2004 Expo Industrial Real Estate November, 2004 Mike Peters 1 st Vice President ProLogis

2 ProLogis Markets Over 286 msf and 1,948 Distribution Facilities Serving over 3,750 Customers 71 Markets in North America, Europe, and Asia

– In the beginning…  Supply chain considered a cost center  Midpoint of heavy bar code implementation  M&A activity  Initial focus on inventory reduction  Facilities size limited to 250k sft

– Conflicting Drivers  Supply Chain considered a competitive advantage  Product Proliferation  Increasing Customer Service Levels  Network Re-designs  Growing Imports

5 Population Based Network Model                           The 10 Best Warehouse Networks for 2003 Networks with the Lowest Possible “Time-to-Market”                  Source: Chicago Consulting                             

6 Denver, CO Coverage

7 Containerized Imports

8 Growth of China Exports  Over the past 10 years, the number of containers handled at China’s mainland ports has grown from 3.1 million TEU’s in 1993 to 46M TEU’s in  In 1995, no major liner service called at a mainland China port. Today, every major liner service has calls at multiple mainland China ports.  Including Hong Kong, 3 of the top 5 global ports are in China.

9 U.S. Imports Container ImportsTEU’s % of total ’01-’03 (000’s) Growth 1. Los Angeles3, %39% 2. Long Beach2, %0% 3. New York1, %24% 4. Charleston7215.2%18% 5. Norfolk6334.6%39% 6. Savannah5954.3%38% 7. Tacoma5944.3%67% 8. Oakland5173.7%23% 9. Seattle4863.5%-3% 10. Houston4503.2%18% 11. Miami4283.1%23% Source: Containerization International *Totals include all U.S. Ports

– Facility Impacts  Fewer, Larger Facilities Wal-Mart building 2MM sft in Houston  More trailer parking  Larger truck courts  Changing sources of supply are changing location dynamics

– If I knew…  Continuing Growth of Imports  Radio Frequency Identification (RFID)  Growing population base  Facility size???

12 Post Panamax Ship (8000 TEU)

13 Alternate Ports

14RFID

Mike Peters ProLogis E. 35 th Place Aurora, CO F a c i l i t i e s G l o b a l S t r a t e g i c (303)