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Unconsolidated Entities

12 Months Ended

Dec. 31, 2020

Equity Method Investments And Joint Ventures [Abstract]

NOTE 5. UNCONSOLIDATED ENTITIES

Summary of Investments

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

We also have investments in other ventures, generally with one partner and that we do not manage, which we account for using the equity method. We refer to our investments in both unconsolidated co-investment ventures and other ventures, collectively, as unconsolidated entities.

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

	2020		2019
Unconsolidated co-investment ventures	$	6,685,567	$	5,873,784
Other ventures⁽¹⁾		916,447		363,587
Total unconsolidated entities	$	7,602,014	$	6,237,371

(1)	In 2020, we completed the Liberty Transaction and acquired an equity method investment in eight ventures.

Unconsolidated Co-Investment Ventures

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

	Ownership Percentage						Investment in and Advances to
Co-Investment Venture	2020			2019			2020		2019
Prologis Targeted U.S. Logistics Fund, L.P. (“USLF”)		25.6	%		27.3	%	$	1,885,467	$	1,728,043
FIBRA Prologis ⁽¹⁾		46.8	%		47.1	%		691,204		517,347
Prologis European Logistics Partners Sàrl (“PELP”) ⁽²⁾		50.0	%		50.0	%		1,687,749		1,595,331
Prologis European Logistics Fund (“PELF”)		24.3	%		24.1	%		1,401,355		1,144,831
Prologis UK Logistics Venture (“UKLV”) ⁽²⁾		15.0	%		15.0	%		63,228		59,937
Nippon Prologis REIT, Inc. (“NPR”) ⁽³⁾		15.1	%		15.1	%		643,663		544,333
Prologis China Core Logistics Fund, LP (“PCCLF”)		15.8	%		15.6	%		81,581		59,984
Prologis China Logistics Venture I, LP, II, LP and III, LP (“Prologis China Logistics Venture”) ⁽²⁾		15.0	%		15.0	%		111,406		83,285
Prologis Brazil Logistics Venture (“PBLV”) and other joint ventures ⁽²⁾		20.0	%		20.0	%		119,914		140,693
Total							$	6,685,567	$	5,873,784

(1)	At December 31, 2020, we owned 397.4 million units of FIBRA Prologis that had a closing price of Ps 44.64 ($2.24) per unit on the Mexican Stock Exchange. We have granted FIBRA Prologis a right of first refusal with respect to stabilized properties that we plan to sell in Mexico.

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

(3)

At December 31, 2020, we owned 0.4 million units of NPR that had a closing price of ¥322,000 ($3,124) per share on the Tokyo Stock Exchange. For any properties we develop and plan to sell in Japan, we have committed to offer those properties to NPR if we determine the properties meet NPR’s investment objectives.

At December 31, 2020 and 2019, we had receivables from NPR of $160.3 million and $136.3 million, respectively, related to customer security deposits that originated through a leasing company owned by us that pertain to properties previously contributed to NPR. We have a corresponding payable to NPR’s customers in Other Liabilities. These amounts are repaid to us as the leases turn over.

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

	2020		2019		2018
Recurring fees	$	318,423	$	266,615	$	230,746
Transactional fees		65,804		57,334		55,816
Promote revenue ⁽¹⁾		239,268		165,635		116,290
Total strategic capital revenues from unconsolidated co-investment ventures ⁽²⁾	$	623,495	$	489,584	$	402,852

(1)	Includes promote revenue earned primarily from our unconsolidated co-investment venture in the U.S. in 2020, Europe in 2019 and China and Europe in 2018.

(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 (not our proportionate share) and the amounts we recognized in the Consolidated Financial Statements related to our unconsolidated co-investment ventures at December 31 and for the years ended December 31 (dollars and square feet in millions):

	U.S.						Other Americas ⁽²⁾						Europe						Asia						Total
As of:	2020 ⁽¹⁾			2019			2020			2019			2020			2019			2020			2019			2020			2019
Key property information:
Ventures		1			1			2			2			3			3			3			3			9			9
Operating properties		706			605			229			214			768			731			167			144			1,870			1,694
Square feet		117			99			51			44			185			176			67			59			420			378

Financial position:
Total assets ($)		10,840			8,408			3,023			2,707			16,918			14,677			10,209			8,758			40,990			34,550
Third-party debt ($)		3,129			2,130			854			769			4,002			3,213			3,831			3,296			11,816			9,408
Total liabilities ($)		3,722			2,514			898			801			5,607			4,575			4,389			3,751			14,616			11,641

Our investment balance ($)⁽³⁾		1,886			1,728			811			658			3,152			2,800			837			688			6,686			5,874
Our weighted average ownership⁽⁴⁾		25.6	%		27.3	%		40.8	%		39.1	%		30.0	%		30.2	%		15.2	%		15.1	%		26.1	%		27.1	%

	U.S.						Other Americas						Europe						Asia						Total
Operating Information:	2020 ⁽¹⁾		2019		2018		2020 ⁽²⁾		2019 ⁽²⁾		2018		2020		2019		2018		2020		2019		2018		2020		2019		2018
For the years ended:
Total revenues ($)		946		738		676		278		266		217		1,208		1,099		1,101		584		514		457		3,016		2,617		2,451
Net earnings ($)		169		128		150		91		91		63		390		311		509		255		49		88		905		579		810

Our earnings from unconsolidated co-investment ventures, net ($)		46		38		45		34		32		26		121		102		193		39		10		15		240		182		279

(1)	In 2020, USLF acquired a portfolio of 108 operating properties, aggregating 18.3 million square feet, in the IPT Transaction for cash consideration of $2.0 billion, including transaction costs and the assumption and repayment of debt.

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

(3)

Prologis’ investment balance is presented at our adjusted basis derived from the ventures’ U.S. GAAP information. The difference between our ownership interest of a venture’s equity and our investment balance at December 31, 2020 and 2019, results principally from four types of transactions: (i) deferred gains from the contribution of property to a venture prior to January 1, 2018 ($589.3 million and $611.5 million, respectively); (ii) recording additional costs associated with our investment in the venture ($101.5 million and $87.2 million, respectively); (iii) receivables, principally for fees and promotes ($165.6 million and $152.0 million, respectively); and (iv) customer security deposits retained subsequent to property contributions to NPR, as discussed above.

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

Equity Commitments Related to Certain Unconsolidated Co-Investment Ventures

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

At December 31, 2020, our outstanding equity commitments were $346.2 million, primarily for Prologis China Logistics Venture. The equity commitments expire from 2021 to 2028 if they have not been previously called.