Industrial REITs: Who Doesn't Love Logistics
The red-hot industrial property market - the physical "hub" of e-commerce - has shown few signs of cooling down through mid-2021 as businesses scramble to build out supply chain resiliency.
Industrial REITs - which recorded the strongest earnings and dividend growth of any real estate sector in 2020 - continue to thrive amid this insatiable demand for logistics space.
Brokerage firm CBRE reported that industrial vacancy rates dipped to record-lows last quarter - the 44th consecutive quarter of positive net absorption - driving a nearly double-digit surge in rents.
Despite soaring rents, property rents represent a tiny - but growing - share of total supply chain costs as retailers and distributors furiously compete to quench the "need for speed" in consumer good distribution.
Sharing similar compelling tailwinds as the U.S. housing industry - structurally constrained supply and robust secular demand - we expect that investors willing to "pay up for quality" won't be disappointed.
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