Why Is It Wise To Hold On To PS Business Parks (PSB) For Now?
Zacks Investment Research | Sep 26, 2019 09:53PM ET
PS Business Parks Inc. (NYSE:PSB) has a well-diversified portfolio of multi-tenant flex, industrial and office assets across various markets. The company has a stable and diversified customer base with limited exposure to any single industry. This ensures stable cash flow from properties and helps in tapping opportunities in different asset classes.
Further, industrial real estate is grabbing headlines amid rapid growth of e-commerce business. This is driving demand for warehouse space as companies are compelled to enhance and renovate their distribution and production platforms. In addition, with a stable job market environment and resilient consumer sentiment, demand from other sectors apart from e-commerce is likely to grow. These positive factors are helping the company do extremely well in recent quarters, driving rental rates as well as occupancy at properties.
PS Business Parks is also making concerted efforts to reshuffle its portfolio and achieve a better mix. Recently, the company acquired a 543,000-square-foot multi-tenant industrial park in Southern (NYSE:SO) California. Positioned in a key last-mile location in the core of the Los Angeles Mid-Counties submarket, the property is fully occupied. Moreover, in April 2019, the company took over a multi-tenant industrial park spreading 74,000 rentable square feet in Signal Hill, CA. Apart from acquisitions, PS Business Parks is divesting office parks that it does not plan to redevelop in the near-to-mid term. The company also has ample financial flexibility to enhance its market position as is evident from cash and cash equivalents of $42 million while exiting second-quarter 2019.
Such encouraging factors have helped PS Business Parks’ shares gain 41.6% so far this year, outperforming the Zacks Investment Research
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