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Duke Realty's Lynwood Warehouse Gets Key Retailer as Tenant

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Duke Realty is experiencing solid demand for its warehouse property in Southern California. In fact, the company’s new 201,207 square feet warehouse in Lynwood, which was developed on a speculative basis on a remediated in-fill site, has got a major retailer as tenant. The retailer has signed a long-term lease for the full building, right before its construction is wrapped up.

Situated in the highly desirable South Bay submarket, this property at 11600 Alameda Avenue in Lynwood enjoys a decent location advantage. It is adjacent to 105 Freeway and just three miles away from 710 and 110 Freeways, enjoying direct access to airports and the Ports of Los Angeles and Long Beach.  

Notably, in the overall U.S. real estate market, industrial properties have grabbed attention on robust demand, a recovery in the economy and job market, strengthening e-commerce and a healthy manufacturing environment.

In the Southern California market too, demand remains solid and Duke Realty has made concerted efforts over the past years to capitalize on the improving fundamentals. The company forayed into this market in 2011 and has grown its portfolio with the help of both acquisitions and developments, to nearly 8.7 million square feet, which helps it to leverage on the healthy trend. Furthermore, across the nation, Duke Realty owns and operates about 144 million rentable square feet of industrial properties in 21 major U.S. logistics markets.

Duke Realty also resorted to the sale of its medical office business in recent quarters. This strategic move is aimed at simplifying its business model and turning into a leading domestic pure play industrial real estate investment trust (REIT). However, rate hike and the dilutive impact of asset sales increase its woes.

Duke Realty currently has a Zacks Rank #3 (Hold). Year to date, shares of the company have climbed 8.6%, outperforming 5.4% growth recorded by the industry.



Stocks to Consider

Better-ranked stocks in the REIT space include CareTrust REIT, Inc. (CTRE - Free Report) , DCT Industrial Trust and Extra Space Storage (EXR - Free Report) . Each of these stocks carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While CareTrust REIT has an expected long-term growth rate of 4.0%, DCT Industrial Trust has a long-term growth rate of 4.2%.

Extra Space Storage currently has a long-term growth rate of 6%.

Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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