First Industrial Realty Trust
First Industrial Realty Trust operates in nearly all sectors of industrial including distribution, manufacturing, and logistics warehouses, having ownership or interest in 435 properties amounting to 64.1 million square feet. The company leases its space to a diverse range of industries with institutional-quality tenants including Ford (NYSE: F), Trane Technologies (NYSE: TT), Best Buy (NYSE: BBY), and Lowes (NYSE: LOW), to name a few.
Rental rates grew 13% while funds from operations (FFO) and net income increased. Occupancy is 95.7%, and rental rate collections averaged 99% from April through December 2020. First Industrial's share prices have yet to fully recover to pre-pandemic highs, trading around 4% lower than February 2020 despite increasing its dividend.
The company has a fairly significant debt maturity payable in 2022 with $162 million in cash and cash equivalents. Right now it has $172 million in developments underway but not yet completed, which are 45% leased to date.
Duke Realty specializes in logistics warehouses, with interest or ownership in 564 properties and 159.4 million square feet in 20 major metro markets. The company leases its space to a diverse range of industries with high-quality tenants like Amazon (NASDAQ: AMZN), UPS (NYSE: UPS), Wayfair (NYSE: W), Home Depot (NYSE: HD), and Target (NYSE: TGT), to name a few. Like most industrial REITs, Duke Realty maintained strong performance during the global recession with an increase in revenues, rent growth, core FFO, and net income.
The company's core FFO grew 5% in 2020 when compared to year-end results for 2019 while occupancy and rental collections are stable with 96% of existing properties and developments underway leased and 99.9% of rent collected in Q4 2020. As a result, share prices grew 7.5% from pre-pandemic highs while increasing dividends. The company has $1.1 billion in development with a fairly healthy debt-to-EBITDA ratio with no significant debt maturities until 2023.
Which is the better buy?
How much debt the company is carrying, the quality of their portfolio and tenants, as well as revenues and developments underway are a few of the key figures to help determine which is the better buy. Both companies have strong portfolios and performance; however, Duke Realty's recent performance and larger exposure to the e-commerce industry makes it a better buy in my opinion.
Both companies share prices, returns, debt ratios, and payout ratios are nearly identical right now, having provided an almost identical return over the past five years. However, over the past year, Duke Realty has definitely outperformed First Industrial Realty Trust.