1

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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-Q
                                 ---------------

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2001

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from _____________ to _____________

                         Commission File Number 01-12846

                                 PROLOGIS TRUST
             (Exact name of registrant as specified in its charter)

               Maryland                                       74-2604728
   (State or other jurisdiction of                         (I.R.S. Employer
    incorporation or organization)                        Identification No.)

14100 East 35th Place, Aurora, Colorado                          80011
(Address or principal executive offices)                      (Zip Code)

                                 (303) 375-9292
              (Registrant's telephone number, including area code)

              (Former name, former address and former fiscal year,
                          if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing for the past 90 days. Yes X  No
                             -----  -----

     The number of shares outstanding of the Registrant's common stock as of May
10, 2001 was 173,975,171.






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   2





                                 ProLogis Trust

                                      Index





                                                                         Page
                                                                       Number(s)
PART I.  Financial Information                                         --------
                                                                         
  Item 1.  Consolidated Condensed Financial Statements:
           Consolidated Condensed Balance Sheets--March 31, 2001
               and December 31, 2000....................................    3
           Consolidated Condensed Statements of Earnings and
               Comprehensive Income--Three months ended March 31,
               2001 and 2000............................................    4
           Consolidated Condensed Statements of Cash Flows--Three
               months ended March 31, 2001 and 2000.....................    5
           Notes to Consolidated Condensed Financial Statements.........  6 - 18
           Report of Independent Public Accountants.....................    19
  Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations......................... 20 - 28
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk...    29

PART II. Other Information

  Item 4.  Submission of Matters to a Vote of Securities Holders........    29
  Item 5.  Other Information............................................    29
  Item 6.  Exhibits..................................................... 30 - 33




                                        2
   3

                                 PROLOGIS TRUST

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                        (In thousands, except share data)


                                     ASSETS


                                                                                      March 31,     December 31,
                                                                                        2001           2000
                                                                                   -------------   -------------
                                                                                    (Unaudited)      (Audited)
                                                                                             
       Real estate............................................................     $   4,866,802   $   4,689,492
         Less accumulated depreciation........................................           505,890         476,982
                                                                                   -------------   -------------
                                                                                       4,360,912       4,212,510
       Investments in and advances to unconsolidated entities.................           895,776       1,453,148
       Cash and cash equivalents..............................................            39,322          57,870
       Accounts and notes receivable..........................................            65,304          50,856
       Other assets...........................................................           246,108         171,950
                                                                                   -------------   -------------
                Total assets..................................................     $   5,607,422   $   5,946,334
                                                                                   =============   =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

       Liabilities:
         Lines of credit......................................................     $     120,210   $     439,822
         Senior unsecured debt................................................         1,700,086       1,699,989
         Mortgage notes and other secured debt................................           536,172         537,925
         Accounts payable and accrued expenses................................           125,302         107,494
         Construction payable.................................................            22,588          40,925
         Distributions and dividends payable..................................               729          57,739
         Other liabilities....................................................           115,966          88,439
                                                                                   -------------   -------------
                Total liabilities.............................................         2,621,053       2,972,333
                                                                                   -------------   -------------
       Minority interest......................................................            46,456          46,630
       Shareholders' equity:
         Series A  Preferred  Shares;  $0.01 par value;  5,400,000
           shares  issued and outstanding  at  March  31,  2001 and
           December 31, 2000; stated liquidation preference of $25.00
           per share..........................................................           135,000         135,000
         Series B Preferred Shares; $0.01 par value; 6,256,100 shares
           issued and outstanding at December 31, 2000; stated liquidation
           preference of $25.00 per share.....................................                --         156,403
         Series C Preferred Shares; $0.01 par value; 2,000,000 shares
           issued and outstanding at March 31, 2001 and December 31,
           2000; stated liquidation preference of $50.00 per share............           100,000         100,000
         Series D Preferred Shares; $0.01 par value; 10,000,000 shares
           issued and outstanding at March 31, 2001 and December 31,
           2000; stated liquidation preference of $25.00 per share............           250,000         250,000
         Series E Preferred Shares; $0.01 par value; 2,000,000 shares
           issued and outstanding at March 31, 2001 and December 31,
           2000; stated liquidation preference of $25.00 per share............            50,000          50,000
         Common shares of beneficial interest; $0.01 par value;
           173,679,733 shares issued and outstanding at March 31,
           2001 and 165,287,358 shares issued and outstanding at
           December 31, 2000..................................................             1,737           1,653
       Additional paid-in capital.............................................         2,907,314       2,740,136
       Employee share purchase notes..........................................           (18,049)        (18,556)
       Accumulated other comprehensive income.................................           (76,452)        (33,768)
       Distributions in excess of net earnings................................          (409,637)       (453,497)
                                                                                   -------------   -------------
                Total shareholders' equity....................................         2,939,913       2,927,371
                                                                                   -------------   -------------
                Total liabilities and shareholders' equity....................     $   5,607,422   $   5,946,334
                                                                                   =============   =============








              The accompanying notes are an integral part of these
                  consolidated condensed financial statements.

                                        3



   4


                                 PROLOGIS TRUST

                  CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
                      (In thousands, except per share data)



                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                     -----------------------
                                                                                        2001          2000
                                                                                     ---------     ---------
                                                                                             
       Income:
         Rental income............................................................   $ 119,764     $ 120,809
         Other real estate income.................................................      42,854        18,945
         Income (loss) from unconsolidated entities...............................      (2,044)       21,367
         Interest.................................................................       1,654         1,871
                                                                                     ---------     ---------
                Total income......................................................     162,228       162,992
                                                                                     ---------     ---------
       Expenses:
         Rental expenses, net of recoveries of $24,868 in 2001 and $23,162
            in 2000, including amounts paid to affiliate of $174 in 2001
            and $306 in 2000......................................................       6,758         6,547
         General and administrative, including amounts paid to affiliate
            of $170 in 2001 and $224 in 2000......................................      14,827        11,241
         Depreciation and amortization............................................      38,752        39,474
         Interest.................................................................      39,382        41,986
         Other....................................................................       1,291         1,218
                                                                                     ---------     ---------
                Total expenses....................................................     101,010       100,466
                                                                                     ---------     ---------
       Earnings from operations...................................................      61,218        62,526
       Minority interest share in earnings........................................       1,376         1,654
                                                                                     ---------     ---------
       Earnings before gain (loss) on disposition of real estate
            and foreign currency exchange gains (losses)..........................      59,842        60,872
       Gain (loss) on disposition of real estate..................................      (1,198)        5,108
       Foreign currency exchange losses, net......................................      (3,189)       (6,520)
                                                                                     ---------     ---------
       Earnings before income taxes...............................................      55,455        59,460
       Income taxes:
         Current income tax expense...............................................       3,436           117
         Deferred income tax benefit..............................................      (3,420)           --
                                                                                     ---------     ---------
                Total income taxes................................................          16           117
                                                                                     ---------     ---------
       Net earnings...............................................................      55,439        59,343
       Less preferred share dividends.............................................      11,432        14,405
                                                                                     ---------     ---------
       Net earnings attributable to Common Shares.................................      44,007        44,938

       Other comprehensive income:
         Foreign currency translation adjustments.................................     (42,684)      (22,574)
                                                                                     ---------     ---------
       Comprehensive income.......................................................   $   1,323     $  22,364
                                                                                     =========     =========

       Weighted average Common Shares outstanding - Basic.........................     167,297       162,124
                                                                                     =========     =========
       Weighted average Common Shares outstanding - Diluted.......................     174,371       162,281
                                                                                     =========     =========

       Basic net earnings attributable to Common Shares............................  $    0.26     $    0.28
                                                                                     =========     =========
       Diluted net earnings attributable to Common Shares..........................  $    0.25     $    0.28
                                                                                     =========     =========

       Distributions per Common Share..............................................  $   0.345     $   0.335
                                                                                     =========     =========






              The accompanying notes are an integral part of these
                  consolidated condensed financial statements.

                                        4



   5


                                 PROLOGIS TRUST
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)


                                                                                    Three Months Ended,
                                                                                         March 31,
                                                                                 --------------------------
                                                                                     2001           2000
                                                                                 -----------    -----------
                                                                                          
Operating activities:
  Net earnings.............................................................      $    55,439    $    59,343
  Minority interest share in earnings......................................            1,376          1,654
  Adjustments to reconcile net earnings to net cash provided
    by operating activities:
       Depreciation and amortization.......................................           38,752         39,474
       (Gain) loss on disposition of real estate...........................            1,198         (5,108)
       Straight-lined rents................................................           (1,649)        (1,921)
       Amortization of deferred loan costs.................................            1,222            987
       Stock-based compensation............................................            1,614            697
       (Income) loss from unconsolidated entities..........................            5,252        (19,029)
       Foreign currency exchange losses, net...............................            2,614          6,553
  Decrease (increase) in accounts receivable and other assets..............           16,076        (21,805)
  Increase in accounts payable, accrued expenses and other liabilities.....           13,194         32,294
  Decrease in amount due to affiliate......................................               --            119
                                                                                 -----------    -----------
        Net cash provided by operating activities..........................          135,088         93,258
                                                                                 -----------    -----------
Investing activities:
  Real estate investments..................................................         (285,825)      (122,289)
  Tenant improvements and lease commissions on previously leased space.....           (4,312)        (5,435)
  Recurring capital expenditures...........................................           (3,936)        (5,142)
  Proceeds from dispositions of real estate................................          338,350         98,353
  Payments from unconsolidated entities....................................          170,590          4,970
  Investments in and advances to unconsolidated entities...................          (75,755)       (23,430)
  Cash balances recorded upon consolidation of Kingspark Holding S. A......           89,788             --
  Cash balances contributed with ProLogis European Properties S.a.r.l......               --        (17,968)
                                                                                 -----------    -----------
        Net cash provided by (used in) investing activities................          228,900        (70,941)
                                                                                 -----------    -----------
Financing activities:
  Proceeds from exercised options and dividend reinvestment and share
       purchase plans......................................................           13,150          3,800
  Payments for the redemption of Series B convertible preferred shares.....           (4,583)            --
  Debt issuance and other transaction costs incurred.......................              (58)           (64)
  Distributions paid on Common Shares......................................          (57,158)       (54,210)
  Distributions paid to minority interest holders..........................           (1,752)        (1,867)
  Distributions paid on preferred shares...................................          (11,432)       (14,561)
  Principal payments received on employee share purchase notes.............              507            540
  Proceeds from settlement of derivative financial instruments.............               --            140
  Proceeds from lines of credit............................................          200,920        268,126
  Payments on lines of credit..............................................         (520,532)      (192,400)
  Regularly scheduled principal payments on mortgage notes.................           (1,598)        (1,789)
                                                                                 -----------    -----------
        Net cash provided by (used in) financing activities................         (382,536)         7,715
                                                                                 -----------    -----------
Net increase (decrease) in cash and cash equivalents.......................          (18,548)        30,032
Cash and cash equivalents, beginning of period.............................           57,870         69,338
                                                                                 -----------    -----------
Cash and cash equivalents, end of period...................................      $    39,322    $    99,370
                                                                                 ===========    ===========

     See Note 8 for information on non-cash investing and financing activities.








              The accompanying notes are an integral part of these
                  consolidated condensed financial statements.

                                        5



   6


                                 PROLOGIS TRUST

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 March 31, 2001
                                   (Unaudited)


1.  General:

   Business

     ProLogis Trust (collectively with its consolidated subsidiaries and
partnerships "ProLogis") is a publicly held real estate investment trust
("REIT") that owns and operates a network of industrial distribution facilities
in North America and Europe. The ProLogis Operating System(TM), comprised of the
Market Services Group, the Global Services Group, the Global Development Group
and the Integrated Solutions Group, utilizes ProLogis' international network of
distribution facilities to meet its customers' distribution space needs
globally. ProLogis has organized its business into three operating segments:
property operations, corporate distribution facilities services business ("CDFS
business") and temperature-controlled distribution operations. See Note 7.

   Principles of Financial Presentation

     The consolidated condensed financial statements of ProLogis as of March 31,
2001 and for the three months ended March 31, 2001 and 2000 are unaudited and,
pursuant to the rules of the Securities and Exchange Commission, certain
information and footnote disclosures normally included in financial statements
have been omitted. While management of ProLogis believes that the disclosures
presented are adequate, these interim consolidated condensed financial
statements should be read in conjunction with ProLogis' December 31, 2000
audited consolidated financial statements contained in ProLogis' 2000 Annual
Report on Form 10-K.

