Tim Arndt
Chief Financial Officer at Prologis
Thanks, Joe. Good morning, everybody, and welcome to our first quarter earnings call. We began the year with results and conditions that remain strong. Market rents have continued to grow, demand has been consistent and we're seeing sharp declines in new construction limiting future supply. While logistics real estate is very healthy, the macroeconomic picture continues to be a concern and we anticipate it could weigh on customer sentiment over the balance of the year, translate into some demand that could be delayed into 2024. However, this will overlap with a slowdown of new deliveries creating a sustained dynamic for high occupancy and continued rent growth into next year.
Beginning with our results, our core FFO excluding promotes was $1.23 per share, and including promotes was $1.22 per share. Our results benefited from higher NOI in the quarter, but offset by approximately $0.02 of higher insurance expense from an unusually active storm season experiencing a year's worth of claims activity in just the first quarter.
In terms of our operating results both ending and average occupancy for the quarter were 98% holding average occupancy flat to the fourth quarter. Rent change was 69% on a net effective basis and 42% on a cash basis each a record. The unusually widespread between the two is reflective of lower free rent and higher escalations and our new leasing. Despite the step-up of in-place rents, our lease mark-to-market expanded to 68% during the quarter as market rent growth remained strong and slightly ahead of expectations. With the remaining lease term of roughly four years, this lease mark-to-market represents over $2.85 per share of incremental earnings as our leases roll the market, providing visibility to future income and dividend growth. These results drove record same-store growth 9.9% on a net effective basis and 11.4% on a cash basis.
During the quarter, our efforts on the balance sheet were focused on liquidity raising over $3.6 billion in new financings for Prologis and our ventures at an interest rate of 4.6% and a term of nearly 14 years. This fundraising total does not include $1 billion of additional capacity from a recast of our global line of credit, which closed in April, and brings our total borrowing potential under our lines to $6.5 billion.
As mentioned, fundamentals in our markets remain strong, but we expect that a more cautious outlook will weigh on the pace of demand. This is not a new perspective as our forecast 90 days ago prepared for a weakening sentiment and how the top-down view for some occupancy loss over the year. We haven't changed our outlook, but we also haven't upgraded it despite the quarter's outperformance.
As an update on proprietary metrics, our proposal activity picked up in absolute terms and is in line with strong market conditions as a percent of available space. Approximately 99% of the units across our 1.2 billion square feet are either leased or in negotiation. Utilization ticked down to 85%, which is normalizing to a level that our customers view as optimal. E-commerce leasing increased during the quarter to 19% of all new leasing. We avoid drawing conclusions from a single quarter of activity on most metrics but it's notable here that e-commerce leasing picked up meaningfully back towards its five-year average.
As we've said before, we ultimately look at retention, pre-leasing, and rent achievement as the best real-time metrics of portfolio health and on that basis, our results are certainly very strong. We expect that the current 3.5% vacancy rate in our US markets will build to the low fours toward the end of the year before turning back to the mid-threes by late 2024, due to the lack of incoming supply and accounting for moderating demand. We anticipate a similar path in our European markets, and, of course, even a 5% vacancy rate is historically excellent and supportive of strong rental growth. We expect this pattern to play out in our true months of supply metrics which was a very healthy 30 months in the US and should decline into the 20s next year.
We are launching markets that have large development pipelines such as a few in the Sunbelt in the US, but so far that supply also seems manageable. In Europe, most of our focus is on the UK, where development starts have continued even as demand has moderated, which will lift market vacancies and may pressure rents. And Japan is also a market which is expected to see larger increases in vacancy over the year, but similarly, expect a slowdown in new supply due to the surges in -- surges in land and construction costs.
Taking all of these movements into account, we are holding our market rent growth forecast for the year at 10% in the US and 9% globally. And capital markets transactions continue to be few and far between but the pickup in activity suggests we will see a second quarter. Appraised values in our funds declined 1% in the US and 2% in Europe during the quarter and 8% and 18%, respectively from the peak. It's worth noting that our view of public market prices in NAVs that they have adjusted, much more than is warranted for these levels of write-down.
Redemption requests in our open-ended funds have slowed significantly with the redemption cues nearly unchanged around 5% of net asset value. This is reflective of both a slower pace of new redemptions, as well as rescissions of prior requests combined with over $150 million of new commitments made our net queue is essentially unchanged from last year. Last quarter, we described our approach to fulfilling redemption requests, which is based on an overarching objective to be consistent and fair to all investors requiring a few quarters for valuers to catch up. In that regard as appraisal seem to be nearing fair value, we plan to redeem units in health this quarter given the swift response to value changes in Europe, and expect to do the same in the US next quarter. In turn, we view this as an excellent time to invest more of our capital into the vehicles, which we'll be doing over the coming quarters and some meaningful numbers.
Turning to guidance, we are tightening and increasing average occupancy to range between 97 in a quarter to 97.75%, a 25 basis point increase at the midpoint. Our same-store will benefit from this increase driving our net effective guidance to a range of 8.5% to 9% in a quarter percent and cash same-store of 9% and 9.75%. We are forecasting our lease mark-to-market to end the year close to 70%.
Extracting the 2024 component of this suggests rent change should exceed 85% next year, even without continued market rent growth, which is a clear illustration of how our exceptional rent change will not only endure but continue to grow. We expect G&A to range between $380 and $390 million and strategic capital revenues excluding promotes to range between $515 and $530 million. We are maintaining our forecast for Net Promote Income of $380 million and given the size of USLF and the potential for small changes in value to have a meaningful impact, there is potential for upside here and we believe we have the downside covered.
We had few development starts in the quarter, a reflection of our disciplines, but our pipeline is deep and we are maintaining our guidance of $2.5 to $3 billion for the year. We expect the pace to remain slow in the second quarter, putting the bulk of the activity into the second half. It's noteworthy that following a belief that construction costs may decline in the coming quarters, we now see them as likely to increase, mostly in line with inflation. As new fundraising has become visible, we forecast contributions to be concentrated in the second half, totaling $2 billion to $3 billion when combined with forecasted dispositions.
So in total, we expect GAAP earnings to range between $310 and $325 per share. We are increasing our core FFO including promotes guidance to a range of $5.42 by $50 per share. And further, we are guiding, core FFO, excluding promotes to range between $5.02 and $5.10 per share with the midpoint representing 10% growth over 2022.
I'd like to close with a few observations that we've made about our standing in the equity markets, which we found interesting and wanted to share. Today, we sit as the 68th largest company in the S&P 500 ahead of names like GE, American Express, Cigna, Citigroup as well as Ford and GM combined. Also of note is that with our planned $3.3 billion of dividends this year, we rank 42nd in terms of total cash return to investors. Of these top 42 dividend payers Prologis has outgrown the Group by 500 basis points per year over the last three years. And in fact, since our IPO, we have paid over $15 billion in dividends at a 15% CAGR, ranking 13th on growth in the entire S&P 100. While getting bigger has never been our objective, we thought the context would be eye-opening.
So in closing, we feel great about the health of our business, even in the face of a slowing economy. Most importantly, nothing we have seen alters the path of its underlying secular drivers for the long-term potential of our platform. In that regard, we're excited to tell you much more about that outlook and our platform later in the year. Last week, we announced our upcoming Investor Day to be held at the New York Stock Exchange this December. We hope to see many of you there in person and tuned into the live webcast, where we will showcase our deep bench of talent and the strong differentiators that define our company. More details on that to come.
And with that, I'll hand it back to the operator for your questions.
