It's now my pleasure to hand the conference over to Senior Vice President of Investor Relations, Tracy Ward. Tracy, I hand it to you. Thanks, Holly, and good morning, everyone. Welcome to our second quarter 2021 earnings conference call. The supplemental document is available on our website at prologis.com under Investor Relations. I'd like to state that this conference call will contain forward-looking statements under federal securities laws. These statements are based on current expectations, estimates, and projections about the market and the industry in which Prologis operates, as well as management's beliefs and assumptions. Forward-looking statements are not guarantees of performance, and actual operating results may be affected by a variety of factors. For a list of those factors, please refer to the forward-looking statement notice in our 10K or SEC filings. Additionally, our second quarter results press release and supplemental do contain financial measures such as FFO and EBITDA that are non-GAAP measures. In accordance with Reg G, we have provided a reconciliation to those measures. This morning we'll hear from Tom Olinger, our CFO, who will cover results, real-time market conditions, and guidance. Hamid Moghadam, Gary Anderson, Chris Caton, Mike Curless, Dan Letter, Ed Nekritz, Gene Reilly, and Colleen McKeown are also here with us today. With that, I'll turn the call over to Tom. Tom, will you please begin? Thank you, Tracy. Good morning, everyone, and thank you for joining our call today. The second quarter exceeded our expectations, both in terms of our results and outlook for 2021 and beyond. With our exceptional portfolio and team, we set high water marks across several measures this quarter. Demand for space is robust and diverse, and market conditions remain the healthiest in our 38-year history. In the second quarter, lease signings were 64 million square feet, and lease proposals were 84 million square feet. Both remain above average and were driven by new and development leasing. Likewise, the Prologis IBI customer activity index reached a new high in the second quarter, an early indicator of strong future demand. Our leasing mix is broad. Currently, the greatest demand is for spaces above 100,000 sq f t. For smaller spaces, activity is picking up. We signed 518 leases totaling 18 million sq ft in the quarter, the highest volume in this segment in three years. For customer segments, e-commerce continues to lead the way, representing 30% of new lease signings in the second quarter. While Amazon remains steady at 6% of total new leasing, we have seen many more e-commerce players come to the table. For example, we signed 168 new e-commerce leases in the first half of 2021 versus 53 in the first half of last year. Supply chains are racing, beginning to restock, and as they do, will create more demand going forward. Containerized imports are up 33% through May versus pre-pandemic levels as retailers replenish their supply chains. While inventories have risen 3% from their trough, they have struggled to grow this year as retail sales are up 19% from pre-pandemic levels. We see the current low level of inventories in our space utilization, which at 84.3% is below the long-term average of 85%. This is yet another sign that our customers are operating with suboptimal levels of inventory. Putting together recent outperformance and ongoing momentum, we are raising our 2021 U.S. forecast for net absorption by 20% to 360 million square feet and deliveries by 8% to 325 million square feet. Looking forward, we foresee continued supply balanced by demand with historic low vacancy of 4.5% carrying into 2022. With balanced demand and supply, acute scarcity in our markets is driving record rent and value growth. Our operating portfolio lease percentage rose by 80 basis points to 97.2% at quarter end. Customers continue to compete for space and are making decisions faster with lease gestation in the quarter of just 44 days. We look at the factors impacting supply, significant barriers exist in our markets and include a lack of viable land, increasingly difficult and expensive permitting and entitlement processes, and rapidly escalating replacement costs. Our research team released an excellent paper on this last month, which you can find on our website. Our supply watch list remains quite small. We reviewed Houston in the quarter, leaving just Spain and Poland. Accelerating demand in the quarter, combined with ultra-low vacancies, translated to very strong rent growth of 4.1% in our U.S. markets, exceeding our expectations. As a result, we are raising our 2021 rent forecast to an all-time high of 10.3% for the U.S., up approximately 40 basis points from our prior estimate, and 8% globally, which is up 300 basis points. Our in-place to market rent spread is now the widest in our history at 16.9%, up 330 basis points sequentially. This represents future gas in the tank of nearly $700 million in NOI, or $0.90 per share. Turning to valuations, our assets had the strongest quarterly uplift in our history, rising 8% in the second quarter alone, with the U.S. up more than 10% and Europe up 5.6%. On the topic of valuation, I want to point out that we enhanced the NAV disclosure in our supplemental related to property management fees. Given the size and scale of our portfolio, we create substantial value through our operational advantages. As a result, we know the real estate is worth more in our hands. Accordingly, we are now including net property management