     In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of ProLogis'
consolidated financial position and results of operations for the interim
periods. The consolidated results of operations for the three months ended March
31, 2001 and 2000 are not necessarily indicative of the results to be expected
for the entire year. Certain of the 2000 amounts have been reclassified to
conform to the 2001 financial statement presentation.

     The preparation of consolidated condensed financial statements in
conformity with generally accepted accounting principles ("GAAP") requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

     ProLogis' investment in Kingspark Holding S.A. ("Kingspark S.A."), an
industrial distribution facility development company in the United Kingdom was
previously accounted for under the equity method. ProLogis owned 100% of the
non-voting preferred stock of Kingspark S.A. and recognized substantially all
economic benefits of Kingspark S.A. and its subsidiaries through January 1,
2001. On January 5, 2001, ProLogis acquired an ownership interest in the voting
common stock of Kingspark S.A resulting in ProLogis having control of Kingspark
S.A. Accordingly, as of January 5, 2001, the accounts of Kingspark S.A. and its
subsidiaries are consolidated in ProLogis' condensed financial statements along
with ProLogis' other majority-owned and controlled subsidiaries and
partnerships.

     ProLogis owns 100% of the preferred stock of ProLogis Development Services
Incorporated ("ProLogis Development Services") and realizes substantially all
economic benefits of this entity's activities. Because ProLogis advances
mortgage loans to ProLogis Development Services to fund its acquisition,
development and construction activities, ProLogis Development Services is
consolidated in ProLogis' condensed financial statements along with ProLogis'
other majority-owned and controlled subsidiaries and partnerships. ProLogis
Development Services is not a qualified REIT subsidiary of ProLogis under the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, provisions
for federal and state income taxes are recognized, as appropriate.






                                        6
   7

Interest Expense

     Interest expense was $39.4 million and $42.0 million for the three months
in 2001 and 2000, respectively, which is net of capitalized interest of $8.1
million and $4.2 million, respectively. Amortization of deferred loan costs
included in interest expense was $1.2 million and $1.0 million for the three
months in 2001 and 2000, respectively. Total interest paid in cash on all
outstanding debt was $38.9 million and $30.4 million during 2001 and 2000,
respectively.

Financial Instruments

     In the normal course of business, ProLogis uses certain derivative
financial instruments for the purpose of foreign currency exchange rate and
interest rate risk management. All derivative financial instruments are
accounted for at fair value with changes in fair value recognized immediately in
accumulated other comprehensive income or income.

     ProLogis adopted Statement of Financial Accounting Standards ("SFAS") No.
133, "Accounting for Derivative Instruments and for Hedging Activities," as
amended, on January 1, 2001. SFAS No. 133 provides comprehensive guidelines for
the recognition and measurement of derivatives and hedging activities and,
specifically, requires all derivatives to be recorded on the balance sheet at
fair value as an asset or liability, with an offset to accumulated other
comprehensive income or income. ProLogis' only derivative financial instruments
in effect at March 31, 2001 are foreign currency put option contracts that have
been previously marked to market through income, as they did not qualify for
hedge accounting treatment. These contracts also do not qualify for hedge
accounting treatment under SFAS No. 133, therefore, ProLogis has continued to
mark these contracts to market through income during the three months ended
March 31, 2001. ProLogis' unconsolidated entities also adopted SFAS No. 133 on
January 1, 2001. The effect to ProLogis of their adoption of SFAS No. 133 was
immaterial as these entities utilize derivative financial instruments on a
limited basis.

     In assessing the fair value of its financial instruments, both derivative
and non-derivative, ProLogis uses a variety of methods and assumptions that are
based on market conditions and risks existing at each balance sheet date.
Primarily, ProLogis uses quoted market prices or quotes from brokers or dealers
for the same or similar instruments. These values represent a general
approximation of possible value and may never actually be realized.

Foreign Currency Exchange Gains or Losses

     ProLogis' consolidated subsidiaries whose functional currency is not the
U.S. dollar translate their financial statements into U.S. dollars. Assets and
liabilities are translated at the exchange rate in effect as of the financial
statement date. Income statement accounts are translated using the average
exchange rate for the period. Income statement accounts that represent
significant, nonrecurring transactions are translated at the rate in effect as
of the date of the transaction. Gains and losses resulting from the translation
are included in accumulated other comprehensive income as a separate component
of shareholders' equity. ProLogis and its foreign subsidiaries have certain
transactions denominated in currencies other than their functional currency. In
these instances, nonmonetary assets and liabilities are reflected at the
historical exchange rate, monetary assets and liabilities are remeasured at the
exchange rate in effect at the end of the period, and income statement accounts
are remeasured at the average exchange rate for the period. Gains and losses
from remeasurement are included in ProLogis' results of operations. In addition,
gains or losses are recorded in the income statement when a transaction with a
third party, denominated in a currency other than the functional currency, is
settled and the functional currency cash flows realized are more or less than
expected based upon the exchange rate in effect when the transaction was
initiated.

     The net foreign currency exchange gains and losses recognized in ProLogis'
results of operations were as follows for the periods indicated (in thousands of
U.S. dollars):



                                                             Three months ended
                                                                  March 31,
                                                            -------------------
                                                              2001       2000
                                                            --------   --------
                                                                 
    Losses from the remeasurement of third party
      debt and remeasurement and settlement of
      intercompany debt, net.............................   $ (4,016)  $ (7,024)
    Mark to market gains on foreign currency put
      option contracts (1)...............................      1,012         57
    Gains (losses) from the settlement of foreign
      currency put option contracts, net.................       (255)       480
    Other gains (losses), net............................         70        (33)
                                                            --------   --------
                                                            $ (3,189)  $ (6,520)
                                                            ========   ========


----------
(1)  Upon settlement, the mark to market adjustments are reversed and the total
     realized gain or loss is recognized.

                                        7
   8

2. Real Estate

Real Estate Investments

     Real estate investments consisting of income producing industrial
distribution facilities, facilities under development and land held for future
development, at cost, are summarized as follows (in thousands):



                                                     March 31,       December 31,
                                                       2001              2000
                                                   -----------       -----------
                                                               
    Operating facilities:
      Improved land............................... $   641,623 (1)   $   648,950 (1)
      Buildings and improvements..................   3,614,289 (1)     3,619,543 (1)
                                                   ------------      -----------
                                                     4,255,912         4,268,493
    Facilities under development (including cost
      of land)....................................     260,693 (2)(3)    186,020 (2)
    Land held for development.....................     323,520 (4)       187,405 (4)
    Capitalized preacquisition costs..............      26,677 (5)        47,574 (5)
                                                   -----------       -----------
              Total real estate...................   4,866,802         4,689,492
    Less accumulated depreciation.................     505,890           476,982
                                                   -----------       -----------
              Net real estate..................... $ 4,360,912       $ 4,212,510
                                                   ===========       ===========


----------

(1)  As of March 31, 2001 and December 31, 2000, ProLogis had 1,242 and 1,244
     operating facilities, respectively, consisting of 125,885,000 and
     126,275,000 square feet, respectively.

(2)  Facilities under development consist of 57 facilities aggregating
     11,009,000 square feet as of March 31, 2001 and 41 facilities aggregating
     8,711,000 square feet as of December 31, 2000.

(3)  In addition to the March 31, 2001 construction payable of $22.6 million,
     ProLogis had unfunded commitments on its contracts for facilities under
     construction totaling $305.1 million.

(4)  Land held for future development consists of 2,314 acres as of March 31,
     2001 and 2,047 acres as of December 31, 2000.

(5)  Capitalized preacquisition costs include $9.6 million and $32.5 million of
     funds on deposit with title companies as of March 31, 2001 and December 31,
     2000, respectively.

     ProLogis' operating facilities, facilities under development and land held
for future development are located in North America (the United States and
Mexico) and eight countries in Europe. No individual market represents more than
10% of ProLogis' real estate assets.

Operating Lease Agreements

     ProLogis leases its facilities to customers under agreements, which are
classified as operating leases. The leases generally provide for payment of all
or a portion of utilities, property taxes and insurance by the tenant. As of
March 31, 2001, minimum lease payments on leases with lease periods greater than
one year are as follows (in thousands):


                                               
                      Remainder of 2001........   $  328,514
                      2002.....................      369,563
                      2003.....................      286,967
                      2004.....................      205,072
                      2005.....................      140,376
                      2006 and thereafter......      276,260
                                                  ----------
                                                  $1,606,752
                                                  ==========


     ProLogis' largest customer (based on rental income) accounted for 1.5% of
ProLogis' rental income (on an annualized basis) for the three months ended
March 31, 2001. The annualized base rent for ProLogis' 25 largest customers
(based on rental income) accounted for 13.4% of ProLogis' rental income (on an
annualized basis) for the three months ended March 31, 2001.

                                        8
   9

3. Unconsolidated Entities:

Investments In and Advances To Unconsolidated Entities

     Investments in and advances to unconsolidated entities are as follows (in
thousands):



                                                   March 31,    December 31,
                                                     2001          2000
                                                  -----------   -----------
                                                          
    Temperature-controlled distribution
     companies:
      Investment in CSI/Frigo LLC................ $     2,827   $        --
      Investment in ProLogis Logistics...........     117,163         7,163
      Investment in Frigoscandia S.A.............     (61,333)      (50,761)
      Notes receivable-ProLogis Logistics/CSI....          --       162,856
      Mortgage notes receivable-CSI..............          --        24,082
      Other receivables-ProLogis Logistics/CSI...       1,946        36,952
      Notes receivable-Frigoscandia S.A..........     254,595       208,945
      Other receivables-Frigoscandia S.A.........      35,282        33,797
                                                  -----------   -----------
                                                      350,480       423,034
                                                  -----------   -----------
     Kingspark S. A. (1).........................          --       570,582

     ProLogis Kingspark Joint Ventures (2).......      64,612            --

     ProLogis California (3).....................     121,215       132,243

     ProLogis North American  Properties
       Fund I (4)................................      45,926        10,369

     ProLogis North American Properties
       Fund II (5)...............................       5,417        13,408

     ProLogis European Properties Fund (6).......     234,410       147,938

     ProLogis European Properties S.a.r.l.(6)....          --        84,767

     Insight (7).................................       2,459         2,470

     ProLogis Equipment Services (8).............         892           450

     GoProLogis (9)..............................      56,315        56,315

     ProLogis Phatpipe (10)......................      14,050        11,572
                                                  -----------   -----------
               Total............................. $   895,776   $ 1,453,148
                                                  ===========   ===========


----------

(1)  Kingspark S.A. is consolidated in 2001. See Note 1.

(2)  Represents investments in joint ventures that collectively own 1,307 acres
     of land in the United Kingdom. ProLogis' ownership in these ventures is
     50.0%.

(3)  ProLogis California I LLC ("ProLogis California") owned 78 operating
     facilities aggregating 12.7 million square feet and had a 332,000 square
     foot facility under development as of March 31, 2001, all located in the
     Los Angeles/Orange County market. ProLogis had a 50.0% ownership interest
     in ProLogis California as of March 31, 2001.

(4)  ProLogis North American Properties Fund I LLC owned 36 operating facilities
     aggregating 9.0 million square feet as of March 31, 2001. In January 2001,
     ProLogis contributed three additional operating facilities to ProLogis
     North American Properties Fund I for an additional equity interest of $34.1
     million. This transaction increased the combined ownership interest of
     ProLogis and ProLogis Development Services to 41.3% from 20.0%.

(5)  ProLogis Iowa LLC ("ProLogis Principal") was formed on June 30, 2000, as a
     limited liability company whose members were ProLogis with 20.0% of the
     membership interests and Principal Financial Group with 80.0% of the
     membership interests. ProLogis Principal owned three operating facilities
     acquired from ProLogis aggregating 440,000 square feet. On March 27, 2001,
     First Islamic Investment Bank E.C. acquired the 80% membership interest
     from Principal Financial Group. Also on that date, this entity, under the
     name ProLogis First US Properties LP ("ProLogis North American Properties
     Fund II") acquired 24 operating facilities aggregating 4.0 million square
     feet from ProLogis.



