Real Estate Investment Trusts, or REITs, as they are more commonly known, have become an important way for investors to diversify their holdings. REITS trade like stocks and allow investors to focus on specific real estate sectors while reducing their overall risk. Typically, individual REITs invest in numerous properties in a designated sector, such as office, retail, or industrial. Industrial REITs can be an attractive addition to most investors’ portfolios.

Industrial Space in Jacksonville MSA | NAI Hallmark

Industrail Space in Jacksonville MSA

2018 was a challenging year for REITs with negative returns; however, 2019 returns have started out very strong. Industrial REITs specifically have fared better than other sectors with assistance from the continued growth in e-commerce. Online ordering has become the preferred shopping method for consumers, creating a need for companies to expand and improve warehouses to store and ship merchandise efficiently.

Low vacancy rates have also contributed to strong Industrial REIT returns. With vacancy for industrial properties remaining around the historic low of 5%, there are few indications of vacancy rates rising in the near term. The continued low vacancy rates have allowed landlords to raise rental rates and push lease expiration dates out further. These are good signs for Industrial REITs and their investors.

Industrial Net Absorption and Vacancy Trend 2019 | NAI Hallmark

Jacksonville, Florida has benefited from this growth and strength of the industrial market. After several years of limited new industrial buildings, Jacksonville has seen an influx in new projects being developed over the past twenty-four months. Industrial REITs have attempted to keep up with the market demand through developing new buildings and actively looking for infill sites to position tenants closer to end consumers. At this point, calculated expansion and new development are positive signs for REIT returns.

In today’s market, Industrial REITs can be a solid addition for any investor’s portfolio who is interested in diversifying into real estate without the day to day worries of being a landlord. Jacksonville is merely one example of a city that is enjoying the positive returns from Industrial REITs.

For more information on Industrial REITs or investments in Jacksonville, contact our Industrial Specialist team.

About the Author: Jason Purdy, VP Industrial Specialist

Jason Purdy joined the NAI Hallmark team in 2016 as a sales associate and was promoted to Vice President in 2018. During his career, Jason has completed significant transactions with EastGroup Properties, Corr Digital, RJ Young, Ashley Furniture, and Pepsi.