Generating Economic Value

[EC1] Industrial distribution facilities provide a crucial link in the modern supply chain by ensuring the accurate and seamless flow of goods to population centers. These facilities also function as processing centers for goods and enable companies to store enough inventory to meet surges in demand and to cushion themselves from the impact of a break in the supply chain. As a leading global provider of distribution facilities, ProLogis consistently meets the distribution needs of new and existing customers with modern, high-quality distribution space.

[EC1] Since going public in 1994, ProLogis has grown from $400 million in assets under management in the United States to a global portfolio comprising more than $34 billion in assets in 18 countries. ProLogis' geographic diversification allows us to support our customers' needs in global markets that have the strongest long-term fundamentals, while our local presence means we can quickly respond to individual market conditions.

[EC1] ProLogis' unwavering commitment to providing superior customer service and establishing lasting client relationships continues to generate value. Our customers consistently turn to us when the need for distribution space arises.

[EC1] As a Real Estate Investment Trust (REIT), we generate income from two main business segments: direct-owned properties and investment management. Our direct-owned segment focuses primarily on the ownership and leasing of industrial and retail properties in key distribution markets. Our investment management segment represents the investment management of our unconsolidated property funds and certain joint ventures and the properties they own.

Realizing that economic value is supported internally by the integrity of our employees and their daily contributions to the business, ProLogis is dedicated to attracting exceptional talent and compensating its associates competitively. [EC7] We also understand that attracting local talent best serves our business operations. More than 99% of our employees are local nationals; we have only nine expatriates working in markets other than their home country, five of which are at the vice president level or above.

Our focus on employee recruitment and retention has proven fruitful. Even through these difficult times, ProLogis associates delivered outstanding results in 2008, achieving record total leasing activity for the year. We believe the quality of our people and strength of our customer relationships will help ProLogis maintain high customer retention and better-than-average market leasing levels despite challenging economic conditions.