The world’s biggest industrial developer raised its financial outlook after doubling its profit and sales at midyear, overcoming signs that once-record global warehouse demand is slowing.

Prologis made more than $4 billion in property acquisitions and other investments in the second quarter, despite a slowing industrial market "where most players are stretched,” Chief Financial Officer Tim Arndt said during a conference call to discuss second-quarter earnings. The firm now expects per-share 2023 net earnings of $3.30 to $3.40, up from the previous estimate of $3.10 to $3.25.

The results show the advantages of size in competing in an industry that benefited from a major acceleration in the need for warehouses in the past few years during the pandemic to process additional goods ordered online. Even as global demand eases off that accelerated demand amid concerns about higher interest rates, the San Francisco-based real estate investment trust that owns 1.2 billion square feet across more than 5,560 buildings in 19 countries reported record rent growth and property acquisitions.

The real estate purchases that totaled over $3 billion in the quarter deepened its presence in key markets across the United States. It also shored up its balance sheet by raising another $1.2 billion in equity during the quarter as the company doubled its total revenue to $2.45 billion from $1.25 billion in the prior-year quarter. Prologis also increased its net earnings to over $1.28 billion from $646 million in the same time.

The REIT tapped its cash reserves to develop new distribution centers and make such big acquisitions as its announced $3.1 billion purchase last month of 70 properties totaling 14 million square feet of logistics properties from affiliates of Blackstone Group in the largest industrial property acquisition in the United States this year.

The deal expands Prologis’ presence in many of the country largest industrial markets in Atlanta, Washington, D.C., Dallas, Las Vegas, Phoenix, South Florida, New York and New Jersey, the REIT said in a statement.

Prologis' record results and optimistic outlook on the heels of the Blackstone acquisition, while a positive sign of investor interest in industrial properties that are focused on consumer purchases, come at a time of slowing demand for the property type.

The national vacancy rate is expected to remain below its 20-year average of 7.3%. The next year could be one of the more challenging periods for the market over the next five years as retailers and wholesalers pull back from adding inventory out of caution over the economic outlook, according to a CoStar Market Analytics report.

“We may be entering a near-term soft patch for the industrial sector,” Ki Bin Kim, an equity analyst for Truist Securities, wrote in a research note following the Prologios earnings release. “We expect Prologis to still post REIT sector-leading overall growth over the next several years, but the company will likely be impacted by the overall industry’s deceleration compared to the abnormally strong 2021-2022 period."

Average occupancy in the company’s warehouses fell to 97.5% in the second quarter from 98% in the first three months of 2023.

Prologis expects the average vacancy rate in its U.S. portfolio to reach the mid-4% range by the end of the year as new warehouse space enters the market, before starting to decline again in 2024 as construction slows down, Arndt said.