$	213,776		$	164,725		$	582,770		$	498,976

See ProLogis’ Consolidated Statements of Earnings (Loss) on Page 2 and the Reconciliations of Net Earnings (Loss) to EBITDA on Page 5.

Footnote references are to pages 8, 8a and 8b.

ProLogis’ definition of EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization):

ProLogis believes that EBITDA is a useful supplemental measure in the calculation of Return on Capital measures (see page 10). ProLogis believes that Return on Capital measures are useful in analyzing the financial returns resulting from capital deployment decisions and for comparing returns associated with alternative investment decisions. EBITDA, as computed by ProLogis, does not represent Net Earnings or cash from operating activities that are computed in accordance with GAAP and is not indicative of cash available to fund cash needs, which ProLogis presents in its Consolidated Statements of Cash Flows and includes in its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the Securities and Exchange Commission. Accordingly, the EBITDA measure presented by ProLogis should not be considered as an alternative to Net Earnings as an indicator of ProLogis’ operating performance, or as an alternative to cash flows from operating, investing, or financing activities as a measure of liquidity. The EBITDA measure presented by ProLogis will not be comparable to similarly titled measures of other REITs.

EBITDA generally represents Net Earnings (computed in accordance with GAAP) excluding: (i) interest expense; (ii) income tax expenses and benefits; and (iii) depreciation and amortization expenses. In ProLogis’ computation of EBITDA the following items are also excluded: (i) preferred dividends and charges related to the redemption of preferred shares; (ii) the foreign currency exchange gains and losses that are also excluded in ProLogis’ definition of Funds From Operations (presented on page 3a); (iii) impairment charges; and (iv) gains and losses from the dispositions of non-CDFS business assets. In addition, ProLogis adjusts the gains and losses from the contributions and sales of developed properties recognized as CDFS income to reflect these gains and losses as if no interest cost had been capitalized during the development of the properties (i.e. the gains are larger since capitalized interest is not included in the basis of the assets contributed and sold). EBITDA of ProLogis’ unconsolidated investees is calculated on the same basis as ProLogis.

Supplemental Information Page 4

ProLogis

Third Quarter 2004
Unaudited Financial Results

Reconciliations of Net Earnings (Loss) to Funds From Operations and EBITDA
(in thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004 (1)			2003 (2)			2004 (1)			2003 (2)
Reconciliation of Net Earnings (Loss) to Funds From Operations (see page 3a):
Net Earnings (Loss) Attributable to Common Shares (see page 2)	$	79,758		$	(7,379	)	$	202,550		$	78,807
Add (Deduct) NAREIT Defined Adjustments:
Real estate related depreciation and amortization		40,752			39,369			121,684			117,408
Funds From Operations adjustment to gain on partial disposition of investment in property fund (17)		—			—			(164	)		—
(Gains) losses recognized on dispositions of non-CDFS business assets, net		—			216			(6,072	)		(3,374	)
Reconciling items attributable to discontinued operations:
Assets held for sale-gains on dispositions of non-CDFS business assets, net (7)		—			—			(241	)		—
Assets disposed of in 2004-(gains) losses recognized on dispositions of non-CDFS business assets, net (11)		(1,956	)		—			887			—
Assets disposed of in 2004-real estate related depreciation and amortization (11)		3			68			187			203

Totals discontinued operations		(1,953	)		68			833			203
ProLogis’ share of reconciling items from unconsolidated investees (19):
ProLogis Property Funds (see page 11):
Real estate related depreciation and amortization		11,002			9,847			29,106			27,677
(Gains) losses on dispositions of non-CDFS business assets, net		1			1			(719	)		(18	)
Other amortization items (20)		(902	)		(363	)		(2,435	)		(2,089	)

Totals ProLogis Property Funds		10,101			9,485			25,952			25,570
Temperature-controlled distribution investees (1)(7)(8):
Real estate related depreciation and amortization		59			3,418			194			6,596
Losses on dispositions of non-CDFS business assets, net		720			490			1,368			490

Totals temperature-controlled distribution investees		779			3,908			1,562			7,086
CDFS Joint Ventures:
Real estate related depreciation and amortization		96			—			96			—

Totals NAREIT Defined Adjustments		49,775			53,046			143,891			146,893

Subtotals—NAREIT Defined Funds From Operations		129,533			45,667			346,441			225,700
Add (Deduct) ProLogis Defined Adjustments:
Foreign currency exchange (gains) expenses/losses, net (18)		884			1,129			(11,669	)		8,531
Deferred income tax expense		2,390			4,380			11,975			9,929
Reconciling items attributable to discontinued operations:
Assets held for sale-deferred income tax benefit (7)		(128	)		—			(242	)		—
ProLogis’ share of reconciling items from unconsolidated investees (19):
ProLogis Property Funds (see page 11):
Foreign currency exchange expenses/losses, net (18)		502			4,377			754			12,152
Deferred income tax benefit		(228	)		(355	)		(385	)		(153	)

Totals ProLogis Property Funds		274			4,022			369			11,999
Temperature-controlled distribution investees (1)(7)(8):
Foreign currency exchange gains, net (18)		—			(28	)		—			(143	)
Deferred income tax benefit		—			(127	)		—			(875	)

Totals temperature-controlled distribution investees		—			(155	)		—			(1,018	)
CDFS Joint Ventures:
Deferred income tax expense		213			—			213			—

Totals ProLogis Defined Adjustments		3,633			9,376			646			29,441

ProLogis Defined Funds From Operations Attributable to Common Shares (see pages 2, 3 and 3a)	$	133,166		$	55,043		$	347,087		$	255,141

Reconciliation of Net Earnings (Loss) to EBITDA (see page 4):
Net Earnings (Loss) Attributable to Common Shares (see page 2)	$	79,758		$	(7,379	)	$	202,550		$	78,807
Add (Deduct):
NAREIT Defined Adjustments to compute Funds From Operations		49,775			53,046			143,891			146,893
ProLogis Defined Adjustments to compute Funds From Operations		3,633			9,376			646			29,441
Other adjustments to compute ProLogis’ EBITDA measure:
Interest expense		38,287			39,069			115,601			115,856
Depreciation of non-real estate assets		1,978			1,941			5,962			6,002
Depreciation of non-real estate assets included in relocation expenses (4)		663			—			928			—
Current income tax expense (benefit)		12,180			(727	)		18,177			1,869
Adjustments to CDFS gains for interest capitalized to disposed assets (see page 4)		7,246			5,695			30,406			12,516
Preferred share dividends		6,354			7,092			19,392			23,450
Excess of redemption values over carrying values of preferred shares redeemed (3)		—			3,587			4,236			3,587
Reconciling items attributable to discontinued operations:
Assets held for sale-current income tax expense (7)		694			—			1,933			—
ProLogis’ share of reconciling items from unconsolidated investees (19):
ProLogis Property Funds (see page 11):
Interest expense		12,278			12,566			36,207			36,499
Current income tax expense		893			738			2,645			1,716
Other amortization items (20)		(172	)		(54	)		(523	)		(506	)

Total ProLogis Property Funds		12,999			13,250			38,329			37,709
CDFS Joint Ventures:
Interest expense		—			615			—			1,846
Current income tax expense		—			129			—			387

Total CDFS Joint Ventures		—			744			—			2,233
Temperature-controlled distribution investees (1)(7)(8):
Interest expense		—			13			—			38
Depreciation of non-real estate assets		72			537			237			1,910
Adjustments to carrying value		—			38,286			—			38,286
Current income tax expense		137			195			482			379

Total temperature-controlled distribution investees		209			39,031			719			40,613

ProLogis’ EBITDA measure (see pages 2 and 4)	$	213,776		$	164,725		$	582,770		$	498,976

See ProLogis’ Consolidated Statements of Earnings (Loss) on Page 2.

The definition of Funds From Operations is on page 3a and the definition of EBITDA is on page 4.
Footnote references are to pages 8, 8a and 8b.

Supplemental Information Page 5

ProLogis

Third Quarter 2004
Unaudited Financial Results

Consolidated Balance Sheets
(in thousands)


	September 30,			December 31,
	2004 (1)			2003 (2)
Assets:
Investments in real estate assets:
Operating properties (21)	$	4,874,785		$	4,868,795
Properties under development (including cost of land) (21)		611,697			404,581
Land held for development (21)		472,413			511,163
Other investments (22)		116,965			69,508

		6,075,860			5,854,047
Less accumulated depreciation		953,242			847,221

Net investments in real estate assets		5,122,618			5,006,826
Investments in unconsolidated investees (see page 7):
Investments in ProLogis Property Funds		950,789			548,243
Investments in CDFS Joint Ventures		32,898			12,734
Investment in temperature-controlled distribution investees		3,668			113,830
Investments in other unconsolidated investees		22,229			2,486

Total investments in unconsolidated investees		1,009,584			677,293
Cash and cash equivalents		207,095			331,503
Accounts and notes receivable		102,507			44,906
Other assets		386,282			306,938
Discontinued operations-assets held for sale (1)(7)		164,790			—

Total assets	$	6,992,876		$	6,367,466

Liabilities and Shareholders’ Equity:
Liabilities:
Lines of credit	$	928,975		$	699,468
Short-term borrowings (23)		95,000			—
Senior unsecured notes		1,925,415			1,776,789
Secured debt and assessment bonds		494,478			514,412
Construction costs payable		46,162			26,825
Interest payable		40,352			39,807
Accounts payable and accrued expenses		144,159			116,067
Other liabilities		143,020			97,389
Discontinued operations-assets held for sale (1)(7)		57,505			—

Total liabilities		3,875,066			3,270,757

Minority interest		76,490			37,777
Shareholders’ equity:
Series C Preferred Shares at stated liquidation preference of $50.00 per share		100,000			100,000
Series D Preferred Shares at stated liquidation preference of $25.00 per share(24)		—			125,000
Series F Preferred Shares at stated liquidation preference of $25.00 per share		125,000			125,000
Series G Preferred Shares at stated liquidation preference of $25.00 per share		125,000			125,000
Common Shares at $.01 par value per share		1,835			1,802
Additional paid-in capital		3,171,147			3,073,959
Accumulated other comprehensive income (25)		144,438			138,235
Distributions in excess of Net Earnings		(626,100	)		(630,064	)

Total shareholders’ equity		3,041,320			3,058,932

Total liabilities and shareholders’ equity	$	6,992,876		$	6,367,466

Footnote references are to pages 8, 8a and 8b.

Supplemental Information Page 6

ProLogis

Third Quarter 2004
Unaudited Financial Results

Selected Balance Sheet Information

Investments in Unconsolidated Investees
(in thousands)


	September 30,		December 31,
	2004 (1)		2003 (2)
ProLogis Property Funds (see page 12):
ProLogis European Properties Fund	$	282,053	$	267,757
ProLogis California LLC		112,567		117,529
ProLogis North American Properties Fund I		36,481		38,342
ProLogis North American Properties Fund II		5,734		5,853
ProLogis North American Properties Fund III		4,910		5,506
ProLogis North American Properties Fund IV		3,190		3,425
ProLogis North American Properties Fund V		55,991		56,965
ProLogis North American Properties Funds VI-X(26)		308,104		—
ProLogis North American Properties Fund XI(27)		36,141		—
ProLogis North American Properties Fund XII(27)		39,486		—
ProLogis Japan Properties Fund		66,132		52,866

Total investments in ProLogis Property Funds		950,789		548,243
CDFS Joint Ventures(6)(15)(28)(29)		32,898		12,734
Temperature-controlled distribution investees(1)(7)(8)		3,668		113,830
Other unconsolidated investees(28)		22,229		2,486

Total investments in unconsolidated investees	$	1,009,584	$	677,293

Land Held for Development


	As of September 30, 2004
	Acres		Investment
Land owned:
North America (A)		1,923		$190,261,718
Europe		1,013		282,151,522
Asia		—		—

Total land owned (see page 6)		2,936		$472,413,240

Land controlled (LOI/option):
North America (A)		728
Europe		828
Asia		50

Total land controlled		1,606

Total land held for development		4,542

COMMENT

(A) As part of the Keystone Transaction that closed on August 4, 2004, ProLogis directly acquired 14 acres of land in two parcels at a value of $1,759,068. Also as part of the Keystone Transaction, ProLogis obtained control of certain land parcels aggregating 275 acres. See note 21 on page 8b.

Footnote references are to pages 8, 8a and 8b.

Supplemental Information Page 7

ProLogis

Third Quarter 2004
Unaudited Financial Results

Notes to Consolidated Financial Statements

(1) ProLogis adopted Interpretation No. 46R, “Consolidation of Variable Interest Entities,” in January 2004. This accounting pronouncement requires that variable interest entities in which ProLogis has a majority variable interest be presented on a consolidated basis rather than under the equity method as of January 1, 2004. Accordingly, ProLogis’ investments in TCL Holding S.A. (formerly Frigoscandia S.A.) are presented on a consolidated basis as of January 1, 2004. This change in reporting method for 2004 does not result in a restatement of the financial information presented for previous periods. This accounting pronouncement does not change the presentation of any of ProLogis’ other investments as these investees are not variable interest entities.

(2) Certain 2003 amounts included in this Supplemental Information package have been reclassified to conform to the 2004 presentation.

(3) These charges have been recognized in accordance with FASB-EITF Topic D-42 and represent the excess of the redemption values over the carrying values of ProLogis’ Series E Preferred Shares that were redeemed in July 2003 and ProLogis’ remaining Series D Preferred Shares that were redeemed in January 2004.

(4) Represents the costs incurred or accrued as of September 30, 2004 associated with ProLogis’ plan to relocate its information technology and corporate accounting functions from El Paso, Texas to Denver, Colorado. Such relocation is expected to occur and costs are expected to be incurred over a period of 9 to 12 months. For the three and nine months ended September 30, 2004, includes $1,047,000 and $1,428,000, respectively, of severance related employee costs, $444,000 and $489,000, respectively, of other costs and $663,000 and $928,000, respectively, of additional depreciation associated with non-real estate assets located in El Paso.

(5) In December 2003, ProLogis’ Board of Trustees set an annual distribution rate for 2004 of $1.46 per Common Share. The amount of the Common Share distribution may be adjusted at the discretion of the Board during the year.

(6) The corporate distribution facilities services business (“CDFS business”) segment represents the development of distribution properties with the intent to either contribute the properties to a ProLogis Property Fund in which ProLogis has an ownership interest and acts as manager or sell the properties to a third party, and the acquisition and rehabilitation or acquisition and repositioning of distribution properties with the intent to contribute the properties to a ProLogis Property Fund. This segment’s income also includes fees earned for development activities performed on behalf of customers or third parties and gains or losses from the dispositions of land parcels that no longer fit into ProLogis’ development plans. ProLogis includes the income generated in the CDFS business segment in its computation of Funds From Operations and EBITDA. Further, ProLogis has ownership interests in various unconsolidated joint ventures that engage in CDFS activities in the United Kingdom, the United States and China. See notes 28 and 29 on page 8b.

(7) TCL Holding S.A. owns a temperature-controlled distribution operating network in Europe, primarily in France. ProLogis presented its investments in TCL Holding S.A. under the equity method in 2003. As a result of adopting Interpretation No. 46R, ProLogis began presenting its investments in TCL Holding S.A. on a consolidated basis in 2004 (see note 1). TCL Holding S.A.’s operations in France were classified as “held for sale” during portions of 2003. However, because ProLogis’ investments were presented under the equity method, ProLogis was not required to reflect the portion of its investments in this unconsolidated investee related to the French operations separately as assets held for sale in 2003. Therefore, the French operations are shown as assets held for sale in ProLogis’ Consolidated Financial Statements only in 2004. See page 13.

(8) In 2004, represents TCL Holding S.A.’s investment in a temperature-controlled distribution company operating in Austria. While ProLogis’ investments in TCL Holding S.A. were presented under the equity method in 2003, this Austrian investment was not separately presented in ProLogis’ balance sheet. See notes 1 and 7.

(9) Represents rental income earned and rental expenses incurred while ProLogis owns a property directly. Under the terms of their respective lease agreements, some or all of ProLogis’ rental expenses are recovered from its customers. Amounts recovered are included as a component of rental income. Rental expense amounts also include ProLogis’ direct expenses associated with its management of the ProLogis Property Funds’ operations. For properties that have been contributed to a ProLogis Property Fund, ProLogis recognizes its share of the total operations of the Property Fund under the equity method and presents these amounts below Operating Income in its Consolidated Statements of Earnings (Loss), Funds From Operations and EBITDA.

(10) Amounts include straight-lined rents of $2,599,000 and $1,545,000 for the three months ended September 30, 2004 and 2003, respectively, and $7,574,000 and $5,271,000 for the nine months ended September 30, 2004 and 2003, respectively, and rental expense recoveries from customers of $24,892,000 and $24,147,000 for the three months ended September 30, 2004 and 2003, respectively, and $77,205,000 and $76,163,000 for the nine months ended September 30, 2004 and 2003, respectively.

(11) Properties disposed of to third parties are considered to be discontinued operations unless such properties were developed under a pre-sale agreement. Through September 30, 2004, ProLogis sold 15 such properties to third parties (eight of which were CDFS business assets). Accordingly, the operations of these properties during 2004 and the net gain or loss recognized upon disposition are presented as discontinued operations. Amounts attributable to the operations of these properties during 2003 have been reclassified and are presented as discontinued operations in ProLogis’ Consolidated Statements of Earnings (Loss) for that period. These amounts are not presented as discontinued operations in either of ProLogis’ Consolidated Statements of Funds From Operations or EBITDA. The operating amounts that are presented as discontinued operations (other than the net gain or loss recognized upon disposition) are as follows (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
Rental income	$	902		$	401		$	1,347		$	1,037
Rental expenses		(46	)		(207	)		(374	)		(545	)
Depreciation and amortization		(3	)		(68	)		(187	)		(203	)

	$	853		$	126		$	786		$	289

(12) For the three and nine months ended September 30, 2004, includes $175,000 and $864,000, respectively, of general and administrative expenses attributable to the operations of TCL Holding S.A. ProLogis began presenting its investments in this entity on a consolidated basis in 2004. In 2003, these investments were presented under the equity method. See note 1.

(Continued)

Supplemental Information Page 8

ProLogis

Third Quarter 2004
Unaudited Financial Results

Notes to Consolidated Financial Statements (Continued)

(13) When ProLogis contributes properties to a ProLogis Property Fund in which it has an ownership interest, ProLogis does not recognize a portion of the proceeds in its computation of the gain resulting from the contribution. The amount of the proceeds that cannot be recognized is determined based on ProLogis’ continuing ownership interest in the contributed property that arises due to ProLogis’ ownership interest in the Property Fund. ProLogis defers this portion of the proceeds by recognizing a reduction to its investment in the respective Property Fund. ProLogis adjusts its proportionate share of the earnings or losses that it recognizes under the equity method from the Property Fund in later periods to reflect the Property Fund’s depreciation expense as if the depreciation expense was computed on ProLogis’ lower basis in the contributed real estate assets rather than on the Property Fund’s basis in the contributed real estate assets. If a loss is recognized when a property is contributed to a ProLogis Property Fund, the entire loss is recognized. See note 14 for the amount of gross proceeds that have not been recognized as of September 30, 2004.

Gross proceeds deferred related to contributions during the three months ended September 30, 2004 and 2003 were $10,072,000 and $5,712,000, respectively, and for contributions during the nine months ended September 30, 2004 and 2003 were $30,987,000 and $21,064,000, respectively. See page 19.

When a property that ProLogis originally contributed to a ProLogis Property Fund is disposed of to a third party, ProLogis recognizes the amount of the gain that it had previously deferred as a part of its CDFS income during the period that the disposition occurs. Further, during periods when ProLogis’ ownership interest in a ProLogis Property Fund decreases, ProLogis will recognize gains to the extent that previously deferred proceeds are recognized to coincide with ProLogis’ new ownership interest in the ProLogis Property Fund.