fee income as a component of adjusted NOI in our NAV disclosure. Switching gears to results for the quarter, our team and portfolio continued to deliver excellent financial results. Core FFO was $1.01 per share, with net promote earnings effectively zero. Rent change on rollover was 32%. Occupied quarter end was 96.8%, up 110 basis points sequentially. Cash same-store NOI growth accelerated to 5.8%, 290 basis points year-over-year. We tapped into favorable market conditions and disposed of $880 million of non-strategic assets across our portfolio. In addition, just last week, we completed the sale of a $920 million owned and managed portfolio, including all of the non-strategic IPT assets. It's worth noting that to date, we have sold $2 billion of non-strategic assets from our IPT and LPT acquisitions at pricing more than 23% above underwriting. Turning to strategic capital, our team raised almost $600 million in the second quarter. Equity queues from our open-ended vehicles hit $3.3 billion at quarter end, hitting another all-time high. Robust investor interest has prompted private equity limited partners to shift away from diversified to more sector-specific funds, particularly for the logistics sector. In light of recent asset management transactions and public comps, the value being ascribed to our strategic capital business is meaningfully understated. For the balance sheet, we continue to maintain excellent financial strength with liquidity and combined leverage capacity between Prologis and our open-ended vehicles totaling $14 billion. Moving to guidance for 2021, our outlook has further improved given higher rent growth, higher valuations, and robust demand. Here are the key updates on our share basis. We're increasing our cash same-store NOI growth midpoint by 75 basis points to now range between 5.25% and 5.75%. We expect bad debt expense to be approximately 10 basis points of gross revenues, down from our prior guidance midpoint of 20 basis points and well below our historical average. We are increasing the midpoint for strategic capital revenue, excluding promotes, to $470 million, up $15 million from prior guidance. This upward revision is due to increased asset management fees resulting from higher property values. Faster development lease-up and higher asset values are also leading to an increase in promotes. We now expect net promote income of $0.02 for this year, an increase of $0.04 from our prior guidance. We are also increasing development starts by $300 million and now expect a midpoint of $3.2 billion. Build-to-suits will comprise more than 40% of development volume. Our owned and managed land portfolio, which is composed of land options and covered land plays, supports $18 billion of future development over the next several years. We are also increasing the midpoint for dispositions and contributions by $650 million in total. This increase will have roughly a $0.02 drag on earnings this year, given the timing to redeploy the incremental proceeds. We now expect to generate net deployment sources of $200 million at the midpoint, with leverage remaining effectively flat in 2021. Taking these assumptions into account, we're increasing our Core FFO midpoint by $0.07 and narrowing the range to $4.04-$4.08 per share. Core FFO excluding promotes will range between $4.02 and $4.06 per share, representing year-over-year growth at the midpoint of almost 13%. We continue to maintain exceptional dividend coverage, and our 2021 guidance implies a payout ratio in the low 60% range and free cash flow after dividends of $1.3 billion. In closing, the first half of the year has been extraordinary, and our outlook is equally promising. Visibility into our strong future organic earnings potential is very clear. We have a significant embedded in-place-to-market rent spread, a development-ready land portfolio, substantial balance sheet capacity, and ability to create value for our customers beyond the real estate. With that, I'll turn it back to Holly for your questions. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star then one on your telephone keypad. Our first question is going to come from the line of Steve Sakwa, Evercore ISI. Thanks. Good morning out there. Maybe Tom or Hamid, I was just wondering if you could spend a little more time just talking about some of the demand drivers across some of the various subsectors and maybe regionally. I know Europe maybe grew a little bit faster, but maybe just provide a little more context around which businesses and which regions you're seeing the most demand in. Hey, Steve, it's Chris Caton. I'm going to jump in with a few highlights, and then I think Gene will share some color. I think there are three or four demand trends that are presenting themselves. The first is broadly the diversification of e-commerce. Internationalization of the major players or smaller mid-size players stepping up. The second is the growth leaders of last year are leasing space. Think about food companies, pharmaceuticals, and durable goods companies. The third trend would be supply chain resilience. For example, we see the port markets are among the strongest they've ever been. You have several clear themes playing through demand. Yeah. Steve, the only thing I'd add to that, if you want to get some geographic color, is coastal markets are definitely doing better. You look at the U.S. Southern California and New Jersey by far, I think, have the strongest demand dynamics. I'd also say that it's very difficult to find a weak