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Duke Realty (DRE) Secures Lease at Fairfield Distribution Center

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Duke Realty Corp. (DRE - Free Report) is witnessing solid demand for its well-located, modern industrial real estates in the Central Florida area. Recently, this industrial REIT secured a lease deal with the United States Postal Service (USPS) for 103,754 square feet of space at Fairfield Distribution 4720, resulting in the 173,514-square-foot logistics building at 4720 Oak Fair Boulevard in Tampa achieving 100% leasing.

Markedly, the Fairfield Distribution Center enjoys proximity to I-4 and I-75, enabling the industrial park to provide decent access to Central Florida and beyond. This highway accessibility and proximity to population centers is likely to have attracted tenants to the industrial real estate space.

As a matter of fact, demand for logistics infrastructure and efficient distribution networks has been shooting up amid the e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. This is helping the industrial real estate market to prosper.

Moreover, 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) , 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. It is witnessing healthy demand in its markets and leased 7.4 million square feet of space during the March-end quarter. Tenant retention was 85% for the first quarter and 94.1% after considering immediate backfills.

Its Central Florida portfolio comprises properties in Tampa and Orlando, aggregating 4.4 million square feet. The company also has a solid property base nationwide with the REIT owning, maintaining an interest in or has under development roughly 162 million rentable square feet of industrial assets in 20 key U.S. logistics markets, enabling it to benefit from the healthy trend in the industrial real estate market.

However, with the 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. New supply is likely to put pressure on vacancy level, which is likely to shoot up to some extent in the upcoming quarters.

Duke Realty currently carries a Zacks Rank #3 (Hold). The company’s shares have gained 18.3%, outperforming its industry’s rally of 13.4% over the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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