ECONOMIC | page 16 of 19

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MANAGEMENT APPROACH
We seek to be the leading global provider of distribution facilities to the world's largest users of distribution space.

Our business model enables us to grow by accessing and managing a variety of capital sources around the globe. Our investment management business is a powerful engine of growth with more than $19 billion of industrial assets under management. Our equity partners obtain access to ProLogis' high-quality portfolio through our contribution of properties and benefit from professional management and our strong ties with global customers. ProLogis has the opportunity to establish relationships with equity partners around the world, aligning our interests with theirs. In addition, our investment management business enables us to expand with less of our overall capital invested, since we generally retain a 20 to 25% interest in the funds. In this way, we leverage our operating system and achieve higher returns on invested capital.

We are a globally diversified company. We anticipate that 80 to 85% of our new development in 2008 will be outside the United States. This diversification helps mitigate the impact of an economic downturn in any one region of the world and helps support sustained economic growth.

Our response to universal climate change has been to increase our environmental awareness and green practices, which includes, but is not limited to, our involvement with CCX and the commitment to develop all new buildings to LEED standards in the United States and to BREEAM standards in the United Kingdom. We believe that environmentally friendly facilities will become increasingly sought after by tenants and that facilities without green features face economic risk, or potentially, ultimate obsolescence. Research already shows that green buildings generate significant benefits. Green buildings command 3% higher rental rates, realize an average increase of 7.5% in building value, deliver 3.5% higher occupancy rates and improve return on investment by an average 6.6%.¹

CORPORATE GOVERNANCE
We are committed to furthering meaningful corporate governance practices and maintaining a business environment of uncompromising integrity. We continue to enhance these objectives through our governance policies and compliance with the Sarbanes-Oxley Act of 2002, the Foreign Corrupt Practices Act and the rules of the New York Stock Exchange (NYSE).

Our highest governance body is the board of trustees, followed by our senior executives. The ProLogis board is responsible for reviewing and approving strategic plans, corporate actions and financial objectives. The chairman of the board is currently the chief executive officer for continuity and involvement purposes. The board adheres to a well-defined code of ethics and participates in a company-wide ethics challenge conducted each year by our legal department.

Following our Annual Meeting of Shareholders in May 2008, our board of trustees will comprise 10 members who are elected annually. We require that a majority of our board be independent under listing standards adopted by the NYSE. To determine whether a trustee is independent, the board must affirmatively determine that there is no direct or indirect material relationship between the company and the trustee.

ECONOMIC | page 16 of 19

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