Back to top

Image: Bigstock

Monmouth (MNR) Buys Industrial Property Net-Leased to FedEx

Read MoreHide Full Article

Monmouth Real Estate Investment Corporation (MNR - Free Report) recently shelled out $47.6 million for the acquisition of an industrial property in the Greensboro, NC, MSA. The company purchased a new 286,281-square-foot industrial building on 39.3 acres at 6538 Judge Adams Road, Whitsett, NC.

This third high-quality acquisition so far in fiscal 2020 is a strategic fit for the company, with the property being net-leased for 15 years to FedEx Ground Packaging System, Inc. Amid the coronavirus crisis, FedEx’s service is playing a key role in keeping supply chains moving and delivery of critically-needed goods across the globe.

Notably, in a rising e-commerce market, the industrial real estate asset category has grabbed headlines and continues to play a pivotal role, transforming the way how consumers shop and receive their goods. Services like same-day delivery are gaining traction and last-mile properties in high-income urban areas are witnessing solid pricing, occupancy and growth in rentals.

Companies are making efforts to improve supply-chain efficiencies, spurring demand for logistics infrastructure and enabling industrial landlords to enjoy a favorable market environment.

Further, warehouse operations have become more essential with higher number e-commerce customers, in light of the coronavirus pandemic. Over the long term, apart from the fast adoption of e-commerce, logistics real estate is expected to benefit from a likely increase in inventory levels post crisis.

Amid these, with focus on single-tenant, net-leased industrial properties on long-term leases, to investment-grade tenants, Monmouth Real Estate seems well poised to grow. The company’s portfolio consists of 117 properties, geographically diversified across 30 states and containing 23.3 million rentable square feet in total. Its tenant roster includes names like Anheuser-Busch, Beam Suntory, Cardinal Health (CAH - Free Report) , Coca-Cola (KO - Free Report) , FedEx (FDX - Free Report) , and several others.

Nevertheless, recovery in the industrial market has continued for long and market rents are expected to remain flat for the rest of 2020. Also, though industrial real estate fundamentals seem more resilient than other asset categories, are not immune. As such, the pandemic’s adverse impact on the economy will likely hinder demand for space in the near term.

Shares of Monmouth Real Estate have depreciated 14.8%, narrower than the 16.9% decline of its industry in the year-to-date period.

Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>