Monmouth (MNR) Acquires Industrial Asset To Expand Pipeline
Zacks Investment Research | Nov 30, 2017 08:14PM ET
Monmouth Real Estate Investment Corporation (NYSE:MNR) announced the acquisition of a new industrial building spanning 300,000 square feet, at 1414 South Council Road, Oklahoma City, OK. The company shelled out $30.3 million for this acquisition.
The property sits on approximately 123 acres of land and is well located near Interstate 40, with close proximity to the Will Rogers International Airport. Further, the property is anticipated to enjoy steady revenues as it is net-leased to a Delaware corporation — Amazon (NASDAQ:AMZN) Fulfillment Services — for 10 years.
For Monmouth Real Estate, which specializes in single tenant, net-leased industrial properties, subject to long-term leases, mainly to investment-grade tenants, the buyout offers a good scope to enjoy steady cash flow from this property.
Per management, with the above-mentioned acquisition, the company adds the largest Internet-based retailer to its tenant roster and also positions itself to benefit from the e-retail boom.
Going by a report by Jones Lang LaSalle Incorporated (NYSE:JLL) , in third-quarter 2017, the e-commerce sector accounted for nearly 25% of the total U.S. leasing demand as compared to 14.7% for the same period in the previous year. Hence, the company has been strategically repositioning its portfolio by investing heavily in industrial asset against the backdrop of the flourishing e-commerce, which is anticipated to drive demand for industrial space.
In fact, per the company’s latest fiscal year earnings release, it acquired 10 properties, spanning 2.8 million square feet of industrial space, for $286.5 million during fiscal 2017. Year over year, the company has grown its gross leasable area by 17% through acquisitions and expansion activities.
Earlier this month, it acquired another 121,683-square-foot industrial property for $21,872,170. The company anticipates benefiting from the shift of supply chain toward the eastern seaboard and the region’s strong economic growth prospects.
Year to date, shares of the company have outperformed the Zacks Investment Research
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