Today Industrial REIT ratings are stable as evidenced by key credit considerations such as the quality of core net operating income and rising occupancy and rental rates. Some positive credit trends for Industrial REITs include low new supply, and high tenant retention rates. In addition, some Industrial REITs have strong credit tenant quality with solid diversification by industry.
Some of the key strengths for Industrial REITs include improved market fundamentals such as increased occupancies, low new construction, modest tenant improvement/upfit costs, and strong tenant retention (driven by sustainable earnings of high quality tenants).
Since the latest recession, we have seen Industrial REITs continue to improve with positive absorption and flat to increasing occupancies. Of course, many Industrial tenants are also...
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