ProLogis’ ownership interests in certain of the ProLogis Property Funds decreased during both the three and the nine month periods in 2004 and 2003. The amount of previously deferred proceeds that were recognized as a result of these ownership changes were $864,000 and $4,143,000 for the three and nine months ended September 30, 2004, respectively, and $125,000 and $1,337,000 for the three and nine months ended September 30, 2003, respectively, resulting in the recognition of additional gains of these amounts during the applicable period.

(14) As of September 30, 2004, the gross proceeds that have not been recognized in computing the gains from the contributions of properties by ProLogis to ProLogis Property Funds (before subsequent amortization) are presented below (in thousands). See note 13.


	Gross Proceeds Not Recognized
	CDFS		Non-CDFS
	Transactions		Transactions		Total
ProLogis European Properties Fund (a)	$	74,858	$	9,344	$	84,202
ProLogis California LLC		5,323		26,129		31,452
ProLogis North American Properties Fund I		8,292		869		9,161
ProLogis North American Properties Fund II		7,366		—		7,366
ProLogis North American Properties Fund III		5,650		337		5,987
ProLogis North American Properties Fund IV		3,805		810		4,615
ProLogis North American Properties Fund V (b)		16,463		871		17,334
ProLogis North American Properties Funds VI-X		2,760		—		2,760
ProLogis Japan Properties Fund		17,223		—		17,223

Totals	$	141,740	$	38,360	$	180,100

(a) In the third quarter of 2004, ProLogis released $0.9 million of previously deferred gains as a result of the decrease in its ownership interest in ProLogis European Properties Fund.

(b) In the second quarter of 2004, ProLogis released $3.3 million of previously deferred gains as a result of the decrease in its ownership interest in ProLogis North American Properties Fund V. See note 17 on page 8b.

(15) Includes ProLogis’ proportionate shares of the earnings or losses, Funds From Operations and EBITDA of unconsolidated investees recognized under the equity method as follows (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
Earnings (losses):
TCL Holding S.A. (a)	$	251		$	(34,502	)	$	856		$	(27,812	)
ProLogis Logistics (b)		(841	)		—			(1,571	)		—
CDFS Joint Ventures (c)		(31	)		301			(31	)		902
Insight, Inc.		—			—			(258	)		(5	)
ProLogis Equipment Services		—			—			—			57

	$	(621	)	$	(34,201	)	$	(1,004	)	$	(26,858	)

ProLogis Defined Funds From Operations:
TCL Holding S.A. (a)	$	310		$	(30,749	)	$	1,050		$	(21,744	)
ProLogis Logistics (b)		(121	)		—			(203	)		—
CDFS Joint Ventures (c)		278			301			278			902
Insight, Inc.		—			—			(258	)		(5	)
ProLogis Equipment Services		—			—			—			57

	$	467		$	(30,448	)	$	867		$	(20,790	)

EBITDA:
TCL Holding S.A. (a)	$	519		$	8,283		$	1,769		$	18,869
ProLogis Logistics (b)		(121	)		—			(203	)		—
CDFS Joint Ventures (c)		278			1,044			278			3,135
Insight, Inc.		—			—			(258	)		(5	)
ProLogis Equipment Services		—			—			—			57

	$	676		$	9,327		$	1,586		$	22,056

(a) See notes 1, 7 and 8 on page 8. During the third quarter of 2003, included in the net loss recognized by ProLogis was a charge of $38,286,000 representing ProLogis’ proportionate share of an impairment charge associated with TCL Holding S.A.’s net assets in the United Kingdom that were held for sale at that time. These assets were ultimately disposed of in December 2003.

(b) Represents expenses of $121,000 and additional losses of $720,000 recognized for the three months ended September 30, 2004 and expenses of $203,000 and additional losses of $1,368,000 recognized for the nine months ended September 30, 2004. The expenses represent adjustments in 2004 to the operating expenses recognized by ProLogis’ United States temperature-controlled distribution company prior to its disposition in October 2002. The additional losses represent adjustments in 2004 to the net gain recognized by ProLogis upon the disposition of this company in October 2002.

(c) See note 6 on page 8. ProLogis has invested in four joint ventures that perform CDFS business activities in the United Kingdom. In November 2003, ProLogis discontinued its participation and significantly reduced its ownership interest in one joint venture that held interests in 11 operating properties. The remaining three joint ventures own no operating properties and engage primarily in development activities. In July 2004, ProLogis invested in a joint venture that performs CDFS business activities in China (see note 29 on page 8b). In August 2004, as part of the Keystone Transaction (see notes 21 and 28 on page 8b). ProLogis acquired an ownership interest in a CDFS joint venture operating in the United States. ProLogis has a 50% ownership interest in all of the CDFS joint ventures.

(Continued)

Supplemental Information Page 8a

ProLogis

Third Quarter 2004
Unaudited Financial Results

Notes to Consolidated Financial Statements (Continued)

(16) Includes amortization of deferred loan costs of $1,370,000 and $1,547,000 for the three months ended September 30, 2004 and 2003, respectively, and $4,183,000 and $4,471,000 for the nine months ended September 30, 2004 and 2003, respectively. Excludes interest that has been capitalized based on ProLogis’ development activities of $9,985,000 and $9,186,000 for the three months ended September 30, 2004 and 2003, respectively, and $26,671,000 and $28,821,000 for the nine months ended September 30, 2004 and 2003, respectively.

(17) In June 2004, ProLogis disposed of a portion of its ownership interest in ProLogis North American Properties Fund V. As provided in certain formation agreements, ProLogis exchanged a certain portion of its investment into shares of Macquarie ProLogis Trust, the listed property trust in Australia that has an 85.9% ownership interest in ProLogis North American Properties Fund V. Upon receipt of the shares, they were immediately sold by ProLogis in the public market. Based on its book basis in the interest disposed of, ProLogis recognized a net gain of $3,328,000 on this disposition in its Consolidated Statement of Earnings (Loss) and a net gain of $3,164,000 on this disposition in both its Consolidated Statements of Funds From Operations and EBITDA.

(18) Foreign currency exchange gains and losses that are recognized as a component of Net Earnings (Loss) computed under GAAP generally result from: (i) remeasurement and/or settlement of certain debt transactions between ProLogis and its foreign consolidated subsidiaries and foreign unconsolidated investees (depending on the type of loan, the currency in which the loan is denominated and the form of ProLogis’ investment); (ii) remeasurement and/or settlement of certain third party debt of ProLogis’ foreign consolidated subsidiaries (depending on the currency in which the loan is denominated); and (iii) mark-to-market adjustments related to derivative financial instruments utilized to manage foreign currency risks. ProLogis generally excludes these types of foreign currency exchange gains and losses from the ProLogis Defined Funds From Operations measure and also from its computation of EBITDA. ProLogis’ definition of Funds From Operations is presented on page 3a and its definition of EBITDA is presented on page 4.

Foreign currency exchange gains and losses that result from transactions (including certain intercompany debt and equity investments) that are settled in a currency other than the reporting company’s functional currency and from the settlement of derivative financial instruments utilized to manage foreign currency risks are included in the ProLogis Defined Funds From Operations measure and in ProLogis’ computation of EBITDA.

(19) ProLogis reports its investments in the ProLogis Property Funds and certain other investments under the equity method. Until January 1, 2004, ProLogis presented its investments in TCL Holding S.A. under the equity method (see note 1 on page 8). For purposes of calculating Funds From Operations and EBITDA, the Net Earnings (Loss) of each of its unconsolidated investees is adjusted to be consistent with the calculation of these measures by ProLogis. ProLogis’ definition of Funds From Operations is presented on page 3a and ProLogis’ definition of EBITDA is presented on page 4.

(20) Consists primarily of adjustments to the amounts that ProLogis recognizes under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on ProLogis’ ownership interest in the ProLogis Property Fund acquiring the property. See note 13 on page 8a.

(21) On May 3, 2004, ProLogis and certain private REIT subsidiaries of established investment funds (all of which are managed by Eaton Vance Management) agreed to acquire Keystone Property Trust, subject to an acquisition agreement between Keystone, ProLogis and the five investment funds. This acquisition was approved by Keystone’s shareholders at the July 30, 2004 shareholders’ meeting. The transaction closed on August 4, 2004. ProLogis acquired certain operating properties, properties under development and land parcels as part of its direct acquisitions in the Keystone Transaction. See notes 26, 27 and 28 and pages 7, 18 and 20.

(22) Other investments include: (i) funds that are held in escrow pending the completion of tax-deferred exchange transactions; (ii) earnest money deposits associated with potential acquisitions; (iii) costs incurred during the pre-acquisition due diligence process; and (iv) costs incurred during the pre-construction phase related to future development projects.

(23) In August 2004, ProLogis entered into a credit agreement with U.S. Bank National Association providing for a $95.0 million short-term borrowing arrangement. The amount outstanding at September 30, 2004 has been repaid. The agreement expires on December 16, 2004 but Prologis cannot borrow additional amounts under the agreement.

(24) On December 11, 2003, ProLogis called for the redemption of all of the remaining 5,000,000 Series D Preferred Shares outstanding at a price of $25.00 per share, plus $0.066 in accrued and unpaid dividends. The redemption of these shares was completed on January 12, 2004 at a total redemption value of $125.3 million. ProLogis recognized a charge of $4.2 million associated with this redemption in January 2004. See note 3 on page 8.

(25) Accumulated other comprehensive income includes cumulative foreign currency translation adjustments and unrealized gains and losses associated with derivative financial instruments that receive hedge accounting treatment. ProLogis also recognizes its proportionate share of the accumulated other comprehensive income balances of its unconsolidated investees.

(26) ProLogis has a 20% ownership interest in each of five property funds (referred to by ProLogis as ProLogis North American Properties Funds VI, VII, VIII, IX and X). The remaining 80% ownership interests in each of the five property funds are held by certain private REIT subsidiaries of established investment funds. These property funds acquired operating properties in the Keystone Transaction aggregating 22,509,102 square feet at an aggregate value of $1.38 billion. See notes 21, 27 and 28 and pages 12 and 18.

(27) ProLogis acquired Keystone’s 20% ownership interest in two property funds as part of its direct acquisitions in the Keystone Transaction. ProLogis refers to these property funds as ProLogis North American Properties Funds XI and XII. See notes 21, 26 and 28 and pages 12 and 18.

(28) ProLogis acquired Keystone’s 50% ownership interest in a CDFS joint venture (valued at $8.5 million) and a preferred interest in a real estate company (valued at $20.0 million) as part of its direct acquisitions in the Keystone Transaction. See notes 21, 26 and 27.

(29) ProLogis has a 50% ownership interest in a CDFS joint venture operating in China. This venture acquired four operating properties aggregating 203,000 square feet in the third quarter of 2004.

Supplemental Information Page 8b

ProLogis

Third Quarter 2004
Unaudited Financial Results

Components of Net Asset Value (A)
(in thousands)

Income Items


	3Q 2004		ProLogis'				Pro Rata
	Pro Forma		Ownership				Annualized
	NOI (B)		Interest				Pro Forma NOI
Direct ownership properties (B)	$	104,712		100.0	%	X4	$	418,848

ProLogis Property Funds—North America (B):
ProLogis California LLC	$	15,211		50.0	%	X4	$	30,422
ProLogis North American Properties Fund I		8,521		41.3	%	X4		14,077
ProLogis North American Properties Fund II		5,222		20.0	%	X4		4,178
ProLogis North American Properties Fund III		3,952		20.0	%	X4		3,162
ProLogis North American Properties Fund IV		3,501		20.0	%	X4		2,801
ProLogis North American Properties Fund V		25,487		11.5	%	X4		11,724
ProLogis North American Properties Funds VI — X		25,028		20.0	%	X4		20,022
ProLogis North American Properties Funds XI		3,612		20.0	%	X4		2,890
ProLogis North American Properties Funds XII		4,135		20.0	%	X4		3,308

Subtotal North America								92,584

ProLogis Japan Properties Fund (B)		11,674		20.0	%	X4		9,339

Total Property Funds—North America and Japan							$	101,923


	3Q 2004 Actual			Annualized Fees
Fee income (includes all ProLogis Property Funds) (see page 11)	$	12,931	X 4	$	51,724


				Actual 12 mos.
	3Q 2004 Actual			ended 09/30/04
Income from CDFS business:
Funds From Operations from CDFS business:
Gains on dispositions of CDFS business assets, net	$	75,623		$	206,852
Development management fees and other CDFS income		373			3,162

		75,996			210,014
Recognition of previously deferred disposition proceeds (see note 13 on page 8a)		(864	)		(30,043	)
Gross amount of disposition proceeds that have not been recognized in Funds From Operations on current period contributions (see note 13 on page 8a)		10,072			35,856

	$	85,204		$	215,827

Balance Sheet Items


Investment in ProLogis European Properties Fund (C)	$	412,396

Net assets held for sale (discontinued operations) (D)	$	107,285

Investments in unconsolidated investees other than ProLogis Property Funds (see page 7):
CDFS Joint Ventures	$	32,898
Temperature-controlled distribution investee		3,668
Other unconsolidated investees		22,229

Total investments in unconsolidated investees other than ProLogis Property Funds	$	58,795

Investments in land and development projects:
Development projects in process (see pages 6 and 20)	$	611,697
Land held for development (see pages 6 and 7)		472,413

Total investments in land and development projects	$	1,084,110

Other assets:
Cash and cash equivalents	$	207,095
Deposits, prepaid assets and other tangible assets		161,245
Accounts and notes receivable		102,507
ProLogis’ share of other tangible assets of ProLogis Property Funds (E)		22,188

Total other assets	$	493,035

Liabilities and preferred equity:
ProLogis’ total liabilities (excluding liabilities associated with assets held for sale-discontinued operations)	$	(3,817,561	)
ProLogis’ share of third party debt of ProLogis Property Funds (see page 12) (E)		(481,174	)
ProLogis’ share of other third party liabilities of ProLogis Property Funds (E)		(20,087	)

Total liabilities		(4,318,822	)
Preferred Shares		(350,000	)

Total liabilities and preferred equity	$	(4,668,822	)

ProLogis’ Consolidated Balance Sheet is at Page 6.

Net Asset Value Discussion

ProLogis considers Net Asset Value to be a useful tool for management, financial analysts, potential investors and shareholders to estimate the fair value of common shareholder equity. The assessment of the fair value of a particular segment of ProLogis’ business is subjective in that it will involve estimates and can be performed using various methods. Therefore, ProLogis has presented the financial results and investments related to its business segments that it believes are important in calculating its Net Asset Value but has not presented any specific methodology nor provided any guidance on the assumptions or estimates that should be used in the calculation.

Comments are on page 9a.

Supplemental Information Page 9

ProLogis

Third Quarter 2004
Unaudited Financial Results

Comments to Components of Net Asset Value
(in thousands)

Comments relate to page 9.

COMMENTS

(A) The components of Net Asset Value provided on page 9 do not consider any incentive management fees that ProLogis can earn from ProLogis Property Funds, the potential growth in rental and fee income streams or the franchise value associated with ProLogis’ global operating platform and the ProLogis Operating System®.

(B) A reconciliation of rental income and rental expenses computed under GAAP to pro forma net operating income (“NOI”) for purposes of the Net Asset Value calculation for ProLogis and the ProLogis Property Funds, excluding ProLogis European Properties Fund, for the three months ended September 30, 2004 follows (amounts in thousands). Because ProLogis’ investment in ProLogis European Properties Fund is subject to periodic third party valuations (see comment C), a separate calculation using pro forma NOI is not necessary.


							ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis			ProLogis
				ProLogis			N.A.			N.A.			N.A.			N.A.			N.A.			N.A.			N.A.			N.A.			Japan
				California			Properties			Properties			Properties			Properties			Properties			Properties			Properties			Properties			Properties
	ProLogis			LLC			Fund I			Fund II			Fund III			Fund IV			Fund V			Funds VI - X			Fund XI			Fund XII			Fund
Calculation of Pro Forma NOI (a):
Rental income computed under GAAP (see pages 3 and 11)	$	136,406		$	18,637		$	10,456		$	6,826		$	5,121		$	4,320		$	30,546		$	19,191		$	3,039		$	3,498		$	10,575
Straight-lined rents (b)		(2,599	)		(271	)		(214	)		(213	)		(61	)		(107	)		(974	)		(984	)		(78	)		(126	)		(367	)
Net termination fees (c)		(789	)		—			—			—			39			—			(468	)		—			—			—			—

Adjusted rental income		133,018			18,366			10,242			6,613			5,099			4,213			29,104			18,207			2,961			3,372			10,208

Rental expenses, computed under GAAP (see pages 3 and 11)		(34,644	)		(3,316	)		(1,817	)		(1,444	)		(1,214	)		(745	)		(5,047	)		(3,906	)		(605	)		(727	)		(1,072	)
Certain fees paid to ProLogis (d)		—			161			96			53			67			33			228			174			—			—			—

Adjusted rental expenses		(34,644	)		(3,155	)		(1,721	)		(1,391	)		(1,147	)		(712	)		(4,819	)		(3,732	)		(605	)		(727	)		(1,072	)

Adjusted NOI		98,374			15,211			8,521			5,222			3,952			3,501			24,285			14,475			2,356			2,645			9,136
Other adjustments (e)(f)		6,338			—			—			—			—			—			1,202			10,553			1,256			1,490			2,538

Pro Forma NOI	$	104,712		$	15,211		$	8,521		$	5,222		$	3,952		$	3,501		$	25,487		$	25,028		$	3,612		$	4,135		$	11,674

(a) Pro forma NOI represents: (i) rental income computed under GAAP for each applicable property, including rental expense recoveries, adjusted to exclude straight-lined rents (see (b) below) and net termination fees (see (c) below); (ii) less rental expenses computed under GAAP for each applicable property adjusted to exclude certain fees paid to ProLogis that have been recognized as rental expenses by the ProLogis Property Funds (see (d) below); (iii) as adjusted to reflect CDFS business assets (completed developments and repositioned acquisitions) at a stabilized yield for the entire period (see (e) below); and (iv) as adjusted to present a full period of operations for those properties that were not stabilized for the entire period (see (f) below).

(b) Straight-lined rents are removed from rental income computed under GAAP to allow for the calculation of a cash yield, which is common in Net Asset Value calculations.

(c) Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability, if any, that has been previously recognized under GAAP. Removing the net termination fees from rental income allows for the calculation of pro forma NOI to include only rental income that is indicative of the property’s recurring operating performance. Customer terminations are negotiated under specific circumstances and are not subject to specific provisions or rights allowed under the lease agreements.

(d) These miscellaneous fees are removed because they represent costs that are specific to the ownership structures of the individual ProLogis Property Fund and are not necessarily indicative of expenses that would be incurred under other structures.

(e) For ProLogis, the NOI generated by CDFS business assets (completed developments and repositioned acquisitions) is removed and replaced with an NOI measure that is computed by applying each property’s projected yield at the time the property was developed or acquired to the gross book basis of the property at September 30, 2004.

(f) For ProLogis North American Properties Fund V, ProLogis North American Properties Funds VI — X, ProLogis North American Properties Funds XI — XII and ProLogis Japan Properties Fund, NOI is adjusted to reflect a full period of operations for the properties that were acquired during the three-month period and to remove the NOI for properties disposed of during the three-month period, if any. See page 18.

(C) At September 30, 2004, the Net Asset Value of ProLogis’ investment in ProLogis European Properties Fund was as follows (in thousands, except per unit amounts):


Number of equity units held by ProLogis on September 30, 2004		31,769
Net Asset Value per unit at December 31, 2003 in euros (g)		10.22

Total Net Asset Value at September 30, 2004 in euros		324,679
Euro to U.S. dollar exchange rate at September 30, 2004		1.2409

Total Net Asset Value at September 30, 2004 in U.S. dollars	$	402,894
ProLogis’ share of Funds From Operations since December 31, 2003 (h)		20,975
Less dividends received by ProLogis since December 31, 2003		(23,299	)
Net amounts owed to ProLogis		11,826

	$	412,396

(g) Based on an independent third party valuation as of December 31, 2003.

(h) Represents ProLogis’ share of Funds From Operations of ProLogis European Properties Fund since the last net asset valuation (December 31, 2003) excluding management fee income which is paid to ProLogis on a current basis. See page 11.

