Industrial REITs: Don't Bite The Hand That Feeds You

September 11, 2019 | Hoya Capital

Industrial REITs: Don't Bite The Hand That Feeds You Uncategorized Sep 10 Written By For full report, click here to visit Seeking Alpha! Industrial REITs remain the unstoppable force in the real estate sector, delivering another stellar second quarter. Investors have systematically under-owned this sector, waiting for the pull-back that never came. Industrial REITs are a case-study in why an investor’s time should be allocated to understanding supply and demand dynamics and long-term macroeconomic trends ahead of static valuation metrics.

Powered by the “need for speed”, fundamentals remain stellar. Market rents are poised to grow by roughly 6% in 2019 after rising 8% in 2018 and 9% in 2017. What trade war? Industrial REITs have seen minimal impact from the elevating tensions between the US and China. Ironically the more worrying trends are related to a Retail Apocalypse 2.0. A concern we raised last quarter, while the sector has benefited more than any from e-commerce, an intensification of retailer bankruptcies would concentrate more power in their largest tenant: Amazon.

Within the Hoya Capital Industrial REIT Index , we track the thirteen largest industrial REITs, which account for roughly $105 billion in market value: Prologis ( PLD ), Duke Realty ( DRE ), Liberty Property ( LPT ), Americold ( COLD ), First Industrial ( FR ), PS Business Parks ( PSB ), EastGroup ( EGP ), Rexford ( REXR ), STAG Industrial ( STAG ), Terreno ( TRNO ), Monmouth ( MNR ), Industrial Logistics ( ILPT ), and Innovative Industrials (IIPR ).

Industrial REITs comprise roughly 10% of the broad-based Real Estate ETFs ( VNQ and IYR ). To continue reading, click to visit SeekingAlpha. If you enjoyed this report, be sure to "Follow" our page to stay up-to-date on the latest developments in the housing and commercial real estate sectors. For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly ...