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Duke Realty (DRE) Announces Activities at 33 Logistics Park

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Duke Realty Corporation announced that it has successfully leased 33 Logistics Park 1611, a bulk warehouse, to a leading logistics company in the nation. Moreover, the company noted that it has commenced the construction of 33 Logistics Park 1620 — a spec industrial building.

Both these properties are located at 33 Logistics Park — the Easton, PA-based industrial development. The company has a third property in 33 Logistics Park, which was unveiled in 2016. This bulk warehouse, which spans across 1.1 million square feet of space, is 100% leased.

33 Logistics Park 1611 is a bulk warehouse spanning 628,475 square feet of space, which was delivered by the company in early July. The warehouse provides the tenant with a larger space and is strategically located for its operations.

33 Logistics Park 1620, the 1,015,740-square-foot cross-dock building, will be delivered in April 2018. It is adjacent to Duke Realty’s other two properties. The property will be equipped with LED lights, four drive-in doors and 120 dock doors. In addition, it will provide parking space for 472 automobiles and 245 trailers.
 
33 Logistics Park is located on the eastern side of the Lehigh Valley near the four-way diamond interchange at Main Street, just off Route 33. The valley is a popular distribution hub as it is well connected to the New York City metropolitan area. Moreover, ease of transportation and sound connectivity to major interstate highways will boost demand for the above mentioned industrial properties.
    
Amid an e-commerce boom, growth in industries and companies opting for consolidation of operations for improving supply chain efficiencies, demand for logistics infrastructure and efficient distribution networks has been shooting up. This, in turn, has been stoking the industrial real estate market’s growth. Hence, the company is actively constructing properties which offer premium office space, in order to benefit from the accommodative industrial environment.

In fact, construction of a spec industrial building also offers many benefits to tenants and developers. Spec buildings are not built to suit a particular tenant, offering the developer flexibility to lease the space to different tenants. Since the buildings are standard constructions, these give tenants an opportunity to customize the space according to their needs. Additionally, spec buildings are constructed in desirable locations — in or around important industrial hubs — and thus enjoy high absorption and occupancy levels.
With a rapid rise in the number of spec projects in the nation, Duke Realty remains well poised to capitalize on this trend.

The recovery in the economy has fueled demand for industrial and distribution space. In line with this, Duke Realty has been making diligent efforts to simplify its business model and turn into a leading domestic pure play industrial REIT. In fact, in May 2017, the company signed a deal with a subsidiary of Healthcare Trust of America, Inc. to sell its medical office business and portfolio for $2.8 billion.

The above discussed efforts of the company led its shares to rally 10.7%, outperforming 4.7% growth recorded by its industry, year to date.


Furthermore, this Zacks Rank #3 (Hold) company’s full-year 2017 funds from operations (FFO) per share estimate inched up 1.6% to $1.22, while the third-quarter 2017 estimate remained unchanged at 29 cents in a month’s time.

Stocks to Consider

A few better-ranked stocks in the REIT space include Getty Realty Corporation (GTY - Free Report) , Seritage Growth Properties (SRG - Free Report) and Communications Sales & Leasing, Inc. (UNIT - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Getty Realty’s 2017 FFO per share estimates moved up 7.8% to $1.94 over the past 60 days.

Seritage’s 2017 FFO per share estimates inched up 0.5% to $2.01 in a month’s time.

Communications Sales & Leasing’s 2017 FFO per share estimates climbed 14.4% to $2.54 during the same time frame.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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