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These 2 Industrial REITs Are Speculating on Continued Red-Hot Demand

Nov 16, 2020 by Matthew DiLallo

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As we think about new investment opportunities, at this point in time, we will continue to be judicious with our capital with a near-term emphasis on maintaining liquidity. We are proceeding with all of our developments in process, which totaled 1.5 million square feet and a total investment of $154 million at March 31. At this time, we are not targeting any new speculative development starts. This includes the postponement of our planned summer start at First Park Miami, where we will continue to monitor the market.
On the new development front, as we noted on our late July earnings call, the demand for newly developed logistics space was coming back strong, and that we planned to commence new projects very soon. During the third quarter, we started four new projects totaling $261 million in costs that were 28% pre-leased on average. Two of the starts were speculative projects totaling 1.4 million square feet in Southern California and Seattle markets.
One of the more notable leases signed this quarter was a 1.1 million square foot new lease for 100% of our speculative project under construction in the Inland Empire, California. This facility is not expected to go into service until the second quarter of 2021. It's a great example of our team's success in leasing speculative developments well ahead of our underwriting.

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