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Duke Realty (DRE) Develops Build-to-Suit Facility in Savannah

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Ongoing technology and manufacturing investments, leading to sales and profit growth across markets, drives Corning's (GLW) first-quarter results.

Industrial REIT Duke Realty Corp. DRE recently announced that the company is developing a 194,120-square-foot, build-to-suit, rail accessible warehouse for Schilli Distribution Services in Savannah.

Being built on a 12.11-acre parcel at 276 Jimmy Deloach Parkway near the Port of Savannah, this facility will be used by the flatbed and open-deck transportation services provider for receiving and distributing products for several industries.

This long-term lease agreement with the rapidly growing transportation provider and a valued tenant of Duke Realty in Savannah reflects the company’s efficiency to offer its clients core facilities in their logistics chain.

The facility is expected to be delivered in September 2019 and will be accessible through a CSX rail branch that serves another Duke Realty building at 100 Logistics Way. Besides being close to the Port of Savannah, the 276 Jimmy Deloach Parkway is situated east of I-95, which is accessible through Jimmy Deloach Parkway and GA-21.

Notably, the Savannah market is experiencing high demand for warehouse space owing to the solid TEU traffic at the Garden City Terminal. TEU refers to 20 feet equivalent units in container port traffic. Duke Realty, being the largest industrial space owner in the market, is able to capitalize on the favorable trends. The company enjoys ownership of more than 7.3 million square feet of space in 24 buildings. Per management, while overall market vacancy is 3%, the company’s current 7.3 million-square-foot portfolio is 98% occupied.

Not only in the Savannah market, but across several regions in the nation, the industrial real estate asset category is in the limelight. This is because high-consumer spending, e-commerce boom as well as healthy manufacturing environment amid recovering economy and job market are spurring demand for the real estate category. In addition to Duke Realty, other REITs, including Prologis PLD, Terreno Realty Corporation TRNO and Liberty Property Trust LPT, are expected to benefit from the same factors.

Nevertheless, there is rising supply of industrial real estate space and this will partly dampen the robust growth momentum in rents. Also, any protectionist trade policies will have an adverse impact on economic growth, as well as the company’s business over the long term.

Duke Realty currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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