Industrial REITs: It's Prime-Time
Amazon’s push towards two-day and same-day delivery has sparked a supply chain “arms race” among retailers and logistics providers of all sizes. Speed is all about supply chain densification.
Riding the e-commerce wave, industrial REIT performance has been relentless over the past half-decade. Consumers increasingly demand speedy delivery, and retailers need industrial REITs to deliver it.
What Trade War? Despite continued uncertainty over trade and its impact on the supply chain, the secular tailwinds driven by domestic e-commerce has overwhelmed trade-related headwinds so far this year.
Last quarter's earnings results indicated that the best may be yet to come. Leasing spreads jumped nearly 11% while the acquisition pipeline has re-opened given REITs' favorable cost of capital.
"Death By Amazon" has been the mantra across retail, but Amazon's push into logistics - and the potential negative impact on industrial REIT pricing power - shouldn't be ignored.
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