Duke Realty Corporation DRE is witnessing solid demand for its high-quality industrial real estates from both new tenants and the existing ones in Nashville. Recently, the company secured seven new lease deals and 13 lease renewals, thereby, locking down 305,000 square feet of industrial space.

The seven new lease agreements total 68,000 square feet of space. The properties in which the new tenants have secured spaces include the company’s Nashville Business Center, Aspen Grove Industrial and the Brentwood South Business Center. The convenient locations of these properties seem to have lured the tenants to go for the leases.

Particularly, the two-facility complex — Nashville Business Center — is situated along I-24 having access to I-65 and I-40, and within three miles of the FedEx FDX and UPS Ground facilities. The other property — Brentwood South Business Center — offers six buildings in the center of the Cool Springs submarket and enjoys access to I-65.

Also, Aspen Grove Industrial, which is a five-building industrial complex with more than 576,000 square feet of space, is just off of I-65 in Franklin. Apart from offering high-quality spaces, convenient access to major transportation routes have played a key role in shaping up the demand for these properties.

In addition, the lease renewals totaled 237,084 square feet of space and helped the 13 tenants to remain in Duke Realty’s spaces in the Nashville metropolitan area.

Markedly, the Nashville metro area is seeing decent demand for modern, convenient spaces and Duke Realty, which owns and manages 3.6 million square feet of industrial properties in this metro area, is well poised to benefit from the favorable trend. Reflecting the strong demand, presently, the company’s in-service portfolio in Nashville is 97.6% leased.

According to Jeff Palmquist, Duke Realty’s vice president of leasing and development in Nashville, “With our high occupancy and second quarter average asking rents up 17.5 percent year-over-year, demand for modern, convenient space in Middle Tennessee is very strong.”

The demand for logistics infrastructure and efficient distribution networks has been shooting up amid the e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, in turn, aiding the industrial real estate market.

Apart from the fast adoption of e-commerce, the logistics real estate is poised to benefit from an increase in inventory levels post the global health crisis, opening up possibilities for industrial landlords, including Duke Realty, Prologis PLD and Terreno Realty Corporation TRNO, to enjoy a favorable market environment.

Duke Realty, which has emerged as a domestic pure-play industrial real estate investment trust, is well positioned to bank on the favorable environment backed by its solid operating platform and robust scale. The company, which enjoys a healthy footing in this asset category, is witnessing healthy demand for industrial real estates, as reflected by the leasing levels of the properties.

The industrial REIT leased 7.6 million square feet of space during the June-end quarter. The tenant retention was 77.5% for the reported quarter and 93.9%, after considering immediate backfills. The company reported overall cash and annualized net effective rent growth on the new and renewal leases of 19.2% and 36.2%, respectively, during the second quarter. Stabilized in-service portfolio was 98.2% leased as of Jun 30, 2021, having expanded 10 basis points, sequentially, and 90 bps from the prior-year quarter end.

Shares of Duke Realty have gained 21.6% over the past six months, outperforming the industry’s 15.9% growth.

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