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Real Estate | 3 Months Ended
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Mar. 31, 2019
Real Estate [Abstract] |
Real Estate | NOTE 3. REAL ESTATE Investments in real estate properties consisted of the following (dollars and square feet in thousands):
| Square Feet |  |  | Number of Buildings |  |  |  |
| March 31, |  |  | December 31, |  |  | March 31, |  |  | December 31, |  |  | March 31, |  | December 31, |
| 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |  |  | 2019 |  | 2018 |
Operating properties: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Buildings and improvements |  | 351,159 |  |  |  | 354,762 |  |  |  | 1,869 |  |  |  | 1,858 |  |  | $ | 22,560,379 |  | $ | 22,587,267 |
Improved land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,106,848 |  |  | 8,044,888 |
Development portfolio, including land costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prestabilized |  | 7,562 |  |  |  | 8,709 |  |  |  | 34 |  |  |  | 30 |  |  |  | 623,569 |  |  | 828,064 |
Properties under development |  | 25,899 |  |  |  | 27,715 |  |  |  | 65 |  |  |  | 70 |  |  |  | 1,316,068 |  |  | 1,314,737 |
Land (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,143,294 |  |  | 1,192,220 |
Other real estate investments (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 645,540 |  |  | 619,811 |
Total investments in real estate properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 34,395,698 |  |  | 34,586,987 |
Less accumulated depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,868,611 |  |  | 4,656,680 |
Net investments in real estate properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 29,527,087 |  | $ | 29,930,307 |
(1) | At March 31, 2019 and December 31, 2018, our land is comprised of 4,582 and 4,929 acres, respectively.
(2) | Included in other real estate investments were: (i) land parcels that are ground leased to third parties; (ii) non-logistics real estate; (iii) our corporate headquarters; (iv) earnest money deposits associated with potential acquisitions; (v) costs related to future development projects, including purchase options on land; and (vi) infrastructure costs related to projects we are developing on behalf of others.
Acquisitions The following table summarizes our real estate acquisition activity (dollars and square feet in thousands):
|  | Three Months Ended March 31, |
|  | 2019 |  |  | 2018 |
Number of operating properties (1) |  |  | 12 |  |  |  | - |
Square feet (1) |  |  | 967 |  |  |  | - |
Acquisition value of net investments in real estate properties (2) |  | $ | 312,252 |  |  | $ | 134,941 |
(1) | During the three months ended March 31, 2018, we did not acquire operating properties.
(2) | Value includes the acquisition of 188 and 379 acres of land during the three months ended March 31, 2019 and 2018, respectively.
Dispositions The following table summarizes our gains on real estate transactions, net (dollars and square feet in thousands):
|  | Three Months Ended March 31, |
|  | 2019 |  |  | 2018 |
Contributions to unconsolidated entities |  |  |  |  |  |  |  |
Number of properties |  |  | 19 |  |  |  | 8 |
Square feet |  |  | 8,149 |  |  |  | 3,078 |
Net proceeds (1) (2) |  | $ | 744,165 |  |  | $ | 539,822 |
Gains on contributions, net (1) (2) |  | $ | 37,138 |  |  | $ | 167,726 |
Dispositions to third parties |  |  |  |  |  |  |  |
Number of properties |  |  | 2 |  |  |  | 11 |
Square feet |  |  | 670 |  |  |  | 1,303 |
Net proceeds (1) |  | $ | 52,024 |  |  | $ | 87,981 |
Gains on dispositions, net (1) |  | $ | 16,048 |  |  | $ | 27,385 |
Total gains on contributions and dispositions, net |  | $ | 53,186 |  |  | $ | 195,111 |
Gain on partial redemption of investment in a co-investment venture (3) |  |  | 135,022 |  |  |  | - |
Total gains on real estate transactions, net |  | $ | 188,208 |  |  | $ | 195,111 |
(1) | Includes the contribution and disposition of land parcels.
(2) | In January 2019, we formed Prologis Brazil Logistics Venture (“PBLV”), a Brazilian unconsolidated co-investment venture, with one partner. We contributed an initial portfolio of real estate properties to PBLV consisting of 14 operating properties totaling 6.9 million square feet and 371 acres of land. We received cash proceeds and units for our 20% equity interest.
(3) | See Note 4 for more information on this transaction.
Leases As a Lessor We lease our operating properties to customers under agreements that are classified as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term. Generally, under the terms of our leases, the majority of our rental expenses, including common area maintenance, real estate taxes and insurance, are recovered from our customers. We record amounts reimbursed by customers in the period that the applicable expenses are incurred, which is generally ratably throughout the term of the lease. The reimbursements are recognized in Rental Revenues in the Consolidated Statements of Income as we are the primary obligor with respect to purchasing and selecting goods and services from third-party vendors and bearing the associated credit risk. The following table summarizes the minimum lease payments due from our customers on leases with lease periods greater than one year for space in our operating properties, prestabilized development properties and leases of land subject to ground leases at March 31, 2019 (in thousands):
2019 |  | $ | 1,518,699 |
2020 |  |  | 1,950,122 |
2021 |  |  | 1,679,801 |
2022 |  |  | 1,360,816 |
2023 |  |  | 1,076,401 |
Thereafter |  |  | 3,550,169 |
Total |  | $ | 11,136,008 |
These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses and rental increases that are not fixed. As a Lessee We have 124 ground and office space leases, which qualify as operating leases, with remaining lease terms of 1 to 89 years. The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by our incremental borrowing rates to calculate the lease liabilities for our operating leases in which we are the lessee (in thousands):
|  | March 31, 2019 |  |  | December 31, 2018 |
2019 |  | $ | 32,091 |  |  | $ | 38,769 |
2020 |  |  | 42,062 |  |  |  | 38,267 |
2021 |  |  | 38,032 |  |  |  | 34,307 |
2022 |  |  | 36,057 |  |  |  | 32,312 |
2023 |  |  | 31,029 |  |  |  | 30,180 |
Thereafter |  |  | 681,381 |  |  |  | 670,147 |
Total undiscounted rental payments |  |  | 860,652 |  |  | $ | 843,982 |
Less imputed interest |  |  | 468,311 |  |  |  |  |
Total lease liabilities |  | $ | 392,341 |  |  |  |  |
The weighted average remaining lease term for our operating leases was 32 and 28 years at March 31, 2019 and December 31, 2018, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.1% at March 31, 2019. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease is denominated.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI http://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI http://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI http://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI http://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI http://asc.fasb.org/topic&trid=2134617 + Details
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