(D) The French operations of ProLogis’ temperature-controlled distribution company are held for sale. See notes 1 and 7 on page 8 and page 13.

(E) Excludes ProLogis European Properties Fund. See comment C.

Supplemental Information Page 9a

ProLogis

Third Quarter 2004
Unaudited Financial Results

Calculations of Return on Capital (A)

(in thousands)

EBITDA


	Third Quarter			Second Quarter			First Quarter		Calendar Year
	2004			2004			2004		2003
EBITDA (see page 4)	$	213,776		$	201,224		$	167,827	$	718,643
Disposition proceeds attributable to current period contributions that have been deferred and not recognized in computing the gains that are included in EBITDA (see page 19)		10,072			12,003			8,912		25,933
Adjustment to the amount of the deferred disposition proceeds due to interest capitalization treatment for computing EBITDA (B)		994			3,028			1,337		3,951
Disposition proceeds attributable to prior period contributions that have been recognized in computing the current period gains that are included in EBITDA (see note 13 on page 8a)		(864	)		(3,279	)		—		(27,116	)

	$	223,978		$	212,976		$	178,076	$	721,411

Total Book Assets (C)


	September 30,			June 30,			March 31,			Averages			December 31,
	2004			2004			2004			for 2003			2003
Direct investment:
ProLogis’ direct investment in real estate assets, before depreciation (D)	$	6,075,860		$	5,926,299		$	6,100,639		$	5,547,257		$	5,854,046
ProLogis’ direct other assets, net of direct other liabilities (E)		322,191			451,603			248,466			233,311			404,996
Net assets held for sale (discontinued operations) (F)		107,285			105,710			104,075			—			—

		6,505,336			6,483,612			6,453,180			5,780,568			6,259,042
ProLogis share of Total Book Assets of unconsolidated investees:
ProLogis Property Funds (G)		1,971,704			1,555,322			1,502,352			1,535,608			1,432,781
Investments in CDFS Joint Ventures (H)		39,592			12,098			11,881			73,938			12,734
Investments in temperature-controlled distribution investees (F)		3,668			701			3,092			167,474			113,977
Investments in other unconsolidated investees (D)		22,229			2,229			2,229			2,851			2,486

		2,037,193			1,570,350			1,519,554			1,779,871			1,561,978
Total Book Assets (including ProLogis’ share of Total Book Assets of unconsolidated investees)	$	8,542,529		$	8,053,962		$	7,972,734		$	7,560,439		$	7,821,020

Total Book Equity Attributable to Common Shareholders (C):
Total Book Assets (C)	$	8,542,529		$	8,053,962		$	7,972,734		$	7,560,439		$	7,821,020
Less: minority interest (D)		(76,490	)		(36,262	)		(36,775	)		(39,599	)		(37,777	)
Less: third party debt (D)		(3,443,868	)		(3,125,068	)		(3,129,072	)		(2,879,060	)		(2,990,669	)
Less: ProLogis’ share of third party debt of unconsolidated investees (see page 21)		(842,742	)		(811,712	)		(787,401	)		(785,539	)		(750,638	)
Less: preferred shares (D)		(350,000	)		(350,000	)		(350,000	)		(405,000	)		(475,000	)

Total Book Equity Attributable to Common Shareholders (including ProLogis’ share of Total Book Equity of unconsolidated investees)	$	3,829,429		$	3,730,920		$	3,669,486		$	3,451,241		$	3,566,936

[Additional columns below]

[Continued from above table, first column(s) repeated]


	September 30,			June 30,			March 31,			December 31,
	2003			2003			2003			2002
Direct investment:
ProLogis’ direct investment in real estate assets, before depreciation (D)	$	5,538,063		$	5,537,659		$	5,410,992		$	5,395,527
ProLogis’ direct other assets, net of direct other liabilities (E)		185,718			237,334			182,212			156,293
Net assets held for sale (discontinued operations) (F)		—			—			—			—

		5,723,781			5,774,993			5,593,204			5,551,820
ProLogis share of Total Book Assets of unconsolidated investees:
ProLogis Property Funds (G)		1,670,371			1,656,601			1,490,450			1,427,836
Investments in CDFS Joint Ventures (H)		98,159			88,450			81,652			88,696
Investments in temperature-controlled distribution investees (F)		158,465			200,697			185,576			178,658
Investments in other unconsolidated investees (D)		2,486			2,486			2,486			4,310

		1,929,481			1,948,234			1,760,164			1,699,500
Total Book Assets (including ProLogis’ share of Total Book Assets of unconsolidated investees)	$	7,653,262		$	7,723,227		$	7,353,368		$	7,251,320

Total Book Equity Attributable to Common Shareholders (C):
Total Book Assets (C)	$	7,653,262		$	7,723,227		$	7,353,368		$	7,251,320
Less: minority interest (D)		(38,716	)		(39,296	)		(39,739	)		(42,467	)
Less: third party debt (D)		(2,953,277	)		(2,891,073	)		(2,828,302	)		(2,731,978	)
Less: ProLogis’ share of third party debt of unconsolidated investees (see page 21)		(865,555	)		(853,686	)		(749,133	)		(708,685	)
Less: preferred shares (D)		(350,000	)		(400,000	)		(400,000	)		(400,000	)

Total Book Equity Attributable to Common Shareholders (including ProLogis’ share of Total Book Equity of unconsolidated investees)	$	3,445,714		$	3,539,172		$	3,336,194		$	3,368,190


	Full Year
Return Calculations	2003
Return on Assets (I):
Average Book Assets	$	7,560,439
Less: average direct other assets, net of direct other liabilities		(233,311	)
Less: average minority interest		(39,599	)

	$	7,287,529

Adjusted EBITDA for the full year	$	721,411

Return on Assets (I)		9.90	%

Return on Equity Attributable to Common Shareholders (J):
Average Book Equity Attributable to Common Shareholders (C)	$	3,451,241
Less: average direct other assets, net of direct other liabilities		(233,311	)

	$	3,217,930

ProLogis Defined Funds From Operations Attributable to Common Shares for the full year	$	400,745
Add back: gains not recognized computed on a Funds From Operations basis, net of recapture amounts recognized (see note 13 on page 8a)		(1,183	)
Add back: non-real estate depreciation		7,884
Add back: non-real estate depreciation of temperature-controlled distribution investees		2,089
Add back: adjustment to carrying values of investments in temperature-controlled distribution investees		38,286
Add back: excess of redemption values over the carrying values of preferred shares redeemed		7,823

ProLogis Defined Funds From Operations Attributable to Common Shares, as adjusted	$	455,644

Return on Equity Attributable to Common Shareholders (J)		14.16	%

Comments are on page 10a.

Supplemental Information Page 10

ProLogis

Third Quarter 2004
Unaudited Financial Results

Comments to Calculations of Return on Capital

Comments relate to page 10.

COMMENTS

(A) Return on Capital measures are commonly used by management, financial analysts, potential investors and shareholders to analyze financial returns. ProLogis believes that Return on Assets is useful in analyzing the financial returns resulting from capital deployment decisions and for comparing returns associated with alternative investment decisions. ProLogis believes that Return on Equity Attributable to Common Shareholders is useful in assessing the financial returns attributable to holders of common equity resulting from capital deployment and capital structuring decisions and evaluating options, as well as for comparing returns for alternative investment decisions. See comments I and J.

(B) In computing ProLogis’ EBITDA measure, the gains and losses from the contributions of developed properties recognized as CDFS income are adjusted to reflect these gains and losses as if no interest cost had been capitalized during the development of the properties (i.e. the gains are larger since capitalized interest is not included in the basis of the assets contributed). See page 4. This adjustment also impacts the amount of the proceeds that are deferred and not recognized due to ProLogis’ ownership interest in the Property Fund acquiring the property. See note 13 on page 8a.

(C) ProLogis’ use of the term “Book Assets” refers to the undepreciated asset base of the company. ProLogis’ use of the term “book equity” refers to the equity of the company with its assets presented on an undepreciated basis.

(D) Represents ProLogis’ recorded balance sheet amount as of the applicable date. ProLogis’ Consolidated Balance Sheets are at page 6.

(E) Other assets includes all assets other than real estate, investments in unconsolidated investees and assets held for sale (discontinued operations) and other liabilities includes all liabilities other than third party debt and liabilities associated with assets held for sale (discontinued operations). ProLogis’ Consolidated Balance Sheets are at page 6.

(F) The French operations of ProLogis’ temperature-controlled distribution company are held for sale. ProLogis began presenting its investments in the temperature-controlled distribution company on a consolidated basis as of January 1, 2004. Prior to that date, these investments were presented under the equity method. See notes 1, 7 and 8 on page 8.

(G) Represents ProLogis’ share of the total assets, before depreciation, net of liabilities, other than third party debt, of each entity. See page 12.

(H) Represents ProLogis’ balance sheet investment in the entities plus ProLogis’ share of the entities’ third party debt, if any.

(I) Return on Assets measures EBITDA, generated by operations and as defined by ProLogis on page 4, against the original capital invested that has generated this EBITDA. ProLogis believes that this EBITDA measure most accurately measures the direct financial return resulting from its capital decisions without including the impacts that financing and capital structure choices would have on the return calculation. While certain components of this measure are provided on an interim basis, ProLogis provides its computation of the actual measure only on a calendar year basis.

(J) Return on Equity Attributable to Common Shareholders measures Funds From Operations as defined by ProLogis on page 3a and as further adjusted to remove all depreciation and amortization amounts and to reflect gains on contributions of CDFS assets at their gross amount prior to any deferrals of proceeds (see note 13 on page 8a) against the invested shareholder capital to which the Funds From Operations generated is attributable. ProLogis believes that the ProLogis Defined Funds From Operations measure, as adjusted, most accurately measures the return related to the capital invested in common equity. While certain components of this measure are provided on an interim basis, ProLogis provides its computation of the actual measure only on a calendar year basis.

Supplemental Information Page 10a

ProLogis

Third Quarter 2004
Unaudited Financial Results

ProLogis Property Funds — EBITDA, Funds From Operations and Net Earnings
(in thousands)


	ProLogis						ProLogis			ProLogis			ProLogis
	European			ProLogis			N.A.			N.A.			N.A.
	Properties			California			Properties			Properties			Properties
	Fund			LLC			Fund I			Fund II			Fund III
	For the Three Months Ended September 30, 2004 (B)
EBITDA, Funds From Operations and Net Earnings of each Property Fund:
Rental revenues	$	79,101		$	18,637		$	10,456		$	6,826		$	5,121
Rental expenses:
Property management fees paid to ProLogis (C)		(683	)		(588	)		(300	)		(204	)		(209	)
Other		(13,794	)		(2,728	)		(1,517	)		(1,240	)		(1,005	)

Total rental expenses		(14,477	)		(3,316	)		(1,817	)		(1,444	)		(1,214	)

Net operating income from properties		64,624			15,321			8,639			5,382			3,907

Other income (expense)		(615	)		4			(6	)		(15	)		(22	)
Gains on dispositions of CDFS business assets, net		650			—			—			—			—
Asset management and other fees paid to ProLogis (C)		(5,547	)		(8	)		(168	)		(294	)		(263	)

EBITDA of the Property Fund (D)		59,112			15,317			8,465			5,073			3,622
Current income tax benefit (expense)		(4,241	)		(3	)		—			—			(3	)
Third party interest expense		(22,383	)		(5,315	)		(4,619	)		(2,838	)		(2,702	)

Funds From Operations of the Property Fund (E)		32,488			9,999			3,846			2,235			917
Real estate related depreciation and amortization		(19,551	)		(4,459	)		(2,503	)		(1,334	)		(1,214	)
Losses on other dispositions, net		—			—			—			—			(1	)
Foreign currency exchange losses, net		(2,267	)		—			—			—			—
Deferred income tax benefit (expense)		(628	)		—			—			—			—

Net Earnings (Loss) of the Property Fund (F)	$	10,042		$	5,540		$	1,343		$	901		$	(298	)

ProLogis’ share of EBITDA, Funds From Operations and Net Earnings (Loss) of each Property Fund recognized under the equity method (see pages 2, 3, 4 and 5):
ProLogis’ average ownership interest for the three-month period (G)		22.0	%		50.0	%		41.3	%		20.0	%		20.0	%

ProLogis’ share of the Property Fund’s EBITDA		13,009			7,659			3,495			1,015			724
Fees paid to ProLogis (H)		6,182			767			580			524			559
Other (I)		1			(107	)		(25	)		(4	)		(4	)

EBITDA recognized by ProLogis (D)	$	19,192		$	8,319		$	4,050		$	1,535		$	1,279

ProLogis’ share of the Property Fund’s Funds From Operations		7,149			5,000			1,588			447			183
Fees paid to ProLogis (H)		6,182			767			580			524			559
Other (I)		2			(58	)		(24	)		(3	)		(4	)

Funds From Operations recognized by ProLogis (E)	$	13,333		$	5,709		$	2,144		$	968		$	738

ProLogis’ share of the Property Fund’s Net Earnings (Loss)		2,206			2,770			554			180			(60	)
Fees paid to ProLogis (H)		6,182			767			580			524			559
Other (I)		384			210			50			39			32

Net Earnings recognized by ProLogis (F)	$	8,772		$	3,747		$	1,184		$	743		$	531

	For the Three Months Ended September 30, 2003 (J)
EBITDA recognized by ProLogis, including fees (D)	$	21,174		$	8,042		$	4,309		$	1,434		$	1,493

Funds From Operations recognized by ProLogis, including fees (E)	$	14,693		$	5,398		$	2,455		$	866		$	953

Net Earnings recognized by ProLogis, including fees (F)	$	5,696		$	3,383		$	1,311		$	501		$	673

[Additional columns below]

[Continued from above table, first column(s) repeated]


	ProLogis			ProLogis			ProLogis			ProLogis			ProLogis
	N.A.			N.A.			N.A.			N.A.			N.A.
	Properties			Properties			Properties			Properties			Properties
	Fund IV			Fund V			Funds VI-X(A)			Fund XI(A)			Fund XII(A)
	For the Three Months Ended September 30, 2004 (B)
EBITDA, Funds From Operations and Net Earnings of each Property Fund:
Rental revenues	$	4,320		$	30,546		$	19,191		$	3,039		$	3,498
Rental expenses:
Property management fees paid to ProLogis (C)		(108	)		(806	)		(519	)		(90	)		(82	)
Other		(637	)		(4,241	)		(3,387	)		(515	)		(645	)

Total rental expenses		(745	)		(5,047	)		(3,906	)		(605	)		(727	)

Net operating income from properties		3,575			25,499			15,285			2,434			2,771

Other income (expense)		(19	)		77			12			(78	)		(38	)
Gains on dispositions of CDFS business assets, net		—			—			—			—			—
Asset management and other fees paid to ProLogis (C)		(181	)		(65	)		(578	)		—			—

EBITDA of the Property Fund (D)		3,375			25,511			14,719			2,356			2,733
Current income tax benefit (expense)		(5	)		313			—			—			—
Third party interest expense		(1,761	)		(6,614	)		—			(432	)		(567	)

Funds From Operations of the Property Fund (E)		1,609			19,210			14,719			1,924			2,166
Real estate related depreciation and amortization		(1,006	)		(6,915	)		(5,123	)		(1,209	)		(1,280	)
Losses on other dispositions, net		—			—			—			—			—
Foreign currency exchange losses, net		—			—			—			—			—
Deferred income tax benefit (expense)		—			2,784			—			—			—

Net Earnings (Loss) of the Property Fund (F)	$	603		$	15,079		$	9,596		$	715		$	886

ProLogis’ share of EBITDA, Funds From Operations and Net Earnings (Loss) of each Property Fund recognized under the equity method (see pages 2, 3, 4 and 5):
ProLogis’ average ownership interest for the three-month period (G)		20.0	%		12.3	%		20.0	%		20.0	%		20.0	%

ProLogis’ share of the Property Fund’s EBITDA		675			3,039			2,944			471			547
Fees paid to ProLogis (H)		323			1,989			1,096			90			82
Other (I)		(4	)		(330	)		—			—			—

EBITDA recognized by ProLogis (D)	$	994		$	4,698		$	4,040		$	561		$	629

ProLogis’ share of the Property Fund’s Funds From Operations		322			2,312			2,944			385			433
Fees paid to ProLogis (H)		323			1,989			1,096			90			82
Other (I)		(4	)		(209	)		—			—			—

Funds From Operations recognized by ProLogis (E)	$	641		$	4,092		$	4,040		$	475		$	515

ProLogis’ share of the Property Fund’s Net Earnings (Loss)		121			1,857			1,919			143			177
Fees paid to ProLogis (H)		323			1,989			1,096			90			82
Other (I)		25			(221	)		20			—			—

Net Earnings recognized by ProLogis (F)	$	469		$	3,625		$	3,035		$	233		$	259

	For the Three Months Ended September 30, 2003 (J)
EBITDA recognized by ProLogis, including fees (D)	$	996		$	4,203		$	—		$	—		$	—

Funds From Operations recognized by ProLogis, including fees (E)	$	643		$	3,478		$	—		$	—		$	—

Net Earnings recognized by ProLogis, including fees (F)	$	410		$	3,090		$	—		$	—		$	—

[Additional columns below]

[Continued from above table, first column(s) repeated]


	ProLogis
	Japan						ProLogis'
	Properties						Share of the
	Fund			Total			Property Funds
	For the Three Months Ended September 30, 2004 (B)
EBITDA, Funds From Operations and Net Earnings of each Property Fund:
Rental revenues	$	10,575		$	191,310			45,178
Rental expenses:
Property management fees paid to ProLogis (C)		—			(3,589	)		(906	)
Other		(1,072	)		(30,781	)		(7,212	)

Total rental expenses		(1,072	)		(34,370	)		(8,118	)

Net operating income from properties		9,503			156,940			37,060

Other income (expense)		(244	)		(944	)		(207	)
Gains on dispositions of CDFS business assets, net		—			650			143
Asset management and other fees paid to ProLogis (C)		(740	)		(7,844	)		(1,714	)

EBITDA of the Property Fund (D)		8,519			148,802			35,282
Current income tax benefit (expense)		(3	)		(3,942	)		(893	)
Third party interest expense		(1,777	)		(49,008	)		(12,278	)

Funds From Operations of the Property Fund (E)		6,739			95,852			22,111
Real estate related depreciation and amortization		(1,904	)		(46,498	)		(11,002	)
Losses on other dispositions, net		—			(1	)		(1	)
Foreign currency exchange losses, net		—			(2,267	)		(502	)
Deferred income tax benefit (expense)		—			2,156			228

Net Earnings (Loss) of the Property Fund (F)	$	4,835		$	49,242		$	10,834

ProLogis’ share of EBITDA, Funds From Operations and Net Earnings (Loss) of each Property Fund recognized under the equity method (see pages 2, 3, 4 and 5):
ProLogis’ average ownership interest for the three-month period (G)		20.0	%		23.1	%

ProLogis’ share of the Property Fund’s EBITDA		1,704			35,282
Fees paid to ProLogis (H)		739			12,931
Other (I)		141			(332	)

EBITDA recognized by ProLogis (D)	$	2,584		$	47,881

ProLogis’ share of the Property Fund’s Funds From Operations		1,348			22,111
Fees paid to ProLogis (H)		739			12,931
Other (I)		140			(160	)

Funds From Operations recognized by ProLogis (E)	$	2,227		$	34,882

ProLogis’ share of the Property Fund’s Net Earnings (Loss)		967			10,834
Fees paid to ProLogis (H)		739			12,931
Other (I)		203			742

Net Earnings recognized by ProLogis (F)	$	1,909		$	24,507

For the Three Months Ended September 30, 2003 (B)
EBITDA recognized by ProLogis, including fees (D)	$	868		$	42,519

Funds From Operations recognized by ProLogis, including fees (E)	$	783		$	29,269

Net Earnings recognized by ProLogis, including fees (F)	$	698		$	15,762

COMMENTS

(A) See notes 26 and 27 on page 8b.

