Hamid Moghadam cites a few principles that guided him in building a small consulting firm into Prologis, one of the world's most valuable real estate companies with $2.7 trillion in goods passing through its warehouses each year.
Don’t be afraid to take chances on new things, learn to create "clarity out of chaos” — and above all, focus on those you serve.
"There's been quite a bit of change in the industry and quite a bit of change for us as well," the Prologis CEO told analysts this past week at Citibank's annual Global Properties CEO Conference. It was his 29th appearance at the event, a tally he added "might be close to a record" and his last in his current role.
Moghadam plans to retire Jan. 1 after 42 years leading San Francisco-based Prologis and its predecessor company, AMB Property Corp., most of them as CEO. He chose to open his statement at Citi's annual conference with some lessons he picked up along the way.
"One has been intense focus on customers," he told analysts at the event, held this year in Hollywood, Florida. "Second has been to drive change and innovation in our business. And finally, to build a culture that is the glue that holds everything together. You can't stick that in a financial model, but it's probably the most important thing."
The scale of change and growth at Prologis is reflected in numbers cited by Moghadam, who founded AMB Property in 1983 and took it public in 1997. The value of the global industrial property sector's assets has grown 35-fold to roughly $1.4 trillion from $40 billion at the time of AMB's public offering, Moghadam told analysts at the Citi event.
The company then had fewer than 100 warehouse properties totaling about 37 million square feet, and 33 mostly grocer-anchored shopping centers across 27 cities — all in the United States, according to filings.
Moghadam has since guided the company from $2 billion in asset value at the time of the offering to over $200 billion with more than 1.3 billion square feet — most of it amassed since AMB merged with its larger rival Prologis in 2011.
Over the past few years, Prologis has acquired major competitors in some of the largest logistics transactions on record. The REIT purchased DCT Industrial in 2018 for $8.4 billion, acquired Liberty Property Trust for $13 billion two years later and finished an all-stock acquisition of Duke Realty at a value of $23 billion in 2022.
Don't get run over
From the beginning, the Iranian American recognized such trends as the rising globalization of trade and the advent of e-commerce, which led the company to make “a bunch of decisions that proved to be fruitful,” Douglas Abbey, who co-founded AMB along with Moghadam and Robert Burke, told CoStar News.
“He was brilliant at seeing how the world was changing and pivoting to get in front of it,” Abbey said. “As Hamid used to say, you can become roadkill if you do the same thing every day, if don’t look constantly at what properties you’re buying and where, and how you’re organizing that process.”
Abbey and Moghadam both worked for John McMahan, their real estate professor at Stanford Business School, when they teamed up to launch the real estate advisory firm Abbey, Moghadam & Co. in 1983. They were joined by Burke the following year to form AMB.
During the market bust of the late 1980s, the team concluded that "office buildings weren’t going to fare very well” and instead decided to focus on lower-risk investments of $3 million to $10 million in small warehouses and neighborhood shopping centers.
“We called it our ‘dingbat strategy,' which we felt was a more defensive strategy — buying these small warehouses and food- and drug-anchored shopping centers,” Abbey said.
However, the closing of hundreds of insolvent savings and loan institutions starting in 1989, followed over the next two years by a national recession, dried up an important source of financing for real estate ventures. AMB’s more conservative investments in industrial and retail “suddenly catapulted us as one of the best performing investors,” Abbey said.
Moghadam and his team decided to sell off the shopping centers to focus solely on the industrial sector after the company went public, seeing more profit potential in warehouses near ports, airports and other transportation hubs in big cities.
“The philosophy was to buy infill locations in major markets, which preceded the internet boom and the rise of Amazon,” Abbey said. “That strategy we had from the beginning — being nearby to deliver goods quickly to the consumer — turned out to square nicely with the rise of e-commerce.”
Warehouses go big
When Moghadam cofounded AMB, the logistics sector was "a business that at least initially had no need to innovate," he said.
Buildings to store things was “the oldest industry in humanity,” Moghadam said during the Groundbreakers forum.
In 1999, years before e-commerce took off, he decided to sell off AMB's retail centers to double down on logistics. He led AMB into Mexico, Europe and Asia, recognizing that supply chains were going global.
At this time, Moghadam met Louis Borders, founder of the Borders Books chain, and other businesses, including Webvan, a startup that pioneered online grocery deliveries.
Borders' vision "was an internet grocer on steroids, and when I saw their first warehouse I knew the world was going to change,” Moghadam told Vikram Malhotra, an analyst now with Mizuho Securities who has followed Prologis for years, in a 2021 interview.
The strategy led Prologis to pursue fulfillment center development projects for Amazon; the e-commerce firm became its largest tenant with 46 million square feet occupied as of the end of 2024.
The logistics business has since evolved from warehouses staffed by a few dozen workers driving forklifts to automated multistory facilities that can total more than 5 million square feet with 1,000 or more employees that pick, pack, store and ship trillions of dollars in goods annually.
Now, Moghadam expects artificial intelligence and the company's growing data center holdings to play a pivotal role across the industrial giant's business, including site selection, determining warehouse leasing rates and setting property values.
"AI is a big, fast-moving train," Moghadam said in late 2023. "You better get on it, or you're going to get run over by it."
While he is turning the day-to-day reins over to Prologis President Dan Letter, Moghadam will remain executive chairman of the company and provide strategic guidance, according to Prologis.
Abbey left AMB in 2005 and accepted an offer to teach the same real estate course at the Stanford Graduate School of Business where he met Moghadam in the early 1980s. He admits he's "in the slow lane" when it comes to technology.
"It just shows that Hamid is brilliant with organizing the business around meeting customers’ needs," Abbey said. "That's different than the way we used to talk about tenants signing and renewing leases every five years. Now, he's waking up every day and saying 'what do my customers want and how can I serve them better?' And that turned the real estate world on its head, with Hamid’s leadership.”
Abbey has no official role with Prologis, but remains "a shareholder and long-term owner" of its stock, he said.
“If I told you that there was a grand plan that would take us — two little guys in a Toyota — to starting a consulting company and then becoming the biggest real estate owner in the world, someone would say, ‘you’ve got to have your head examined.’”