Industrial REITs

Industrial REITs own and operate properties that are used for manufacturing, production, storage and distribution of goods. Such properties include factories, distribution centers, warehouses and e-commerce fulfillment centers. Generally, these industrial properties are located outside of cities because their operations require a lot of space.

Industrial REITs play a central role in helping to meet the demand for rapid delivery of goods. Therefore, the e-commerce boom over recent years has been largely beneficial to the industrial REIT sector. As the number of online shoppers grows rapidly, companies with e-commerce capabilities must set up warehouses and fulfillment centers.

Industrial REITs are an advantageous investment because they are highly adaptable. Industrial REITs are not too sensitive to changes in the economic environment. Industrial REIT properties can meet demands at any time during an economic cycle, as the floor space can be converted to serve varying purposes.

Industrial REITs have done well throughout the pandemic, as one of the only REIT sectors to deliver positive returns. This positive performance can be attributed to the widespread increase in online shipping.

Large-cap industrial REITs include Duke Realty Corporation (NYSE: DRE), STAG Industrial, Inc (NYSE: STAG) and Monmouth Real Estate Investment Corporation (NYSE: MNR).