                                        9
   10

(6)  ProLogis European Properties Fund owned 110 operating facilities
     aggregating 16.0 million square feet as of March 31, 2001, including
     facilities owned by ProLogis European Properties S.a.r.l. On January 7,
     2001, ProLogis contributed the remaining 49.9% of the common stock of
     ProLogis European Properties S.a.r.l. to ProLogis European Properties Fund
     for an additional equity interest. ProLogis had contributed 50.1% of the
     common stock of this entity to ProLogis European Properties Fund on January
     7, 2000. As of March 31, 2001, ProLogis European Properties Fund, in which
     ProLogis had a 41.8% ownership, owned 100% of ProLogis European Properties
     S.a.r.l. ProLogis recognized a gain of $0.5 million related to the January
     2001 transaction (total gain of $9.8 million net of $9.3 million which does
     not qualify for current income recognition due to ProLogis' continuing
     ownership in ProLogis European Properties Fund).

(7)  Investment represents ProLogis Development Services' investment in the
     common stock of Insight, Inc. ("Insight"), a privately owned logistics
     optimization consulting company, as adjusted for ProLogis Development
     Services' share of Insight's earnings or loss. ProLogis Development
     Services had a 33.3% ownership interest in Insight as of March 31, 2001.

(8)  Investment represents ProLogis Development Services' equity investment in
     ProLogis Equipment Services LLC, a limited liability company whose other
     member is a subsidiary of Dana Commercial Credit Corporation, as adjusted
     for ProLogis Development Services' share of the earnings or loss of
     ProLogis Equipment Services. ProLogis Equipment Services began operations
     on April 26, 2000 for the purpose of acquiring, leasing and selling
     material handling equipment and providing asset management services for
     such equipment. ProLogis Development Services had a 50.0% ownership
     interest in ProLogis Equipment Services as of March 31, 2001.

(9)  Investment represents ProLogis' investment in GoProLogis Incorporated
     ("GoProLogis") which has invested $25.0 million in the non-cumulative
     preferred stock of Vizional Technologies, Inc. (formerly GoWarehouse.com,
     Inc.) ("Vizional Technologies"), a provider of integrated global logistics
     network technology services. This investment was made on July 21, 2000. In
     addition, investment includes $30.4 million of non-cumulative preferred
     stock of Vizional Technologies received by GoProLogis under a license
     agreement for the non-exclusive use of the ProLogis Operating System(TM)
     over a five-year period and $0.9 million of other costs associated with
     this investment. ProLogis accounts for its investment in GoProLogis on the
     equity method. GoProLogis has not received any dividends from its preferred
     stock investment in Vizional Technologies. As of March 31, 2001, ProLogis
     had deferred $26.2 million of income related to this agreement. ProLogis
     had a 98.0% ownership interest in GoProLogis as of March 31, 2001.

(10) Investment represents ProLogis' investment in ProLogis Broadband (1)
     Incorporated ("ProLogis PhatPipe") which has invested $6.0 million in the
     non-cumulative preferred stock of PhatPipe, Inc. ("PhatPipe"), a real
     estate technology company. The investment was initially made on September
     20, 2000. ProLogis has committed to invest an additional $2.0 million in
     ProLogis PhatPipe during 2001. In addition, investment includes $8.0
     million of non-cumulative preferred stock of PhatPipe received by ProLogis
     PhatPipe under a license agreement for the non-exclusive use of the
     ProLogis Operating System(TM) over a three-year period and $50,000 of other
     costs associated with this investment. ProLogis accounts for its investment
     in ProLogis PhatPipe on the equity method. ProLogis PhatPipe has not
     received any dividends from its preferred stock investment in PhatPipe. As
     of March 31, 2001, ProLogis had deferred $6.6 million of income related to
     this agreement. ProLogis had a 98.0% ownership interest in ProLogis
     PhatPipe as of March 31, 2001.

Income (Loss) from Unconsolidated Entities

     ProLogis recognized income (loss) from its investments in unconsolidated
entities as follows (in thousands):



                                                        Three months ended
                                                             March 31,
                                                       ---------------------
                                                          2001        2000
                                                       ---------   ---------
                                                             
   Temperature-controlled distribution
     companies (1)...................................  $  (9,472)  $   1,197
   Kingspark S.A. (2)................................         --       4,820
   ProLogis California (3)...........................      3,067       3,099
   ProLogis North American Properties Fund I (4).....      1,352          --
   ProLogis North American Properties Fund II (5)....        341          --
   ProLogis European Properties Fund (6).............        454       7,324
   ProLogis European Properties S.a.r.l. (7).........         36       4,927
   Insight...........................................        (10)         --
   GoProLogis (8)....................................      1,521          --
   ProLogis PhatPipe (8).............................        667          --
                                                       ---------   ---------
                                                       $  (2,044)  $  21,367
                                                       =========   =========



                                       10
   11

--------------

(1)  For 2001 includes a loss of $1,744,000 from ProLogis Logistics Services
     Incorporated ("ProLogis Logistics") and a loss of $7,728,000 from
     Frigoscandia S.A. For 2000, includes income of $2,871,000 from ProLogis
     Logistics and a loss of $1,674,000 from Frigoscandia S.A. Amounts include
     interest income on notes due to ProLogis.

(2)  Kingspark S.A. is consolidated in 2001. See Note 1.

(3)  Income includes management, leasing and development fees of $666,000 for
     the three months in 2001 and $665,000 for the three months in 2000.
     ProLogis has had a 50.0% ownership interest in ProLogis California since
     its inception.

(4)  ProLogis North American Properties Fund I was formed on June 30, 2000.
     Income includes management fees of $512,000. ProLogis had a 41.3% ownership
     interest in ProLogis North American Properties Fund I as of March 31, 2001.

(5)  ProLogis North American Properties Fund II was originally formed as
     ProLogis Principal on June 30, 2000. Income includes management fees of
     $45,000. ProLogis had 20.0% ownership interest in ProLogis North American
     Properties Fund II as of March 31, 2001.

(6)  Income includes management fees of $1,722,000 for the three months in 2001
     and $1,142,000 for the three months in 2000. ProLogis had a 41.8% ownership
     interest in ProLogis European Properties Fund as of March 31, 2001.

(7)  Represents income from ProLogis' investment in 49.9% of the common stock of
     ProLogis European Properties S.a.r.l in 2000 for the period from January 7,
     2000 to March 31, 2000 and in 2001 for the period from January 1, 2001 to
     January 6, 2001.

(8)  Represents license fees earned for the non-exclusive use of the ProLogis
     Operating System(TM) under licensing agreements entered into in the second
     quarter of 2000.

Temperature-Controlled Distribution Companies

     ProLogis has the following ownership interests in temperature-controlled
distribution companies accounted for under the equity method:

o       Investment in 100.0% of the preferred stock of ProLogis Logistics and
        100.0% of the preferred stock of Frigoscandia S.A. The preferred stock
        of each entity represents substantially all of the economic interests of
        the entity (in excess of 99%).

o       Investment in CSI/Frigo LLC which owns the voting common stock of
        ProLogis Logistics and Frigoscandia S.A. ProLogis owns 89.0% of the
        membership interests of CSI/Frigo LLC with K. Dane Brooksher, ProLogis'
        chairman, owning the remaining 11.0% of the membership interests. The
        common stock of ProLogis Logistics and Frigoscandia S.A. was owned by an
        unrelated party until January 5, 2001 when it was purchased by CSI/Frigo
        LLC. Additionally, ProLogis has a note agreement with CSI/Frigo LLC that
        allows ProLogis to participate in its earnings such that it will
        recognize approximately 95% of the economic interests of CSI/Frigo LLC.

o       ProLogis Logistics owns 100% of CS Integrated LLC ("CSI"), a
        temperature-controlled distribution company operating in the United
        States. As of March 31, 2001, owned or operated under lease agreements
        facilities aggregating 181.6 million cubic feet (including 35.5 million
        cubic feet of dry distribution space located in temperature-controlled
        facilities). Of the total, 3.5 million cubic feet were under
        development.

o       Frigoscandia S.A., through its wholly owned subsidiaries, owns 100% of
        Frigoscandia AB, a temperature-controlled distribution company operating
        in ten countries in Europe. As of March 31, 2001, Frigoscandia AB owned
        or operated under lease agreements facilities aggregating 184.2 million
        cubic feet.

o       ProLogis had amounts due from Frigoscandia S.A. or its subsidiaries in
        the currency equivalent of $289.9 million as of March 31, 2001.

o       ProLogis had amounts due from ProLogis Logistics or its subsidiaries of
        $1.9 million as of March 31, 2001.

     On January 2, 2001, ProLogis Logistics borrowed $125.0 million under
ProLogis' U.S. dollar denominated unsecured line of credit agreement as a
designated subsidiary borrower under the agreement. The proceeds from this
borrowing were used to repay $125.0 million of the outstanding notes and accrued
interest due to ProLogis. The remaining amounts due to ProLogis were converted
to preferred stock by ProLogis on January 2, 2001.




                                       11
   12

     As of March 31, 2001, Frigoscandia AB had a 138.5 million euro credit
agreement (increased to 185.0 million euro in April 2001). Borrowings under the
agreement bear interest at Euribor plus 0.90% per annum. ProLogis has guaranteed
100% of the borrowings under the agreement. The currency equivalent of
approximately $122.3 million was outstanding as of March 31, 2001. Additionally,
in April 2001, the currency equivalent of approximately $45.9 million was
borrowed under the credit agreement. The agreement expires on September 28, 2001
and contains a provision to extend the due date until December 28, 2001.

ProLogis California I LLC

     ProLogis' total investment in ProLogis California as of March 31, 2001
consisted of (in millions):


                                                             
         Equity interest.....................................   $  160.1
         Distributions ($3.7 million received in 2001).......      (27.3)
         ProLogis' share of ProLogis California's earnings,
           excluding fees earned.............................       14.8
                                                                --------
                Subtotal.....................................      147.6
         Adjustments to carrying value (1)...................      (28.3)
         Other, (including acquisition costs), net...........        1.5
                                                                --------
                Subtotal.....................................      120.8
         Other receivables...................................        0.4
                                                                --------
                Total........................................   $  121.2
                                                                ========


----------

(1)     Reflects the reduction in carrying value for the amount of net gain on
        the disposition of properties to ProLogis California that does not
        qualify for current income recognition due to ProLogis' continuing
        ownership in ProLogis California.

ProLogis European Properties Fund

     ProLogis' total investment in ProLogis European Properties Fund as of March
31, 2001 consisted of (in millions of U.S. dollars):


                                                              
         Equity interest.....................................    $  251.5
         Distributions ($5.4 million received in 2001).......        (9.4)
         ProLogis' share of ProLogis European Properties
           Fund's earnings, excluding fees earned............         9.3
                                                                 --------
                 Subtotal....................................       251.4
         Adjustments to carrying value (1)...................       (36.0)
         Other (including acquisitions costs), net...........        (9.5)
                                                                 --------
                 Subtotal....................................       205.9
          Other receivables..................................        28.5
                                                                 --------
                 Total.......................................    $  234.4
                                                                 ========


----------

(1)     Reflects the reduction in carrying value for amount of net gain on the
        disposition of facilities to ProLogis European Properties Fund that does
        not qualify for current income recognition due to ProLogis' continuing
        ownership in ProLogis European Properties Fund.

     Third parties (19 institutional investors) have invested 396.9 million
euros (the currency equivalent of approximately $349.9 million as of March 31,
2001) in ProLogis European Properties Fund and have committed to fund an
additional 663.4 million euros (the currency equivalent of approximately $585.0
million as of March 31, 2001) through 2002. ProLogis has also entered into a
subscription agreement to make additional capital contributions of 84.4 million
euros (the currency equivalent of approximately $74.4 million) as of March 31,
2001.

     ProLogis European Properties Fund has a credit agreement with two
international banks for a multi-currency secured revolving credit facility in
the currency equivalent of 500.0 million euros. The credit agreement matures in
October 2002. Borrowings can be denominated in pound sterling or the euro, and
bear interest at 0.55% above the relevant index (LIBOR or Euribor). As of March
31, 2001, 95.4 million euros and 73.6 million pound sterling were outstanding on
the line (the currency equivalent of approximately $189.2 million as of March
31, 2001). As of March 31, 2001, ProLogis no longer guarantees this credit
agreement. In April 2001, ProLogis European Properties Fund placed over 212.0
million euros (the currency equivalent of approximately $186.9 million as of
March 31, 2001) of permanent commercial mortgage-backed securities. After
interest rate and currency swap agreements, the effective interest rate on these
securities is 5.74%. The proceeds were used to repay borrowings on the credit
agreement.


