Industrial REIT Duke Realty Corp. (DRE - Free Report) is experiencing solid demand for properties in the Savannah market. Recently, the company signed a long-term lease with a manufacturer and distributor of fine home furniture — SOFAMANIA — at 175 Portside Court in Savannah. The latest transaction enabled the company achieve year-to-date leasing volume of 2.4 million square feet of space.
Specifically, more than half of 175 Portside Court, which is a 600,000-square-foot logistics building at the intersection of I-95 and GA-21, will be occupied by SOFAMANIA. Its advantageous location near the Port of Savannah and easy access to I-16, the main transportation highway to Atlanta, makes it an appropriate choice to receive delivery of incoming shipments and dispense items to customers throughout the nation.
Notably, the Savannah market is experiencing high demand for warehouse space because of the solid TEU traffic at the Port of Savannah. TEU refers to 20 feet equivalent units in container port traffic. Duke Realty, being the largest industrial space owner in the market, is able to capitalize on the favorable trends. The company signed around 1.7 million square feet of new leases and 786,000 square feet of renewals year to date.
In fact, Duke Realty already has solid presence in the Savannah port area and owns more than 7.0 million square feet of space in 25 buildings. Encouragingly, this portfolio is fully occupied, reflecting robust demand for its properties.
Not only in the Savannah market, but across several regions in the nation, the industrial real estate asset category is in the limelight. This is because high-consumer spending, e-commerce boom as well as healthy manufacturing environment amid recovering economy and job market are spurring demand for this real estate category. In addition to Duke Realty, other REITs including Prologis (PLD - Free Report) , Terreno Realty Corporation (TRNO - Free Report) and Liberty Property Trust (LPT - Free Report) are expected to benefit from the same factors.
Nevertheless, there is rising supply of industrial real estate space and this will partly dampen the robust growth momentum in rents. Also, rate hike add to the REIT’s woes.
Duke Realty currently has a Zacks Rank #3 (Hold). In the past six months, the stock has returned 8% compared with the industry’s 4.8% rise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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