We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Duke Realty (DRE) Raises Guidance for 2020 Development Starts
Read MoreHide Full Article
Duke Realty Corp. has raised the guidance for 2020 development starts to $775-$850 million, from the prior estimate of $650-$800 million, following significant development transactions since the beginning of the current quarter.
This industrial REIT executed two leases in its speculative development projects in the under-construction pipeline, having scheduled delivery dates not until the second quarter of 2021, reflecting the solid demand for the company’s properties. One of those is a 622,000-square-foot lease in Northern New Jersey to a national home furnishings retailer. The other is a 290,000-square-foot lease in the Southern California South Bay submarket to a national beverage distributor.
With the leasing activities, the company was able to raise its pre-leasing level of the Sep 30, 2020 under-construction pipeline to 76%, considerably up from the 63% reported at third-quarter end.
Moreover, since the end of the third quarter, Duke Realty has commenced seven development projects aggregating $405 million. These projects are 73% pre-leased in total. Of these, two are speculative developments in the Southern California Inland Empire West and San Gabriel Valley submarkets, aggregating 649,000 square feet of space.
The remaining are five build-to-suit development starts in the Southern California, Northern California, Dallas, Columbus, and Indianapolis markets, comprising 1.75 million square feet in total.
According to Jim Connor, Duke Realty’s chairman and CEO, “The announced transactions, including the year-to-date total as of September 30th, brings the Company’s total development starts for 2020 to 5.8 million square feet and a projected $780 million in total project costs, with an initial pre-leasing level of 64 percent.”
Executed with the existing customers in the e-commerce business, along with new customers in the global tire manufacturing and distribution business, the above-discussed leases reflect the decent demand for this domestic pure play industrial REIT’s properties.
The industrial asset class has grabbed the limelight for showing resilience amid the coronavirus crisis, with low vacancy rates, high asking rents and robust rent collections. There has been a notable increase in e-commerce’s share of total retail sales, spurring demand for warehouse and distribution spaces. Apart from the fast adoption of e-commerce, the industrial real estate space is anticipated to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruptions.
This, in turn, will likely keep supporting industrial landlords, including Duke Realty, Prologis (PLD - Free Report) , Terreno Realty Corporation (TRNO - Free Report) , Rexford Industrial Realty, Inc. (REXR - Free Report) among others to enjoy a favorable market environment.
Particularly, with a robust pipeline of development, both build-to-suit and speculative, as well as an active pipeline of build-to-suit prospects, Duke Realty is well poised to enhance its presence in Tier 1 markets.
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Duke Realty (DRE) Raises Guidance for 2020 Development Starts
Duke Realty Corp. has raised the guidance for 2020 development starts to $775-$850 million, from the prior estimate of $650-$800 million, following significant development transactions since the beginning of the current quarter.
This industrial REIT executed two leases in its speculative development projects in the under-construction pipeline, having scheduled delivery dates not until the second quarter of 2021, reflecting the solid demand for the company’s properties. One of those is a 622,000-square-foot lease in Northern New Jersey to a national home furnishings retailer. The other is a 290,000-square-foot lease in the Southern California South Bay submarket to a national beverage distributor.
With the leasing activities, the company was able to raise its pre-leasing level of the Sep 30, 2020 under-construction pipeline to 76%, considerably up from the 63% reported at third-quarter end.
Moreover, since the end of the third quarter, Duke Realty has commenced seven development projects aggregating $405 million. These projects are 73% pre-leased in total. Of these, two are speculative developments in the Southern California Inland Empire West and San Gabriel Valley submarkets, aggregating 649,000 square feet of space.
The remaining are five build-to-suit development starts in the Southern California, Northern California, Dallas, Columbus, and Indianapolis markets, comprising 1.75 million square feet in total.
According to Jim Connor, Duke Realty’s chairman and CEO, “The announced transactions, including the year-to-date total as of September 30th, brings the Company’s total development starts for 2020 to 5.8 million square feet and a projected $780 million in total project costs, with an initial pre-leasing level of 64 percent.”
Executed with the existing customers in the e-commerce business, along with new customers in the global tire manufacturing and distribution business, the above-discussed leases reflect the decent demand for this domestic pure play industrial REIT’s properties.
The industrial asset class has grabbed the limelight for showing resilience amid the coronavirus crisis, with low vacancy rates, high asking rents and robust rent collections. There has been a notable increase in e-commerce’s share of total retail sales, spurring demand for warehouse and distribution spaces. Apart from the fast adoption of e-commerce, the industrial real estate space is anticipated to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruptions.
This, in turn, will likely keep supporting industrial landlords, including Duke Realty, Prologis (PLD - Free Report) , Terreno Realty Corporation (TRNO - Free Report) , Rexford Industrial Realty, Inc. (REXR - Free Report) among others to enjoy a favorable market environment.
Particularly, with a robust pipeline of development, both build-to-suit and speculative, as well as an active pipeline of build-to-suit prospects, Duke Realty is well poised to enhance its presence in Tier 1 markets.
Duke Realty currently carries a Zacks Rank #3 (Hold). The company’s shares have gained 9.9%, as against the industry’s decline of 3.4% over the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>