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Duke Realty (DRE) Sees Solid Demand, Renews 2 Tenant Leases

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Duke Realty Corporation (DRE - Free Report) is witnessing solid demand for its high-quality industrial real estates from both new tenants and existing ones. Recently, the company announced renewal of two tenant leases for a total of 59,390 square feet of space within TransDulles Centre at the intersection of Route 28 and Sterling Boulevard in Sterling, VA.

The lease agreement with V. Alexander & Company Inc., which is a global freight transportation and warehousing provider, has been extended for 49,218 square feet of space at 22815 Glenn Drive. Also, another 10,172-square-foot lease at 22626 Sally Ride Drive has been extended by the company.

This first-class 850,000-square-foot, 13-building industrial park in Loudoun County — TransDulles Centre — offers access to major highways, including the Dulles Toll Road, Route 28 and Washington Dulles International Airport. This convenient access and high-quality space are likely to have lured the existing tenants to go for renewals. Apart from this, the facility is close to amenities, including lodging, restaurants and service providers.

Demand for logistics infrastructure and efficient distribution networks has been shooting up amid e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, in turn, aiding the industrial real estate market to prosper.

Apart from the fast adoption of e-commerce, logistics real estate is poised to benefit from an increase in inventory levels post the global health crisis, opening up possibilities for 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.

Duke Realty, which has emerged as a domestic pure-play industrial real estate investment trust, is well positioned to bank on the favorable environment backed by its solid operating platform and robust scale. The company, which enjoys a healthy footing in this asset category, is witnessing solid demand for industrial real estates, as reflected by the leasing levels of the properties.

The industrial REIT leased 7.6 million square feet of space during the June-end quarter. Tenant retention was 77.5% for the reported quarter and 93.9% after considering immediate backfills. The company reported overall cash and annualized net effective rent growth on new and renewal leases was 19.2% and 36.2%, respectively, during the second quarter. Stabilized in-service portfolio was 98.2% leased as of Jun 30, 2021, having expanded 10 basis points, sequentially, and 90 bps from the prior-year quarter end.

Shares of Duke Realty have gained 9.2% over the past three months, outperforming the industry’s 7.3% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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