Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

Investing In Industrial REITs, Part 1: Is Stag Industrial's Valuation Justifiable?

Industrial REITs trade at a sizable premium to the broader market. In fact, even the most cheaply valued among them, STAG Industrial (NYSE:STAG), trades above the market average with a price/FFO of 16.3. This article will use fundamental analysis to discern whether investment in this space is viable despite the oversized price tag. Specifically, we will demonstrate why STAG seems to be the best investment in the sector and detail its value justification.

Industrial sector fundamentals

As most industrial properties involve enormous volumes of goods, access to rail, sea and major highways is of paramount importance. Consequently, location is everything. Below is a table of the property portfolios of each of the industrial REITs

Company (ticker) Total square ...
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