3 Best Industrial REITs to Buy Now

The staggering growth of e-commerce over recent years accelerated even more during the pandemic, adding more fuel to the fire for distributors of all kinds needing to tie down logistics space they can use for storage and shipping.

That set the stage for a serious rally by the real estate investment trusts (REITs) that specialize in such properties. Nareit, a leading REIT researcher, lists 13 industrial REITs, and says they delivered an average total return of 47.11% in 2021. That's been followed by an average decline of 14.32% so far this year.

But that recent decline presents the opportunity to pick up shares at relatively low prices. **Some of the best industrial REITs you can buy right now include Prologis (PLD 4.80%), Rexford Industrial Realty (REXR 5.66%), and Duke Realty (DRE). **

Prologis

Prologis is one of the largest of all REITs, regardless of sector, with about 4,700 properties in 19 countries. This San Francisco-based powerhouse garners attention not just for its size, for its thought leadership.

For instance, when CEO Chairman and CEO Hamid Moghadam reported recently that "space in our markets is effectively sold out," that quote became the go-to mantra about the state of the warehouse market worldwide.

His company also has 181 million square feet that it can build out to add to the billion or so it now has, so despite its size, there's still room to grow for this provider of critical space to many of the world's leading shippers.

Prologis stock is trading for about $164 a share, good for a market cap of about $119 billion, and is yielding about 1.97% after raising its dividend by about 49% over the past three years.

Duke Realty

Duke Realty is the second-largest industrial REIT, with about 545 properties in 19 markets across the country. That's good for about 160 million square feet, and its largest clients, in order, are Amazon, Home Depot, Wayfair, and UPS.

That's a who's who of major shippers, and there's also a healthy mix of manufacturers and transportation companies who also will help keep this 50-year-old operation profitable and growing.

Expansion is underway, for instance, in the hot San Jose market, where the company just won approval for a 303,000-square-foot building and is seeking the same for one of similar size.

These and other projects on the drawing boards in that market are not cookie-cutter greenfield projects. The company's ability to take on challenging builds that involve, for instance in San Jose, revamping the site of a former foundry, speaks to its ability to find opportunities where others might not venture.

Duke Realty stock is trading for about $58.69 a share, good for a market cap of about $22 billion, and is yielding about 1.94% after raising its dividend by about 30% over the past three years.

Rexford Industrial Realty

Rexford Industrial is even more concentrated, with a portfolio of 308 properties that it defines as "100% infill Southern California." That 37 million square feet is 99.7% occupied and, like other industrial REITs, its clients are willing and able to pay escalating rents and sign long-term leases.

Rexford's focus on this market can make it a particularly attractive investment among logistics stock. The company points out that it operates exclusively in areas where the average rent is more than 80% higher than the average of the next five highest U.S. markets.

Rexford stock is trading for about $75 a share, good for a market cap of about $12 billion, and is yielding about 1.7% after raising its dividend by about 70% over the past three years.

Now, let's look at some graphic illustrations of the performance and potential of these three equities. We'll include Vanguard Real Estate ETF (VNQ 3.93%), too, to provide a benchmark comparison from this index fund of about 180 REITs.

Resource: https://www.fool.com/investing/2022/04/01/3-best-industrial-reits-to-buy-now/