X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-The average FFO per share for seven industrial REITs tracked by Bear Stearns rose 7.3% in the second quarter of the year, according to the firm’s quarterly publication, Industrial REIT Performance Monitor. Bear Stearns had projected a 6.6% increase excluding nonrecurring charges. Average same-store NOI growth came in at 3.9%, down from 4.3% in the Q1, but in line with the firm’s expectations.

The Monitor’s editors maintain their belief that industrial REITs are attractive investments on a risk-adjusted basis with total returns estimated in the mid teens. Currently, they are at 90.9% of net asset value and 8.7x estimated 2002 funds from operations on average, while office REITs now trade at 9.5x and apartment REITs at 9.8x.

Going forward, Bear Stearns analysts project FFO per share growth to rise to 7% in Q3 and 12.6% in the fourth quarter. For the year, the consensus is that these firms will earn 8.9% FFO per share growth and 9.2% in 2002.

Factors favorable to industrial REITs include their appeal to pension funds, many of which are underweighted to real estate and disposed to industrial properties. Also, the REIT Modernization Act, which went into effect this year, is expected to transform these trusts into larger entities and their taxable subsidiaries into major enterprises.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE Awards 2020Event

These awards honor the industry's most influential and knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.