Here’s why industrial REITs are outperforming all others

As online shopping grows, demand will increase for distribution centers to process and fill orders.

TRD WEEKEND EDITION /
Apr.April 15, 2018 01:12 PM

Pantos Logistics Warehouse. (Credit from back: Romlogistics, Pixabay)

Thanks to e-retailers like Amazon, industrial REITs are on the upswing.

Though online shopping still only counts for under 10 percent of retail sales, the potential is already transforming supply chains, which starts with warehouses, according to Bloomberg.

REITs like Prologis, Rexford Industrial Realty and Terreno Realty are doing notably well with returns over 16 percent over the past 12 months, allowing them to surpass both other industrial REITs, which had about 8 percent returns, and all other types of REITs from retail to residential to offices.

Why? Online retailers need about triple the space along with more intricate logistical servicing, and, on top of that, the demand for delivery services are highest in dense cities where land for big facilities is scare, Bloomberg reports. As a result, rents are climbing, nearly guaranteeing a win for industrial investors.

In New York earlier this year, warehouse rents were already approaching record highs. That came on the heels of Amazon’s plans, filed last year, for its new 2-million-square-foot Staten Island warehouse, which qualified it as 2017’s largest new project in the city. [Bloomberg]Erin Hudson


Related Articles

arrow_forward_ios

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

An example of roll-off waste management (Credit: YouTube, iStock)

Big building owners prevent city from dumping container-pickup in trash-collection reform

Joel Schreiber (Credit: Shir Stein and Wikipedia)

WeWork’s first investor used his stock as collateral. Now his lenders are suing him

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Here’s a look at Blackstone’s industrial plays after its record-breaking portfolio purchase

Trump’s tax returns, Amazon gets into proptech: Daily digest

Amazon CEO Jeff Bezos (Credit: Getty Images, iStock)

The Daily Dirt: Amazon pushes further into brick-and-mortar space

arrow_forward_ios