market globally. No matter whether you're in Latin America, Europe, the U.S., there's strength in demand really everywhere. Thank you. Our next question is going to come from the line of Emmanuel Korchman with Citi. Hey, good morning, everyone. Chris, maybe this is another one for you, but you spoke about broad-based demand. Is the specific demand from especially the e-commerce customers changing at all? Are they kind of willing to get whatever they can? Are they being more specific as to what they want? Are they pinpointing markets? Is it a wider sort of paintbrush of demand? Can you help us figure out what they're actually asking for when they come to you? Yeah. The message on e-commerce is actually very diverse, and I think if you look across the maturity of different organizations, they all want something slightly different. If you have a large international player, I do think they're getting much more pinpointed. We've seen a lot of growth, for example, in last-mile submarkets. There's a lot of focus on shortening those delivery times. More mid-size organizations might be in an adjacent location or in a regional location to still build out the basic infrastructure for executing online. Our next question is going to come from the line of Caitlin Burrows with Goldman Sachs. Hi, good morning, team. I was just wondering if you could talk maybe about development. Prologis is obviously an active developer. You increased your guidance for development starts and stabilizations and also their contributions. Could you give some detail on how you think about your development business' valuation, how the development gains are related to that, and how it might be different than peers' activity? I know that's a lot. Hey, Caitlin. Thanks for your question. This is Tom. I'll take a first shot at that. I think there are several aspects of our development business that are quite unique. The first, I would just think, looking at the size of that portfolio, $18 billion of build-out, almost 20% of our market cap. That portfolio is very focused in our high-barrier markets in which we operate. We've got a land bank that we can build out a very high-quality portfolio that's in high demand. It's very diversified across 19 different countries, and it's a huge opportunity set that our development platform has to build out. Just having the menu to seek the best returns and to solve customers' problems across all of those different markets is a huge advantage, and I think that leads to just the durability of those development gains. If you look at our track record, we've got a track record of 20 years developing $37 billion of assets, 20% unlevered IRR, and we get those results verified externally by Duff & Phelps, by the way. An incredible track record of durability. When you look at the $18 billion of build-out, our history of being able to continue to develop at very attractive rates, there's a very long runway of opportunity that's just presented in front of us. To your point on realized gains, I think that's another point that makes us quite unique that, given our capital structure and how we want to structure the vast majority of our assets outside the U.S. are held in funds, but we're developing the vast majority of those assets on balance sheet in Europe, in Japan, Mexico. Those assets, with very few exceptions, are contributed into our funds. There's a real crystallization of those gains. When you think about the 20% unlevered IRRs, all that development, the vast majority of those gains were realized in cash, and that's real cash flow. That is part of your AFFO, and should be embedded in your valuation. I think when we look at valuation in particular for development, I think there's a very scattershot approach because there's a couple of different things you have to do. Obviously, you've got the CIP that's in front of you. You got to finish that and value that. You've got your land bank, in our case, $18 billion that you have to value. There's also residual for this platform. This platform has a history of $37 billion and 20% unlevered IRRs. There is a value here. I think you can put those all together. There's different ways to do it, obviously. I would just encourage you to take a look at the cash flows that this thing generates historically, and I think you're going to find that the valuations for our development capabilities are, I would say, significantly undervalued. Thank you. Our next question will come from the line of Craig Mailman with KeyBanc Capital Markets. Hey, everyone. Appreciate the update there on where you think market rent growth is and clearly, your net absorption stats as well. Just looks like we're still in equilibrium. I'm just curious, as you guys talk to tenants and kind of continue to push through rents or maybe even accelerate that, how does the conversation change now with labor shortages continuing and maybe even getting a little bit worse places and just gas prices continuing to rise and impacting the transportation side? I mean, are rents even, how high up on the list are they at this point? Maybe update us on how many deals you're losing as a result of rents versus other factors. I know that's a few questions. Yeah, this is Gene, I'll take that. I think if you look at the conversations we're having with customers and what their pain points are relative. Excuse me. Gene is having a little bit of issue with an abscess tooth. Let me take over while he clears his throat. The conversations are mostly around labor. That is absolutely a