With the overall warehousing space seeing in a post-pandemic downtrend for multiple years now, Prologis is betting that the bottom of the cycle is coming up soon.

Already saying that warehousing was “near peak vacancy” back in July, the logistics real estate company suggested the industry is getting closer to that point during a Wednesday earnings call.

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“Overall, the bottoming process is underway, and we expect demand to remain soft in the near term,” said Timothy Arndt, chief financial officer at Prologis in the call. “Looking ahead, market vacancy is at or near its peak and will hover there as utilization improves, and global rents will bottom sometime mid next year.”

Chris Caton, managing director, global head of strategy and analytics at Prologis, said the elongation of the peak will continue “over the course of the first part of next year. You’ll see recovery emerge later next year and accelerate into 2026.”

Nevertheless, Prologis still saw a sales jump based on increases in rental revenues. The logistics real estate company generated third quarter revenue of $2 billion, a 6.5 percent increase from the $1.9 billion brought in during the year-ago period. The firm also reeled in $1 billion in net income in the quarter, up from $746 million in the year prior.

Prologis raised its projected spending on acquisitions to between $1.75 billion and $2.25 billion for the full year, up from its prior estimate of between $1 billion and $1.5 billion. This marks the second straight quarter the firm has increased its 2024 outlook on deals.

“We are very much looking at markets that we see to build additional scale and deepen our presence and our teams are scouring the market in that regard looking for opportunities,” said Arndt.

Occupancy rates across its 1.2 billion-square-foot global portfolio dipped to 95.9 percent from more than 97.1 percent during the same time in 2023.

“While occupancy and rent softened against the backdrop of positive yet subdued demand, we continue to deliver impressive net effective rent…which bridges us through this soft patch to the next cycle of rent growth,” Arndt said.

Caton noted that Prologis still has a measured outlook on demand, saying that while customers are engaged, “they are taking their time in terms of making decisions.”

“We’re going to be going into 2025 with a relatively low level of supply and an opportunity for demand to improve as we progress through this uncertainty in the spare capacity,” said Caton.