Duke Realty Pre-Leases Perris Facility, Starts Building Another
Duke Realty Corporation DRE recently announced entering into a long-term lease agreement for one of its logistic buildings in Perris, CA. The company has also commenced construction of another facility in the Inland Empire East sub-market, as part of its effort to capitalize on the growing demand for modern distribution space in the region.
The 1 million-square-foot building, for which the company has secured a full-building lease, is located at 4375 N. Perris Avenue. Currently under construction, the property will likely be delivered in second-quarter 2020.
The building sits on a 54-acre site at the corner of Perris Avenue and Markham Street. Its features include 40’ clear height, 138 dock doors, 245 trailer stalls, 608 auto parking spaces, and 4-grade level loading doors.
Further, the development of the 800,218-square-foot logistics building at 4501 Patterson Avenue in Perris has been initiated by the company, likely to be delivered in the second half of 2020. The building is located on the southeast corner of Patterson Avenue and Markham Street, spanning 37.3 acres. It will feature 40’ clear height, 117 dock doors, 246 trailer stalls, 367 automobile parking spaces and four grade-level loading doors.
Nancy Shultz, senior vice president of Duke Realty’s Southern California operations, noted, “Perris continues to be a preferred location in the Inland Empire East for companies looking for large blocks of modern distribution space because of its proximity to the I-215 and business friendly environment.”
On an overall basis, resilient consumer sentiment, low unemployment level and rising wages play key roles in maintaining the industrial and logistics sector’s healthy performance. Services like same-day delivery are gaining traction and last-mile properties in high-income urban areas are witnessing solid pricing, occupancy and growth in rentals. This looks good for REITs like Duke Realty, Prologis Inc. PLD, Terreno Realty Corporation TRNO and PS Business Parks PSB.
Duke Realty’s solid capacity to bank on this favorable trend will likely help the company witness active leasing and healthy rent levels across a number of its properties in the upcoming period. The company’s acquisitions and development pipeline augur well for long-term growth. Duke Realty already has a robust presence in Southern California and achieved 100% leasing for more than 12.5 million square feet of space in 30 buildings in the region, reflecting the high demand for its properties.
However, recovery in the industrial market has continued for long and a whole lot of new buildings have become available in the market. This is leading to higher supply and increased competition, resulting in lesser scope for any robust rent and occupancy growth.
Shares of this Zacks Rank #2 (Buy) company have rallied 34.2%, outperforming the industry's growth of 20.2%, in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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