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Monmouth (MNR) Acquires Industrial Building Worth $33.7M

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Monmouth Real Estate Investment Corporation (MNR - Free Report) has shelled out nearly $33.7 million for the purchase of a new 362,942-square-foot industrial building at 6735 Trippel Road, Theodore, AL. Net-leased for 11 years to Amazon Fulfillment Service, this buyout marks the company’s second property leased to Amazon.

The purchase of this industrial property, which is situated on around 31.27 acres, in the Mobile, AL MSA, is a strategic fit. This is because it will help Monmouth Real Estate capitalize on the growing demand for the Port of Mobile due to the completion of the Panama Canal expansion.

Per the company, over the past years, shipping container growth at the U.S. East Coast ports is surpassing that of the West Coast ports. Moreover, with two interstate highway systems and five Class-1 railroads serving the port, industrial real estate assets in the region are likely to experience solid demand for space.

Of late, demand for modern distribution facilities have been getting a significant boost as companies are compelled to enhance, and renovate their distribution and production platforms to support the e-commerce business, address a large customer base and urbanization.

As such, industrial REITs are scaling new heights. Per a study by the commercial real estate services firm, CBRE Group Inc. (CBRE - Free Report) , availability fell for 31 straight quarters to 7.3%, for the U.S. industrial market, in first-quarter 2018. Moreover, with demand surpassing new supply, net asking rents inched up 1.9% in Q1 to $7.01 per square foot, denoting the highest level since 1989.

In addition, per a report from Prologis Inc. (PLD - Free Report) , for a given level of revenues, online retailers require three times the distribution-center space compared with traditional retailers. This, in turn, is spurring demand for industrial space.

Particularly, with a recovering economy and job market gains, as well as tax reforms, consumption levels are anticipated to remain elevated. And with a healthy manufacturing environment and high business inventories, demand for warehouse and logistics real estate is anticipated to be high, giving significant impetus to industrial REITs like Prologis Inc., Duke Realty Corp. (DRE - Free Report) and others to flourish.

Particularly, Monmouth Real Estate, with a portfolio of 109 properties spanning around 20.5 million rentable square feet of area, across 30 states, remains well poised to leverage on the favorable trend. Its focus on single tenant, net-leased industrial properties that are leased for long term to mainly investment-grade tenants augurs well for growth.

Additionally, shares of this Zacks Rank #3 (Hold) company have outperformed the industry over the past three months. While the company’s shares have rallied 7.1%, the industry has grown 6.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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