Prologis CEO Dan Letter Says warehouse demand Shifting Fast

Prologis CEO Dan Letter Says warehouse demand Shifting Fast

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According to a new survey from Prologis in partnership with the Harris Poll, ninety-one percent of company leaders say retailers and logistics providers “urgently” need expanded decentralized fulfillment networks to satisfy delivery expectations. The responses came from more than 1,800 business leaders across the U.S., U.K., Germany, India, China and Mexico.

    The Bottom Line:

  • 91% of surveyed business leaders call decentralized fulfillment networks an urgent need as same-day delivery expectations escalate.
  • Only 36% of companies now plan to keep their existing global footprint, a 14-percentage-point drop from a year ago.
  • Power reliability ranks as the number-one factor in logistics location decisions.

The 36% Retreat From the Global Footprint

The single sharpest number in the survey is not the 91% urgency figure but the collapse in companies willing to defend their current layouts. Just 36% plan to keep their existing global footprint, down 14 percentage points from a year ago. That is a rapid reversal in corporate strategy, and it explains why speed now tops price when companies weigh competitive advantage. The share of companies offering same-day delivery has doubled since 2019.

More than half of the surveyed companies are both diversifying and regionalizing their networks, while about a third are nearshoring and reshoring. The warehouse is no longer a single vast node on a map. It is becoming a web of smaller, closer positions.

Closer to the Rooftops

Dan Letter, CEO of Prologis, described the shift as a narrowing of focus toward consumption. “Our focus is the consumption end, so we have really narrowed our focus into being in not only the most dynamic consumption centers, most dynamic population centers around the world, but we’re very specific what sub markets in those cities that we want to focus on? Because it is all about being closer to those rooftops,” Letter said.

That strategy shows up in the portfolio math. Prologis owns 1.3 billion square feet of industrial space, but it has also sold over 200 million square feet over the last 15 years. “That’s why we’ve been very focused on where our portfolio is. We talk a lot about the size of our portfolio, but we’ve actually sold a fair amount of property over the last 15 years as well. Just property that we heard from our customers that that’s not their long-term vision. So, despite having 1.3 billion feet, we actually sold over 200 million feet as well because it wasn’t what our customers were looking for,” Letter explained.

Power Is the New Prime Location

Energy infrastructure is now driving location decisions alongside delivery speed. Power reliability ranks number one in logistics location decisions, a shift driven in part by the rise of artificial intelligence and its electricity demands. Slightly more than one-quarter of the executives polled indicated they anticipate industrial landlords and developers will spearhead or finance on-site energy resilience infrastructure, including solar, energy storage and fleet charging.

Prologis moved early on that bet. “We really doubled down on the energy side about five years ago, and we turned it into a business,” Letter said. “We have over 1.4 gigawatts of power that we generate from our solar and our storage business. And then we have also been focusing on how do we help our customers electrify their fleets.”

AI Deepens the Customer Tie

Artificial intelligence is the other force reshaping the warehouse. Survey respondents called demand forecasting and agentic AI systems some of the most “transformative technologies” for supply chains over the next three years. Three-quarters said they are planning big investments in AI demand forecasting as well as inventory replenishment.

For Prologis, that means investing alongside customers rather than waiting. “As they’ve gotten deeper on AI, we’ve gone deeper with them as well,” Letter said. “We’ve been making investments alongside our customers to just understand what’s next, and that helps us in all aspects of our business and be way out in front of our customers.”

What This Means for the American Doorstep

For the everyday consumer, this reshuffling lands at the front door. Same-day delivery is becoming the baseline expectation rather than a premium perk, and the warehouses enabling it are moving into suburban and urban submarkets near population centers. That means more industrial buildings near residential rooftops, more delivery vans on local streets, and a logistics economy where the last mile carries more of the cost. When speed outranks price in corporate strategy, the trade-offs show up in delivery fees, subscription models, and the pace of local hiring at fulfillment centers.

Institutional investors track industrial real estate closely because warehouse portfolios sit inside real estate investment trusts and pension holdings. When a landlord of Prologis’s scale divests over 200 million square feet and pivots toward energy generation and customer AI systems, the shift underscores an industry where speed tops price for competitive advantage.

The Smart Money Tracker

Big-picture sentiment in the industrial sector is tilting toward flexibility and resilience.

The trajectory is clear. The massive centralized warehouse will not disappear, but it is no longer the default answer. The next three years belong to decentralized networks, on-site power, and AI-driven forecasting, and Prologis is positioning its 1.3 billion square feet accordingly.

Disclaimer: The information provided in this article is for educational and market analysis purposes only and does not constitute financial, investment, or legal advice. Always consult with a certified financial professional before making investment decisions.

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