Industrial REIT Duke Realty Corp. DRE recently announced signing a lease with Old World Industries for 354,400-square-foot of space at a Bolingbrook property. Particularly, the automotive and chemical company will occupy the entire industrial building positioned at 605 West Crossroads Parkway in Bolingbrook.
Notably, this 354,400-square-foot building is, in fact, one of Duke Realty-owned buildings aggregating 4.3 million square feet in the I-55 submarket. And with excellent highway access and vicinity to the rest of the Chicago metro area and beyond, the I-55 industrial properties are among the top choices of the warehouse and distribution companies.
Further, the company owns, manages or has under development around 14.9 million square feet of industrial properties in the greater Chicago area. In addition, the company has strategic land positions available for future development and this augurs well for Duke Realty’s development activities.
Given its operational strength, we believe Duke Realty can continue its development activities in the upcoming period as well. Moreover, not only in the greater Chicago area but also on an overall basis, the industrial real estate asset category has grabbed headlines on the back of high consumer spending, strength in e-commerce market and a healthy manufacturing environment amid healthy economy. Also, the job market is propelling demand for the same space. This is fueling growth opportunities for the industrial REITs, including Prologis, Inc. PLD, Duke Realty, Terreno Realty TRNO and Liberty Property Trust LPT.
Specifically, Duke Realty has made concerted efforts to transform itself into a domestic-focused industrial property REIT. It resorted to the sale of the sub-urban office assets and the medical-office buildings in the past. The company owns and operates around 153 million rentable square feet of the industrial assets across 20 major U.S. logistics markets.
Nevertheless, recovery in the industrial market has continued for long, and a whole lot of new buildings are slated to be completed and made available in the near term. This will lead to higher supply, and lesser scope for rent and occupancy growth.
Also, of late, the domestic economy has been losing steam and concerns are rife regarding the fate of the U.S. economy amid prevalent trade-war tensions, the economic slowdown in Europe and China, as well as the declining stimulus from the lower tax rates. In fact, any protectionist trade policy will have an adverse impact on economic growth. This, in turn, might affect the company’s business and limit its growth tempo.
Duke Realty currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Terreno Realty Corporation (TRNO) : Free Stock Analysis Report
Prologis, Inc. (PLD) : Free Stock Analysis Report
Duke Realty Corporation (DRE) : Free Stock Analysis Report
Liberty Property Trust (LPT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research