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Monmouth Real Estate (MNR) Buys Industrial Property in Ohio

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Monmouth Real Estate Investment Corporation (MNR - Free Report) recently announced the acquisition of an industrial property situated on a piece of land of roughly 100 acres in the Columbus, OH Metropolitan Statistical Area (MSA) for $73.3 million.

The property, spanning an area of about 487,900 square feet, is located at 8341 Industrial Parkway, Plain City. It is net-leased for 15 years to Delaware-based FedEx Ground Packaging System, Inc.

According to Michael P. Landy, president and chief executive officer (CEO) of Monmouth Real Estate, “This large 100-acre site has ample expansion capacity and is situated near Interstate 270.” Hence, with an advantageous location and ample scope for expansion, the buyout is a strategic fit.

Additionally, the company recently leased a vacant building to an investment-grade tenant for 10.3 years. This increased the occupancy rate in its 120-property portfolio, encompassing an area of 23.9 million rentable square feet across 31 states, to 99.6%.

The company's recent leasing and acquisition activities reflect the robust demand for industrial real estates. This asset class has grabbed the limelight for showing resilience amid the pandemic with low vacancy rates, high asking rents and robust rent collections.

Shares of Monmouth Real Estate have appreciated 17.8%, outperforming the 4.3% rally of its industry in the past six months.

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 disruption. This, in turn, will likely keep supporting industrial landlords like Monmouth Real Estate, Terreno Realty (TRNO - Free Report) , Prologis PLD, and Duke Realty Corp. (DRE - Free Report) .

Nevertheless, the pandemic’s adverse impact on the economy might thwart demand for spaces to some extent in the near term. Rent relief and deferrals for tenants are likely to be concerns as well. Also, surplus supply is a headwind for the industrial real estate market.

Currently, the stock carries a Zacks Rank #5 (Strong Sell).

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