Liberty Property Trust (LPT - Free Report) is making efforts to grow its industrial portfolio. The company recently announced the expansion of its Southern California portfolio, with the purchase of new fully leased building in Redlands.
This is the third building that Liberty Property acquired in Redlands. The building comprises 289,683 square feet. This industrial property is likely to experience a decent demand as it is located near the San Bernardino Airport and has proximity to I-10, I-210, and I-215.
Liberty already has strong presence in Southern California and its portfolio includes more than five million square feet of industrial space, which is now 93.7% leased. Further it is marketing its newly acquired property in 520 E. Orange Show Road property, San Bernadino.
The company is developing two more buildings in Rialto and Ontario, which are expected to be delivered in the fourth quarter of 2019. This extensive portfolio in the region is likely to help it capitalize on healthy fundamentals of the industrial real estate market and generate stable cash flows.
Recently, Liberty Property also leased its LEED-certified 2000 W. Baseline Rd. property in Rialto, which was acquired in 2018. This 176,000-square-foot property was leased to Global Commerce Solutions Enterprises, LLC.
Admittedly, the expansion of the industrial real estate portfolio is a strategic fit for Liberty Property. In fact, this asset category grabbed attention because of high demand for space amid improving economy, job market gains, high consumer spending and e-commerce boom.
This led to strong rent growth, high occupancy and development opportunities for industrial REITs — including Liberty Property, Prologis, Inc. (PLD - Free Report) , Duke Realty (DRE - Free Report) and Terreno Realty (TRNO - Free Report) .
Liberty Property is also likely to benefit from the rising demand for industrial real estate and therefore it is focusing more on acquiring such properties. However, in the process, the company is continuously divesting its office properties. This is likely to affect its earnings in the near term. Further, there is rising supply of industrial real estate space and this might partly dampen the robust growth momentum in rents. Trade tensions and any rate hike add to REITs’ woes as well.
Liberty Property currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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