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Duke Realty Caps 10M-SF Portfolio in Southern California

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Duke Realty Corporation (DRE - Free Report) is making concerted efforts to strengthen its portfolio in strategic markets. Recently, the company added approximately 900,000 square feet of space in its Southern California portfolio by securing a pair of two industrial properties in the Inland Empire East submarket.   

The latest projects have enabled the pure play real estate investment trust (REIT) to enhance an industrial portfolio exceeding 10 million square feet of space in Southern California. Notably, the company has expanded its portfolio through disciplined acquisitions and development since it entered the market in 2011, resulting in an impressive asset base of more than 30 well-situated premium bulk distribution properties.  

Specifically, Duke Realty is developing a bulk industrial building spanning 241,216 square feet of area at 24960 San Michele in the Moreno Valley and another 656,695-square-foot warehouse at 4323 Indian Avenue in Perris.

While both industrial facilities are currently under construction, the property at 24960 San Michele was fully pre-leased by ResMed — a manufacturer of CPAP masks and products related to sleep-disordered breathing.

The spec building at 4323 Indian Avenue is scheduled to complete in December 2018. It will offer 650,000 square feet of space, with 36′ clear height, LED lighting, 56′ x 60′ bay spacing, 98 dock doors and 4 drive-thru doors. Further, parking for 154 automobiles and 278 trailers will also be made available.

Amid recovering economy and job market gains, elevating consumption levels and healthy manufacturing environment, demand for warehouse and logistics real estate is anticipated to remain robust. This is offering significant impetus to industrial REITs like Prologis Inc. (PLD - Free Report) , Duke Realty and Liberty Property Trust (LPT - Free Report) to flourish.

As for Duke Realty, opportunistic acquisition of land sites and ability to identify high-quality properties has enabled the company to gain significant penetration in Southern California which is considered a high-demand industrial market.

Per management, there is low vacancy in Inland Empire East and limited new construction. It cited a report by CBRE Group Inc. (CBRE - Free Report) , per which, the Empire market consists of 511 million square feet of industrial space and has a low vacancy rate of 3.6%.  

Hence, the company’s new spec building, providing large and modern industrial space, will enjoy solid leasing activity. Such strategic moves will enable the company to enhance and fortify its portfolio in desired markets.

Moreover, this Zacks Rank #3 (Hold) stock has rallied 10.9% in the past three months, outperforming 7.9% growth recorded by its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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