0 Changing Financial Strategy to Drive Growth Leeds School of Business - University of Colorado Walter C. Rakowich – President and COO October 22, 2007

1 ProLogis markets 86.5 msf $2.5B of wholly owned assets

2 Financial Structure Market Value of Common Equity $3.0 Billion 65% Premium to Book Direct Debt $0.9 B Preferreds $0.4 B Book Value Common Equity $1.8 B $3.1 Billion Book Value of Assets Owned, Managed and Under Development

3 ProLogis-European Opportunity Opportunity:  Dominant regional distribution hubs emerging to efficiently serve unified marketplace  Major companies consolidating and reconfiguring distribution networks  Functional obsolescence of much existing stock  Growing need for state-of-the-art Pan- European distribution facilities Strategy:  Employ a local team of nationals in each market  Control land for new development  Leverage off of established global customer relationships for growth  Develop new facilities in major distribution hubs Estimated at the time to be a $3+ billion opportunity

4 ProLogis Stock Price Significant decline in multiple renders common equity too expensive for growth ProLogis Common Share Price ProLogis Annual FFO Per Share

5 ProLogis Property Fund Business Strategy  Raise private equity primarily from institutional investors looking for long-term stable returns  Develop facilities on our balance sheet at wholesale value  Create value through leasing and contribute to property funds at retail value  Co-invest profit and receive cash for wholesale value thereby recycling capital  Manage the properties in funds for fees thereby creating higher returns on invested capital Benefits  Access a broader, less dilutive base of equity for growth  Retain customer relationships  Grow platform globally in a more capital-light manner which increases return on equity

6 Property Fund Example PLD Fund $1,000 $1,200 $1,000 $200 Development Cost Asset Value Return of Capital Gross Profit $1,200 $600 $200$400 Debt (50%) Equity PLD Equity (33%) Investor Equity (67%) - = Contribution

7 Property Fund Example Return on Equity within the Fund: Equity Partners ProLogis Total Percentage Ownership67%33%100% Debt$400$200$600 Equity Total Investment$800$400$1,200 Unleveraged Return (8.5%) $68$34$102 Mgmt Fees (Avg 75 bps on Value) (6)(3)(9) Interest Expense (at 5%) (20)(10)(30) $42$21$63 Add Back Mgmt Fees 9 $30 Return on Equity 10.5% 15.0%

8 ProLogis European Properties Fund I – Initial Structure Fund equity commitments:Initial equity raise of €1.04 billion in 1999 from 19 institutional investors ProLogis ownership:Largest owner of the Fund, 20% minimum long-term ownership Leverage:60% maximum Investment criteria:Fund to purchase stabilized distribution facilities in identified target markets Management:ProLogis to manage day-to-day operations of the Fund within the ProLogis Operating System ® pursuant to 20- year management contract Management fees:ProLogis to receive asset management fees and property management fees equal to approximately 75 bps per year on total value ProLogis incentive return:ProLogis to receive 20% incentive return above 12% internal rate of return Initial term/liquidity:Potential IPO in 7-10 years

9 As of 6/30/07:  950 properties, 13 funds, $14.2B in assets under management  50% leverage  23% average PLD ownership  $1.5B invested by ProLogis  Fund fees projected in 2007: $98 – $104M  PLD’s portion of NOI: $140 - $145M Superior Growth – Investment Management Business $0.7B $1.7B $2.9B $4.6B $5.7B $9.4B $9.9B $12.3B $14.2B CAGR – 49% Investment Management Asset Growth Note: All figures estimated as of year end 2007, unless noted

10 ProLogis Property Funds at 6/30/07 Year ofSq. Feet Investment Inception(In Millions)(in $Billions) European Properties Fund $5.2 California LLC North American Fund I North American Fund V North American Funds VI-X North American Funds XI North American Industrial Fund Japan Properties Fund I Japan Properties Fund II Totals204.3$14.2 Created 5 new funds in 3Q07 with additional capacity of $16.2B

11 Diverse Global Capital Relationships By Investor Type By Investor Location 49 Institutional Investors 26% in multiple funds 28% North America 26% Asia 44% Europe 2% Middle East 33% Pension Plans – Gov’t 5% Investment Mgrs 10% R/E Funds 26% Gov’t Investment Authorities 11% Insurance Co 12% Banks 2% Pension Plans - Corp 1% Other

12 Potential to More Than Double Investment Management Business  Additional fund launches since 6/30/07 add to current capacity  Expected AUM growth of $23B - $25B in next 3 years  Accelerated growth in management fees Investment Management Platform $14.2B $37B - $40B

13 Unmatched Global Platform Over 2,500 distribution facilities serving more than 4,700 customers in 20 countries Over $29B of Total Assets Asia  26 markets  39.7 msf  $4.4B invested in facilities and land North America  42 markets  msf  $16.4B invested in facilities and land Europe  37 markets  msf  $9.1B invested in facilities and land

14 Financial Structure at 6/30/07 Wholly Owned Assets $15.1 B Fund Assets $14.2 B Development JVs $0.6 B Fund Equity $6.6B Direct Debt $9.6B Direct Pfd $0.4B Book Value Direct Equity $5.7B Fund Debt $7.6B Market Value of Common Equity on 10/12/07 $18.8 Billion 230% Premium to Book $29.9 Billion of Assets Owned, Managed and Under Development Sources of Funding

15 Delivering Superior Returns IPO $ /12/07 $71.75 Over 20% Compound Annual Return since IPO