                                       12
   13

ProLogis North American Properties Fund I

     ProLogis' and ProLogis Development Services' total investment in ProLogis
North American Properties Fund I as of March 31, 2001 consisted of (in
millions):


                                                               
         Equity interest.....................................     $  52.7
         Distributions ($0.6 million received in 2001).......        (1.0)
         ProLogis' share of ProLogis North American
           Properties Fund's earnings, excluding fees
           earned............................................         1.1
                                                                  -------
                Subtotal.....................................        52.8
         Adjustments to carrying value (1)...................        (9.7)
         Other(including acquisition costs), net.............         2.7
                                                                  -------
                Subtotal.....................................        45.8
         Other receivables...................................         0.1
                                                                  -------
                Total........................................     $  45.9
                                                                  =======


----------

(1)     Reflects the reduction in carrying value for amount of net gain on the
        disposition of facilities to ProLogis North American Properties Fund I
        that does not qualify for current income recognition due to ProLogis'
        and ProLogis Development Services' continuing ownership in ProLogis
        North American Properties Fund I.

ProLogis North American Properties Fund II

     ProLogis' and ProLogis Development Services' total investment in ProLogis
North American Properties Fund II as of March 31, 2001 consisted of (in
millions):


                                                               
         Equity interest.....................................     $  14.0
         Adjustments to carrying value (1)...................        (7.0)
         Other (including acquisition costs), net............         1.3
                                                                  -------
                   Subtotal..................................         8.3
         Other payables......................................        (2.9)
                                                                  -------
                   Total.....................................     $   5.4
                                                                  =======


----------

(1)     Reflects the reduction in carrying value for amount of net gain on the
        disposition of facilities to ProLogis North American Properties Fund II
        that does not qualify for current income recognition due to ProLogis'
        and ProLogis Development Services' continuing ownership in ProLogis
        North American Properties Fund II.

     As of March 31, 2001, ProLogis North American Properties Fund II had a
$165.0 million short-term borrowing arrangement outstanding which is due on June
25, 2001. ProLogis North American Properties Fund II intends to obtain permanent
secured financing which will be used to repay its short-term borrowings.
ProLogis has guaranteed 100% of the short-term borrowings outstanding.

Summarized Financial Information

     Summarized financial information for ProLogis' unconsolidated entities as
of and for the three months ended March 31, 2001 is presented below (in millions
of U.S. dollars). The information presented is for the entire entity.



                                                                         ProLogis   ProLogis North     ProLogis
                                 ProLogis                                European      American     North American
                                 Logistics Frigoscandia   ProLogis      Properties    Properties      Properties
                                    (1)      S.A.(1)     California (2)  Fund (3)     Fund I (4)      Fund II (5)
                                 --------- ------------  -------------  ----------  --------------  -------------
                                                                                    
     Total assets..............   $ 368.8   $ 480.3         $ 598.4      $  964.0       $ 363.1       $235.7 (6)
     Total liabilities (7).....   $ 250.8   $ 548.8         $ 303.2      $  420.4       $ 236.9       $165.0
     Minority interest.........   $    --   $    --         $    --      $     --       $    --       $   --
     Equity....................   $ 118.0   $ (68.5)        $ 295.2      $  543.6       $ 126.2       $ 70.7
     Revenues..................   $  77.2   $  91.3         $  16.2      $   20.0       $  11.5       $  1.0
     Adjusted EBITDA (8).......   $   5.7   $   8.1         $  13.4      $   17.9       $   8.6       $  0.7
     Net earnings (loss) (9)...   $  (1.8)  $ (10.4) (10)   $   4.5      $    2.2 (11)  $   1.8       $  0.2


----------

(1)     ProLogis had an ownership interest in excess of 99.0% in each entity as
        of March 31, 2001.

(2)     ProLogis had a 50.0% ownership interest as of March 31, 2001.

(3)     ProLogis had a 41.8% ownership interest as of March 31, 2001. Includes
        the ProLogis European Properties S.a.r.l. which is wholly owned by
        ProLogis European Properties Fund as of March 31, 2001


                                       13
   14

(4)     ProLogis and ProLogis Development Services had a combined 41.3%
        ownership interest as of March 31, 2001.

(5)     ProLogis and ProLogis Development Services had a combined 20.0%
        ownership interest as of March 31, 2001.

(6)     Includes amount due from ProLogis of $2.9 million.

(7)     Includes amounts due to ProLogis of $1.9 million from ProLogis
        Logistics, $289.9 million from Frigoscandia S.A., $0.4 million from
        ProLogis California, $28.5 million from ProLogis European Properties
        Fund, and $0.1 million from ProLogis North American Properties Fund I.
        Includes loans from third parties (including accrued interest) of $216.0
        million for ProLogis Logistics, $143.1 million for Frigoscandia S.A.,
        $294.8 million for ProLogis California, $340.4 million for ProLogis
        European Properties Fund, $233.6 million for ProLogis North American
        Properties Fund I and $165.1 million for ProLogis North American
        Properties Fund II.

(8)     Adjusted EBITDA represents earnings from operations before interest
        expense, interest income, current and deferred income taxes,
        depreciation, amortization, gains and losses on disposition of non-CDFS
        business segment assets (see Note 7); foreign currency exchange gains
        and losses resulting from the remeasurement (at current foreign currency
        exchange rates) of third party and intercompany debt and mark to market
        adjustments related to derivative financial instruments utilized to
        manage foreign currency risks.

(9)     ProLogis' share of the net earnings (loss) of the respective entities
        and interest income on notes and mortgage notes due to ProLogis are
        recognized in the Consolidated Condensed Statements of Earnings as
        "Income from unconsolidated entities." The net earnings (loss) of each
        entity includes interest expense on amounts due to ProLogis, as
        applicable.

(10)    Includes net foreign currency exchange losses of $1.4 million.

(11)    Includes net foreign currency exchange losses of $1.0 million.

4.  Shareholders' Equity:

     During the three months ended March 31, 2001, ProLogis generated net
proceeds of $13.2 million from the issuance of 558,000 common shares of
beneficial interest, $0.01 par value ("Common Shares") under its 1999 Dividend
Reinvestment and Share Purchase Plan and issued 49,000 Common Shares upon the
exercise of stock options.

     ProLogis called for the redemption of all of its outstanding Series B
cumulative convertible redeemable preferred shares ("Series B preferred shares")
as of March 20, 2001. Subsequent to the call for redemption on February 12,
2001, 5,908,971 Series B preferred shares were converted into 7,575,301 Common
Shares. The remaining 183,302 Series B preferred shares outstanding on March 20,
2001 were redeemed at a price of $25.00 per share, plus $0.442 in accrued and
unpaid dividends, for an aggregate redemption price of $25.442 per share.

     On January 11, 2001, ProLogis announced a Common Share repurchase program
under which it may repurchase up to $100.0 million of its Common Shares. The
Common Shares will be repurchased from time to time in the open market and in
privately negotiated transactions, depending on market prices and other
conditions. As of March 31, 2001, no common shares had been repurchased.

     On March 30, 2001, ProLogis called for the redemption of its outstanding
Series A cumulative, redeemable preferred shares of beneficial interest ("Series
A preferred shares") at the price of $25.00 per share, plus $0.2481 in accrued
and unpaid dividends, for an aggregate redemption price of $25.2481 per share
(the "Redemption Price"). The shares were redeemed on May 8, 2001 at a total
cost of $136.3 million.

5.  Distributions and Dividends:

   Common Distributions

     On February 23, 2001, ProLogis paid a quarterly distribution of $0.345 per
Common Share to shareholders of record on February 9, 2001. The distribution
level for 2001 was set by ProLogis' Board of Trustees in December 2000 at $1.38
per Common Share.

   Preferred Dividends

     The annual dividend rates on ProLogis' preferred shares are $2.35 per
cumulative redeemable Series A preferred share, $4.27 per cumulative redeemable
Series C preferred share, $1.98 per cumulative redeemable Series D preferred
share and $2.1875 per cumulative redeemable Series E preferred share.

         On January 31, 2001,  ProLogis paid quarterly  dividends of $0.5469 per
cumulative redeemable Series E preferred share. On March 30, 2001, ProLogis paid
quarterly  dividends  of $0.5875 per  cumulative  redeemable  Series A preferred
share, $1.0675 per cumulative redeemable Series C preferred share and $0.495 per
cumulative redeemable Series D preferred share.
                                       14
   15

     Pursuant to the terms of its preferred shares, ProLogis is restricted from
declaring or paying any distribution with respect to the Common Shares unless
all cumulative dividends with respect to the preferred shares have been paid and
sufficient funds have been set aside for dividends that have been declared for
the then-current dividend period with respect to the preferred shares.

6.  Earnings Per Common Share:

     A reconciliation of the denominator used to calculate basic earnings per
Common Share to the denominator used to calculate diluted earnings per Common
Share for the periods indicated (in thousands, except per share amounts) is as
follows:



                                                           Three Months Ended
                                                                March 31,
                                                         ----------------------
                                                            2001         2000
                                                         ---------    ---------
                                                                
    Net earnings attributable to Common Shares.......    $  44,007    $  44,938
    Add:  Series B preferred share dividends.........           81           --
                                                         ---------    ---------
    Adjusted net earnings attributable to Common
      Shares.........................................    $  44,088    $  44,938
                                                         =========    =========
    Weighted average Common Shares outstanding -
      Basic..........................................      167,297      162,124
    Incremental weighted average effect of common
      stock equivalents and contingently issuable
      shares.........................................          811          157
    Weighted average convertible Series B preferred
      shares.........................................        6,263           --
                                                         ---------    ---------
    Adjusted weighted average Common Shares
      outstanding - Diluted..........................      174,371      162,281
                                                         =========    =========
    Per share net earnings attributable to Common
      Shares:
         Basic.......................................    $    0.26    $    0.28
                                                         =========    =========
         Diluted.....................................    $    0.25    $    0.28
                                                         =========    =========


     For the periods indicated, the following weighted average convertible
securities were not included in the calculation of diluted per share net
earnings attributable to Common Shares as the effect, on an as-converted basis,
was antidilutive (in thousands):



                                                            Three Months Ended
                                                                 March 31,
                                                          ---------------------
                                                            2001         2000
                                                          --------     --------
                                                                 
     Series B preferred shares.......................           --        8,968
                                                          ========     ========
     Limited partnership units.......................        5,088        5,587
                                                          ========     ========


7. Business Segments:

    ProLogis has three reportable business segments:

    o   Property  operations  represents the long-term  ownership and leasing of
        industrial  distribution  facilities in the United  States  (portions of
        which are owned through  ProLogis  California,  ProLogis  North American
        Properties Fund I and ProLogis North American  Properties Fund II -- See
        Note 3), Mexico and Europe (portions of which are owned through ProLogis
        European  Properties Fund and ProLogis European  Properties  S.a.r.l. --
        See Note 3); each  operating  facility is considered to be an individual
        operating  segment having  similar  economic  characteristics  which are
        combined within the reportable segment based upon geographic location;

    o   Corporate distribution  facilities services business ("CDFS") represents
        the  development  of industrial  distribution  facilities by ProLogis in
        United  States,  Mexico and Europe (see Note 3) which are often disposed
        of to third  parties or  entities  in which  ProLogis  has an  ownership
        interest and the  development of industrial  distribution  facilities by
        ProLogis on a fee basis for third parties in the United  States,  Mexico
        and Europe; the development  activities of ProLogis are considered to be
        individual  operating  segments having similar economic  characteristics
        which are combined  within the reportable  segment based upon geographic
        location; and

    o   Temperature-controlled  distribution operations represents the operation
        of a  temperature-controlled  distribution and logistics network through
        investments in  unconsolidated  entities in the United States  (ProLogis
        Logistics) and Europe  (Frigoscandia  S.A.);  each  company's  operating

                                       15
   16

        facilities are  considered to be individual  operating  segments  having
        similar   economic   characteristics   which  are  combined  within  the
        reportable segment based upon geographic location. See Note 3.