pain point. There's an ability to push through pricing today because when you have retail sales jump 20% from pre-pandemic levels, and God knows what percent from pandemic levels, and the supply chain is drying, and there's very little probability of losing that piece of business because people are flush with cash and out there spending money. I think that's going to continue for a while. Basically, everybody's hair is on fire trying to keep up with demand. Mike, any additional color on that? Yeah, I think one way you can really represent this is the fact that we've had more customers competing over space than we've seen ever before. That creates some difficult situations, but we always start with transparency with both parties. I got to tell you, the rent becomes a very minor discussion. Just the availability and accessibility of that space becomes the priority. I think that's a good description of what we're seeing out there in terms of the customers' priorities. Frank, I wish we were losing more deals because of rent, because we actually look at that on a quarterly basis by geography. The number is under 5%, which to me means we may not be pushing rents enough. In a way, the fact that we're not losing those deals to rents may not be such a great thing. Let me jump in here and continue my point. With respect to gas prices, that pretty much makes location all the more important. I think that's probably a tailwind with respect to rents. Our next question is going to come from the line of Vikram Malhotra with Morgan Stanley. Morning. Thanks for taking the question. Just maybe wanted to build upon comments around the strategic capital business. You referenced several times the power of the business and potentially being undervalued. I'm assuming that's on the equity side. As I talk to my colleagues who cover the asset managers, there's clearly different multiples that you use to value some of these larger or asset management platforms. Maybe you can unpack this for us a little bit in terms of the power of the business, the more focused customer base you're seeing that are focused on logistics-only platforms, and then just the valuation. That'd be really helpful. Yeah, Vikram, I'll take that first. I think let's start with that business and how that business has grown. If you look over the last 5 years, AUM and revenues of that business have grown 18%, 18% CAGR. More importantly, the EBITDA or cash flow that that business is generating has grown by 26% CAGR. Incredible growth. As we look forward, just given what we're seeing, I think the opportunities are there for very strong continued EBITDA growth. I think that's a baseline I would think about there. A highly scalable business for what we do. Relative to valuation, I think clarity around valuation in this business has never been better because there's been several transactions that have cleared the market lately, and you can certainly look at public comps. I think for us, you need to look at the alternative asset managers as the right place to start. While there are a lot of different ways, I think analysts and investors are looking at multiples. When you pore through it all for the alternatives and the comps we're seeing, you're going to see multiples in the mid-20s on earnings, and those include promotes. When you strip out promotes, you're seeing for the best alternative asset managers, a multiple of 30 or higher, and they're getting an X on promotes. Yeah, that would tell you our business is, I would say, very undervalued because as you're thinking about how we compare to them, I think you need to think about the stickiness of our AUM. 90%+ of our AUM is in long life or perpetual vehicles. We talked about the growth profile that we have. Clearly there's incredible investor demand for our product, which is also lining up to support growth. Our equity queue at quarter end was $3.3 billion, an all-time high. We are happy to get into more discussions with you all on this going forward, but a lot of good visibility out there on valuation. Yeah, I would add two things which we sort of assume but are important. First, the business has scaled. It's a $60 billion-plus business. That puts us among the top real estate asset managers anywhere by any measure, and we're focused on one property type. That's a pretty significant market share in the most desirable market. That plays to the premium, and also, I would say we have the longest history of actually producing these returns. That goes back to AMB's early days in the mid-'80s. Both in terms of longevity, the quality of the income stream, these are not a bunch of closed-end funds that expire. These are, as Tom pointed out, very sticky and long-lived cash flow streams. I would argue that they have more leverage on the upside than the real estate cash flows that support that business because of the fee and promote structure. For the life of me, I don't really understand why they're being valued the way they are. We're going to do a better job of explaining that to people who follow this business because we're honestly getting a lot of receptivity from those investors that really understand the sector. Our next question will come from the line of Jamie Feldman with Bank of America. Thank you. Following up to the last question, $14 billion of investment capacity. We've seen a good amount of large portfolios trade the last few years, but clearly pricing is getting more and more dear. How should we think about your ability to do large-scale transactions to keep growing