Prologis added 1.5 gigawatts of power capacity to its data center business in the third quarter, and the industrial giant is aggressively searching for more electricity to meet customer demand.

“Every megawatt we can deliver over the next three years is already in dialogue with customers,” President Dan Letter said on the firm’s earnings call Wednesday.

A little over a year after the world’s largest industrial developer launched a dedicated data center segment, the sector is becoming an increasingly integral part of its business. The REIT intends to use its economy of scale and strong credit history to create capital solutions to unlock new opportunities for its hyperscaler customers.

The additional energy deals boosted Prologis’ total capacity to 5.2 gigawatts committed by utilities or in advanced stages of negotiations. Prologis has a land bank spanning 14,000 acres and 6,000 buildings in infill locations that the firm is exploring for potential data center development, Letter said.

“These are big numbers, and we have taken the next step of starting an exploration over what the universe of opportunities are — what is the art of the possible for us in the data center business and capitalization,” Letter said.

Prologis had $7.5B in liquidity at the end of the third quarter, during which it and its partners issued $2.3B in debt with an average 4.2% interest rate and 5.7-year term.

Its energy holdings would translate to $15B worth of investment for powered shells or up to $60B for turnkey data center development, Chief Financial Officer Tim Arndt said. The sheer volume of the opportunity in data centers pushed Prologis to explore additional capitalization strategies, he said.

With the power and land in place, Prologis is positioned for explosive growth in the space, but it remains focused on build-to-suit projects.

“I don't know that I see a limit. Three billion [dollars worth of development starts] is honestly a very easy number to handle. If we were talking about a speculative program, that's where we would have a lot of consternation about what's the appropriate number and getting out on a limb,” Arndt said.

Prologis beat analyst forecasts and reported a 4.2% increase in funds from operations and $2.2B in revenue in the third quarter. The REIT's leasing volume jumped 15% from the second quarter, and a record 65.6M SF worth of leases commenced from July to September.

Arndt said the firm tracked a “clear turning point in demand” for industrial space in the recent months, and Prologis forecasts roughly 60M SF in leasing volume in upcoming quarters.

Investors are pouring hundreds of billions of dollars into data center and infrastructure development to support what is expected to be a future fully integrated with artificial intelligence.

Consumer-level AI deployments are widespread, but corporate applications are less prevalent. AI companies are struggling to crack the code of profitability, leading to some bubble predictions that leaders in the sector have waved away as they plow ahead.

Prologis launched its data center segment in July 2024 with a focus on power procurement and 1.3 GW already in hand.

“I hope it's getting underscored here the incredible amount of energy we have now gathered, and the volume of customer conversations that we're having is also very high,” Arndt told analysts on the firm’s earnings call Wednesday. “We're going to see these volumes come through. We're preparing for them, and we're ready for them.”