    Reconciliations of the three reportable segments':  (i) income from external
customers to ProLogis'  total income;  (ii) net  operating  income from external
customers to ProLogis'  earnings  from  operations  (ProLogis'  chief  operating
decision  makers rely primarily on net operating  income to make decisions about
allocating  resources and assessing  segment  performance);  and (iii) assets to
ProLogis' total assets are as follows (in thousands):



                                                        Three Months Ended
                                                             March 31,
                                                     -----------------------
                                                         2001         2000
                                                     ----------   ----------
                                                            
     Income:
       Property operations:
          United States (1).......................   $  119,091   $  119,765
          Mexico..................................        4,230        3,342
          Europe (2)..............................        1,693       13,053
                                                     ----------   ----------
               Total property operations
                 segment..........................      125,014      136,160
                                                     ----------   ----------
       CDFS business:
          United States (3).......................       28,253       16,812
          Mexico..................................          (10)         697
          Europe (4) (5)..........................       14,611        6,255
                                                     ----------   ----------
               Total CDFS business segment........       42,854       23,764
                                                     ----------   ----------
          Temperature-controlled distribution
            operations:
             North America (6)....................       (1,744)       2,871
             Europe (7)...........................       (7,728)      (1,674)
                                                     ----------   ----------
                  Total temperature-controlled
                    distribution operations
                    segment.......................       (9,472)       1,197
                                                     ----------   ----------
          Reconciling items:
             Interest income......................        1,654        1,871
             Income from unconsolidated entities..        2,178           --
                                                     ----------   ----------
                  Total reconciling items.........        3,832        1,871
                                                     ----------   ----------
                  Total income....................   $  162,228   $  162,992
                                                     ==========   ==========
        Net operating income:
         Property operations:
              United States (1)....................  $  112,424   $  112,874
              Mexico...............................       4,434        3,247
              Europe (2)...........................       1,398       13,492
                                                     ----------   ----------
                   Total property operations
                     segment.......................     118,256      129,613
                                                     ----------   ----------
           CDFS business:
              United States (3)....................      28,253       16,812
              Mexico...............................         (10)         697
              Europe (4) (5).......................      14,611        6,255
                                                     ----------   ----------
                   Total CDFS business segment.....      42,854       23,764
                                                     ----------   ----------
           Temperature-controlled distribution
            operations:
              North America (6)....................      (1,744)       2,871
              Europe (7)...........................      (7,728)      (1,674)
                                                     ----------   ----------
                   Total temperature-controlled
                     distribution operations
                     segment.......................      (9,472)       1,197
                                                     ----------   ----------
           Reconciling items:
              Interest income......................       1,654        1,871
              Income from unconsolidated entities..       2,178           --
              General and administrative expense...     (14,827)     (11,241)
              Depreciation and amortization........     (38,752)     (39,474)
              Interest expense.....................     (39,382)     (41,986)
              Other expenses.......................      (1,291)      (1,218)
                                                     ----------   ----------
                 Total reconciling items...........     (90,420)     (92,048)
                                                     ----------   ----------
                 Earnings from operations..........  $   61,218   $   62,526
                                                     ==========   ==========

                                       16
   17



                                                      March 31,  December 31,
                                                        2001        2000
                                                     ----------  -----------
                                                           
       Assets:
         Property operations:
           United States (8).....................    $3,754,058  $ 3,887,601
           Mexico................................       119,805      113,538
           Europe (8)............................       388,982      308,457
                                                     ----------  -----------
                   Total property operations
                     segment.....................     4,262,845    4,309,596
                                                    ----------  -----------
         CDFS business:
           United States.........................       281,302      304,697
           Mexico................................        30,425       26,288
           Europe (9)............................       474,557      637,207
                                                     ----------  -----------
                   Total CDFS business segment...       786,284      968,192
                                                     ----------  -----------
         Temperature controlled distribution
          operations:
           North America (8).....................       120,928      231,053
           Europe (8)............................       229,552      191,981
                                                     ----------  -----------
                   Total temperature controlled
                     distribution operations
                     segment.....................       350,480      423,034
                                                     ----------  -----------
         Reconciling items:
           Investments in unconsolidated entities        73,716       70,807
           Cash..................................        39,322       57,870
           Accounts and notes receivable.........        29,538       43,040
           Other assets..........................        65,237       73,795
                                                     ----------  -----------
                   Total reconciling items.......       207,813      245,512
                                                     ----------  -----------
                   Total assets..................    $5,607,422  $ 5,946,334
                                                     ==========  ===========


-----------

(1)     In addition to the operations of ProLogis that are reported on a
        consolidated basis, includes amounts recognized under the equity method
        related to ProLogis' investment in ProLogis California, ProLogis North
        American Properties Fund I and ProLogis North American Properties Fund
        II in 2001 and ProLogis California in 2000. See Note 3 for summarized
        financial information of ProLogis California, ProLogis North American
        Properties Fund I and ProLogis North American Properties Fund II.

(2)     In addition to the operations of ProLogis that are reported on a
        consolidated basis, includes amounts recognized under the equity method
        related to ProLogis' investment in ProLogis European Properties Fund
        (including net foreign currency exchange losses of $0.8 million in 2001
        and net foreign currency gains of $5.1 million in 2000) and ProLogis
        European Properties S.a.r.l. (including net foreign currency exchange
        losses of $0.2 million in 2001 and net foreign currency gains of $3.3
        million in 2000). See Note 3 for summarized financial information of
        ProLogis European Properties Fund.

(3)     In 2001, includes $20.4 million of net gains recognized by ProLogis
        related to the disposition of facilities to ProLogis North American
        Properties Fund II.

(4)     Includes amounts recognized under the equity method related to ProLogis'
        investment in Kingspark S.A.in 2000 (including $0.4 million of net
        foreign currency exchange gains). Kingspark S.A. is consolidated in
        2001. See Notes 1 and 3.

(5)     Includes $12.2 million and $0.3 million of net gains recognized by
        ProLogis related to the disposition of facilities to ProLogis European
        Properties Fund in 2001 and 2000, respectively. In addition, includes
        $0.5 million of net gains recognized under the equity method related to
        the disposition of facilities to ProLogis European Properties Fund by
        Kingspark S.A. in 2000.

(6)     Represents amounts recognized under the equity method related to
        ProLogis' investment in ProLogis Logistics. See Note 3 for summarized
        financial information of ProLogis Logistics.

(7)     Represents amounts recognized under the equity method related to
        ProLogis' investment in Frigoscandia S.A. (including $1.4 million and
        $2.2 million of net foreign currency exchange losses in 2001 and 2000,
        respectively). See Note 3 for summarized financial information of
        Frigoscandia S.A.

(8)     Amounts include investments in unconsolidated entities accounted for
        under the equity method. See also Note 3 for summarized financial
        information of the unconsolidated entities as of and for the three
        months ended March 31, 2001.

(9)     In 2000, includes ProLogis' investment in Kingspark S. A. and its
        subsidiaries under the equity method.

                                       17
   18


8. Supplemental Cash Flow Information

    Non-cash investing and financing activities for the three months ended March
31, 2001, and 2000 are as follows:

    o   In 2001, ProLogis  contributed its 49.9% of the common stock of ProLogis
        European Properties S.a.r.l. to ProLogis European Properties Fund for an
        additional equity interest in ProLogis European Properties Fund of $83.0
        million.  In 2000, in connection with ProLogis' initial  contribution of
        50.1% of the common stock of ProLogis European  Properties  S.a.r.l.  to
        ProLogis European  Properties Fund, ProLogis received an equity interest
        in ProLogis  European  Properties Fund of  approximately  $78.0 million.
        ProLogis European Properties S.a.r.l. had total assets of $403.9 million
        and  total  liabilities  of  $248.1  million.  ProLogis  recognized  its
        investment in the  remaining  49.9% of the common stock under the equity
        method from January 7, 2000 through January 6, 2001. See Note 3.

    o   ProLogis received $13.6 million,  $34.1 million and $13.4 million of the
        proceeds  from  its  disposition  of  facilities  to  ProLogis  European
        Properties Fund,  ProLogis North American Properties Fund I and ProLogis
        North  American  Properties  Fund  II,  respectively,  in the form of an
        equity  interest in these entities during 2001.  ProLogis  received $0.7
        million of the proceeds from its  disposition  of facilities to ProLogis
        European Properties Fund in the form of an equity interest during 2000.

    o   ProLogis  received  $10.8  million of the proceeds  from its disposition
        of a facility to a third party in the form of a note receivable in 2001.

    o   In connection  with the agreement for the acquisition of Kingspark S.A.,
        ProLogis  issued  approximately  201,000  Common  Shares  valued at $3.9
        million in 2000.

    o   Series B preferred shares aggregating $151.8 million and $1.0 million
        were converted into Common Shares in 2001 and 2000, respectively.

    o   Net foreign currency translation adjustments of $(42,684,000) and
        $(22,574,000) were recognized in 2001 and 2000, respectively.

9. Commitments and Contingencies:

Environmental Matters

    All  of  the  facilities   acquired  by  ProLogis  have  been  subjected  to
environmental  reviews by ProLogis or  predecessor  owners.  While some of these
assessments  have  led  to  further  investigation  and  sampling,  none  of the
environmental   assessments   has  revealed,   nor  is  ProLogis  aware  of  any
environmental  liability  (including  asbestos related  liability) that ProLogis
believes would have a material adverse effect on ProLogis'  business,  financial
condition or results of operations.





















                                       18

   19







                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS





To the Board of Trustees and
   Shareholders of ProLogis Trust:

         We have reviewed the accompanying consolidated condensed balance sheets
of  ProLogis  Trust and  subsidiaries  as of March  31,  2001,  and the  related
consolidated  condensed  statements of earnings and comprehensive income and the
consolidated condensed statements of cash flows for the three months ended March
31, 2001 and 2000.  These  financial  statements are the  responsibility  of the
Trust's management.

         We conducted our review in accordance with standards established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards  generally accepted in the United States, the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements taken as a whole. Accordingly, we do not express such an opinion.

         Based on our  review,  we are not aware of any  material  modifications
that should be made to the financial statements referred to above for them to be
in  conformity  with  accounting  principles  generally  accepted  in the United
States.

         We have  previously  audited,  in accordance  with  auditing  standards
generally  accepted in the United  States,  the  consolidated  balance  sheet of
ProLogis Trust and subsidiaries as of December 31, 2000, and in our report dated
March 15, 2001, we expressed an unqualified  opinion on that  statement.  In our
opinion,  the information set forth in the accompanying  consolidated  condensed
balance  sheet as of  December  31,  2000,  is  fairly  stated  in all  material
respects,  in relation to the consolidated  balance sheet from which it has been
derived.


                                     ARTHUR ANDERSEN LLP



Chicago, Illinois
May 9, 2001















                                       19
   20


ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

    The  following  discussion  should  be read in  conjunction  with  ProLogis'
Consolidated  Condensed  Financial  Statements and the notes thereto included in
Item 1 of this report. See also ProLogis' 2000 Annual Report on Form 10-K.

    The statements  contained in this discussion  that are not historical  facts
are  forward-looking  statements  within  the  meaning  of  Section  27A  of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934, as amended.  These forward-looking  statements are based on current
expectations,  estimates and projections about the industry and markets in which
ProLogis  operates,  management's  beliefs,  and assumptions made by management.
Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks",
"estimates",  variations of such words and similar  expressions  are intended to
identify such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are  difficult  to predict.  Therefore,  actual  outcomes and results may differ
materially  from  what  is  expressed  or  forecasted  in  such  forward-looking
statements.  Factors which may affect outcomes and results include:  (i) changes
in general economic  conditions in ProLogis' markets that could adversely affect
demand for ProLogis' facilities and the creditworthiness of ProLogis' customers,
(ii) changes in financial markets,  interest rates and foreign currency exchange
rates that could adversely  affect  ProLogis' cost of capital and its ability to
meet its  financial  needs and  obligations,  (iii)  increased or  unanticipated
competition for distribution  facilities in ProLogis' target market cities;  and
(iv) those factors discussed in ProLogis' 2000 Annual Report on Form 10-K.

Results of Operations

Three Months Ended March 31, 2001 and 2000

    ProLogis' net earnings  attributable to Common Shares were $44.0 million for
the three months ended March 31, 2001 as compared to $44.9  million for the same
period in 2000. For the three months ended March 31, 2001, basic and diluted per
share net earnings attributable to Common Shares were $0.26 and $0.25 per share,
respectively.  Basic and diluted per share net earnings  attributable  to Common
Shares were $0.28 per share for the same period in 2000.