that business through acquisitions? We do not care one iota about external growth and through M&A. That is no skill of the management team, just multiple conversion. This myth that's there that our size prevents us from growing fast, I would just invite people to look at the numbers, and you can strip out the M&A from that. M&A is opportunistic, never part of our business plan, and if we never had another $1 of M&A, I'll put our growth rate against anybody else's in any sector, frankly, over time. Thank you. Our next question will come from the line of John Kim with BMO Capital Markets. Thank you. Given the increase you've had in valuations this quarter, I was wondering if you could provide an updated view on exit cap rates and that spread between exit and going-in yields when you and your partners are looking at investments? Well, historically, we used to pencil in a 50 basis point increase in the residual calculation based on our rent projections and the like. I think 50 basis points when cap rates were 9% was quite a bit. When the cap rates are in the mid 3s, that's even a great deal more on a relative basis. We're mostly using about a 25% increase in residual calculations 10 years out. Again, we are an infinite life vehicle. When you invest in our REIT, we just sell non-strategic assets. We don't sell our other assets that we like. You look at the dividend or the cash flow that comes off those assets and the growth rate of those assets, that translates into a very nice overall IRR, which is really the fundamental driver of value in our business. Thank you. Our next question will come from the line of Jon Petersen with Jefferies. Great. Thanks. You guys, in your press release, mentioned the same cash growth in the international portfolio was higher than the U.S., which I think is kind of a flip from what we've seen in recent years. I was looking at the occupancy. The occupancy is still growing faster in the U.S. Maybe you could just talk about what's driving that higher international growth. Yeah. Tom, I'll take that. I think part of it was driven by strong results in other Americas, and Europe was also strong. I think it's more of a reflection of an easier comp in Q2 2020 than everything else. Listen, I think longer term, by and large, particularly in Europe, the cap rates have dropped furthest in Europe over the last several years. That's been more of a headwind on rent growth. I would expect, going forward, we're going to see, whether it's next year or the year after that, but we're going to see growth in our international markets be on par, if not better, than our U.S. markets. Yeah, I would also say that land is very difficult in the U.S., but it's even more difficult in Europe because the government is a much bigger actor in allocating land out, and they really tie it to employment, and they're not wild about logistics. Land supply is just that much more difficult. Our next question will come from the line of Blaine Heck with Wells Fargo. Great. Thanks. We noticed turnover costs on leases ticked up this quarter, and those costs as a percentage of lease value have been trending up over the last four quarters, as has free rent. Just given the context of you guys having the highest demand you've ever seen, that increase seems somewhat counterintuitive. Can you just give some color on what might be driving that increase and how we should think about those concessions going forward? Blaine, this is Tom. It's a good observation. What is driving that over the last four quarters, and particularly in the second quarter, is higher levels of new leasing. New leasing in Q2 versus Q1 increased 40% sequentially. New leases generally come with slightly higher concessions, slightly higher turnover costs as a result. The key is we're looking at long-term economics. Yeah, there's a little bit of short-term pain with that, but we're getting in what we believe to be a better cash flow and higher rents. I think that's the key. We're looking at the long-term economics here, and we're getting that. I do think, and clearly over the last four quarters, we've seen much higher levels of new leasing than in the past. I think that's going to moderate a bit going forward. We're looking at the long-term end game here, and it's clearly the right economic decision to make. Yeah. The other issue you should keep in mind is that we're pushing rents a lot harder than we were before. Likely to replace existing customers with the most efficient, the customers that have the highest value chain and the ability to pay. That reshuffle has been accelerated in the last 12, 24 months. Our next question will come from the line of Michael Carroll with RBC Capital Markets. Yeah. I wanted to touch back on the earlier comments regarding the broadening out of tenant interest, specifically from e-commerce players. I guess, when you say you're seeing more demand from the smaller players, are these companies that are looking to insource their logistics needs versus outsourcing it to 3PLs? Or do they already have an insourced network and they're just looking to expand it right now? Or is it a little bit of both? Hey, this is Mike. It's certainly a little bit of both. I think the bigger story here is we get asked a lot of questions about, is it all about Amazon? While they've been very steady and robust in terms of their activity with us this year, with actually plenty of back-end activity coming up in the next couple of quarters. The bigger takeaway is what Tom said in the earnings front end