Industrial REIT Liberty Property Trust Says Rents Rising in Proportion to Costs

Bill Hankowsky, chairman, president, and CEO of Liberty Property Trust (NYSE: LPT), participated in a video interview at Nareit’s REITweek: 2018 Investor Conference in New York.

Hankowsky commented on trends in construction prices, which are roughly split between labor and material costs. He noted that distributors immediately raised prices when steel and aluminum tariffs were recently announced, even though they hadn’t gone into effect. Land prices have also risen, as has the site work needed to improve it, he said.

On the other hand, rents are rising at least in proportion to costs, according to Hankowsky.

This year, Liberty Property Trust expects to start $500 million to $600 million in new development. Hankowsky said the goal is to achieve maximum flexibility with its new buildings: “You want traditional logistics players, but you also need to respond to e-commerce.”

Hankowsky emphasized the elevated level of competition for industrial assets, which is forcing the company to spend a lot of time seeking out deals.