    The CDFS business segment provides capital for ProLogis to redeploy into its
development  activities  in addition to  generating  profits that  contribute to
ProLogis' total income.  ProLogis'  income from this segment  increased by $19.1
million in 2001 over 2000, primarily the result of the number of dispositions of
facilities  developed  by ProLogis to entities in which  ProLogis  maintains  an
ownership  interest,  such as ProLogis  North  American  Properties  Fund II and
ProLogis  European  Properties  Fund,  as well as to  third  parties.  The  2001
increases in the CDFS  business  segment  income were offset by an $11.1 million
decrease from 2000 in the property  operations  segment's income. This operating
segment's  net  income  includes  rental  income and net  rental  expenses  from
facilities  directly  owned by ProLogis  and also its share of the income of its
unconsolidated  entities that engage in property  operations segment activities.
Income from ProLogis'  temperature-controlled  distribution operations decreased
in 2001 from 2000 by $10.7  million,  primarily  due to losses  incurred  in the
European operations.  See "-- Property  Operations",  "-- CDFS Business" and "--
Temperature-Controlled Distribution Operations".

     ProLogis'  investment in Kingspark  Holding S. A.  ("Kingspark  S. A."), an
industrial  distribution  facility development company in the United Kingdom was
accounted  for under the equity method in 2000.  ProLogis  included its share of
the  income  from  Kingspark  S. A. and its  subsidiaries  in the CDFS  business
segment.  ProLogis owned 100% of the non-voting  preferred stock of Kingspark S.
A. and recognized substantially all economic benefits of Kingspark S. A. and its
subsidiaries  through January 1, 2001. On January 5, 2001,  ProLogis acquired an
ownership  interest in the voting  common  stock of  Kingspark S. A resulting in
ProLogis having control of Kingspark S. A.  Accordingly,  as of January 5, 2001,
the  accounts  of  Kingspark  S. A. and its  subsidiaries  are  consolidated  in
ProLogis'   condensed   financial   statements   along  with   ProLogis'   other
majority-owned and controlled subsidiaries and partnerships.

Property Operations

    ProLogis  owned  or  had  ownership  interests  in the  following  operating
facilities as of the dates indicated:






                                       20
   21



                                                   March 31,
                                 ----------------------------------------------
                                         2001                     2000
                                 ---------------------   ----------------------
                                             Square                   Square
                                 Number      Footage     Number       Footage
                                 ------    -----------   ------     -----------
                                                        
Direct ownership (1)..........    1,242    125,885,043    1,266     127,750,345
ProLogis California (2).......       78     12,720,307       78      11,751,208
ProLogis North American
  Properties Fund I (3).......       36      8,962,549       --              --
ProLogis North American
  Properties Fund II (4)......       26      4,162,645       --              --
ProLogis European Properties
  Fund and ProLogis European
  Properties S.a.r.l. (5).....      110     15,958,676       80      10,273,249
                                  -----    -----------    -----     -----------

                                  1,492    167,689,220    1,424     149,774,802
                                  =====    ===========    =====     ===========


----------
(1) Includes  operating  facilities  owned  by  ProLogis  and  its  consolidated
    entities.  The  decrease  in 2001 from 2000 is  primarily  the result of the
    formation  of ProLogis  North  American  Properties  Fund I in June 2000 and
    ProLogis North American  Properties Fund II in 2001, whose entire portfolios
    consist of  operating  facilities  that were  previously  directly  owned by
    ProLogis.  In 2001,  includes 11 operating  facilities  aggregating  710,246
    square  feet  owned  by  Kingspark  S. A.  and its  subsidiaries  that  were
    previously  accounted for under the equity method. In 2000,  ProLogis' share
    of the income  from the  operating  facilities  of  Kingspark  S. A. and its
    subsidiaries was included in the CDFS business segment.

(2) ProLogis has had a 50.0%  ownership  interest in ProLogis  California  since
    its inception.  See Note 3 to ProLogis' Consolidated Condensed Financial
    Statements in Item 1.

(3) ProLogis  has a 41.3%  ownership  interest  as of March 31, 2001 in ProLogis
    North  American  Fund I which was  formed on June 30,  2000.  All  operating
    facilities owned by this entity were previously  directly owned by ProLogis.
    See Note 3 to ProLogis'  Consolidated Condensed Financial Statements in Item
    1.

(4) ProLogis  has a 20.0%  ownership  interest  as of March 31, 2001 in ProLogis
    North  American Fund II which was  originally  formed on June 30, 2000.  All
    operating  facilities owned by this entity were previously directly owned by
    ProLogis.   See  Note  3  to  ProLogis'   Consolidated  Condensed  Financial
    Statements in Item 1.

(5) As of March 31,  2001,  ProLogis'  ownership  interest in ProLogis  European
    Properties  Fund is  41.8%.  As of  March  31,  2000,  ProLogis  had a 44.6%
    ownership  interest in the ProLogis European  Properties Fund. See Note 3 to
    ProLogis' Consolidated Condensed Financial Statements in Item 1.

    ProLogis'  property  operations  segment  income  consists  of the:  (i) net
operating  income  from the  operating  facilities  that are  owned by  ProLogis
directly or through its consolidated  entities and (ii) the income recognized by
ProLogis under the equity method from its investments in unconsolidated entities
engaged in property operations.  See Note 7 to ProLogis'  Consolidated Condensed
Financial  Statements in Item 1. The amounts  recognized under the equity method
are  based  on the net  earnings  of each  unconsolidated  entity  and  include:
interest income and interest  expense,  depreciation and amortization  expenses,
general and administrative expenses,  income taxes and foreign currency exchange
gains and losses (with respect to ProLogis European Properties Fund and ProLogis
European Properties S.a.r.l.).  ProLogis' net operating income from the property
operations  segment  was as  follows  (in  thousands)  (see Note 7 to  ProLogis'
Consolidated Condensed Financial Statements in Item 1):



                                                            Three Months Ended
                                                                 March 31,
                                                          ---------------------
                                                             2001        2000
                                                          ---------   ---------
                                                                
 Facilities directly owned by ProLogis and its
  consolidated entities:
   Rental income.....................................     $ 119,764   $ 120,809
   Property operating expenses.......................         6,758       6,547
                                                          ---------   ---------
      Net operating income (1).......................       113,006     114,262
                                                          ---------   ---------
 Income from the ProLogis California.................         3,067       3,099
 Income from ProLogis North American Properties
   Fund I (2)........................................         1,352          --
 Income from ProLogis North American Properties
   Fund II (2).......................................           341          --
 Income from ProLogis European Properties Fund (3)...           454       7,324
 Income from ProLogis European Properties S.a.r.l.
   (3)...............................................            36       4,928
                                                         ----------   ---------
      Total property operations segment..............    $  118,256    $129,613
                                                         ==========   =========



                                   21
   22

------------
(1)  The  fluctuations in rental expenses  between years is primarily the result
     of the changes in the composition of the directly owned  facilities in each
     year in addition to increased rental expense recoveries (as a percentage of
     total rental  expenses) in each year.  Rental expenses,  before  recoveries
     from  tenants  were  26.4% of  rental  income  for 2001 and 24.6% of rental
     income for 2000.  Total rental expense  recoveries  were 78.6% and 78.0% of
     total  rental  expenses  in 2001 and 2000,  respectively.  The  increase in
     rental expense recoveries as a percentage of total rental expenses reflects
     ProLogis'   emphasis  on  on-site   property   management   teams  and  the
     effectiveness of the ProLogis Operating System(TM). Net operating income in
     2001 includes $0.5 million of net operating income from facilities owned by
     Kingspark S. A. and its  subsidiaries.  In 2000,  the net operating  income
     from the  facilities  owned by  Kingspark  S. A. and its  subsidiaries  was
     reported under the equity method and included in the CDFS business segment.

(2)  ProLogis  North  American  Properties  Fund I and ProLogis  North  American
     Properties Fund II began operations on June 30, 2000.

(3) In 2001,  ProLogis' share of the income of ProLogis European Properties Fund
    and ProLogis  European  Properties  S.a.r.l.  includes net foreign  currency
    losses of $0.8 million and $0.2 million,  respectively.  In 2000,  ProLogis'
    share of the  income  of  ProLogis  European  Properties  Fund and  ProLogis
    European  Properties  S.a.r.l.  includes net foreign  currency gains of $5.1
    million and $3.3  million,  respectively.  Excluding  net  foreign  currency
    exchange  gains  and  losses,  ProLogis'  share of the  income  of  ProLogis
    European  Properties  Fund would have been $1.3 million and $2.2 million for
    2001 and 2000,  respectively.  Excluding net foreign currency exchange gains
    and losses,  ProLogis' share of the income of ProLogis  European  Properties
    S.a.r.l.  would  have  been  $229,000  and $1.6  million  for 2001 and 2000,
    respectively.  ProLogis European  Properties Fund's income decreased in 2001
    from 2000  primarily  due to higher  interest  expense in 2001 due to higher
    debt levels.  ProLogis  recognized income under the equity method related to
    ProLogis European Properties S.a.r.l. in 2001 for only six days.

    The facilities that ProLogis develops are not always pre-leased at the start
of  construction.   In  addition,  ProLogis  may  acquire  facilities  that  are
underleased  at the time of  acquisition.  While  these  situations  will reduce
ProLogis'  overall  occupancy rate below its stabilized level in the short-term,
they do provide opportunities to increase revenues.  The term "stabilized" means
that capital  improvements,  repositioning,  new  management  and new  marketing
programs  (or  development  and  marketing,  in  the  case  of  newly  developed
facilities)  have been in effect for a sufficient  period of time  (generally 12
months) to achieve stabilized  occupancy (typically 93%, but ranging from 90% to
95%, depending on the submarket and product type).  ProLogis has been successful
in  increasing  occupancies  on acquired and developed  facilities  during their
initial  months of  operation,  resulting  in an  occupancy  rate of 94.6% and a
leased  rate of  95.6%  for  stabilized  facilities  owned by  ProLogis  and its
consolidated  and  unconsolidated  entities  as of March 31,  2001.  The average
increase in rental rates for both new and renewed  leases on  previously  leased
space (8.5 million  square  feet) for all  facilities  including  those owned by
ProLogis' consolidated and unconsolidated entities during 2001 was 20.2%. During
2001,  the net  operating  income  (rental  income  less  net  rental  expenses)
generated  by  ProLogis'   "same  store"   portfolio  of  operating   facilities
(facilities owned by ProLogis and its consolidated and  unconsolidated  entities
that were in operation  throughout  both 2001 and 2000)  increased by 3.90% over
2000.

    There has been minimal  impact of the  California  energy  situation and the
attendant  increase  in utility  costs on  ProLogis'  income  from the  property
operations segment. ProLogis' customers are responsible for their direct utility
bills and ProLogis'  facilities have minimal common utility  charges,  which are
generally  included in amounts  recovered from customers  under the terms of the
lease  agreements.  Given the typical use of ProLogis'  distribution  facilities
(bulk distribution and light manufacturing and assembly uses), ProLogis believes
that its  customers'  total  utility  expenses are a small  portion of the total
expenses related to the operations within ProLogis' facilities.

CDFS Business

     Income from ProLogis' CDFS business segment consists  primarily of: (i) the
profits from the  disposition of land parcels and facilities that were developed
by ProLogis and disposed of to customers or to entities in which ProLogis has an
ownership interest;  (ii) development fees earned by ProLogis;  and (iii) income
recognized under the equity method from ProLogis' investment in the Kingspark S.
A.  and its  subsidiaries  in 2000  (Kingspark  S. A. and its  subsidiaries  are
consolidated  in  2001).  Kingspark  S. A. and its  subsidiaries  engage in CDFS
business activities in the United Kingdom similar to those activities  performed
directly by ProLogis.  In 2000,  ProLogis  recognized 95% of the net earnings of
Kingspark  S. A. and its  subsidiaries  under the equity  method that  includes:
interest income and interest expense (net of capitalized  amounts),  general and
administrative  expense (net of capitalized  amounts),  income taxes and foreign
currency exchange gains and losses.

