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Monmouth (MNR) Boosts Charleston Portfolio With New Buyout

Monmouth Real Estate Investment Corporation MNR has shelled out nearly $47.2 million for the purchase of a new 265,318-square-foot industrial building at 6850 Weber Boulevard, N. Charleston, SC. Net-leased for 15 years to FedEx Ground Packaging System, this buyout marks the company’s fourth property in Charleston.

The purchase of this industrial property, which is situated on around 50 acres, is a strategic fit. This can be attributed to the advantageous location of the property, which is situated close to the Charleston International Airport.

Also, there is scope for expansion because of ample acerage. Further, the Port of Charleston is growing at a rapid pace, while Boeing, BMW, Daimler, Volvo, as well as a number of other large companies have opted for expansion of their operations here. As such, the market is a thriving one which makes it logical to expand Monmouth’s portfolio in the region.

Of late, demand for modern distribution facilities has 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.

Per a study by the commercial real estate services firm — CBRE Group Inc. CBRE — availability rate for the U.S. industrial real estate market in Q2 shrunk 10 basis points (bps) to 7.2%, denoting the lowest level since Q4 2000. Additionally, with demand surpassing new supply, net asking rents inched up 1.7% in Q2 to $7.11 per square feet — marking the highest level since 1989.

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. PLD, Duke Realty Corp. DRE and Monmouth Real Estate to flourish.

However, any protectionist trade policies will have an adverse impact on economic growth, as well as this asset category’s business over the long term. Also, a whole lot of new buildings are slated to be completed and made available in the market in the near term, leading to lesser scope for rent and occupancy growth.

Particularly, Monmouth Real Estate, with a portfolio of 110 properties spanning around 20.8 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 11.5%, the industry has grown 7.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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