(B) All ProLogis Property Funds were operating throughout the period with the exception of ProLogis North American Properties Funds XI and XII, which were acquired by ProLogis on August 4, 2004.

(C) These fees are paid to ProLogis on a current basis.

(D) EBITDA is a supplemental measure that is used to calculate Return on Capital measures (see page 10). See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2, ProLogis’ Consolidated Statements of EBITDA on page 4 and the Reconciliations of Net Earnings (Loss) to EBITDA on page 5. ProLogis’ definition of EBITDA is presented on page 4.

(E) Funds From Operations is a supplemental measure used by ProLogis. See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2, ProLogis’ Consolidated Statements of Funds From Operations on page 3 and the Reconciliations of Net Earnings (Loss) to Funds From Operations on page 5. ProLogis’ definition of Funds From Operations is presented on page 3a.

(F) See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2.

(G) The average ownership is weighted based on each entity’s contribution to the total Funds From Operations for the period presented.

(H) In addition to the property and asset management fees earned by ProLogis and expensed by the ProLogis Property Funds, ProLogis earns other fees for leasing, development and other activities performed on behalf of the ProLogis Property Funds. Certain of these fees are capitalized by the ProLogis Property Funds (primarily leasing and development fees). ProLogis defers an amount of the leasing and development fees it earns in an amount proportionate to its ownership interest in the ProLogis Property Fund. The deferred fees are recognized as income by ProLogis in future periods by reducing the amount of the capitalized fees that the ProLogis Property Fund includes in amortization or depreciation expense when ProLogis recognizes its share of the earnings and/or loss of the Property Fund under the equity method. For Funds From Operations and EBITDA, the deferred fees are not recognized unless the underlying asset is sold to a third party by the ProLogis Property Fund.

(I) Consists primarily of adjustments to the amounts that ProLogis recognizes under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on ProLogis’ ownership interest in the ProLogis Property Fund acquiring the property. See comment H and note 13 on page 8a.

(J) All ProLogis Property Funds were operating throughout the period with the exception of ProLogis North American Properties Funds VI — XII which were formed in 2004.

Supplemental Information Page 11

ProLogis

Third Quarter 2004
Unaudited Financial Results

ProLogis Property Funds — EBITDA, Funds From Operations and Net Earnings
(in thousands)


		ProLogis						ProLogis			ProLogis
		European			ProLogis			N.A.			N.A.
		Properties			California			Properties			Properties
		Fund			LLC			Fund I			Fund II
		For the Nine Months Ended September 30, 2004 (B)
EBITDA, Funds From Operations and Net Earnings of each Property Fund:
Rental revenues		$	221,703		$	55,910		$	32,458		$	20,214
Rental expenses:
Property management fees paid to ProLogis (C)			(2,187	)		(1,877	)		(998	)		(608	)
Other			(30,799	)		(8,481	)		(5,209	)		(3,946	)

Total rental expenses			(32,986	)		(10,358	)		(6,207	)		(4,554	)

Net operating income from properties			188,717			45,552			26,251			15,660

Other income (expense)			(2,725	)		(14	)		(76	)		(66	)
Gains on dispositions of CDFS business assets, net			1,758			—			—			—
Asset management and other fees paid to ProLogis (C)			(16,104	)		(11	)		(489	)		(886	)

EBITDA of the Property Fund (D)			171,646			45,527			25,686			14,708
Current income tax expense			(11,725	)		(9	)		(28	)		(5	)
Third party interest expense			(65,438	)		(16,000	)		(13,856	)		(8,513	)

Funds From Operations of the Property Fund (E)			94,483			29,518			11,802			6,190
Real estate related depreciation and amortization			(56,757	)		(13,351	)		(7,438	)		(3,973	)
Gains on other dispositions, net			—			1,431			—			—
Foreign currency exchange expenses/losses, net			(3,395	)		—			—			—
Deferred income tax benefit			78			—			—			—

Net Earnings of the Property Fund (F)		$	34,409		$	17,598		$	4,364		$	2,217

ProLogis’ share of EBITDA, Funds From Operations and Net Earnings of each Property Fund recognized under the equity method (see pages 2, 3, 4 and 5):
ProLogis’ average ownership interest for the nine-month period (G)			22.2	%		50.0	%		41.3	%		20.0	%

ProLogis’ share of the Property Fund’s EBITDA			38,105			22,764			10,608			2,942
Fees paid to ProLogis (H)			18,517			2,599			1,791			1,717
Other (I)			(32	)		(334	)		(65	)		(9	)

EBITDA recognized by ProLogis (D)		$	56,590		$	25,029		$	12,334		$	4,650

ProLogis’ share of the Property Fund’s Funds From Operations			20,975			14,759			4,874			1,238
Fees paid to ProLogis (H)			18,517			2,599			1,791			1,717
Other (I)			(31	)		(185	)		(65	)		(8	)

Funds From Operations recognized by ProLogis (E)		$	39,461		$	17,173		$	6,600		$	2,947

ProLogis’ share of the Property Fund’s Net Earnings			7,640			8,799			1,802			443
Fees paid to ProLogis (H)			18,517			2,599			1,791			1,717
Other (I)			921			632			150			116

Net Earnings recognized by ProLogis (F)		$	27,078		$	12,030		$	3,743		$	2,276

	For the Nine Months Ended September 30, 2003(B)
EBITDA recognized by ProLogis, including fees (D)		$	60,665		$	24,336		$	12,811		$	4,216

Funds From Operations recognized by ProLogis, including fees (E)		$	42,931		$	16,349		$	7,203		$	2,507

Net Earnings recognized by ProLogis, including fees (F)		$	17,747		$	10,668		$	4,248		$	1,744

[Additional columns below]

[Continued from above table, first column(s) repeated]


		ProLogis			ProLogis			ProLogis			ProLogis			ProLogis
		N.A.			N.A.			N.A.			N.A.			N.A.
		Properties			Properties			Properties			Properties			Properties
		Fund III			Fund IV			Fund V			Funds VI - X (A)			Fund XI (A)
		For the Nine Months Ended September 30, 2004 (B)
EBITDA, Funds From Operations and Net Earnings of each Property Fund:
Rental revenues		$	17,323		$	12,806		$	83,619		$	19,226		$	3,039
Rental expenses:
Property management fees paid to ProLogis (C)			(661	)		(313	)		(2,323	)		(519	)		(90	)
Other			(3,275	)		(1,962	)		(14,666	)		(3,391	)		(515	)

Total rental expenses			(3,936	)		(2,275	)		(16,989	)		(3,910	)		(605	)

Net operating income from properties			13,387			10,531			66,630			15,316			2,434

Other income (expense)			(69	)		(68	)		175			10			(78	)
Gains on dispositions of CDFS business assets, net			—			—			—			—			—
Asset management and other fees paid to ProLogis (C)			(788	)		(542	)		(240	)		(578	)		—

EBITDA of the Property Fund (D)			12,530			9,921			66,565			14,748			2,356
Current income tax expense			(10	)		(14	)		(66	)		—			—
Third party interest expense			(8,103	)		(5,281	)		(19,356	)		—			(432	)

Funds From Operations of the Property Fund (E)			4,417			4,626			47,143			14,748			1,924
Real estate related depreciation and amortization			(3,579	)		(2,626	)		(18,158	)		(5,123	)		(1,209	)
Gains on other dispositions, net			19			—			—			—			—
Foreign currency exchange expenses/losses, net			—			—			—			—			—
Deferred income tax benefit			—			—			2,784			—			—

Net Earnings of the Property Fund (F)		$	857		$	2,000		$	31,769		$	9,625		$	715

ProLogis’ share of EBITDA, Funds From Operations and Net Earnings of each Property Fund recognized under the equity method (see pages 2, 3, 4 and 5):
ProLogis’ average ownership interest for the nine-month period (G)			20.0	%		20.0	%		13.2	%		20.0	%		20.0	%

ProLogis’ share of the Property Fund’s EBITDA			2,506			1,984			8,787			2,950			471
Fees paid to ProLogis (H)			1,662			937			5,638			1,096			90
Other (I)			(12	)		(9	)		(655	)		—			—

EBITDA recognized by ProLogis (D)		$	4,156		$	2,912		$	13,770		$	4,046		$	561

ProLogis’ share of the Property Fund’s Funds From Operations			883			925			6,224			2,950			385
Fees paid to ProLogis (H)			1,662			937			5,638			1,096			90
Other (I)			(12	)		(9	)		(282	)		—			—

Funds From Operations recognized by ProLogis (E)		$	2,533		$	1,853		$	11,580		$	4,046		$	475

ProLogis’ share of the Property Fund’s Net Earnings			171			400			4,194			1,925			143
Fees paid to ProLogis (H)			1,662			937			5,638			1,096			90
Other (I)			96			75			(311	)		20			—

Net Earnings recognized by ProLogis (F)		$	1,929		$	1,412		$	9,521		$	3,041		$	233

	For the Nine Months Ended September 30, 2003(B)
EBITDA recognized by ProLogis, including fees (D)		$	4,420		$	2,922		$	12,888		$	—		$	—

Funds From Operations recognized by ProLogis, including fees (E)		$	2,790		$	1,860		$	11,076		$	—		$	—

Net Earnings recognized by ProLogis, including fees (F)		$	2,134		$	1,247		$	9,500		$	—		$	—

[Additional columns below]

[Continued from above table, first column(s) repeated]


		ProLogis			ProLogis
		N.A.			Japan						ProLogis'
		Properties			Properties						Share of the
		Fund XII (A)			Fund			Total			Property Funds
		For the Nine Months Ended September 30, 2004 (B)
EBITDA, Funds From Operations and Net Earnings of each Property Fund:
Rental revenues		$	3,498		$	25,990		$	495,786		$	122,036
Rental expenses:
Property management fees paid to ProLogis (C)			(82	)		—			(9,658	)		(2,597	)
Other			(645	)		(2,366	)		(75,255	)		(18,385	)

Total rental expenses			(727	)		(2,366	)		(84,913	)		(20,982	)

Net operating income from properties			2,771			23,624			410,873			101,054

Other income (expense)			(38	)		(164	)		(3,113	)		(715	)
Gains on dispositions of CDFS business assets, net			—			—			1,758			390
Asset management and other fees paid to ProLogis (C)			—			(1,921	)		(21,559	)		(4,757	)

EBITDA of the Property Fund (D)			2,733			21,539			387,959			95,972
Current income tax expense			—			(54	)		(11,911	)		(2,645	)
Third party interest expense			(567	)		(4,117	)		(141,663	)		(36,207	)

Funds From Operations of the Property Fund (E)			2,166			17,368			234,385			57,120
Real estate related depreciation and amortization			(1,280	)		(4,018	)		(117,512	)		(29,106	)
Gains on other dispositions, net			—			—			1,450			719
Foreign currency exchange expenses/losses, net			—			—			(3,395	)		(754	)
Deferred income tax benefit			—			—			2,862			385

Net Earnings of the Property Fund (F)		$	886		$	13,350		$	117,790		$	28,364

ProLogis’ share of EBITDA, Funds From Operations and Net Earnings of each Property Fund recognized under the equity method (see pages 2, 3, 4 and 5):
ProLogis’ average ownership interest for the nine-month period (G)			20.0	%		20.0	%		24.4	%

ProLogis’ share of the Property Fund’s EBITDA			547			4,308			95,972
Fees paid to ProLogis (H)			82			1,921			36,050
Other (I)			—			323			(793	)

EBITDA recognized by ProLogis (D)		$	629		$	6,552		$	131,229

ProLogis’ share of the Property Fund’s Funds From Operations			433			3,474			57,120
Fees paid to ProLogis (H)			82			1,921			36,050
Other (I)			—			322			(270	)

Funds From Operations recognized by ProLogis (E)		$	515		$	5,717		$	92,900

ProLogis’ share of the Property Fund’s Net Earnings			177			2,670			28,364
Fees paid to ProLogis (H)			82			1,921			36,050
Other (I)			—			466			2,165

Net Earnings recognized by ProLogis (F)		$	259		$	5,057		$	66,579

	For the Nine Months Ended September 30, 2003(B)
EBITDA recognized by ProLogis, including fees (D)		$	—		$	1,525		$	123,783

Funds From Operations recognized by ProLogis, including fees (E)		$	—		$	1,358		$	86,074

Net Earnings recognized by ProLogis, including fees (F)		$	—		$	1,217		$	48,505

COMMENTS

(A) See notes 26 and 27 on page 8b.

(B) All ProLogis Property Funds were operating throughout the period with the exception of ProLogis North American Properties Funds VI through X which began operations on June 30, 2004 and ProLogis North American Properties Funds XI and XII which were acquired by ProLogis on August 4, 2004.

(C) These fees are paid to ProLogis on a current basis.

(D) EBITDA is a supplemental measure that is used to calculate Return on Capital measures (see page 10). See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2, ProLogis’ Consolidated Statements of EBITDA on page 4 and the Reconciliations of Net Earnings (Loss) to EBITDA on page 5. ProLogis’ definition of EBITDA is presented on page 4.

(E) Funds From Operations is a supplemental measure used by ProLogis. See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2, ProLogis’ Consolidated Statements of Funds From Operations on page 3 and the Reconciliations of Net Earnings (Loss) to Funds From Operations on page 5. ProLogis’ definition of Funds From Operations is presented on page 3a.

(F) See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2.

(G) The average ownership is weighted based on each entity’s contribution to the total Funds From Operations for the period presented.

(H) In addition to the property and asset management fees earned by ProLogis and expensed by the ProLogis Property Funds, ProLogis earns other fees for leasing, development and other activities performed on behalf of the ProLogis Property Funds. Certain of these fees are capitalized by the ProLogis Property Funds (primarily leasing and development fees). ProLogis defers an amount of the leasing and development fees it earns in an amount proportionate to its ownership interest in the ProLogis Property Fund. The deferred fees are recognized as income by ProLogis in future periods by reducing the amount of the capitalized fees that the ProLogis Property Fund includes in amortization or depreciation expense when ProLogis recognizes its share of the earnings of the Property Fund under the equity method. For Funds From Operations and EBITDA, the deferred fees are not recognized unless the underlying asset is sold to a third party by the ProLogis Property Fund.

(I) Consists primarily of adjustments to the amounts that ProLogis recognizes under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on ProLogis’ ownership interest in the ProLogis Property Fund acquiring the property. See comment H and note 13 on page 8a.

Supplemental Information Page 11a

ProLogis

Third Quarter 2004
Unaudited Financial Results

ProLogis Property Funds — Balance Sheets
(in thousands)


	ProLogis						ProLogis			ProLogis			ProLogis			ProLogis
	European			ProLogis			N.A.			N.A.			N.A.			N.A.
	Properties			California			Properties			Properties			Properties			Properties
Selected Balance Sheet Items of the ProLogis Property Funds	Fund			LLC			Fund I			Fund II			Fund III			Fund IV
Operating properties, before depreciation	$	3,309,924		$	623,683		$	376,438		$	235,309		$	209,425		$	141,645

Other assets, net of other liabilities	$	46,141		$	9,559		$	3,147		$	3,739		$	3,068		$	4,459

Total assets, before depreciation, net of other liabilities	$	3,356,065		$	633,242		$	379,585		$	239,048		$	212,493		$	146,104

Third party debt (B)	$	1,642,937		$	283,494		$	242,304		$	165,000		$	150,278		$	103,182

ProLogis’ ownership interest as of September 30, 2004		21.6	%		50.0	%		41.3	%		20.0	%		20.0	%		20.0	%

[Additional columns below]

[Continued from above table, first column(s) repeated]


	ProLogis			ProLogis			ProLogis			ProLogis			ProLogis
	N.A.			N.A.			N.A.			N.A.			Japan
Selected Balance Sheet Items	Properties			Properties			Properties			Properties			Properties
of the ProLogis Property Funds	Fund V			Funds VI -X (A)			Fund XI (A)			Fund XII (A)			Fund			Total
Operating properties, before depreciation	$	1,105,629		$	1,507,392		$	227,218		$	269,180		$	685,855		$	8,691,698

Other assets, net of other liabilities	$	30,324		$	52,494		$	11,302		$	9,969		$	(147,215	)	$	26,987

Total assets, before depreciation, net of other liabilities	$	1,135,953		$	1,559,886		$	238,520		$	279,149		$	538,640		$	8,718,685

Third party debt (B)	$	551,200		$	14,409		$	51,319		$	80,823		$	314,818		$	3,599,764

ProLogis’ ownership interest as of September 30, 2004		11.5	%		20.0	%		20.0	%		20.0	%		20.0	%		21.4%	(C)


	ProLogis						ProLogis			ProLogis			ProLogis			ProLogis
	European			ProLogis			N.A.			N.A.			N.A.			N.A.
	Properties			California			Properties			Properties			Properties			Properties
ProLogis' Share of the ProLogis Property Funds' Balances	Fund			LLC			Fund I			Fund II			Fund III			Fund IV
ProLogis’ Balance Sheet Investment (see page 7)	$	282,053		$	112,567		$	36,481		$	5,734		$	4,910		$	3,190
Add (Deduct):
ProLogis’ share of third-party debt		354,874			141,747			100,072			33,000			30,056			20,636
ProLogis’ share of depreciation and amortization		40,916			33,154			14,941			3,084			2,543			1,537
Gross proceeds not recognized on a cumulative basis (before amortization) (D)		84,202			31,452			9,161			7,366			5,987			4,615
Other (E)		(37.135	)		(2,299	)		(3,886	)		(1,374	)		(997	)		(757	)

ProLogis’ share of total assets, before depreciation, net of other liabilities	$	724,910		$	316,621		$	156,769		$	47,810		$	42,499		$	29,221

[Additional columns below]

[Continued from above table, first column(s) repeated]


	ProLogis			ProLogis			ProLogis		ProLogis			ProLogis
	N.A.			N.A.			N.A.		N.A.			Japan
	Properties			Properties			Properties		Properties			Properties
ProLogis' Share of the ProLogis Property Funds' Balances	Fund V			Funds VI -X(A)			Fund XI(A)		Fund XII(A)			Fund			Total
ProLogis’ Balance Sheet Investment (see page 7)	$	55,991		$	308,104		$	36,141	$	39,486		$	66,132		$	950,789
Add (Deduct):
ProLogis’ share of third-party debt		63,388			2,882			10,264		16,165			62,964			836,048
ProLogis’ share of depreciation and amortization		3,485			804			241		256			947			101,908
Gross proceeds not recognized on a cumulative basis (before amortization) (D)		17,334			2,760			—		—			17,223			180,100
Other (E)		(9,563	)		(2,573	)		1,058		(77	)		(39,538	)		(97,141	)

ProLogis’ share of total assets, before depreciation, net of other liabilities	$	130,635		$	311,977		$	47,704	$	55,830		$	107,728		$	1,971,704

COMMENTS

(A) See notes 26 and 27 on page 8b.

(B) ProLogis North American Properties Funds VI through X intend to issue secured debt of approximately $915 million on a combined basis. Proceeds from these financing transactions will be treated as a return of capital to the equity holders in each property fund.

(C) The average ownership is weighted based on each entity’s contribution to total assets, before depreciation, net of other liabilities.

(D) See note 14 on page 8a.

(E) Generally consists of: (i) intercompany balances; (ii) additional basis in the investments that have been recorded directly by ProLogis; (iii) adjustments necessary to reflect ProLogis’ share of the retained earnings of the property fund based on ProLogis’ ownership at the time the earnings were recognized for those property funds (applicable when ProLogis’ ownership has varied over time); and (iv) ProLogis’ proportionate share of the accumulated other comprehensive income of ProLogis European Properties Fund (cumulative foreign currency translation adjustments and hedge accounting adjustments) and ProLogis Japan Properties Fund (cumulative foreign currency translation adjustments). See note 25 on page 8b.