                                       22
   23

    The CDFS  business  segment  operations  increased  in volume  for the three
months in 2001 over the same period in 2000; consequently, ProLogis' income from
this segment has  increased in each year.  The CDFS business  segment  income is
comprised of the following (in thousands):



                                                         Three Months Ended
                                                              March 31,
                                                        ---------------------
                                                           2001        2000
                                                        ----------  ---------
                                                              
    Net gains on disposition of land parcels and
      facilities developed (1)......................    $   40,450  $  17,271
    Development fees and other, net.................         2,404      1,673
    Income from Kingspark S.A. and its subsidiaries
      (2)...........................................            --      4,820
                                                        ----------  ---------
                                                        $   42,854  $  23,764
                                                        ==========  =========


----------
(1)  Represents  gains  from the  disposition  of land  parcels  and  facilities
     developed as follows:

   o     2001: 76 acres; 5.6 million square feet; $365.0 million of proceeds

   o     2000: 39 acres; 2.1 million square feet; $92.9 million of proceeds

(2)  Kingspark S. A. and its subsidiaries' income in 2000 includes:

   o     Gains from the disposition  of land  parcels and  facilities  developed
         (9 acres; 0.2 million square feet; $24.3 million of proceeds; net gains
         of $2.6 million);

   o     Development fees and other miscellaneous net income of $2.6 million;

   o     Deferred and current income tax expense of $0.8 million; and

   o     Foreign currency exchange gains of $0.4 million

Temperature-Controlled Distribution Operations

    ProLogis  recognizes  income  from the  temperature-controlled  distribution
operations  segment of its business under the equity method.  ProLogis' share of
the net  income or loss of  ProLogis  Logistics  and  Frigoscandia  S.A.  was as
follows (in thousands)  (see Notes 3 and 7 to ProLogis'  Consolidated  Condensed
Financial Statements in Item 1):



                                                          Three Months Ended
                                                               March 31,
                                                        ----------------------
                                                           2001         2000
                                                        ----------  ----------
                                                              
     Income (loss) from ProLogis Logistics..........    $   (1,744) $    2,871
     Loss from Frigoscandia S.A.....................        (7,728)     (1,674)
                                                        ----------  ----------
               Total temperature-controlled
                 distribution operations
                 segment............................    $   (9,472) $    1,197
                                                        ==========  ==========


    Amounts  recognized  under the equity  method of  accounting  from  ProLogis
Logistics and Frigoscandia  S.A.  includes interest income and interest expense,
depreciation  and  amortization  expense,  general and  administrative  expense,
income taxes and foreign  currency  exchange  gains and losses (with  respect to
Frigoscandia).  ProLogis  recognizes  in excess of 99% the net  earnings of each
entity in 2001, as compared to 95% in 2000.

    CSI's operating  capacity was comparable in both  three-month  periods.  The
decrease in ProLogis'  share of ProLogis  Logistics'  net earnings  from 2000 to
2001 of $4.6 million is primarily  attributable to higher interest  expense as a
result of  increasing  external  debt by $125.0  million.  The proceeds from the
borrowings  of  ProLogis   Logistics  were  used  to  repay  $125.0  million  of
outstanding  notes and accrued  interest due to ProLogis.  See "-- Liquidity and
Capital Resources -- Credit Facilities".

    Frigoscandia's   operating  capacity  was  comparable  in  both  three-month
periods.  ProLogis' share of Frigoscandia S.A.'s net losses includes net foreign
currency  exchange  losses of $1.4  million  and $2.2  million in 2001 and 2000,
respectively.   Excluding  these  foreign  currency  exchange  losses,  ProLogis
recognized  $6.8  million  less income  under the equity  method in 2001 than it
recognized  in 2000 from its  investment  in  Frigoscandia  S.A. The increase in
Frigoscandia  S.A.'s  net  loss in 2001  from  the  loss  recognized  in 2000 is
primarily due to lower occupancy levels, principally the result of the reduction
in inventories of beef and pork products by the German and French governments.


                                       23
   24

    ProLogis  believes  that the  factors  that  contributed  to the  decline in
operating  performance  of  Frigoscandia  are  temporary  and  can be  partially
mitigated in the  short-term by reductions in general and  administrative  costs
and other operating costs. However, there is no assurance that these factors are
temporary  or that some or all of these  factors  will not  continue  past 2001.
ProLogis and Frigoscandia  are currently  monitoring the recent outbreak of foot
and mouth disease in Europe. At this time, the effect (positive or negative), if
any,  on the demand for  temperature-controlled  distribution  services  and the
related transportation services offered by Frigoscandia cannot be determined.

Other Income and Expense Items

Interest Expense


     Interest  expense  is a  function  of the level of  borrowings  outstanding
offset by  interest  capitalization  with  respect  to  development  activities.
Interest  expense  was $39.4  million in 2001 and $42.0  million in 2000  ($39.6
million assuming ProLogis had consolidated the financial statements of Kingspark
S. A. and its subsidiaries in 2000).  Total interest  expense in 2000,  assuming
consolidation,  is  lower  due to the  effects  of  interest  capitalization  by
Kingspark S. A. and its subsidiaries.

     Capitalized  interest  was $8.1  million  in 2001 and $4.2  million in 2000
($6.5 million assuming  ProLogis had  consolidated  the financial  statements of
Kingspark S. A. and its subsidiaries in 2000).  Capitalized  interest levels are
reflective of ProLogis' cost of funds and the level of  development  activity in
each year.

Gain (Loss) on Disposition of Real Estate

    Gain on  disposition  of real  estate  represents  the net  gains  from  the
disposition of operating  facilities that were acquired or developed  within the
property operations segment.  Generally,  ProLogis disposes of facilities in the
property  operations  segment  because  such  facilities  are  considered  to be
non-strategic  facilities or to complement the portfolio of developed facilities
that are acquired by entities in which ProLogis maintains an ownership interest.
Non-strategic facilities are assets located in markets or submarkets that are no
longer considered target markets as well as assets that were acquired as part of
previous  portfolio  acquisitions  that are not  consistent  with ProLogis' core
portfolio based on the asset's size or configuration.

    Property operations segment dispositions were as follows:

    o   2001:  1.6  million  square  feet;  $62.9 million of proceeds;  net loss
        of $1.7  million  (offset by a gain of $0.5  million recognized upon the
        contribution of ProLogis' 49.9% investment in the common stock of
        ProLogis European  Properties S.a.r.l. to ProLogis European Properties
        Fund), and

    o   2000: 0.7 million square feet; $26.4 million of proceeds; net gains of
        $5.1 million.

Foreign Currency Exchange Losses

    ProLogis recognized net foreign currency exchange losses of $3.2 million and
$6.5  million for 2001 and 2000,  respectively.  Had ProLogis  consolidated  the
financial  statements of Kingspark S. A. and its  subsidiaries in 2000,  foreign
currency exchange losses for 2000 would have been $6.1 million. Foreign currency
exchange  gains and losses are  primarily  the result of the  remeasurement  and
settlement of  intercompany  debt and the  remeasurement  of third party debt of
ProLogis'  foreign  subsidiaries.  Fluctuations in the foreign currency exchange
gains and losses recognized in each period are a product of movements in certain
foreign currency  exchange rates,  primarily the euro and the pound sterling and
the level of intercompany  and third party debt  outstanding that is denominated
in currencies other than the U.S. dollar.

Income Taxes

    ProLogis  is taxed as a REIT for  federal  income  tax  purposes  and is not
required to pay federal income taxes if minimum  distribution and income,  asset
and shareholder tests are met. ProLogis  Development Services is not a qualified
REIT subsidiary for tax purposes.  Also, the foreign countries in which ProLogis
operates do not recognize  REITs under their  respective tax laws.  Accordingly,
ProLogis recognizes income taxes as appropriate and in accordance with GAAP with
respect to the taxable earnings of ProLogis Development Services and its foreign
subsidiaries.



                                       24
   25

    Current income tax expense  recognized in 2001 and 2000 was $3.4 million and
$117,000,  respectively  (a  benefit  of  $0.4  million  assuming  ProLogis  had
consolidated the financial statements of Kingspark S. A. and its subsidiaries in
2000).  Current  income  tax  expense  is  higher in 2001  primarily  due to the
increased level of income  recognized by ProLogis'  taxable  subsidiaries in the
CDFS business segment.  Deferred income tax expense was $3.4 million and zero in
2001 and 2000, respectively ($1.4 million assuming ProLogis had consolidated the
financial statements of Kingspark S. A. and its subsidiaries in 2000). ProLogis'
deferred  tax  component  of total  income  taxes is a function  of each  year's
temporary  differences (items that are treated differently for tax purposes than
for book purposes) as well as the need for a deferred tax valuation allowance to
adjust certain deferred tax assets (primarily deferred tax assets created by tax
net operating losses) to their estimated realizable value.

Environmental Matters

    ProLogis has not experienced any environmental  condition on its facilities,
which  materially  adversely  affected  its results of  operations  or financial
position nor is ProLogis  aware of any  environmental  liability  that  ProLogis
believes  would  have a  material  adverse  effect  on its  business,  financial
condition or results of operations.

Liquidity and Capital Resources

Overview

    ProLogis   considers  its  liquidity  and  ability  to  generate  cash  from
operations as well as its financing  capabilities  (including  proceeds from the
disposition  of  facilities)  to be  adequate  and  expects it to continue to be
adequate to meet its anticipated  development,  acquisition,  operating and debt
service needs as well as its shareholder distribution requirements.

    ProLogis'  future  investing  activities  are  expected  to consist  of: (i)
acquisitions of existing facilities in key distribution  markets in the property
operations segment;  (ii) the acquisition of land for future development and the
development of distribution  facilities in the CDFS business  segment for future
disposition to entities in which ProLogis  maintains an ownership interest or to
third parties; and (iii) certain  temperature-controlled  distribution  facility
expansions   and,   to   a   limited    extent,    investments   in   additional
temperature-controlled    distribution    facilities.     Temperature-controlled
investments  will be made as deemed  necessary to achieve  strategic  objectives
with  respect to targeted  markets in the United  States or to address  specific
customer  needs in the United  States and  Europe.  ProLogis'  future  investing
activities are expected to be primarily funded with:

    o   cash generated by operations;

    o   the proceeds from the disposition of facilities developed to third
        parties;

    o   the proceeds  from the  disposition  of  facilities to entities in which
        ProLogis  maintains an  ownership  interest,  such as ProLogis  European
        Properties Fund or other entities that may be formed in the future; and

    o   utilization of ProLogis' revolving credit facilities.

    In the  short-term,  borrowings  on and  subsequent  repayments of ProLogis'
unsecured  revolving  credit  facilities  will provide  ProLogis  with  adequate
liquidity  and  financial   flexibility   to   efficiently   respond  to  market
opportunities.   As  of  May  10,  2001,  on  a  combined  basis,  ProLogis  had
approximately $389.8  million of short-term  borrowing  capacity available under
its  U.S. dollar  denominated  and  multi-currency  unsecured  revolving  credit
facilities (see "-- Credit Facilities").  ProLogis will continue to evaluate the
public debt markets with the objective of reducing its short-term borrowings and
extending debt maturities on favorable terms.

    Within  ProLogis  European  Properties  Fund,  ProLogis  has access to 396.9
million euros (the currency  equivalent of  approximately  $349.9  million as of
March 31, 2001) of third party equity  capital in Europe that has been committed
primarily  by  institutional  investors  through  2002 to fund  acquisitions  of
ProLogis' completed  stabilized European  developments and acquisitions of other
facilities  from  third  parties.   ProLogis  European  Properties  Fund  has  a
multi-currency secured,  revolving credit facility in the currency equivalent of
500.0 million euros that is utilized in conjunction with the committed equity to
provide  additional  capital for its  acquisitions.  As of March 31, 2001,  95.4
million  euros and 73.6 million  pounds  sterling  (the  currency  equivalent of
approximately  $189.2  million) was outstanding on the 500.0 million euro credit
facility.  As of March 31,  2001,  ProLogis  no longer  guarantees  this  credit
agreement.  In April 2001,  ProLogis European  Properties Fund placed over 212.0
million euros (the currency  equivalent of  approximately  $186.9  million as of
March 31, 2001) of permanent commercial mortgage-backed securities. The proceeds
were used to repay borrowings on the credit agreement.

