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 New York 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
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

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

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

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Blackstone's Frank Cohen and Amazon CEO Jeff Bezos with the HQ2 site (Getty; Blackstone; Google Maps)

Amazon grows HQ2 site near DC with hotel buy

Amazon grows HQ2 site near DC with hotel buy
Rendering of the Tokyo Tokiwabashi project (Courtesy of Mitsubishi)

Mitsubishi unveils design for Japan’s tallest skyscraper

Mitsubishi unveils design for Japan’s tallest skyscraper
Charles Rettig, Commissioner of the IRS (Getty)

Opportunity Zone rule change seeks to entice foreign investors

Opportunity Zone rule change seeks to entice foreign investors
The proposal to rezone Industry City in Brooklyn was unveiled five years ago, but collapsed under political pressure (Courtesy of Industry City)

Here’s how Industry City’s controversial rezoning unraveled

Here’s how Industry City’s controversial rezoning unraveled
731 Lexington Avenue and 410 East 61st Street (inset) with Vornado's Steve Roth (Googel Maps; VNO)

Home Depot eyes former Bed Bath & Beyond space on First Ave

Home Depot eyes former Bed Bath & Beyond space on First Ave
Ian Schrager and the Pulic Hotel at 215 Chrystie Street (Getty; Google)

$60M mezz loan on Ian Schrager’s Public Hotel is for sale

$60M mezz loan on Ian Schrager’s Public Hotel is for sale
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...