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Duke Realty (DRE) Sees Solid Demand for Assets in Midwest Market
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The industrial asset class has grabbed the limelight for showing resilience amid the coronavirus pandemic with low vacancy rates, high asking rents and robust rent collections. Amid this, the domestic-only, pure-play logistics property REIT Duke Realty Corp. is witnessing solid demand for its well-located industrial real estates in the Minneapolis-St. Paul market from both its existing and new tenants.
The company has achieved 736,525 square feet of new leases and renewals of its more than 5 million-square-foot portfolio in the Twin Cities metropolitan area over the last six months. This includes securing a lease deal with a manufacturer of COVID-19 RT-PCR testing kits, four lease renewals, as well as lease expansion with a national consumer products manufacturer.
Particularly, the new, long-term lease for 52,888 square feet of space at 10500 Arbor Lakes within the Arbor Lakes Business Park, has been secured with Sensiva Health LLC, a clinical testing, healthcare solutions company and maker of COVID-19 RT-PCR tests. With this the Arbor Lakes Business Park, which is a Duke Realty master-planned, four-building project, has achieved 100% occupancy.
The lease expansion is at Gateway South 2101 in Shakopee, MN, where a national manufacturer has expanded its footprint by 92,664 square feet within the facility, resulting in the facility achieving full occupancy.
Among the lease renewals are that of Ruan Transportation Management for 299,904 square feet at Gateway North 6701 as well as furniture manufacturer, Blu Dot’s lease renewal for 266,264 square feet at Gateway North 6301 at the Gateway North Business Center, along the Highway 1010 corridor in Otsego.
The other lease renewals include Woody’s Pet Food Deli’ lease renewal for 13,583 square feet of space at 1245 Trapp Road within the Trapp Road Commerce Center, along highways 494 and 35E in Eagan, MN, as well as Holdahl Company’s, which is in selling of cabinet and furniture making supplies, lease renewal for 11,222 square feet of space at 2015 Silver Bell Road in Eagan, MN, along the Sibley Memorial Highway.
Notably, amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for logistics infrastructure and efficient distribution networks has been shooting up. This is aiding the industrial real estate market to prosper. In addition, over the long term, apart from the fast adoption of e-commerce, logistics real estate is anticipated to benefit from a likely increase in inventory levels post the global health crisis, offering scope to industrial landlords, including Duke Realty, Prologis (PLD - Free Report) , Terreno Realty Corporation (TRNO - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) , among others, to enjoy a favorable market environment.
Given Duke Realty’s solid capacity to offer modern, high-quality logistics facilities, the company is well poised to bank on this trend. The company is witnessing healthy demand in its markets, and is making efforts to enhance the portfolio on developments and acquisitions in strategic markets with solid growth potential.
However, with the industrial asset category being attractive in these challenging times, there is a development boom in a number of markets. This high supply is likely to fuel competition and curb pricing power. Specifically, new supply is likely to put pressure on vacancy level which might shoot up to some extent in the upcoming quarters.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Duke Realty (DRE) Sees Solid Demand for Assets in Midwest Market
The industrial asset class has grabbed the limelight for showing resilience amid the coronavirus pandemic with low vacancy rates, high asking rents and robust rent collections. Amid this, the domestic-only, pure-play logistics property REIT Duke Realty Corp. is witnessing solid demand for its well-located industrial real estates in the Minneapolis-St. Paul market from both its existing and new tenants.
The company has achieved 736,525 square feet of new leases and renewals of its more than 5 million-square-foot portfolio in the Twin Cities metropolitan area over the last six months. This includes securing a lease deal with a manufacturer of COVID-19 RT-PCR testing kits, four lease renewals, as well as lease expansion with a national consumer products manufacturer.
Particularly, the new, long-term lease for 52,888 square feet of space at 10500 Arbor Lakes within the Arbor Lakes Business Park, has been secured with Sensiva Health LLC, a clinical testing, healthcare solutions company and maker of COVID-19 RT-PCR tests. With this the Arbor Lakes Business Park, which is a Duke Realty master-planned, four-building project, has achieved 100% occupancy.
The lease expansion is at Gateway South 2101 in Shakopee, MN, where a national manufacturer has expanded its footprint by 92,664 square feet within the facility, resulting in the facility achieving full occupancy.
Among the lease renewals are that of Ruan Transportation Management for 299,904 square feet at Gateway North 6701 as well as furniture manufacturer, Blu Dot’s lease renewal for 266,264 square feet at Gateway North 6301 at the Gateway North Business Center, along the Highway 1010 corridor in Otsego.
The other lease renewals include Woody’s Pet Food Deli’ lease renewal for 13,583 square feet of space at 1245 Trapp Road within the Trapp Road Commerce Center, along highways 494 and 35E in Eagan, MN, as well as Holdahl Company’s, which is in selling of cabinet and furniture making supplies, lease renewal for 11,222 square feet of space at 2015 Silver Bell Road in Eagan, MN, along the Sibley Memorial Highway.
Notably, amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for logistics infrastructure and efficient distribution networks has been shooting up. This is aiding the industrial real estate market to prosper. In addition, over the long term, apart from the fast adoption of e-commerce, logistics real estate is anticipated to benefit from a likely increase in inventory levels post the global health crisis, offering scope to industrial landlords, including Duke Realty, Prologis (PLD - Free Report) , Terreno Realty Corporation (TRNO - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) , among others, to enjoy a favorable market environment.
Given Duke Realty’s solid capacity to offer modern, high-quality logistics facilities, the company is well poised to bank on this trend. The company is witnessing healthy demand in its markets, and is making efforts to enhance the portfolio on developments and acquisitions in strategic markets with solid growth potential.
However, with the industrial asset category being attractive in these challenging times, there is a development boom in a number of markets. This high supply is likely to fuel competition and curb pricing power. Specifically, new supply is likely to put pressure on vacancy level which might shoot up to some extent in the upcoming quarters.
Duke Realty currently carries a Zacks Rank #3 (Hold). The company’s shares have gained 8.6%, underperforming its industry’s rally of 9.3% over the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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