The industrial sector of commercial real estate (CRE) is doing incredibly well these days. As online shopping increases, the demand for sites to manufacture products and store goods is higher than ever.
Real estate investment trusts (REITs) let investors with less capital and time participate in the potential gains of industrial CRE right now. Let’s take a look at three of the best industrial REITs you could buy right now.
Industrial real estate includes:
- refrigeration/cold storage,
- telecom/data hosting centers,
- light manufacturing,
- research and development (R&D),
- biotech, and
- showroom properties.
According to the NCREIF property index, the industrial sector has achieved an impressive 13.86% return from Q3 2018 to Q2 2019 and is currently the top-performing property type in CRE. Occupancy rates have consistently remained above 95% and the sector as a whole has provided consistent year-over-year rental growth.
There are currently 14 publicly traded industrial REITs with a total market cap of $111.67 billion. However, industrial REITs aren’t high-paying dividend investments compared to other REIT types like apartment REITs or mortgage REITs. Industrial REITs act more like growth stocks than top-yielding dividend players.
Currently, multiple industrial REITs are overpriced. While the top three industrial REITs described below present potential growth and opportunity, investors may fare better by waiting for pricing to settle some before buying. Always conduct your own due diligence to determine if a company meets your investment principles and risk threshold or if it’s the right fit for you.