                                       25
   26

Cash Operating Activities

    Net cash  provided by operating  activities  was $135.1  million in 2001 and
$93.3  million in 2000.  The increase is primarily  the result of the  increased
number of  operating  facilities  in 2001.  See "--  Results  of  Operations  --
Property  Operations".  Cash provided by operating  activities exceeded the cash
distributions paid on Common Shares in 2001 and 2000.

Cash Investing and Cash Financing Activities

    In 2001,  ProLogis' investing activities provided net cash of $228.9 million
and financing activities used net cash of $382.5 million. Proceeds received from
the dispositions of real estate and the repayments of loans by and distributions
received from  ProLogis'  unconsolidated  entities were used to fund real estate
investments and repay borrowings on ProLogis' line of credit. In 2000,  ProLogis
used net cash of $70.9  million in  financing  activities,  which was  primarily
funded by borrowings on its line of credit.

Credit Facilities

    ProLogis  has an  unsecured  credit  agreement  that  provides  for a $475.0
million  unsecured  revolving  line of credit.  ProLogis  Logistics and ProLogis
Development  Services  may also  borrow  under the credit  agreement,  with such
borrowings  guaranteed  by  ProLogis.  As of March  31,  2001,  ProLogis  had no
borrowings  outstanding  on the  unsecured  line of credit and  ProLogis  was in
compliance with all covenants contained in the credit agreement. As of March 31,
2001,  ProLogis Logistics had borrowed $125.0 million under the credit agreement
and ProLogis Development Services had no borrowings under the credit agreement.

    ProLogis  has a credit  agreement  that  provides  for a 325.0  million euro
multi-currency,  unsecured  revolving line of credit (the currency equivalent of
approximately  $286.6 million as of March 31, 2001). As of March 31, 2001, there
were 132.8  million  euros (the  currency  equivalent  of  approximately  $120.2
million) of  borrowings  outstanding  on the line of credit and  ProLogis was in
compliance with all covenants contained in the credit agreement.

Commitments

    As of  March  31,  2001,  ProLogis  had  letters  of  intent  or  contingent
contracts,  subject to ProLogis' final due diligence, for the acquisition of 1.7
million square feet of operating facilities at an estimated  acquisition cost of
$41.4 million. The foregoing transactions are subject to a number of conditions,
and ProLogis  cannot predict with certainty  that they will be  consummated.  In
addition,  as of March  31,  2001,  ProLogis  had  $558.4  million  of  budgeted
development  costs for  developments  in process,  of which  $305.1  million was
unfunded.

    On January 11, 2001,  ProLogis  announced a Common Share repurchase  program
under which it may  repurchase up to $100.0  million of its Common  Shares.  The
Common  Shares will be  repurchased  from time to time in the open market and in
privately  negotiated  transactions,   depending  on  market  prices  and  other
conditions. As of March 31, 2001, no common shares had been repurchased.

    On March 30, 2001,  ProLogis  called for the  redemption of its  outstanding
Series A cumulative, redeemable preferred shares of beneficial interest ("Series
A preferred  shares") at the price of $25.00 per share,  plus $0.2481 in accrued
and unpaid  dividends,  for an aggregate  redemption price of $25.2481 per share
(the  "Redemption  Price").  The shares were  redeemed on May 8, 2001 at a total
cost of $136.3 million.

    ProLogis  has  entered  into a  subscription  agreement  to make  additional
capital contributions to ProLogis European Properties Fund of 84.4 million euros
(the currency  equivalent of  approximately  $74.4 million as of March 31, 2001)
through 2002.  Also,  ProLogis is committed to invest an additional $2.0 million
in the  non-cumulative  preferred stock of PhatPipe Inc. during 2001. See Note 3
to ProLogis' Consolidated Condensed Financial Statements in Item 1.

    As of March  31,  2001,  Frigoscandia  AB had a 138.5  million  euro  credit
agreement  (increased to 185.0 million in April 2001).  ProLogis has  guaranteed
100%  of  the  borrowings  under  the  agreement.  The  currency  equivalent  of
approximately $122.3 million was outstanding as of March 31, 2001. Additionally,
in April 2001,  the  currency  equivalent  of  approximately  $45.9  million was
borrowed under the credit agreement. The agreement expires on September 28, 2001
and contains a provision to extend the due date until December 28, 2001.


                                       26
   27

    ProLogis   European   Properties  Fund  has  a  credit  agreement  with  two
international  banks for a multi-currency  secured  revolving credit facility in
the currency  equivalent of 500.0 million euros. The credit agreement matures in
October 2002.  Borrowings  can  be  denominated  in  pound sterling or the euro.
As of March 31, 2001,  95.4 million euros and 73.6 million  pound  sterling were
outstanding on the line (the currency equivalent of approximately $189.2 million
as of March 31, 2001). As of March 31, 2001,  ProLogis no longer guarantees this
credit agreement.

    ProLogis  has   guaranteed  a  140.0  million  French  franc  (the  currency
equivalent of  approximately  $18.8 million as of March 31, 2001) unsecured loan
outstanding of ProLogis European Properties S.a.r.l.

    As of March 31,  2001,  ProLogis  North  American  Properties  Fund II has a
$165.0 million short-term borrowing arrangement  outstanding  which is  due June
25, 2001. ProLogis North American Properties Fund II intends to obtain permanent
secured  financing  which  will  be  used  to  repay its short-term  borrowings.
ProLogis has guaranteed the 100% of the amount outstanding.

Distribution and Dividend Requirements

    ProLogis' current  distribution policy is to pay quarterly  distributions to
shareholders based upon what it considers to be a reasonable  percentage of cash
flow and at the level that will allow  ProLogis to continue to qualify as a REIT
for  tax  purposes.  Because  depreciation  is a  non-cash  expense,  cash  flow
typically  will be greater  than  earnings  from  operations  and net  earnings.
Therefore,  annual  distributions  are expected to be  consistently  higher than
annual earnings.

    On February 23, 2001,  ProLogis paid a quarterly  distribution of $0.345 per
Common Share to  shareholders of  record on February 9, 2001.  The  distribution
level for 2001 was set by ProLogis'  Board of Trustees in December 2000 at $1.38
per Common Share.

    The  annual  dividend  rates on  ProLogis'  preferred  shares  are $2.35 per
cumulative  redeemable Series A preferred share, $4.27 per cumulative redeemable
Series C preferred  share,  $1.98 per cumulative  redeemable  Series D preferred
share and $2.1875 per cumulative redeemable Series E preferred share.

    On January  31,  2001,  ProLogis  paid  quarterly  dividends  of $0.5469 per
cumulative redeemable Series E preferred share. On March 30, 2001, ProLogis paid
quarterly  dividends  of $0.5875 per  cumulative  redeemable  Series A preferred
share, $1.0675 per cumulative redeemable Series C preferred share and $0.495 per
cumulative redeemable Series D preferred share.

    Pursuant to the terms of its preferred  shares,  ProLogis is restricted from
declaring or paying any  distribution  with respect to the Common  Shares unless
and until all  cumulative  dividends  with respect to the Preferred  Shares have
been paid and  sufficient  funds have been set aside for  dividends for the then
current dividend period with respect to the preferred shares.

Funds from Operations

    Funds from operations  attributable to Common Shares increased $12.9 million
to $100.7 million for 2001 from $87.8 million for 2000.

    Funds from  operations  does not represent net income or cash from operating
activities in  accordance  with GAAP and is not  necessarily  indicative of cash
available to fund cash needs,  which is presented in the Consolidated  Condensed
Statement of Cash Flows in ProLogis' Consolidated Condensed Financial Statements
in Item 1. Funds from  operations  should not be considered as an alternative to
net  income  as  an  indicator  of  ProLogis'  operating  performance  or  as an
alternative to cash flows from operating, investing or financing activities as a
measure of liquidity.  Additionally, the funds from operations measure presented
by ProLogis will not  necessarily be comparable to similarly  titled measures of
other  REITs.   ProLogis   considers  funds  from  operations  to  be  a  useful
supplemental  measure  of  comparative  period  operating  performance  and as a
supplemental  measure  to  provide  management,  financial  analysts,  potential
investors and shareholders  with an indication of ProLogis'  ability to fund its
capital expenditures and investment activities and to fund other cash needs.





                                       27
   28

    Funds from operations is defined by the National  Association of Real Estate
Investment  Trusts  ("NAREIT")  generally as net income  (computed in accordance
with GAAP),  excluding real estate related depreciation and amortization,  gains
and losses from sales of properties, except those gains and losses from sales of
properties upon completion or stabilization  under pre-sale agreements and after
adjustments for  unconsolidated  entities to reflect their funds from operations
on the same basis.  ProLogis  includes gains and losses from the  disposition of
its CDFS business segment assets in funds from operations.

    Funds from  operations,  as used by  ProLogis,  is modified  from the NAREIT
definition.  ProLogis'  funds from  operations  measure  does not  include:  (i)
deferred  income tax  benefits  and  deferred  income tax  expenses of ProLogis'
taxable subsidiaries;  (ii) foreign currency exchange gains and losses resulting
from debt transactions  between ProLogis and its consolidated and unconsolidated
entities;   (iii)  foreign   currency   exchange   gains  and  losses  from  the
remeasurement  (based on current foreign currency exchange rates) of third party
debt of ProLogis' foreign  consolidated and  unconsolidated  entities;  and (iv)
mark to market adjustments related to derivative financial  instruments utilized
to manage  ProLogis'  foreign  currency risks.  These  adjustments to the NAREIT
definition are made to reflect  ProLogis'  funds from operations on a comparable
basis with the other REITs that do not engage in the types of transactions  that
give rise to these items.

    Funds from operations is as follows (in thousands):



                                                          Three Months Ended
                                                               March 31,
                                                         ---------  ---------
                                                           2001        2000
                                                         ---------  ---------
                                                              
    Net earnings attributable to Common Shares.........  $  44,007  $  44,938
      Add (Deduct):
        Real estate related depreciation and
          amortization..................................    37,139     38,728
        Loss (gain) on disposition of non-CDFS business
          segment assets................................     1,198     (5,108)
        Foreign currency exchange losses, net...........     3,004      6,522
        Deferred income tax benefit.....................    (3,420)        --
        ProLogis' share of reconciling items of
          unconsolidated entities.......................
        Real estate related depreciation and
          amortization..................................    17,380     14,239
        Gain on disposition of non-CDFS business
          segment assets................................        (5)      (312)
        Foreign currency exchange (gains) losses, net...     3,001    (10,637)
        Deferred income tax expense benefit.............    (1,599)      (566)
                                                         ---------  ---------
      Funds from operations attributable to Common
        Shares.......................................... $ 100,705  $  87,804
                                                         =========  =========





























                                       28
   29

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk

         As of March 31, 2001, no  significant  change had occurred in ProLogis'
interest  rate risk or foreign  currency  risk as discussed  in  ProLogis'  2000
Annual Report on Form 10-K.


PART II

Item 4.  Submission of Matters to Vote of Securities Holders

         None.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

12.1     Computation of Ratio of Earnings to Fixed Charges
12.2     Computation of Ratio of Earnings to Combined Fixed Charges and
         Preferred Share Dividends
15.1     Letter from Arthur Andersen LLP regarding unaudited financial
         information dated May 9, 2001

(b)      Reports on Form 8-K:

                                          Items                  Financial
             Date                        Reported                Statements
           --------                     ----------              ------------

             None






























                                       29

   30










                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                PROLOGIS TRUST



                                 BY:  /S/     WALTER C. RAKOWICH
                                      ------------------------------------
                                              Walter C. Rakowich
                                             Managing Director and
                                            Chief Financial Officer
                                          (Principal Financial Officer)



                                 BY:  /S/        LUKE A. LANDS
                                      ------------------------------------
                                                 Luke A. Lands
                                      Senior Vice President and Controller



                                 BY:  /S/        SHARI J. JONES
                                      ------------------------------------
                                                 Shari J. Jones
                                                 Vice President
                                         (Principal Accounting Officer)


Date:  May 10, 2001



















                                       30


   31
                                 EXHIBIT INDEX


Exhibit
Number                            Description
-------                           -----------

12.1     Computation of Ratio of Earnings to Fixed Charges

12.2     Computation of Ratio of Earnings to Combined Fixed Charges and
         Preferred Share Dividends

15.1     Letter from Arthur Andersen LLP regarding unaudited financial
         information dated May 9, 2001