Monmouth CEO Says Build-to-Suit Demand Fueling Company’s Growth

Michael Landy, president and CEO of Monmouth Real Estate Investment Corp. (NYSE: MNR), joined REIT.com for a CEO Spotlight video interview at NAREIT’s 2015 Washington Leadership Forum.

Monmouth completed an active quarter on the acquisitions front. Landy said low interest rates and a “resurgent” market for build-to-suit industrial facilities prompted his company’s deal-making. The portfolio of the company now consists of more than 12 million square feet of industrial space and more than $270 million in new properties under construction.

“We’ve been very successful in sourcing high-quality acquisitions with very favorable yield spreads,” Landy said. He noted that the new properties also have long-term leases with investment-grade tenants, leading to “meaningful earnings accretion.”

Monmouth is currently enjoying rising occupancy rates and lease maturities, which Landy attributed to “strong” demand for industrial real estate as a result of the growth in e-commerce and domestic manufacturing. He pointed out that industrial occupancy rates on the whole continue to rise. Meanwhile, lease maturities are growing as a result of Monmouth’s acquisitions and building expansions, Landy explained.

Monmouth has retained 100 percent of its tenants in the last year, according to Landy.

In terms of the major stories impacting the industrial sector, Landy cited the growth of online shopping.

“As a result of the Internet, stores are now ubiquitous,” Landy said “They can be found everywhere and they are virtually unlimited. All you need is an Internet connection.”

Landy dismissed the idea of brick-and-mortar stores disappearing from the retail market. However, he did note that the changing nature of the physical space needed for modern commerce should benefit the industrial sector.