here, where the other customers. Last year, we leased about 50 leases to non-Amazon e-com players. This time, fast-forward, the number's 3x as high. It's a wide variety of smaller and larger customers. There's some big brand names in there like Walmart.com or MercadoLibre in Latin America, JD.com. The bigger story is there's over 150 of these smaller, more diversified players using a combination of insourcing and outsourcing. We really like that diversification there. Again, the story, it's just not all about Amazon. I think there's a frenzy of playing catch up that is creating a lot of activity. I think people, if anything, the pandemic sort of suggested that they can't take business as usual in a very incremental approach with respect to their e-commerce strategy. Now they're realizing how important it is, and they're just pedal to the metal, and that's showing up in our 3PL leasing statistics as well. Our next question will come from the line of Mike Mueller with JP Morgan. Yeah. Hi. Can you talk a little bit about your development margins on spec versus build-to-suit? Do you think we could see the mix, which I think you said is about 40% this year, drift down further? Yeah, Mike, this is Gene. I think that's going to hold. In fact, I think we might see ultimately a higher build-to-suit%. I'd be careful looking at the comparison of margins between build-to-suit and spec, because mix has an awful lot to do with it. How long a transaction has taken to negotiate has something to do with it. I think in both cases, you can expect margins to creep up. We have costs increasing on us on the construction side. We have return compression and rent growth that's ahead of our underwriting expectations, and that overwhelms the cost increases. I think generally, you're going to see margins expand. Our next question will come from the line of Dave Rodgers with Baird. If I maybe start with Mike or Gene. Wanted to ask on the inventory and the sales topics that you guys mentioned earlier. Obviously, a big increase in sales and inventory's not keeping up. I guess when you talk to customers, what are they trying to solve for from an inventory to sales perspective? Maybe how does that vary between industries, if at all? I guess how do they take into consideration maybe interest costs with interest going down? Does that change kind of their willingness to carry even more inventory in the near term? Those type of conversations in any color would be helpful. Hey, Dave, it's Chris Caton. I'll kick it off. First off, as has been shared a few times, right now it's fulfillment by any means necessary. Trying to get goods into the country. Look, inventories are down 10% from pre-pandemic levels, it's really just a race to get levels in. As it relates to resilience, I do think we're starting to see this, but I think the specific numbers that people are looking at, they're not yet at the strategic planning phase. They're much more tactically focused on fixing their supply chains this year. We're fresh off a supply chain conference four days ago. 75% of the people we spoke with there in pulse survey said increasing inventories due to resilience-related issues is top of mind, and we're starting to see that play out. Our next question will come from the line of Vince Tibone with Green Street. Hi, good morning. I wanted to follow up on the significant increase in your U.S. market rent growth forecast. I just wanted to get a little more color on which markets you're seeing the greatest improvement in fundamentals from reviews last quarter, and also just hear how high you're forecasting growth in Southern California, New Jersey, and the likes. Hey, Vince, it's Chris Caton. Indeed, we did make a material increase. Look, I think the facts of the situation are really impressive. Rents in the U.S. are up nearly 7% just in the first half of the year. That's a record. Look, it's not just the U.S. Rents are rising, in Europe. They're up 2% so far this year. When I think about different categories, let's start with the major markets on the coasts, and let's add Toronto in there. Typically, these markets on an annual basis will outperform by 250-400 basis points. Last year, that compressed, as there was less differentiation. That differentiation has returned. We're going to see these coastal markets in Toronto hit mid-teens, I think, this year. Based on some of the trends we discussed earlier, I'd say we should expect to see this relative outperformance widen in the coming years. Hope that helps you. Vince, it's Tom. I would just tack on the impact of that on our earnings, right? We're rolling, I don't know, 16%-17% of our portfolio a year now. All of this good news on rent growth is not coming through the P&L right away. You need to look at the in-place to market, which significantly gapped out this quarter now at almost 17%, and as I said in my prepared remarks, that's almost $700 million of incremental NOI, and we'll have to see where rent growth continues to go. I would continue to think that in-place to market's going to march a little higher. Yeah, one other thing I would add. As strong as rents have been in some of the best markets, with today's rents, today's construction costs, and today's land costs, development doesn't pencil. When people are developing, that means they're thinking, they may be wrong, that rents have to grow quite a bit from here, or cap rates are going to compress significantly from here. I don't know which, and they may be wrong, but I can tell you that with today's marginal