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Monmouth (MNR) Acquires Industrial Asset to Expand Pipeline

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Monmouth Real Estate Investment Corporation (MNR - Free Report) announced the acquisition of a new industrial building spanning 300,000 square feet, at 1414 South Council Road, Oklahoma City, OK. The company shelled out $30.3 million for this acquisition.

The property sits on approximately 123 acres of land and is well located near Interstate 40, with close proximity to the Will Rogers International Airport. Further, the property is anticipated to enjoy steady revenues as it is net-leased to a Delaware corporation — Amazon Fulfillment Services — for 10 years. 

For Monmouth Real Estate, which specializes in single tenant, net-leased industrial properties, subject to long-term leases, mainly to investment-grade tenants, the buyout offers a good scope to enjoy steady cash flow from this property.

Per management, with the above-mentioned acquisition, the company adds the largest Internet-based retailer to its tenant roster and also positions itself to benefit from the e-retail boom.

Going by a report by Jones Lang LaSalle Incorporated (JLL - Free Report) , in third-quarter 2017, the e-commerce sector accounted for nearly 25% of the total U.S. leasing demand as compared to 14.7% for the same period in the previous year. Hence, the company has been strategically repositioning its portfolio by investing heavily in industrial asset against the backdrop of the flourishing e-commerce, which is anticipated to drive demand for industrial space.

In fact, per the company’s latest fiscal year earnings release, it acquired 10 properties, spanning 2.8 million square feet of industrial space, for $286.5 million during fiscal 2017. Year over year, the company has grown its gross leasable area by 17% through acquisitions and expansion activities.  

Earlier this month, it acquired another 121,683-square-foot industrial property for $21,872,170. The company anticipates benefiting from the shift of supply chain toward the eastern seaboard and the region’s strong economic growth prospects.

Year to date, shares of the company have outperformed the industry it belongs to. In fact, its shares have gained 17.2% compared with the industry’s gain of 6.7% during the same time frame.

Monmouth Real Estate currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the real estate investment trust space include Columbia Property Trust , Easterly Government Properties (DEA - Free Report) and Franklin Street Properties (FSP - Free Report) . All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Columbia Property Trust’s FFO per share estimates for the current year have moved up to $1.15 in a week’s time. Year to date, the company shares have gained 5.4%.

Easterly Government Properties’ FFO per share estimates for the current year have remained unchanged at $1.26 in a month’s time. Its shares have gained 5.8%, in the year so far.

Franklin Street Properties’ FFO per share estimates for 2017 remained unchanged at $1.05 over the past month. Its share price has increased 9.2% in three months’ time.

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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