Supplemental Information Page 12

ProLogis

Third Quarter 2004
Unaudited Financial Results

Leased and Physical Occupancy Analysis

By Ownership


					09/30/04						12/31/03 (A)
	Square Feet		Current
			Investment		Leased			Occupied			Leased			Occupied
Stabilized Portfolio (B):
Direct Investment:
North America		124,413,189	$	4,404,871,002		88.46	%		87.75	%		87.78	%		87.17	%
Europe		4,673,968		303,268,292		53.03	%		44.56	%		44.97	%		44.97	%

Total Direct Investment—Stabilized		129,087,157		4,708,139,294		87.18	%		86.19	%		85.98	%		85.40	%
ProLogis Property Funds (C):
ProLogis California LLC		13,003,562		623,683,029		99.17	%		98.86	%		97.05	%		96.06	%
ProLogis North American Properties Fund I		9,406,069		376,438,115		90.48	%		90.12	%		91.29	%		91.29	%
ProLogis North American Properties Fund II		4,476,668		235,308,769		95.18	%		95.18	%		90.85	%		90.07	%
ProLogis North American Properties Fund III		4,380,489		209,424,899		88.15	%		86.82	%		95.53	%		95.43	%
ProLogis North American Properties Fund IV		3,474,903		141,645,411		97.34	%		96.89	%		95.96	%		95.96	%
ProLogis North American Properties Fund V		26,722,493		1,105,628,952		98.78	%		96.74	%		99.31	%		98.70	%
ProLogis North American Properties Fund VI-X (D)		25,462,598		1,507,391,884		86.09	%		82.99	%		—			—
ProLogis North American Properties Fund XI (E)		4,314,961		227,217,853		92.77	%		92.77	%		—			—
ProLogis North American Properties Fund XII (E)		3,363,810		269,180,445		97.56	%		97.56	%		—			—
ProLogis European Properties Fund		45,239,626		3,309,924,408		96.09	%		95.29	%		95.15	%		94.56	%
ProLogis Japan Properties Fund		3,892,960		685,854,620		98.40	%		98.35	%		98.37	%		98.37	%

Total ProLogis Property Funds		143,738,139		8,691,698,385		94.49	%		93.20	%		95.82	%		95.27	%

Total Stabilized Portfolio		272,825,296	$	13,399,837,679		91.03	%		89.89	%		90.21	%		89.64	%

Total Operating Portfolio (F):
Direct Investment:
North America		126,627,557	$	4,479,028,618		87.82	%		87.06	%		86.99	%		86.34	%
Europe		5,704,468		395,756,011		47.96	%		41.01	%		35.92	%		35.92	%

Total Direct Investment—Total Portfolio		132,332,025		4,874,784,629		86.10	%		85.08	%		84.11	%		83.50	%
ProLogis Property Funds (C):
ProLogis California LLC		13,003,562		623,683,029		99.17	%		98.86	%		97.05	%		96.06	%
ProLogis North American Properties Fund I		9,406,069		376,438,115		90.48	%		90.12	%		91.29	%		91.29	%
ProLogis North American Properties Fund II		4,476,668		235,308,769		95.18	%		95.18	%		90.85	%		90.07	%
ProLogis North American Properties Fund III		4,380,489		209,424,899		88.15	%		86.82	%		95.53	%		95.43	%
ProLogis North American Properties Fund IV		3,474,903		141,645,411		97.34	%		96.89	%		95.96	%		95.96	%
ProLogis North American Properties Fund V		26,722,493		1,105,628,952		98.78	%		96.74	%		99.31	%		98.70	%
ProLogis North American Properties Fund VI-X (D)		25,462,598		1,507,391,884		86.09	%		82.99	%		—			—
ProLogis North American Properties Fund XI (E)		4,314,961		227,217,853		92.77	%		92.77	%		—			—
ProLogis North American Properties Fund XII (E)		3,363,810		269,180,445		97.56	%		97.56	%		—			—
ProLogis European Properties Fund		45,239,626		3,309,924,408		96.09	%		95.29	%		95.15	%		94.56	%
ProLogis Japan Properties Fund		3,892,960		685,854,620		98.40	%		98.35	%		98.37	%		98.37	%

Total ProLogis Property Funds		143,738,139		8,691,698,385		94.49	%		93.20	%		95.82	%		95.27	%

Total Operating Portfolio		276,070,164	$	13,566,483,014		90.47	%		89.31	%		89.05	%		88.46	%

COMMENTS

(A) The stabilized portfolio at 12/31/03 consisted of 226,392,718 square feet. Total operating portfolio at 12/31/03 consisted of 230,360,309 square feet.

(B) ProLogis defines its stabilized properties as those properties where the capital improvements, repositioning efforts, new management and new marketing programs for acquisitions or developments, and marketing programs in the case of newly developed properties, have been in effect for a sufficient period of time, generally 12 months. A property enters the stabilized pool at the earlier of 12 months or when it becomes substantially leased, defined as 93% or more.

(C) The investment amount represents the property fund’s basis in the real estate.

(D) These property funds were formed in the second quarter to acquire operating properties in the Keystone Transaction which closed on August 4, 2004 (see note 26 on page 8b). In June 2004, ProLogis contributed a total of 21 operating properties aggregating 2,953,496 square feet to these property funds.

(E) ProLogis acquired a 20% interest in these property funds as a result of the Keystone Transaction (see note 27 on page 8b). Previously, these interests were held directly by Keystone.

(F) The total operating portfolio consists of both stabilized properties and prestabilized properties. Prestable properties are development or acquisition properties that have been completed or held for less than 12 months and are not substantially leased (generally 93%).

Supplemental Information Page 14

ProLogis

Third Quarter 2004
Unaudited Financial Results

Leased and Physical Occupancy Analysis (Continued)

By Geographic Area and Asset Classification


	Square		Current		09/30/04
	Feet		Investment		Leased			Occupied
Stabilized Portfolio (B):
North America:
Direct Investment
Operating properties		113,369,669	$	4,027,495,286		89.74	%		89.05	%
CDFS properties — repositioned acquisitions		5,606,144		179,289,233		80.64	%		79.74	%
CDFS properties — completed developments		5,437,376		198,086,483		69.89	%		68.99	%

Total Direct Investment — North America		124,413,189		4,404,871,002		88.46	%		87.75	%
ProLogis Property Funds (C)		94,605,553		4,695,919,357		93.56	%		92.00	%

Total North America Stabilized Properties		219,018,742		9,100,790,359		90.66	%		89.59	%

Europe:
Direct Investment
Operating properties		984,219		48,621,566		99.18	%		99.18	%
CDFS properties — repositioned acquisitions		373,119		16,357,008		48.24	%		48.24	%
CDFS properties — completed developments		3,316,630		238,289,718		39.87	%		27.94	%

Total Direct Investment — Europe		4,673,968		303,268,292		53.03	%		44.56	%
ProLogis Property Funds (C)		45,239,626		3,309,924,408		96.09	%		95.29	%

Total Europe Stabilized Properties		49,913,594		3,613,192,700		92.06	%		90.54	%

Asia
Direct Investment		—		—		—			—
ProLogis Property Funds (C)		3,892,960		685,854,620		98.40	%		98.35	%

Total Asia Stabilized Properties		3,892,960		685,854,620		98.40	%		98.35	%

Total Stabilized Portfolio		272,825,296	$	13,399,837,679		91.03	%		89.89	%

Total Operating Portfolio (F):
North America:
Total North America Stabilized Properties		219,018,742	$	9,100,790,359		90.66	%		89.59	%
Prestabilized Properties
Operating properties		528,035		30,193,212		40.23	%		40.23	%
CDFS properties — repositioned acquisitions		721,611		18,374,888		60.95	%		49.86	%
CDFS properties — completed developments		964,722		25,589,516		51.71	%		51.13	%

Total Prestabilized Properties — North America		2,214,368		74,157,616		51.98	%		48.12	%

Total North America Operating Portfolio		221,233,110		9,174,947,975		90.28	%		89.17	%

Europe:
Total Europe Stabilized Properties		49,913,594		3,613,192,700		92.06	%		90.54	%
Prestabilized Properties
CDFS properties — repositioned acquisitions		356,654		18,905,861		72.04	%		72.04	%
CDFS properties — completed developments		673,846		73,581,858		0.00	%		0.00	%

Total Prestabilized Properties — Europe		1,030,500		92,487,719		24.93	%		24.93	%

Total Europe Operating Portfolio		50,944,094		3,705,680,419		90.70	%		89.21	%

Asia
Total Asia Stabilized Properties		3,892,960		685,854,620		98.40	%		98.35	%

Total Asia Operating Portfolio		3,892,960		685,854,620		98.40	%		98.35	%

Total Operating Portfolio		276,070,164	$	13,566,483,014		90.47	%		89.31	%

Comments are on page 14.

Supplemental Information Page 14a

ProLogis

Third Quarter 2004
Unaudited Financial Results

Lease Expirations

Total Operating Portfolio – Lease Expirations (A)


	Direct Investment							ProLogis Property Funds
					Percentage of							Percentage of
	Occupied		Annual Base		Total Annual			Occupied		Annual Base		Total Annual
	Square Footage		Rents (B)		Base Rents			Square Footage		Rents (B)		Base Rents
2004 (C)		10,461,094	$	36,355,860		7.79	%		4,108,476	$	16,169,352		2.29	%
2005		22,970,168		99,582,048		21.35	%		14,983,923		68,818,044		9.73	%
2006		20,092,495		84,715,788		18.16	%		16,302,172		74,770,416		10.57	%
2007		15,750,277		62,026,428		13.30	%		13,154,260		67,208,868		9.51	%
2008		14,544,154		63,169,572		13.54	%		11,965,558		56,804,832		8.03	%
2009		13,697,130		53,943,480		11.56	%		11,887,029		67,533,912		9.55	%
2010		4,114,499		17,508,924		3.75	%		8,920,091		46,414,680		6.56	%
2011		2,455,874		9,994,452		2.14	%		10,923,469		55,965,072		7.91	%
2012		2,190,106		12,384,504		2.65	%		9,776,566		55,063,668		7.79	%
2013		2,548,633		9,763,200		2.09	%		9,949,466		52,014,864		7.36	%
2014		2,547,037		10,706,940		2.30	%		7,310,250		43,332,288		6.13	%
Thereafter		1,211,318		6,381,780		1.37	%		14,688,137		102,984,552		14.57	%

Totals		112,582,785	$	466,532,976		100.00	%		133,969,397	$	707,080,548		100.00	%

Top 25 Customers

Total Operating Portfolio – By Annualized Base Rent (D)(E)


		Percentage of
		Annualized			Number
Rank	Customer Name	Base Rent (F)			of Leases
1	TPG N.V. (TNT Automotive)		2.20	%		18
2	Deutsche Post AG (DHL)		2.16	%		40
3	Unilever		1.75	%		8
4	Exel Logistics		1.51	%		29
5	NYK Line (Nippon Yusen Kaisha)		1.38	%		14
6	Nippon Express Group		1.23	%		11
7	Sears Roebuck and Co.		1.15	%		20
8	Altria Group, Inc. (Kraft)		1.14	%		10
9	FM Logistic		0.81	%		6
10	Home Depot, Inc.		0.79	%		10
11	General Electric Company, Inc.		0.78	%		20
12	ID Logistics France		0.71	%		8
13	Royal Ahold (Koninklijke Ahold NV)		0.69	%		7
14	NOL Group (Neptune Orient Lines)		0.59	%		4
15	Goodyear Tire & Rubber Co.		0.57	%		4
16	Electrolux North America, Inc.		0.54	%		8
17	Geodis Logistics		0.53	%		7
18	Amazon.com, Inc.		0.53	%		2
19	Brandt Appliances SAS		0.51	%		3
20	PSA (Peugeot)		0.46	%		6
21	FedEx Corporation		0.43	%		14
22	Gillette (UK) Ltd.		0.41	%		2
23	Williams-Sonoma, Inc.		0.41	%		2
24	EGL, Inc. (Eagle Global Logistics)		0.41	%		9
25	Ryohin Keikaku Co. Ltd.		0.39	%		1

	Total		22.08	%(G)		263

COMMENTS

(A) Assumes customers do not exercise renewal options.

(B) Represents annualized base rents at lease expiration. As of September 30, 2004, the average base rent per square foot is $3.91 (Direct Investment) and $5.23 (ProLogis Property Funds).

(C) Includes amounts leased on a month-to-month basis of 3,256,431 square feet (Direct Investment) and 925,481 square feet (ProLogis Property Funds).

(D) Includes customers leasing space in properties owned directly by ProLogis and in properties owned by ProLogis Property Funds.

(E) As of September 30, 2004, ProLogis (including ProLogis Property Funds) had 486 Global 1000 Customers (targeted 1,000 largest users of distribution space). These customers lease 140,727,779 square feet of distribution space representing 50.8% of the total operating portfolio as of September 30, 2004.

(F) Percentage is based on the annualized collected base rents as of September 30, 2004.

(G) The Top 25 customers when considering only the annualized collected base rents in ProLogis’ Direct Investment properties was 15.97% of ProLogis’ total annualized collected base rents as of September 30, 2004.

Supplemental Information Page 15

ProLogis

Third Quarter 2004
Unaudited Financial Results

Leasing Activity (A)


	Total Leasing Activity (B)				Turnover Costs (C)				Rent Growth (D)					Weighted Average
	No. of		Square		Square				Square					Tenant
	Leases		Feet		Feet		Cost		Feet		Growth			Retention
First Quarter		377		15,696,963		12,062,980	$	1.25		11,909,798		-5.5	%		60.7	%
Second Quarter		420		15,813,493		12,986,146	$	1.01		12,351,064		-7.0	%		72.7	%
Third Quarter		381		15,830,636		11,436,891	$	1.10		10,805,146		-3.4	%		57.7	%

Year to Date		1,178		47,341,092		36,486,017	$	1.12		35,066,008		-5.4	%		63.7	%

Actual Capital Expenditures
For the Nine Months Ended September 30, 2004


									ProLogis’
									Ownership			ProLogis’
	Recurring						Total		Percentage at			Share of
	Capital		Tenant		Leasing		Capital		September 30,			Actual Capital
	Maintenance		Improvements		Commissions		Expenditures		2004			Expenditures
ProLogis	$	16,848,071	$	22,080,157	$	9,822,835	$	48,751,063		100.0	%	$	48,751,063
ProLogis European Properties Fund		7,297,458		1,647,505		81,024		9,025,987		21.6	%		1,949,613
ProLogis California LLC		1,200,742		1,035,759		1,689,434		3,925,935		50.0	%		1,962,968
ProLogis North American Properties Fund I		269,393		890,867		1,019,734		2,179,994		41.3	%		900,338
ProLogis North American Properties Fund II		93,056		1,083,567		556,716		1,733,339		20.0	%		346,668
ProLogis North American Properties Fund III		287,316		903,532		541,378		1,732,226		20.0	%		346,445
ProLogis North American Properties Fund IV		185,646		99,030		104,861		389,537		20.0	%		77,907
ProLogis North American Properties Fund V		1,146,526		716,270		564,951		2,427,747		11.5	%		279,191

	$	27,328,208	$	28,456,687	$	14,380,933	$	70,165,828				$	54,614,193

COMMENTS

(A) Represents leasing activity for distribution space in properties that are directly owned by ProLogis and properties that are owned by the ProLogis Property Funds.

(B) Represents all leases signed during the period, including leases for space in properties that are under development.

(C) Represents the square feet and associated costs that will be incurred to prepare a space for a new tenant, except for space that is being leased for the first time (i.e., in a new development property). Includes the square feet for a lease renewal with the same tenant and associated costs, if any. Includes square feet and costs associated with leasing activity for space in properties acquired, if the space was vacant at the date of acquisition. The amount provided is the total turnover costs expected to be incurred on the leases signed during the period and does not represent actual turnover expenditures for the period.

(D) Represents the leasing activity and associated rent growth for space that has been previously leased by ProLogis and/or the ProLogis Property Funds. Excludes leasing activity and rent growth for space in properties acquired, if the space was vacant at the date of acquisition.

Supplemental Information Page 16

ProLogis

Third Quarter 2004
Unaudited Financial Results

Same Store Sales Analysis (A)


			Percentage Change in
												Adjusted
	Square Footage					Rental			Net			Net
	of Same Store		Rental			Expenses			Operating			Operating			Average			Rent
	Sales Population		Income(B)			(C)			Income (D)			Income (E)			Occupancy			Growth (F)
First Quarter		207,223,354		+0.71	%		+0.77	%		+0.70	%		+0.77	%		+0.67	%		-6.20	%

Second Quarter		206,730,254		-0.66	%		+2.64	%		-1.56	%		-1.72	%		+1.06	%		-6.80	%

Third Quarter		206,706,725		+0.98	%		+2.10	%		+0.67	%		+0.80	%		+0.76	%		-3.70	%

Year to Date				+0.39	%		+1.64	%		+0.04	%		+0.05	%		+0.93	%		-5.60	%

COMMENTS

(A) A key component of ProLogis’ evaluation of the operating performance of its properties, its management personnel and its individual markets is a “same store” analysis. ProLogis defines its same store portfolio of properties each quarter as those properties that have been in operation throughout the full quarter in both the current year and the prior year. Accordingly, when a property is disposed of to a third party it will be removed from the population for the current quarter and the corresponding quarter of the prior year but previously presented quarterly information will not be changed. Same store statistics allow management to evaluate the actual operating performance of its operating portfolio as a consistent population from period to period and eliminates the effects of changes in the composition of the portfolio on performance measures.

The percentage change presented is the weighted average of the measure computed separately for ProLogis and each of the ProLogis Property Funds with the weighting based on each entity’s proportionate share of the combined component on which the change is computed. In order to derive an appropriate measure of period-to-period operating performance, the percentage change computation removes the effects of foreign currency exchange rate movements by computing each property’s components in that property’s functional currency.

(B) Rental income computed under GAAP includes the amount of rental expenses that are recovered from customers under the terms of their respective lease agreements. In computing the percentage change in rental income for the same store analysis, rental income is adjusted to remove the net termination fees recognized for each period. Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability that has been previously recognized under GAAP, if any. Removing the net termination fees for the same store calculation allows ProLogis’ management to evaluate the growth or decline in each property’s rental income without regard to items that are not indicative of the property’s recurring operating performance. Customer terminations are negotiated under specific circumstances and are not subject to specific provisions or rights allowed under the lease agreements.

Net termination fees removed from rental income were $1,002,233 and $302,040 for the three months ended September 30, 2004 and 2003, respectively. Net termination fees removed from rental income were $3,388,957 and $5,308,046 for the nine months ended September 30, 2004 and 2003, respectively.

(C) Rental expenses computed under GAAP represent gross property operating expenses. In computing the percentage change in rental expenses for the same store analysis, rental expenses include property management expenses for ProLogis’ direct owned properties based on the property management fee that has been computed as provided in the individual agreements under which ProLogis’ wholly owned management company provides property management services to each property (generally the fee is based on a percentage of revenues). In ProLogis’ Consolidated Statements of Earnings (Loss), Funds From Operations and EBITDA, the net profit or loss of the management company is recognized as part of ProLogis’ rental expenses reported under GAAP.

(D) In computing the percentage change in net operating income, ProLogis computes net operating income as the weighted difference between the rental income balance that is computed as described in comment B and the rental expenses balance that is computed as described in comment C.

(E) To derive adjusted net operating income, ProLogis adjusts the net operating income balance that is computed as described in comment D to exclude the amount of straight-lined rents recognized in each period. The straight-lined rents removed from rental income were $3,173,188 and $3,365,712 for the three months ended September 30, 2004 and 2003, respectively. The straight-lined rents removed from rental income were $9,838,178 and $9,900,867 for the nine months ended September 30, 2004 and 2003, respectively.

(F) Represents the weighted average rent growth associated with leasing activity for space that has been previously leased by ProLogis and/or the ProLogis Property Funds. Excludes leasing activity and rent growth for space in properties acquired, if the space was vacant at the date of acquisition.