land cost and building costs, no way you come close to clearing a margin in development. Our next question will come from the line of Rob Simone with Hedgeye Risk Management. Hey, guys. Thanks for taking the question. Kind of a two-part question from me. It gets back to your earlier comments on strategic capital. We took a shot at that valuation, and I think Tom, your comments were really helpful. I think in many ways we were probably too conservative. On the growth rate side, one of the things that's a little bit tougher to handicap from the outside is kind of the sustainable growth rate in your capital raising. The deployments from contributions is a little more obvious from the numbers, at least historically. I was hoping you guys could comment on how you see the fundraising environment kind of proceeding over the coming years. Also maybe secondarily to that, it's really interesting. This is the first year that the net income excluding promotes kind of subsumes your corporate G&A. From a valuation perspective, how do you think about addressing that? It's obviously a huge benefit, but a big change versus prior years. Hey, Rob, let me take a shot at this. Today, our third-party AUM is $mid-60s billion. At the time of the merger exactly 10 years ago, the merger closed on June 30th, 2011, exactly 10 years ago, it was $14 billion. You do the math as to what the growth rate has been. I think 10 years, it's got to be a pretty representative period because we had some early not so great years in industrial, and the past couple of years have been really good. I haven't done the CAGR, but if you do the CAGR between $14 billion and whatever, $60 billion plus, it's got to be pretty impressive. The guys are trying to do the math. Anyway, you can do the math. It's certainly higher than what any valuation model would suggest, and I bet you it's higher than a lot of public company asset managers. It's 16% annual growth rate in third-party funds under management. The limiter on that growth is not our ability to raise capital. We can go out there and raise gobs more capital than we have right now. It's just that we don't want to raise the capital if we think we don't have good deployment opportunities for it. We don't want our queues getting too long and investors to get frustrated, and we certainly don't want to have a big queue that forces deal-making like we see in a lot of other places. We've raised somewhere between $2 and $6 billion of good capital over the course of the last three years, depending on need. This year, you'll be interested to know that 60% of the new capital that's raised is from new investors, new to Prologis. That really underscores the broadening of interest in the logistics sector. The other thing that I think you're going to find interesting is that 60% of the investors are now diligencing ESG as an imperative. That really plays to our strength. We've been an ESG leader for more than 2 decades. I think that's a differentiator for PLD. Rob, I'd just also point out you focused on equity raising, but these, our open-ended funds are extremely well levered. They're A-minus rated entities. They have significant financing capacity. We've got a lot of runway just by using their balance sheets, much less ours. Thanks for pointing out your point about G&A and scale. That just tells you the power of the scale of this business. As we talked about the AUM growth, that's 16 over the last 10 years or 18 over the last five years, but it's all about cash flow and EBITDA. That's grown 26% CAGR in the last five years. As we grow, the vast majority of that money's going to drop to the bottom line. Our next question is going to come from the line of Tom Catherwood, BTIG. Excellent. Thank you, guys. Hamid, just wanted to follow up on your comment on industrial development not penciling out. Last quarter, I think you had mentioned that replacement costs could increase by maybe as much as 25%, and that Prologis had gotten ahead of that by pre-ordering a lot of material, including steel. As we sit today, what are your current thoughts as far as input costs and how they could continue to trend? Is there a timeframe in which you might kind of fully utilize the material you pre-ordered, and we could see maybe more margin compression on the development side as you have to pay kind of market rates for those? What are your thoughts on that? In terms of our pre-purchasing steel, I didn't want to create the false impression that we've got our entire development program hedged on steel costs. We're pretty much working through the steel that's been hedged. I don't think that's a big factor in forecasting margins going forward. My personal view is that some of these supply chain related issues that have impacted the material costs are going to subside, and there's a period out there, one-two years out, where maybe the steel price escalation could reverse and get back on a sort of normal inflationary trend, once all the plants are back up and producing. The most important thing affecting margins is what Gene mentioned a little while ago, which is that cap rates are compressing and rents are growing faster than land costs and replacement costs are going up. The margins, if anything, are going to expand, unless something material changes that I can't think of right now, particularly given the outlook for demand. When someone asked Chris about the different sectors and all that, notably absent in his sectors was housing. Housing is still not anywhere near its potential, and it's