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Duke Realty Updates on Purpose-Built Warehouse Development

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Duke Realty Corporation (DRE - Free Report) announced an update regarding the progress on the 615,600-square-foot, build-to-suit warehouse.  The development of the facility is on schedule, with expected delivery in spring 2020.

The new building will be known as Central Logistics Park 100 and is being constructed on part of a 132-acre parcel at 100 Fort Motel Drive in Myerstown. It is located in the proximity of the split between I-81 and I-78 in Berks County, PA, at the western edge of the Lehigh Valley submarket.

The property will be occupied by Max Finkelstein, Inc. — one of the nation’s prominent wholesale distributors of passenger and light-truck tires.

The new warehouse will provide enhanced storage and warehouse capabilities, and incorporate modern features, including 45′ clear heights, enhanced LED lighting and best-in-class fire protection system. The location of the purpose-built property has likely attracted the tenants and it will serve as the center of Max Finkelstein’s distribution center network.

Notably, amid the e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for logistics infrastructure and efficient distribution networks has been increasing. This is helping the industrial real estate market to grow. Given Duke Realty’s solid capacity to offer modern, bulk distribution properties, it is leveraging the trend. Particularly, the company is making efforts to upgrade its portfolio on the back of development and acquisitions in high-barrier markets with solid growth potential.

Moreover, the supply-chain disruption caused by the coronavirus pandemic is likely to accelerate the consumer adoption of e-commerce and increase demand for incremental inventory storage. Hence, with a decent portion of the company’s tenant base being e-commerce oriented, Duke Realty is well-positioned to capture growth opportunities from the e-commerce boom, even amid a slowing economy.

However,in light of the economic uncertainties, the company suspended speculative development starts. Additionally, near-term lease concessions and rent collections are concerning, specifically from Duke Realty’s smaller tenants, who are severely impacted by the virus outbreak.

Shares of this Zacks Rank #3 (Hold) company have gained 5.3% as against its industry’s decline of 12% over the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 


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Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 FFO per share has moved upward to 83 cents over the past month. The company currently flaunts a Zacks Rank of 1.

Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past week. Further, it currently carries a Zacks Rank of 2 (Buy).

Clipper Realty Inc.’s (CLPR - Free Report) FFO per share estimate for the ongoing year has been unchanged at 57 cents over the past 30 days. Additionally, it carries a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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