Supplemental Information Page 17

ProLogis

Third Quarter 2004
Unaudited Financial Results

Acquisitions and Dispositions


	Three Months Ended
	September 30,			June 30,			March 31,			Year
	2004			2004			2004			to Date
Acquisitions From Third Parties:
Operating Properties Acquired by ProLogis (A):
Square feet		2,904,022			—		$	2,841,944		$	5,745,966
Total expected investment of assets acquired	$	143,230,451		$	—			136,301,912			279,532,363
Percentage leased at period end		89.13	%		—			81.98	%		85.59	%
Operating Properties Acquired by ProLogis Property Funds (B):
Square feet		23,698,159			2,403,344		$	607,922		$	26,709,425
Total expected investment of assets acquired	$	1,485,262,074		$	83,121,442			75,789,132			1,644,172,648
Percentage leased at period end		85.68	%		100.00	%		87.36	%		87.01	%
Investments in Property Funds Acquired by ProLogis (C):
Square feet		7,678,771			—			—			7,678,771
Total expected investment of assets acquired	$	496,398,298		$	—		$	—		$	496,398,298
Percentage leased at period end		94.87	%		—			—			94.87	%
Dispositions:
Direct Dispositions by ProLogis:
CDFS completed developments:
Contributions to ProLogis Property Funds:
Square feet		2,542,321			2,544,495			2,352,764			7,439,580

Net sales proceeds	$	199,290,814		$	321,427,079		$	136,069,876		$	656,787,769
Dispositions to Third Parties:
Square feet		886,552			351,069			728,995			1,966,616

Net sales proceeds	$	118,982,633		$	43,942,013		$	64,622,950		$	227,547,596
CDFS repositioned acquisitions:
Contributions to ProLogis Property Funds:
Square feet		401,280			3,310,858			559,196			4,271,334

Net sales proceeds	$	16,162,722		$	138,446,648		$	15,848,660		$	170,458,030
Dispositions to Third Parties:
Square feet		—			41,732			100,000			141,732

Net sales proceeds	$	—		$	2,373,193		$	3,526,537		$	5,899,730
Land dispositions:

Net sales proceeds	$	75,446,528		$	22,117,107		$	7,003,630		$	104,567,265
Total CDFS assets (see page 19):
Square feet		3,830,153			6,248,154			3,740,955			13,819,262
Net sales proceeds	$	409,882,697		$	528,306,040		$	227,071,653		$	1,165,260,390
Percentage of CDFS proceeds generated by contributions to ProLogis Property Funds		52.0	%		87.0	%		66.9	%		71.0	%
Non-CDFS assets:
Contributions to ProLogis Property Funds:
Square feet		—			369,830			—			369,830

Net sales proceeds	$	—		$	17,552,636		$	—		$	17,552,636
Dispositions to Third Parties:
Square feet		119,929			77,990			128,509			326,428

Net sales proceeds	$	2,971,776		$	2,151,447		$	4,501,837		$	9,625,060
Total all dispositions:
Square feet		3,950,082			6,695,974			3,869,464			14,515,520
Net sales proceeds	$	412,854,473		$	548,010,123		$	231,573,490		$	1,192,438,086
Direct Dispositions by ProLogis Property Funds (D):
Square feet		—			160,080			111,136			271,216
Total expected investment of assets disposed	$	—		$	10,588,799		$	5,858,358		$	16,447,157

COMMENTS

(A) Of the direct acquisition, all were made in ProLogis’ CDFS business segment with the exception of the operating properties acquired directly by ProLogis in the third quarter of 2004 as part of the Keystone Transaction (2,329,880 square feet at a total expected investment of $126,587,998). See note 21 on page 8b.

(B) Represents acquisitions of operating properties by ProLogis Property Funds from other than ProLogis as follows:

First Quarter:

ProLogis California—2 properties; 257,400 square feet; total expected investment of $13,256,167
ProLogis Japan Properties Fund—1 property; 350,522 square feet; total expected investment of $62,532,965

Second Quarter:

ProLogis North American Properties Fund V—6 properties; 2,236,739 square feet; total expected investment of $73,585,824
ProLogis European Properties Fund—1 property; 166,605 square feet; total expected investment of $9,535,618

Third Quarter:

ProLogis North American Properties Fund V—1 property; 467,853 square feet; total expected investment of $25,149,351
ProLogis Japan Properties Fund—4 properties; 721,204 square feet; total expected investment of $76,402,708
Keystone Transaction (See note 26 on page 8b):
ProLogis North American Properties Fund VI — 17 properties; 7,590,869 square feet; total expected investment of $464,922,652
ProLogis North American Properties Fund VII — 25 properties; 5,483,781 square feet; total expected investment of $362,785,415
ProLogis North American Properties Fund VIII — 20 properties; 2,643,582 square feet; total expected investment of $171,683,626
ProLogis North American Properties Fund IX — 18 properties; 3,253,535 square feet; total expected investment of $186,919,147
ProLogis North American Properties Fund X — 24 properties; 3,537,335 square feet; total expected investment of $197,399,175

(C) As part of the Keystone Transaction that closed on August 4, 2004, ProLogis acquired a 20% ownership interest in two property funds (see note 27 on page 8b). The operating properties owned by these property funds are as follows:

ProLogis North American Properties Fund XI — 14 properties; 4,314,961 square feet; total expected investment of $227,217,853
ProLogis North American Properties Fund XII — 12 properties; 3,363,810 square feet; total expected investment of $269,180,445

(D) Represents one disposition by ProLogis California in each quarter.

Supplemental Information Page 18

ProLogis

Third Quarter 2004
Unaudited Financial Results

CDFS Business Summary

CDFS Leasing Activity


	Three Months Ended
	September 30,			June 30,			March 31,			Year
	2004			2004			2004			to Date
Square feet of leases signed on CDFS properties (A)		4,639,023			3,657,031			4,683,702			12,979,756
Square feet of leases signed on CDFS properties to repeat ProLogis customers		2,045,431			1,660,880			3,056,389			6,762,700
Percentage to repeat ProLogis customers		44.1	%		45.4	%		65.3	%		52.1	%

Proceeds from 2004 CDFS Dispositions/Contributions by Market/Region


	Three Months Ended												Percentage
	September 30,			June 30,			March 31,			Year			of Total
	2004			2004			2004			to Date			Proceeds
North America:
Atlanta, Georgia	$	—		$	11,379,016		$	—		$	11,379,016			0.98	%
Birmingham, Alabama		—			—			11,500,030			11,500,030			0.99	%
Charlotte, North Carolina		—			45,950,984			—			45,950,984			3.94	%
Chicago, Illinois		—			—			892,358			892,358			0.08	%
Cincinnati, Ohio		—			18,685,042			3,088,090			21,773,132			1.87	%
Columbus, Ohio		—			18,458,229			11,859,758			30,317,987			2.60	%
Dallas/Fort Worth, Texas		—			4,517,557			1,027,124			5,544,681			0.48	%
Denver, Colorado		—			—			4,692,899			4,692,899			0.40	%
El Paso, Texas		—			11,084,319			7,180,718			18,265,037			1.57	%
Fort Lauderdale, Florida		—			14,427,664			—			14,427,664			1.24	%
Houston, Texas		16,162,722			253,598			3,988,902			20,405,222			1.75	%
Indianapolis, Indiana		—			—			3,508,948			3,508,948			0.30	%
Juarez, Mexico		—			2,445,731			—			2,445,731			0.21	%
Los Angeles/Orange County, California		26,648,340			—			—			26,648,340			2.29	%
Memphis, Tennessee		—			—			3,526,537			3,526,537			0.30	%
Nashville, Tennessee		—			12,100,883			—			12,100,883			1.04	%
Reynosa, Mexico		—			5,789,775			—			5,789,775			0.50	%
San Antonio, Texas		—			9,431,733			5,783,786			15,215,519			1.31	%
San Francisco (East Bay), California		—			10,136,975			—			10,136,975			0.87	%
Tampa, Florida		543,910			—			—			543,910			0.05	%
Tijuana, Mexico		—			6,039,338			6,987,675			13,027,013			1.12	%

		43,354,972			170,700,844			64,036,825			278,092,641			23.89	%

Europe:
France (Central)		46,972,990			—			11,224,105			58,197,095			4.99	%
France (East)		—			—			19,011,791			19,011,791			1.63	%
France (South)		—			—			15,033,655			15,033,655			1.29	%
Germany (North)		—			13,358,444			—			13,358,444			1.15	%
Germany (Rhine/Main)		—			15,085,829			—			15,085,829			1.29	%
Germany (South)		—			20,037,666			—			20,037,666			1.72	%
Hungary (Budapest)		—			—			8,673,263			8,673,263			0.74	%
Netherlands (South)		30,987,908			—			32,493,202			63,481,110			5.45	%
Poland (Central)		—			—			21,900,692			21,900,692			1.88	%
Poland (West)		7,250,001			3,454,770			—			10,704,771			0.92	%
United Kingdom (East Midlands)		15,006,881			54,769,904			54,698,120			124,474,905			10.68	%
United Kingdom (London and Southeast)		92,875,928			43,656,423			—			136,532,351			11.72	%
United Kingdom (North)		—			19,391,390			—			19,391,390			1.66	%
United Kingdom (West Midlands)		99,097,027			42,014,501			—			141,111,528			12.12	%

		292,190,735			211,768,927			163,034,828			666,994,490			57.24	%

Asia:
Japan (Nagoya)		45,324,612			—			—			45,324,612			3.87	%
Japan (Osaka)		29,012,378			—			—			29,012,378			2.49	%
Japan (Tokyo)		—			145,836,269			—			145,836,269			12.51	%

		74,336,990			145,836,269			—			220,173,259			18.87	%

Net sales proceeds on 2004 transactions before deferrals and recapture		409,882,697			528,306,040			227,071,653			1,165,260,390			100.00	%

Add: contingent proceeds realized (B)		—			—			5,870,505			5,870,505
Add: ownership percentage recapture (C)		863,805			3,279,413			—			4,143,218
Less: amounts not recognized (D)		(10,071,541	)		(12,003,350	)		(8,911,746	)		(30,986,637	)

	$	400,674,961		$	519,582,103		$	224,030,412		$	1,144,287,476

COMMENTS

(A) Includes leases of previously unleased space of 3,836,830 square feet and leases of previously leased space of 802,193 square feet for the three months ended September 30, 2004, includes leases of previously unleased space of 2,885,997 square feet and leases of previously leased space of 771,034 square feet for the three months ended June 30, 2004 and leases of previously unleased space of 3,617,246 square feet and leases of previously leased space of 1,066,456 square feet for the three months ended March 31, 2004.

(B) A contribution to ProLogis Japan Properties Fund in 2003 provided for an additional $5.9 million of proceeds, the receipt of which was contingent on the satisfactory performance of certain activities by ProLogis. These activities were completed in 2004. Upon receipt of the contingent proceeds, an additional gain ($4.7 million after deferral) was recognized in 2004.

(C) Previously deferred proceeds recognized due to the change in ProLogis’ ownership percentage in ProLogis North American Properties Fund V to 11.5% from 14.0% in the second quarter of 2004 and in ProLogis European Properties Fund to 21.6% from 22.5% in the third quarter of 2004.

(D) When ProLogis contributes properties to a ProLogis Property Fund in which it has an ownership interest, ProLogis does not recognize a portion of the proceeds in its computation of the gain resulting from the contribution. The amount of the proceeds that cannot be recognized relates to ProLogis’ continuing ownership interest in the contributed property through its ownership in the Property Fund. See notes 13 and 14 on Page 8a.

Supplemental Information Page 19

ProLogis

Third Quarter 2004
Unaudited Financial Results

Development Summary


	September 30,			June 30,			March 31,			December 31,
	2004			2004			2004			2003
Development Starts:
North America:
Square feet (A)		2,196,060			1,695,903			1,866,315			457,701
Total expected investment	$	86,692,859		$	64,713,904		$	66,486,382		$	17,180,281
Cost per square foot	$	39.48		$	38.16		$	35.62		$	37.54
Europe:
Square feet		2,101,134			1,506,211			1,486,564			2,395,346
Total expected investment	$	124,605,852		$	93,483,142		$	84,688,487		$	115,639,226
Cost per square foot	$	59.30		$	62.07		$	56.97		$	48.28
Asia:
Square feet		—			224,427			1,655,985			259,751
Total expected investment	$	—		$	22,474,127		$	220,328,760		$	22,321,065
Cost per square foot	$	—		$	100.14		$	133.05		$	85.93
Total:
Square feet		4,297,194			3,426,541			5,008,864			3,112,798
Total expected investment	$	211,298,711		$	180,671,173		$	371,503,629		$	155,140,572
Cost per square foot	$	49.17		$	52.73		$	74.17		$	49.84
Development Completions:
North America:
Square feet		626,600			1,007,952			815,500			243,820
Total expected investment	$	23,548,193		$	28,483,632		$	27,674,269		$	8,373,779
Cost per square foot	$	37.58		$	28.26		$	33.94		$	34.34
Leased percentage at completion (B)		100.00	%		44.71	%		100.00	%		90.21	%
Leased percentage as of 09/30/04		100.00	%		56.15	%		100.00	%		90.21	%
Europe:
Square feet		1,799,063			1,574,220			596,149			761,247
Total expected investment	$	106,017,375		$	82,284,975		$	55,438,729		$	48,388,496
Cost per square foot	$	58.93		$	52.27		$	92.99		$	63.56
Leased percentage at completion (B)		100.00	%		74.70	%		54.71	%		79.93	%
Leased percentage as of 09/30/04		100.00	%		83.05	%		54.71	%		79.93	%
Asia:
Square feet		605,819			—			619,963			466,954
Total expected investment	$	56,944,653		$	—		$	112,046,270		$	55,948,012
Cost per square foot	$	94.00		$	—		$	180.73		$	119.81
Leased percentage at completion (B)		100.00	%		—			74.11	%		100.00	%
Leased percentage as of 09/30/04		100.00	%		—			93.36	%		100.00	%
Total:
Square feet		3,031,482			2,582,172			2,031,612			1,472,021
Total expected investment	$	186,510,221		$	110,768,607		$	195,159,268		$	112,710,287
Cost per square foot	$	61.52		$	42.90		$	96.06		$	76.57
Leased percentage at completion (B)		100.00	%		62.99	%		78.81	%		88.00	%
Leased percentage as of 09/30/04		100.00	%		72.55	%		84.69	%		88.00	%
Under Development as of End of Period:
North America (A):
Square feet		6,471,609			4,902,149			4,214,198			3,163,383
Total expected investment	$	239,232,026		$	176,087,360		$	139,857,088		$	101,044,975
Cost per square foot	$	36.97		$	35.92		$	33.19		$	31.94
Leased percentage as of 09/30/04		27.87	%
Europe:
Square feet		5,184,795			4,882,724			4,950,733			4,060,318
Total expected investment	$	312,537,869		$	293,949,392		$	282,751,225		$	246,246,309
Cost per square foot	$	60.28		$	60.20		$	57.11		$	60.65
Leased percentage as of 09/30/04		39.98	%
Asia:
Square feet		3,253,961			3,859,780			3,635,353			2,599,331
Total expected investment	$	405,012,419		$	461,957,072		$	439,482,945		$	331,200,455
Cost per square foot	$	124.47		$	119.68		$	120.89		$	127.42
Leased percentage as of 09/30/04		47.61	%
Total:
Square feet		14,910,365			13,644,653			12,800,284			9,823,032
Total expected investment	$	956,782,314		$	931,993,824		$	862,091,258		$	678,491,739
Cost per square foot	$	64.17		$	68.30		$	67.35		$	69.07
Leased percentage as of 09/30/04		36.39	%
Construction in Progress:
North America	$	132,417,788		$	72,164,679		$	52,396,557		$	51,752,456
Europe		196,953,174			181,681,078			155,357,076			129,305,479
Asia		282,325,958			277,163,208			214,940,593			223,523,519

Total Construction in Progress	$	611,696,920		$	531,008,965		$	422,694,226		$	404,581,454

COMMENTS

(A) Development starts and properties under development include one property that was acquired directly by ProLogis as part of the Keystone Transaction (750,005 square feet at a total expected investment of $39,085,752). See note 21 on page 8b.

(B) Represents the leased percentage as of the end of the quarter in which the development was completed.

Supplemental Information Page 20

ProLogis

Third Quarter 2004
Unaudited Financial Results

Capital Structure
(in thousands)

Debt Outstanding as of September 30, 2004


				Principal Maturities
				of Direct Debt
Principal Outstanding - Direct Debt				(excluding Lines of Credit)

Direct Debt:
Senior unsecured notes:
7.05% Notes due 2006	$	250,000		Remainder of 2004		$	2,411
7.25% Notes due 2007		135,000			2005		109,618
7.95% Notes due 2008		100,000			2006		321,139
7.10% Notes due 2008		250,000			2007		343,124
8.72% Notes due 2009		93,750			2008		308,832
7.875% Notes due 2009		46,875			2009		77,522
7.30% Notes due 2009		25,000			2010		35,406
4.375% Euro Notes due 2011(A)		427,385			2011		457,323
5.50% Notes due 2013		300,000			2012		34,919
7.81% Notes due 2015		100,000			2013		368,411
9.34% Notes due 2015		50,000
8.65% Notes due 2016		50,000			Thereafter		363,783
7.625% Notes due 2017		100,000			Less discount		(2,595	)

Less discount		(2,595	)			$	2,419,893

Total senior unsecured notes		1,925,415

Secured debt		487,196
Assessment bonds		7,282

		494,478

Subtotal		2,419,893
Short-term borrowing (see note 23 on page 8b)		95,000
Lines of credit (see page 22)		928,975

Total direct debt	$	3,443,868

ProLogis’ share of third party debt of unconsolidated investees:
ProLogis Property Funds (see page 12)	$	836,048
CDFS Joint Ventures		6,694

	$	842,742

Total	$	4,286,610

Market Capitalization as of September 30, 2004


	Shares		Market
	or Equivalents		Price		Market Value
	Outstanding		at 9/30/04		Equivalents
8.54% Series C Cumulative Redeemable Preferred Shares		2,000	$	56.00	$	112,000
6.75% Series F Cumulative Redeemable Preferred Shares		5,000	$	25.05		125,250
6.75% Series G Cumulative Redeemable Preferred Shares		5,000	$	24.89		124,450

		12,000				361,700

Common Shares		183,469	$	35.24		6,465,448
Convertible limited partnership units (5,547,000 units)		5,550	$	35.24		195,582

		189,019				6,661,030

Total equity						7,022,730
Total debt (including ProLogis’ share of third party debt of unconsolidated investees)						4,286,610

Total market capitalization (including ProLogis’ share of third party debt of unconsolidated investees)					$	11,309,340

COMMENT

(A) In April 2004, ProLogis issued 350.0 million euro of notes that are registered on the Luxembourg Stock Exchange. The net proceeds from the issuance of the notes were 347.8 million euro.

Supplemental Information Page 21

ProLogis
Third Quarter 2004
Unaudited Financial Results

Debt Analysis

Revolving Lines of Credit
(in thousands)


								Weighted
	Total			Outstanding		Remaining		Average
	Commitment			at 09/30/04		Capacity		Interest Rate (A)
ProLogis-North America	$	560,000	(B)	$	155,400	$	404,600		2.51	%
ProLogis-Europe		549,495	(C)		460,566		88,929		2.82	%
ProLogis-Europe (United Kingdom only)		44,887	(D)		—		44,887		—
ProLogis-Asia		588,022	(E)		313,009		275,013		0.97	%

	$	1,742,404		$	928,975	$	813,429		2.14	%

Weighted Average Interest Rates and Term to Maturity (F)


				Weighted			Weighted Average
				Average			Term to
	% of Debt			Interest Rate (A)			Maturity (G)
Revolving lines of credit		27.03	%		2.14	%		n/a
Short-term borrowings (note 23 on page 8b)		2.76	%		2.20	%		n/a
Senior unsecured notes		56.03	%		6.56	%	6.6 years
Secured debt		14.18	%		7.14	%	10.2 years

Totals (F)		100.00	%		5.27	%	7.5 years

Financial Ratios


	Nine
	Months Ended			Year Ended
	09/30/04			12/31/03
Interest coverage ratio (H)		4.4			4.3
Fixed charge coverage ratio (I)		3.8			3.5
Total debt to total book assets (including ProLogis’ share of unconsolidated investees) (see pages 10 and 21)		50.2	%		49.5	%
Total debt to total market capitalization (including ProLogis’ share of unconsolidated investees) (see page 21)		37.9	%		36.8	%

COMMENTS

(A) Represents the weighted average base interest rates on borrowings that were outstanding at September 30, 2004.