a big consumer of warehouse space that hasn't even kicked in. You know how low the housing inventory is and how much prices are going up in the housing sector. I expect actually that to be an additional engine of growth for demand. Our next question will come from the line of Ki Bin Kim with Truist. Thanks. Good morning. Just wanted to go back to the land topic. You guys bought more land year to date than you did in 2020. Just a couple of broad questions. You already have a pretty sizable land bank. I'm just curious about what the thinking is behind it. Is it demand is so good that you had to kind of secure market value land to put it to work relatively soon, or is there a longer term element to it that you think the demand is long lasting and so good that you want to replenish the land inventory? How should we think about the $18 billion of build out in your land bank today? Should we expect that to start to get smaller as you do more development, or is this a level that you probably need to maintain just to keep things humming along? Yeah. A couple of things, Ki Bin. First of all, land comes in a couple of different flavors. One is raw, unentitled land, of which we buy some, but not a lot. Second comes in the form of options that we actually don't buy. It doesn't show up in the period when we made the deal. It shows up in the period that we actually close the land option. I don't know the specifics for this quarter that you're looking at, but we can find that out. It could be closing options that we negotiated many moons ago. Finally, the infrastructure cost of improving land shows up as land, and it may not be actually new land. It may be just additional infrastructure on existing land. For example, in our Tracy Park, we're doing million sq ft deals like they're going out of style. Along with that, we need to put the infrastructure in. That's land we bought in 2012. That infrastructure shows up as additional land. Finally, an increasing percentage of our land is covered land plays, and they have an income stream, and they pencil as investments even if we weren't going to scrape them and redevelop them down the road. These are land purchases deals that are actually pretty attractive in their own right, but they also have an embedded upside in terms of developing new product on it. Gene, anything? Yeah. Ki Bin, if you look at that $18 billion of build out, about 44% of it is either covered land plays or option land. If you look at how we are replenishing the land bank over time, we're sticking pretty much to those ratios. Nearly 50% of it comes in those two categories. With respect to the size of the land bank, it's got to grow. Our development program is growing, and you're going to see the land bank grow along with it. Yeah. A good example would be this Hilltop transaction that got all this attention that all of a sudden, are we going into the retail business? No, we're not going into the retail business. That's just another way of buying land with a yield on it. It's chunky. It's $100 million. That shows up. That can move the numbers around in a given quarter by quite a bit. It's covered land play at the end of the day. Our next question is a follow-up from Jamie Feldman, Bank of America. Thanks. I just wanted two quick follow-up questions. One is going back to supply chain shortages. Pleasantly surprised to see you raise your starts guidance and your stabilizations guidance. Would you say that we'll see that across the board in the sector, or there's something specific about the PLD platform that let you continue on with your development plans? Secondly, you've mentioned housing is not yet at its full potential for demand. Any latest thoughts on reshoring and what that could mean to demand? Anything coming out of Congress with the infrastructure bill that could also be a driver of growth? Thank you. Yeah, on the infrastructure side, a lot of it isn't infrastructure, as best as I can tell. I don't think those things are necessarily going to add a lot of business. The real infrastructure part, which is less than $1 billion, should do really great for the business. Onshoring I only see onshoring in newspaper articles. I haven't really actually seen them. If you look at the import numbers, we've had month after month of records. Now, I do think there will be onshoring of medical supplies and PPE and some of the things that are strategic, to use an overused word. Generally speaking, we just don't have the resources, the infrastructure, the labor, the know-how to manufacture a lot of the things that come in with containers. Yeah, I think you will see it in Mexico. We are seeing it, but I don't think you see reshoring here. What was the first part of your question? Will we see others? Right. Oh, I have no idea. Yeah. Unique. Yeah. We'll find out in a couple of weeks. I can tell you that, and you've heard us talk about this for years now, we've really taken the customer and put it in the middle of our business, and that is paying dividends. This customer-centric model allows us to do a lot of business. By the way, that playbook will get copied like everything else, so I assume other people will do the same thing. So far, we're doing great with major customer business. Thanks for the good work that the teams are doing. With that, Jamie, you were the last. Thank you again for your attention, and we look forward to talking to you before next quarter for sure. Take care. Once again, we'd like to thank you for participating in today's Prologis conference call.