DCT Industrial Trust Inc. (DCT) recently bought a bulk distribution property in the Northern California region. The company acquired this building from an affiliate of Transpacific Development Company for an undisclosed amount. This buyout expanded DCT Industrial’s North California portfolio to 3.9 million square feet.
However, following the announcement, shares of this industrial real estate investment trust (REIT) dipped 0.66% during the regular trading session on Oct 10, on broader market concerns.
In particular, the acquired Class A facility, spanning 750,000 square foot, is positioned in the Central Valley submarket of Tracy, CA. It is conveniently connected to Interstate 5 and Highways 580 and 205. The asset is fully leased to a high credit tenant, on a long-term basis.
We view this transaction as a strategic fit, given the property’s location in one of the top submarkets of California. This will enhance DCT Industrial’s overall portfolio quality and pave the way for rental revenue generation.
As a matter of fact, the company has been very active on premium assets acquisitions in recent times. Last week, DCT Industrial boosted its Southern California portfolio with a value-add building buyout in San Diego. Moreover, last month the company acquired two industrial properties and a land parcel in Chicago, IL. Such deals bode well for DCT Industrial’s long-term growth.
DCT Industrial is scheduled to release its third-quarter 2014 results on Oct 30, after the closing bell. The Zacks Consensus Estimate for third-quarter funds from operations (FFO) is currently pegged at 12 cents per share, flat year over year.
DCT Industrial currently carries a Zacks Rank #2 (Buy). Investors interested in REITs may also consider stocks like Cousins Properties Incorporated (CUZ), Duke Realty Corp. (DRE) and EastGroup Properties Inc. (EGP). All these stocks carry the same rank as DCT Industrial.
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