Unconsolidated Entities

6 Months Ended

Jun. 30, 2023

Equity Method Investments And Joint Ventures [Abstract]

NOTE 4. UNCONSOLIDATED ENTITIES

Summary of Investments

We have investments in entities through a variety of ventures. We co-invest in entities that own multiple properties with partners and investors and we provide asset management and property management services to these entities, which we refer to as co-investment ventures. These entities may be consolidated or unconsolidated depending on the structure, our partner’s participation and other rights and our level of control of the entity. This note details our investments in unconsolidated co-investment ventures, which are related parties and accounted for using the equity method of accounting. See Note 7 for more detail regarding our consolidated investments that are not wholly owned.

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

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


	June 30,		December 31,
	2023		2022
Unconsolidated co-investment ventures	$	8,795,399	$	8,073,927
Other ventures (1)		1,135,862		1,624,971
Total	$	9,931,261	$	9,698,898

(1)

Included in other ventures is our $177.9 million and $162.6 million investment in early and growth-stage companies that are focused on emerging technologies in the logistics sector at June 30, 2023 and December 31, 2022, respectively.

Unconsolidated Co-Investment Ventures

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Recurring fees	$	113,338	$	115,806	$	226,895	$	229,043
Transactional fees		13,522		17,519		28,602		34,748
Promote revenue (1)		669,352		19,514		669,672		19,514
Total strategic capital revenues from unconsolidated co-investment ventures (2)	$	796,212	$	152,839	$	925,169	$	283,305

(1)

Includes promote revenue earned from unconsolidated co-investment ventures principally in the U.S. and Mexico during the three and six months ended June 30, 2023.

(2)

These amounts exclude strategic capital revenues from other ventures.

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


	U.S.						Other Americas (1)						Europe						Asia (2)						Total
At:	Jun 30, 2023			Dec 31, 2022			Jun 30, 2023			Dec 31, 2022			Jun 30, 2023			Dec 31, 2022			Jun 30, 2023			Dec 31, 2022			Jun 30, 2023			Dec 31, 2022
Key property information:
Ventures		1			1			2			2			2			2			4			3			9			8
Operating properties		739			739			264			260			994			989			223			217			2,220			2,205
Square feet		123			123			61			60			220			219			92			89			496			491

Financial position:
Total assets ($)		12,804			12,617			4,190			3,744			22,958			22,502			9,729			9,964			49,681			48,827
Third-party debt ($)		3,718			3,468			918			919			5,587			5,315			3,836			3,811			14,059			13,513
Total liabilities ($)		5,075			4,143			1,056			1,011			7,602			7,292			4,244			4,279			17,977			16,725

Our investment balance ($) (3)		2,990			2,398			1,145			1,070			3,868			3,786			792			820			8,795			8,074
Our weighted average ownership (4)		26.2	%		26.2	%		39.1	%		41.0	%		31.3	%		31.0	%		15.2	%		15.2	%		27.5	%		27.4	%

	U.S.						Other Americas (1)						Europe						Asia						Total
Operating Information:	Jun 30, 2023			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022
For the three months ended:
Total revenues ($)		329			291			102			96			412			354			162			157			1,005			898
Net earnings ($)		75			68			47			31			91			127			1			32			214			258

Our earnings from unconsolidated co-investment ventures, net ($)		20			19			15			10			30			39			1			5			66			73

For the six months ended:
Total revenues ($)		653			577			205			185			826			710			327			326			2,011			1,798
Net earnings ($)		176			140			90			64			160			231			28			66			454			501

Our earnings from unconsolidated co-investment ventures, net ($)		47			38			31			22			51			70			5			11			134			141

(1)

Prologis Brazil Logistics Venture (“PBLV”) and our other Brazilian joint ventures are combined as one venture for the purpose of this table.

(2)

In April 2023, we formed Prologis Japan Core Logistics Fund ("PJLF") with two investors through the initial contribution of assets for ¥30.3 billion ($222.8 million) for which we received cash and equity ownership. We account for our investment in PJLF under the equity method of accounting. At June 30, 2023 our ownership interest was 16.3% and the remaining equity commitments were ¥104.8 billion ($724.6 million) and ¥17.0 billion ($117.7 million) our share.

(3)

Prologis’ investment balance is presented at our adjusted basis. The difference between our ownership interest of a venture’s equity and our investment balance at June 30, 2023 and December 31, 2022, results principally from four types of transactions: (i) deferred gains from the contribution of property to a venture prior to January 1, 2018; (ii) recording additional costs associated with our investment in the venture; (iii) receivables, principally for fees and promotes ($1.0 billion and $193.7 million, respectively); and (iv) customer security deposits retained subsequent to property contributions to Nippon Prologis REIT, Inc. The receivables balance at June 30, 2023 was primarily due to the promote revenue we earned from Prologis Targeted U.S. Logistics Fund during the second quarter of 2023.

(4)

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

Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures

At June 30, 2023, our outstanding equity commitments were $399.7 million, principally for Prologis China Logistics Venture and PJLF. The equity commitments expire from 2023 to 2033 if they have not been previously called. Typically, equity commitments are used for future development and acquisitions in the unconsolidated co-investment ventures.