Page 31 - IreitEbook

And the good news keeps coming from there, since these spaces don’t need

to be anywhere as sophisticated or aesthetically pleasing as the typical office

space. Their first and foremost purpose is to hold items, not house people.

So they require far less time to be constructed, making oversupply an even

smaller problem to worry about.

That kind of intense stability does come with a trade-off. Of course. So

industrial REITs’ share prices probably won’t rise at any more than a steady,

expected pace. But many investors find that factor a more-than-reasonable

price to pay for SWAN-style stability.

Considering their slow but steady attributes, it should come as no surprise

that industrial REITs, like healthcare REITs, tend to employ triple-net leases.

That or modified-gross leases, where they'll pay basic property taxes and

insurance costs alone.

Either way, they’ll no doubt include rent bumps to factor in inflation along

the way.

Moreover, these real estate investment trusts will tailor themselves to the

markets they operate within. As such, they can offer lease lengths as short as

a year for small-space users with local distribution needs, all the way up to 10-

year contracts or more.

Regardless, tenant renewal rates remain rather strong at 65% or higher, since,

once again, businesses need storage space. It’s as simple as that.

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