(B) Total commitment available to ProLogis at September 30, 2004 has been reduced by letters of credit outstanding with the lending bank aggregating $9.6 million at September 30, 2004.

(C) Represents the approximate U.S. dollar equivalent at September 30, 2004 of ProLogis’ 450.0 million euro denominated line of credit.

(D) Represents the approximate U.S. dollar equivalent at September 30, 2004 of ProLogis’ 25.0 million pound sterling denominated line of credit available for borrowing in the United Kingdom. The total commitment available to ProLogis has been reduced by letters of credit outstanding with the lending bank in the currency equivalent of approximately $23.6 million at September 30, 2004.

(E) Represents the approximate U.S. dollar equivalent at September 30, 2004 of ProLogis’ 65.0 billion yen denominated line of credit (increased from 45.0 billion yen in the third quarter of 2004).

(F) Excludes assessment bonds.

(G) Calculated as of the beginning of the year through final maturity for debt outstanding at September 30, 2004.

(H) Calculated as Funds From Operations as defined by ProLogis before impairment charges, preferred dividends and charges related to the redemption of preferred shares, interest expense and minority interest, divided by interest expense (interest expense excludes capitalized interest and amortization of loan costs). Funds From Operations is defined on Page 3a.

(I) Calculated as Funds From Operations as defined by ProLogis before impairment charges, preferred dividends and charges related to the redemption of preferred shares, interest expense and minority interest, divided by combined interest expense (interest expense excludes capitalized interest and amortization of loan costs) and preferred dividends. Funds From Operations is defined on Page 3a.

Supplemental Information Page 22

ProLogis
Third Quarter 2004
Unaudited Financial Results

Geographic Distribution (A)

North America


Central Region	%		Mid-Atlantic Region	%
Austin		0.86	Chicago		3.23
Dallas/Fort Worth		6.38	Cincinnati		2.46
El Paso		1.36	Columbus		3.67
Houston		3.45	I-81 Corridor (E. Pennsylvania)		5.06
Kansas City		0.57	Indianapolis		3.28
Oklahoma City		0.23	Louisville		1.18
San Antonio		2.24	New Jersey		6.37
Tulsa		0.19	St. Louis		1.04
Other non-target		0.05	Other non-target		0.03

Total Central Region		15.33	Total Mid-Atlantic Region		26.32


Pacific Region	%		Southeast Region	%
Denver		1.32	Atlanta		4.59
Las Vegas		0.83	Charlotte		2.05
Los Angeles/Orange County		6.23	Chattanooga		0.42
Phoenix		0.89	Ft. Lauderdale/Miami		1.73
Portland		0.76	Greenville		0.98
Reno		1.34	Memphis		3.46
Salt Lake City		0.74	Nashville		1.94
San Francisco-Central Valley		1.61	Orlando		0.94
San Francisco-East Bay		1.09	Tampa		1.39
San Francisco-South Bay		1.34	Washington D.C./Baltimore		2.29
Seattle		0.51

Total Pacific Region		16.66	Total Southeast Region		19.79


Mexico	%
Juarez		0.35
Monterrey		0.55
Reynosa		0.71
Tijuana		0.43

Total Mexico		2.04	Total North America	80.14	%


Europe	%
Belgium		0.16
Czech Republic		0.48
France		7.49
Germany		0.93
Hungary		0.19
Ireland		(B	)
Italy		1.62
The Netherlands		1.79
Poland		1.42
Portugal		(B	)
Spain		0.92
Sweden		0.26
United Kingdom		3.19

Total Europe		18.45	%


Asia	%
China		(C	)
Japan (D)		1.41

Total Asia		1.41	%

COMMENTS

(A) Percentages are based on the square footage of the operating portfolio. The operating portfolio includes direct owned properties and operating properties owned by the ProLogis Property Funds.

(B) At September 30, 2004, ProLogis has no real estate assets in this market.

(C) At September 30, 2004, ProLogis has an interest in a CDFS Joint Venture that owns four operating properties in the Shanghai region. Three markets in China (Guangdong Province and the Shanghai and Beijing regions) are designated as target markets.

(D) ProLogis’ target markets in Japan include Tokyo, Osaka and Nagoya.

Supplemental Information Page 23


1-12846		74-2604728

(Commission File Number)		(I.R.S. Employer Identification No.)

14100 East 35^th Place, Aurora, Colorado		80011

(Address of Principal Executive Offices)		(Zip Code)


	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Press Release


Exhibit No.		Description
99.1		Press Release, dated October 28, 2004, and supplemental information.


	PROLOGIS


October 28, 2004	By:	/s/ Walter C. Rakowich

		Name: Walter C. Rakowich
		Title: Managing Director and Chief Financial Officer


Exhibit No.		Description
99.1		Press Release, dated October 28, 2004, and supplemental information.

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o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Investor Relations:		Media:
Melissa Marsden		Rick Roth
Tel: 303-576-2622		Tel: 303-576-2641
mmarsden@prologis.com		media@prologis.com


	Page
OVERVIEW:
Selected Financial Information		1
FINANCIAL STATEMENTS:
Consolidated Statements of Earnings (Loss)		2
Consolidated Statements of Funds From Operations		3 & 3a
Consolidated Statements of EBITDA		4
Reconciliations of Net Earnings (Loss) to Funds From Operations and EBITDA		5
Consolidated Balance Sheets		6
Selected Balance Sheet Information:
Investments in Unconsolidated Entities/Land Held for Development		7
Notes to Consolidated Financial Statements		8, 8a, & 8b
SELECTED FINANCIAL INFORMATION:
Components of Net Asset Value and Related Comments		9 & 9a
Calculations of Return on Capital and Related Comments		10 & 10a
ProLogis Property Funds — EBITDA, Funds From Operations and Net Earnings		11 & 11a
ProLogis Property Funds — Balance Sheets		12
Discontinued Operations — Assets Held For Sale		13
SELECTED STATISTICAL INFORMATION:
Leased and Physical Occupancy Analysis		14 & 14a
Lease Expirations/Top 25 Customers		15
Leasing Activity/Actual Capital Expenditures		16
Same Store Sales Analysis		17
SELECTED INVESTMENT INFORMATION:
Acquisitions and Dispositions		18
CDFS Business Summary		19 & 19a
Development Summary		20
SELECTED OTHER INFORMATION:
Capital Structure		21
Debt Analysis		22
Geographic Distribution		23

(1)		ProLogis adopted Interpretation No. 46R, “Consolidation of Variable Interest Entities,” in January 2004. This accounting pronouncement requires that variable interest entities in which ProLogis has a majority variable interest be presented on a consolidated basis rather than under the equity method as of January 1, 2004. Accordingly, ProLogis’ investments in TCL Holding S.A. (formerly Frigoscandia S.A.) are presented on a consolidated basis as of January 1, 2004. This change in reporting method for 2004 does not result in a restatement of the financial information presented for previous periods. This accounting pronouncement does not change the presentation of any of ProLogis’ other investments as these investees are not variable interest entities.

(2)		Certain 2003 amounts included in this Supplemental Information package have been reclassified to conform to the 2004 presentation.

(3)		These charges have been recognized in accordance with FASB-EITF Topic D-42 and represent the excess of the redemption values over the carrying values of ProLogis’ Series E Preferred Shares that were redeemed in July 2003 and ProLogis’ remaining Series D Preferred Shares that were redeemed in January 2004.

(4)		Represents the costs incurred or accrued as of September 30, 2004 associated with ProLogis’ plan to relocate its information technology and corporate accounting functions from El Paso, Texas to Denver, Colorado. Such relocation is expected to occur and costs are expected to be incurred over a period of 9 to 12 months. For the three and nine months ended September 30, 2004, includes $1,047,000 and $1,428,000, respectively, of severance related employee costs, $444,000 and $489,000, respectively, of other costs and $663,000 and $928,000, respectively, of additional depreciation associated with non-real estate assets located in El Paso.

(5)		In December 2003, ProLogis’ Board of Trustees set an annual distribution rate for 2004 of $1.46 per Common Share. The amount of the Common Share distribution may be adjusted at the discretion of the Board during the year.

(6)		The corporate distribution facilities services business (“CDFS business”) segment represents the development of distribution properties with the intent to either contribute the properties to a ProLogis Property Fund in which ProLogis has an ownership interest and acts as manager or sell the properties to a third party, and the acquisition and rehabilitation or acquisition and repositioning of distribution properties with the intent to contribute the properties to a ProLogis Property Fund. This segment’s income also includes fees earned for development activities performed on behalf of customers or third parties and gains or losses from the dispositions of land parcels that no longer fit into ProLogis’ development plans. ProLogis includes the income generated in the CDFS business segment in its computation of Funds From Operations and EBITDA. Further, ProLogis has ownership interests in various unconsolidated joint ventures that engage in CDFS activities in the United Kingdom, the United States and China. See notes 28 and 29 on page 8b.

(7)		TCL Holding S.A. owns a temperature-controlled distribution operating network in Europe, primarily in France. ProLogis presented its investments in TCL Holding S.A. under the equity method in 2003. As a result of adopting Interpretation No. 46R, ProLogis began presenting its investments in TCL Holding S.A. on a consolidated basis in 2004 (see note 1). TCL Holding S.A.’s operations in France were classified as “held for sale” during portions of 2003. However, because ProLogis’ investments were presented under the equity method, ProLogis was not required to reflect the portion of its investments in this unconsolidated investee related to the French operations separately as assets held for sale in 2003. Therefore, the French operations are shown as assets held for sale in ProLogis’ Consolidated Financial Statements only in 2004. See page 13.

(8)		In 2004, represents TCL Holding S.A.’s investment in a temperature-controlled distribution company operating in Austria. While ProLogis’ investments in TCL Holding S.A. were presented under the equity method in 2003, this Austrian investment was not separately presented in ProLogis’ balance sheet. See notes 1 and 7.

(9)		Represents rental income earned and rental expenses incurred while ProLogis owns a property directly. Under the terms of their respective lease agreements, some or all of ProLogis’ rental expenses are recovered from its customers. Amounts recovered are included as a component of rental income. Rental expense amounts also include ProLogis’ direct expenses associated with its management of the ProLogis Property Funds’ operations. For properties that have been contributed to a ProLogis Property Fund, ProLogis recognizes its share of the total operations of the Property Fund under the equity method and presents these amounts below Operating Income in its Consolidated Statements of Earnings (Loss), Funds From Operations and EBITDA.

(10)		Amounts include straight-lined rents of $2,599,000 and $1,545,000 for the three months ended September 30, 2004 and 2003, respectively, and $7,574,000 and $5,271,000 for the nine months ended September 30, 2004 and 2003, respectively, and rental expense recoveries from customers of $24,892,000 and $24,147,000 for the three months ended September 30, 2004 and 2003, respectively, and $77,205,000 and $76,163,000 for the nine months ended September 30, 2004 and 2003, respectively.

(11)		Properties disposed of to third parties are considered to be discontinued operations unless such properties were developed under a pre-sale agreement. Through September 30, 2004, ProLogis sold 15 such properties to third parties (eight of which were CDFS business assets). Accordingly, the operations of these properties during 2004 and the net gain or loss recognized upon disposition are presented as discontinued operations. Amounts attributable to the operations of these properties during 2003 have been reclassified and are presented as discontinued operations in ProLogis’ Consolidated Statements of Earnings (Loss) for that period. These amounts are not presented as discontinued operations in either of ProLogis’ Consolidated Statements of Funds From Operations or EBITDA. The operating amounts that are presented as discontinued operations (other than the net gain or loss recognized upon disposition) are as follows (in thousands):

(13)		When ProLogis contributes properties to a ProLogis Property Fund in which it has an ownership interest, ProLogis does not recognize a portion of the proceeds in its computation of the gain resulting from the contribution. The amount of the proceeds that cannot be recognized is determined based on ProLogis’ continuing ownership interest in the contributed property that arises due to ProLogis’ ownership interest in the Property Fund. ProLogis defers this portion of the proceeds by recognizing a reduction to its investment in the respective Property Fund. ProLogis adjusts its proportionate share of the earnings or losses that it recognizes under the equity method from the Property Fund in later periods to reflect the Property Fund’s depreciation expense as if the depreciation expense was computed on ProLogis’ lower basis in the contributed real estate assets rather than on the Property Fund’s basis in the contributed real estate assets. If a loss is recognized when a property is contributed to a ProLogis Property Fund, the entire loss is recognized. See note 14 for the amount of gross proceeds that have not been recognized as of September 30, 2004.

		Gross proceeds deferred related to contributions during the three months ended September 30, 2004 and 2003 were $10,072,000 and $5,712,000, respectively, and for contributions during the nine months ended September 30, 2004 and 2003 were $30,987,000 and $21,064,000, respectively. See page 19.

		When a property that ProLogis originally contributed to a ProLogis Property Fund is disposed of to a third party, ProLogis recognizes the amount of the gain that it had previously deferred as a part of its CDFS income during the period that the disposition occurs. Further, during periods when ProLogis’ ownership interest in a ProLogis Property Fund decreases, ProLogis will recognize gains to the extent that previously deferred proceeds are recognized to coincide with ProLogis’ new ownership interest in the ProLogis Property Fund.

		ProLogis’ ownership interests in certain of the ProLogis Property Funds decreased during both the three and the nine month periods in 2004 and 2003. The amount of previously deferred proceeds that were recognized as a result of these ownership changes were $864,000 and $4,143,000 for the three and nine months ended September 30, 2004, respectively, and $125,000 and $1,337,000 for the three and nine months ended September 30, 2003, respectively, resulting in the recognition of additional gains of these amounts during the applicable period.

(14)		As of September 30, 2004, the gross proceeds that have not been recognized in computing the gains from the contributions of properties by ProLogis to ProLogis Property Funds (before subsequent amortization) are presented below (in thousands). See note 13.

(16)		Includes amortization of deferred loan costs of $1,370,000 and $1,547,000 for the three months ended September 30, 2004 and 2003, respectively, and $4,183,000 and $4,471,000 for the nine months ended September 30, 2004 and 2003, respectively. Excludes interest that has been capitalized based on ProLogis’ development activities of $9,985,000 and $9,186,000 for the three months ended September 30, 2004 and 2003, respectively, and $26,671,000 and $28,821,000 for the nine months ended September 30, 2004 and 2003, respectively.

(17)		In June 2004, ProLogis disposed of a portion of its ownership interest in ProLogis North American Properties Fund V. As provided in certain formation agreements, ProLogis exchanged a certain portion of its investment into shares of Macquarie ProLogis Trust, the listed property trust in Australia that has an 85.9% ownership interest in ProLogis North American Properties Fund V. Upon receipt of the shares, they were immediately sold by ProLogis in the public market. Based on its book basis in the interest disposed of, ProLogis recognized a net gain of $3,328,000 on this disposition in its Consolidated Statement of Earnings (Loss) and a net gain of $3,164,000 on this disposition in both its Consolidated Statements of Funds From Operations and EBITDA.

(18)		Foreign currency exchange gains and losses that are recognized as a component of Net Earnings (Loss) computed under GAAP generally result from: (i) remeasurement and/or settlement of certain debt transactions between ProLogis and its foreign consolidated subsidiaries and foreign unconsolidated investees (depending on the type of loan, the currency in which the loan is denominated and the form of ProLogis’ investment); (ii) remeasurement and/or settlement of certain third party debt of ProLogis’ foreign consolidated subsidiaries (depending on the currency in which the loan is denominated); and (iii) mark-to-market adjustments related to derivative financial instruments utilized to manage foreign currency risks. ProLogis generally excludes these types of foreign currency exchange gains and losses from the ProLogis Defined Funds From Operations measure and also from its computation of EBITDA. ProLogis’ definition of Funds From Operations is presented on page 3a and its definition of EBITDA is presented on page 4.

		Foreign currency exchange gains and losses that result from transactions (including certain intercompany debt and equity investments) that are settled in a currency other than the reporting company’s functional currency and from the settlement of derivative financial instruments utilized to manage foreign currency risks are included in the ProLogis Defined Funds From Operations measure and in ProLogis’ computation of EBITDA.

(19)		ProLogis reports its investments in the ProLogis Property Funds and certain other investments under the equity method. Until January 1, 2004, ProLogis presented its investments in TCL Holding S.A. under the equity method (see note 1 on page 8). For purposes of calculating Funds From Operations and EBITDA, the Net Earnings (Loss) of each of its unconsolidated investees is adjusted to be consistent with the calculation of these measures by ProLogis. ProLogis’ definition of Funds From Operations is presented on page 3a and ProLogis’ definition of EBITDA is presented on page 4.

(20)		Consists primarily of adjustments to the amounts that ProLogis recognizes under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on ProLogis’ ownership interest in the ProLogis Property Fund acquiring the property. See note 13 on page 8a.

(21)		On May 3, 2004, ProLogis and certain private REIT subsidiaries of established investment funds (all of which are managed by Eaton Vance Management) agreed to acquire Keystone Property Trust, subject to an acquisition agreement between Keystone, ProLogis and the five investment funds. This acquisition was approved by Keystone’s shareholders at the July 30, 2004 shareholders’ meeting. The transaction closed on August 4, 2004. ProLogis acquired certain operating properties, properties under development and land parcels as part of its direct acquisitions in the Keystone Transaction. See notes 26, 27 and 28 and pages 7, 18 and 20.

(22)		Other investments include: (i) funds that are held in escrow pending the completion of tax-deferred exchange transactions; (ii) earnest money deposits associated with potential acquisitions; (iii) costs incurred during the pre-acquisition due diligence process; and (iv) costs incurred during the pre-construction phase related to future development projects.

(23)		In August 2004, ProLogis entered into a credit agreement with U.S. Bank National Association providing for a $95.0 million short-term borrowing arrangement. The amount outstanding at September 30, 2004 has been repaid. The agreement expires on December 16, 2004 but Prologis cannot borrow additional amounts under the agreement.

(24)		On December 11, 2003, ProLogis called for the redemption of all of the remaining 5,000,000 Series D Preferred Shares outstanding at a price of $25.00 per share, plus $0.066 in accrued and unpaid dividends. The redemption of these shares was completed on January 12, 2004 at a total redemption value of $125.3 million. ProLogis recognized a charge of $4.2 million associated with this redemption in January 2004. See note 3 on page 8.

(25)		Accumulated other comprehensive income includes cumulative foreign currency translation adjustments and unrealized gains and losses associated with derivative financial instruments that receive hedge accounting treatment. ProLogis also recognizes its proportionate share of the accumulated other comprehensive income balances of its unconsolidated investees.

(26)		ProLogis has a 20% ownership interest in each of five property funds (referred to by ProLogis as ProLogis North American Properties Funds VI, VII, VIII, IX and X). The remaining 80% ownership interests in each of the five property funds are held by certain private REIT subsidiaries of established investment funds. These property funds acquired operating properties in the Keystone Transaction aggregating 22,509,102 square feet at an aggregate value of $1.38 billion. See notes 21, 27 and 28 and pages 12 and 18.

(27)		ProLogis acquired Keystone’s 20% ownership interest in two property funds as part of its direct acquisitions in the Keystone Transaction. ProLogis refers to these property funds as ProLogis North American Properties Funds XI and XII. See notes 21, 26 and 28 and pages 12 and 18.

(28)		ProLogis acquired Keystone’s 50% ownership interest in a CDFS joint venture (valued at $8.5 million) and a preferred interest in a real estate company (valued at $20.0 million) as part of its direct acquisitions in the Keystone Transaction. See notes 21, 26 and 27.

(29)		ProLogis has a 50% ownership interest in a CDFS joint venture operating in China. This venture acquired four operating properties aggregating 203,000 square feet in the third quarter of 2004.

(A)		The components of Net Asset Value provided on page 9 do not consider any incentive management fees that ProLogis can earn from ProLogis Property Funds, the potential growth in rental and fee income streams or the franchise value associated with ProLogis’ global operating platform and the ProLogis Operating System®.

(B)		A reconciliation of rental income and rental expenses computed under GAAP to pro forma net operating income (“NOI”) for purposes of the Net Asset Value calculation for ProLogis and the ProLogis Property Funds, excluding ProLogis European Properties Fund, for the three months ended September 30, 2004 follows (amounts in thousands). Because ProLogis’ investment in ProLogis European Properties Fund is subject to periodic third party valuations (see comment C), a separate calculation using pro forma NOI is not necessary.

	(a)		Pro forma NOI represents: (i) rental income computed under GAAP for each applicable property, including rental expense recoveries, adjusted to exclude straight-lined rents (see (b) below) and net termination fees (see (c) below); (ii) less rental expenses computed under GAAP for each applicable property adjusted to exclude certain fees paid to ProLogis that have been recognized as rental expenses by the ProLogis Property Funds (see (d) below); (iii) as adjusted to reflect CDFS business assets (completed developments and repositioned acquisitions) at a stabilized yield for the entire period (see (e) below); and (iv) as adjusted to present a full period of operations for those properties that were not stabilized for the entire period (see (f) below).

	(b)		Straight-lined rents are removed from rental income computed under GAAP to allow for the calculation of a cash yield, which is common in Net Asset Value calculations.

	(c)		Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability, if any, that has been previously recognized under GAAP. Removing the net termination fees from rental income allows for the calculation of pro forma NOI to include only rental income that is indicative of the property’s recurring operating performance. Customer terminations are negotiated under specific circumstances and are not subject to specific provisions or rights allowed under the lease agreements.

	(d)		These miscellaneous fees are removed because they represent costs that are specific to the ownership structures of the individual ProLogis Property Fund and are not necessarily indicative of expenses that would be incurred under other structures.

	(e)		For ProLogis, the NOI generated by CDFS business assets (completed developments and repositioned acquisitions) is removed and replaced with an NOI measure that is computed by applying each property’s projected yield at the time the property was developed or acquired to the gross book basis of the property at September 30, 2004.

	(f)		For ProLogis North American Properties Fund V, ProLogis North American Properties Funds VI — X, ProLogis North American Properties Funds XI — XII and ProLogis Japan Properties Fund, NOI is adjusted to reflect a full period of operations for the properties that were acquired during the three-month period and to remove the NOI for properties disposed of during the three-month period, if any. See page 18.

	(g)		Based on an independent third party valuation as of December 31, 2003.

	(h)		Represents ProLogis’ share of Funds From Operations of ProLogis European Properties Fund since the last net asset valuation (December 31, 2003) excluding management fee income which is paid to ProLogis on a current basis. See page 11.

(D)		The French operations of ProLogis’ temperature-controlled distribution company are held for sale. See notes 1 and 7 on page 8 and page 13.

(E)		Excludes ProLogis European Properties Fund. See comment C.

(A)		Return on Capital measures are commonly used by management, financial analysts, potential investors and shareholders to analyze financial returns. ProLogis believes that Return on Assets is useful in analyzing the financial returns resulting from capital deployment decisions and for comparing returns associated with alternative investment decisions. ProLogis believes that Return on Equity Attributable to Common Shareholders is useful in assessing the financial returns attributable to holders of common equity resulting from capital deployment and capital structuring decisions and evaluating options, as well as for comparing returns for alternative investment decisions. See comments I and J.

(B)		In computing ProLogis’ EBITDA measure, the gains and losses from the contributions of developed properties recognized as CDFS income are adjusted to reflect these gains and losses as if no interest cost had been capitalized during the development of the properties (i.e. the gains are larger since capitalized interest is not included in the basis of the assets contributed). See page 4. This adjustment also impacts the amount of the proceeds that are deferred and not recognized due to ProLogis’ ownership interest in the Property Fund acquiring the property. See note 13 on page 8a.

(C)		ProLogis’ use of the term “Book Assets” refers to the undepreciated asset base of the company. ProLogis’ use of the term “book equity” refers to the equity of the company with its assets presented on an undepreciated basis.

(D)		Represents ProLogis’ recorded balance sheet amount as of the applicable date. ProLogis’ Consolidated Balance Sheets are at page 6.

(E)		Other assets includes all assets other than real estate, investments in unconsolidated investees and assets held for sale (discontinued operations) and other liabilities includes all liabilities other than third party debt and liabilities associated with assets held for sale (discontinued operations). ProLogis’ Consolidated Balance Sheets are at page 6.

(F)		The French operations of ProLogis’ temperature-controlled distribution company are held for sale. ProLogis began presenting its investments in the temperature-controlled distribution company on a consolidated basis as of January 1, 2004. Prior to that date, these investments were presented under the equity method. See notes 1, 7 and 8 on page 8.

(G)		Represents ProLogis’ share of the total assets, before depreciation, net of liabilities, other than third party debt, of each entity. See page 12.

(H)		Represents ProLogis’ balance sheet investment in the entities plus ProLogis’ share of the entities’ third party debt, if any.

(I)		Return on Assets measures EBITDA, generated by operations and as defined by ProLogis on page 4, against the original capital invested that has generated this EBITDA. ProLogis believes that this EBITDA measure most accurately measures the direct financial return resulting from its capital decisions without including the impacts that financing and capital structure choices would have on the return calculation. While certain components of this measure are provided on an interim basis, ProLogis provides its computation of the actual measure only on a calendar year basis.

(J)		Return on Equity Attributable to Common Shareholders measures Funds From Operations as defined by ProLogis on page 3a and as further adjusted to remove all depreciation and amortization amounts and to reflect gains on contributions of CDFS assets at their gross amount prior to any deferrals of proceeds (see note 13 on page 8a) against the invested shareholder capital to which the Funds From Operations generated is attributable. ProLogis believes that the ProLogis Defined Funds From Operations measure, as adjusted, most accurately measures the return related to the capital invested in common equity. While certain components of this measure are provided on an interim basis, ProLogis provides its computation of the actual measure only on a calendar year basis.

(A)		See notes 26 and 27 on page 8b.

(B)		All ProLogis Property Funds were operating throughout the period with the exception of ProLogis North American Properties Funds XI and XII, which were acquired by ProLogis on August 4, 2004.

(C)		These fees are paid to ProLogis on a current basis.

(D)		EBITDA is a supplemental measure that is used to calculate Return on Capital measures (see page 10). See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2, ProLogis’ Consolidated Statements of EBITDA on page 4 and the Reconciliations of Net Earnings (Loss) to EBITDA on page 5. ProLogis’ definition of EBITDA is presented on page 4.

(E)		Funds From Operations is a supplemental measure used by ProLogis. See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2, ProLogis’ Consolidated Statements of Funds From Operations on page 3 and the Reconciliations of Net Earnings (Loss) to Funds From Operations on page 5. ProLogis’ definition of Funds From Operations is presented on page 3a.

(F)		See ProLogis’ Consolidated Statements of Earnings (Loss) on page 2.

(G)		The average ownership is weighted based on each entity’s contribution to the total Funds From Operations for the period presented.

(H)		In addition to the property and asset management fees earned by ProLogis and expensed by the ProLogis Property Funds, ProLogis earns other fees for leasing, development and other activities performed on behalf of the ProLogis Property Funds. Certain of these fees are capitalized by the ProLogis Property Funds (primarily leasing and development fees). ProLogis defers an amount of the leasing and development fees it earns in an amount proportionate to its ownership interest in the ProLogis Property Fund. The deferred fees are recognized as income by ProLogis in future periods by reducing the amount of the capitalized fees that the ProLogis Property Fund includes in amortization or depreciation expense when ProLogis recognizes its share of the earnings and/or loss of the Property Fund under the equity method. For Funds From Operations and EBITDA, the deferred fees are not recognized unless the underlying asset is sold to a third party by the ProLogis Property Fund.

(I)		Consists primarily of adjustments to the amounts that ProLogis recognizes under the equity method that are necessary to recognize the amount of the gains that were not recognized at the contribution date due to the deferral of certain proceeds based on ProLogis’ ownership interest in the ProLogis Property Fund acquiring the property. See comment H and note 13 on page 8a.

(J)		All ProLogis Property Funds were operating throughout the period with the exception of ProLogis North American Properties Funds VI — XII which were formed in 2004.


	September 30, 2004
Assets:
Plant, property and equipment (B)	$	227,882
Accumulated depreciation (C)		(148,798	)

Net plant, property and equipment		79,084
Cash		30,946
Accounts receivable		29,260
Other assets		25,500

Total assets		164,790
Liabilities:
Third party debt		237
Accounts payable		15,986
Deferred tax liability		13,038
Other liabilities		28,244

Total liabilities		57,505

Net Assets Held For Sale	$	107,285


	Three Months			Nine Months
	Ended September 30,			Ended September 30,
	2004			2004
Operating income	$	26,730		$	74,935
Operating expenses		(20,183	)		(56,840	)
Other income, net		171			492
General and administrative expenses		(2,159	)		(6,296	)

EBITDA		4,559			12,291
Current income tax expense		(694	)		(1,933	)

Funds From Operations		3,865			10,358
Gain on the disposition of non-CDFS assets, net		—			241
Deferred income tax benefit		128			242

Net Earnings	$	3,993		$	10,841

(A)		The French operations of ProLogis’ temperature-controlled distribution investee (TCL Holding S.A.) are held for sale. ProLogis began presenting its investments in this entity on a consolidated basis as of January 1, 2004. Prior to that date, these investments were presented under the equity method. See notes 1 and 7 on page 8.

(B)		As of September 30, 2004, these assets, all located in France, aggregated 62.8 million cubic feet.

(C)		The property, plant and equipment that are held for sale are not being depreciated.

(A)		The stabilized portfolio at 12/31/03 consisted of 226,392,718 square feet. Total operating portfolio at 12/31/03 consisted of 230,360,309 square feet.

(B)		ProLogis defines its stabilized properties as those properties where the capital improvements, repositioning efforts, new management and new marketing programs for acquisitions or developments, and marketing programs in the case of newly developed properties, have been in effect for a sufficient period of time, generally 12 months. A property enters the stabilized pool at the earlier of 12 months or when it becomes substantially leased, defined as 93% or more.

(C)		The investment amount represents the property fund’s basis in the real estate.

(D)		These property funds were formed in the second quarter to acquire operating properties in the Keystone Transaction which closed on August 4, 2004 (see note 26 on page 8b). In June 2004, ProLogis contributed a total of 21 operating properties aggregating 2,953,496 square feet to these property funds.

(E)		ProLogis acquired a 20% interest in these property funds as a result of the Keystone Transaction (see note 27 on page 8b). Previously, these interests were held directly by Keystone.

(F)		The total operating portfolio consists of both stabilized properties and prestabilized properties. Prestable properties are development or acquisition properties that have been completed or held for less than 12 months and are not substantially leased (generally 93%).

(A)		Assumes customers do not exercise renewal options.

(B)		Represents annualized base rents at lease expiration. As of September 30, 2004, the average base rent per square foot is $3.91 (Direct Investment) and $5.23 (ProLogis Property Funds).

(C)		Includes amounts leased on a month-to-month basis of 3,256,431 square feet (Direct Investment) and 925,481 square feet (ProLogis Property Funds).

(D)		Includes customers leasing space in properties owned directly by ProLogis and in properties owned by ProLogis Property Funds.

(E)		As of September 30, 2004, ProLogis (including ProLogis Property Funds) had 486 Global 1000 Customers (targeted 1,000 largest users of distribution space). These customers lease 140,727,779 square feet of distribution space representing 50.8% of the total operating portfolio as of September 30, 2004.

(F)		Percentage is based on the annualized collected base rents as of September 30, 2004.

(G)		The Top 25 customers when considering only the annualized collected base rents in ProLogis’ Direct Investment properties was 15.97% of ProLogis’ total annualized collected base rents as of September 30, 2004.

(A)		Represents leasing activity for distribution space in properties that are directly owned by ProLogis and properties that are owned by the ProLogis Property Funds.

(B)		Represents all leases signed during the period, including leases for space in properties that are under development.

(C)		Represents the square feet and associated costs that will be incurred to prepare a space for a new tenant, except for space that is being leased for the first time (i.e., in a new development property). Includes the square feet for a lease renewal with the same tenant and associated costs, if any. Includes square feet and costs associated with leasing activity for space in properties acquired, if the space was vacant at the date of acquisition. The amount provided is the total turnover costs expected to be incurred on the leases signed during the period and does not represent actual turnover expenditures for the period.

(D)		Represents the leasing activity and associated rent growth for space that has been previously leased by ProLogis and/or the ProLogis Property Funds. Excludes leasing activity and rent growth for space in properties acquired, if the space was vacant at the date of acquisition.

(A)		A key component of ProLogis’ evaluation of the operating performance of its properties, its management personnel and its individual markets is a “same store” analysis. ProLogis defines its same store portfolio of properties each quarter as those properties that have been in operation throughout the full quarter in both the current year and the prior year. Accordingly, when a property is disposed of to a third party it will be removed from the population for the current quarter and the corresponding quarter of the prior year but previously presented quarterly information will not be changed. Same store statistics allow management to evaluate the actual operating performance of its operating portfolio as a consistent population from period to period and eliminates the effects of changes in the composition of the portfolio on performance measures.

		The percentage change presented is the weighted average of the measure computed separately for ProLogis and each of the ProLogis Property Funds with the weighting based on each entity’s proportionate share of the combined component on which the change is computed. In order to derive an appropriate measure of period-to-period operating performance, the percentage change computation removes the effects of foreign currency exchange rate movements by computing each property’s components in that property’s functional currency.

(B)		Rental income computed under GAAP includes the amount of rental expenses that are recovered from customers under the terms of their respective lease agreements. In computing the percentage change in rental income for the same store analysis, rental income is adjusted to remove the net termination fees recognized for each period. Net termination fees generally represent the gross fee negotiated at the time a customer is allowed to terminate its lease agreement offset by that customer’s rent leveling asset or liability that has been previously recognized under GAAP, if any. Removing the net termination fees for the same store calculation allows ProLogis’ management to evaluate the growth or decline in each property’s rental income without regard to items that are not indicative of the property’s recurring operating performance. Customer terminations are negotiated under specific circumstances and are not subject to specific provisions or rights allowed under the lease agreements.

		Net termination fees removed from rental income were $1,002,233 and $302,040 for the three months ended September 30, 2004 and 2003, respectively. Net termination fees removed from rental income were $3,388,957 and $5,308,046 for the nine months ended September 30, 2004 and 2003, respectively.

(C)		Rental expenses computed under GAAP represent gross property operating expenses. In computing the percentage change in rental expenses for the same store analysis, rental expenses include property management expenses for ProLogis’ direct owned properties based on the property management fee that has been computed as provided in the individual agreements under which ProLogis’ wholly owned management company provides property management services to each property (generally the fee is based on a percentage of revenues). In ProLogis’ Consolidated Statements of Earnings (Loss), Funds From Operations and EBITDA, the net profit or loss of the management company is recognized as part of ProLogis’ rental expenses reported under GAAP.

(D)		In computing the percentage change in net operating income, ProLogis computes net operating income as the weighted difference between the rental income balance that is computed as described in comment B and the rental expenses balance that is computed as described in comment C.

(E)		To derive adjusted net operating income, ProLogis adjusts the net operating income balance that is computed as described in comment D to exclude the amount of straight-lined rents recognized in each period. The straight-lined rents removed from rental income were $3,173,188 and $3,365,712 for the three months ended September 30, 2004 and 2003, respectively. The straight-lined rents removed from rental income were $9,838,178 and $9,900,867 for the nine months ended September 30, 2004 and 2003, respectively.

(F)		Represents the weighted average rent growth associated with leasing activity for space that has been previously leased by ProLogis and/or the ProLogis Property Funds. Excludes leasing activity and rent growth for space in properties acquired, if the space was vacant at the date of acquisition.

(A)		Of the direct acquisition, all were made in ProLogis’ CDFS business segment with the exception of the operating properties acquired directly by ProLogis in the third quarter of 2004 as part of the Keystone Transaction (2,329,880 square feet at a total expected investment of $126,587,998). See note 21 on page 8b.

(B)		Represents acquisitions of operating properties by ProLogis Property Funds from other than ProLogis as follows:

(A)		Includes leases of previously unleased space of 3,836,830 square feet and leases of previously leased space of 802,193 square feet for the three months ended September 30, 2004, includes leases of previously unleased space of 2,885,997 square feet and leases of previously leased space of 771,034 square feet for the three months ended June 30, 2004 and leases of previously unleased space of 3,617,246 square feet and leases of previously leased space of 1,066,456 square feet for the three months ended March 31, 2004.

(B)		A contribution to ProLogis Japan Properties Fund in 2003 provided for an additional $5.9 million of proceeds, the receipt of which was contingent on the satisfactory performance of certain activities by ProLogis. These activities were completed in 2004. Upon receipt of the contingent proceeds, an additional gain ($4.7 million after deferral) was recognized in 2004.

(C)		Previously deferred proceeds recognized due to the change in ProLogis’ ownership percentage in ProLogis North American Properties Fund V to 11.5% from 14.0% in the second quarter of 2004 and in ProLogis European Properties Fund to 21.6% from 22.5% in the third quarter of 2004.

(D)		When ProLogis contributes properties to a ProLogis Property Fund in which it has an ownership interest, ProLogis does not recognize a portion of the proceeds in its computation of the gain resulting from the contribution. The amount of the proceeds that cannot be recognized relates to ProLogis’ continuing ownership interest in the contributed property through its ownership in the Property Fund. See notes 13 and 14 on Page 8a.

(A)		Development starts and properties under development include one property that was acquired directly by ProLogis as part of the Keystone Transaction (750,005 square feet at a total expected investment of $39,085,752). See note 21 on page 8b.

(B)		Represents the leased percentage as of the end of the quarter in which the development was completed.

(A)		Represents the weighted average base interest rates on borrowings that were outstanding at September 30, 2004.

(B)		Total commitment available to ProLogis at September 30, 2004 has been reduced by letters of credit outstanding with the lending bank aggregating $9.6 million at September 30, 2004.

(C)		Represents the approximate U.S. dollar equivalent at September 30, 2004 of ProLogis’ 450.0 million euro denominated line of credit.

(D)		Represents the approximate U.S. dollar equivalent at September 30, 2004 of ProLogis’ 25.0 million pound sterling denominated line of credit available for borrowing in the United Kingdom. The total commitment available to ProLogis has been reduced by letters of credit outstanding with the lending bank in the currency equivalent of approximately $23.6 million at September 30, 2004.

(E)		Represents the approximate U.S. dollar equivalent at September 30, 2004 of ProLogis’ 65.0 billion yen denominated line of credit (increased from 45.0 billion yen in the third quarter of 2004).

(F)		Excludes assessment bonds.

(G)		Calculated as of the beginning of the year through final maturity for debt outstanding at September 30, 2004.

(H)		Calculated as Funds From Operations as defined by ProLogis before impairment charges, preferred dividends and charges related to the redemption of preferred shares, interest expense and minority interest, divided by interest expense (interest expense excludes capitalized interest and amortization of loan costs). Funds From Operations is defined on Page 3a.

(I)		Calculated as Funds From Operations as defined by ProLogis before impairment charges, preferred dividends and charges related to the redemption of preferred shares, interest expense and minority interest, divided by combined interest expense (interest expense excludes capitalized interest and amortization of loan costs) and preferred dividends. Funds From Operations is defined on Page 3a.

(A)		Percentages are based on the square footage of the operating portfolio. The operating portfolio includes direct owned properties and operating properties owned by the ProLogis Property Funds.

(B)		At September 30, 2004, ProLogis has no real estate assets in this market.

(C)		At September 30, 2004, ProLogis has an interest in a CDFS Joint Venture that owns four operating properties in the Shanghai region. Three markets in China (Guangdong Province and the Shanghai and Beijing regions) are designated as target markets.

(D)		ProLogis’ target markets in Japan include Tokyo, Osaka and Nagoya.