Andrew MoffsFirst Industrial Realty TrustFRTOP PICKMar 27, 2024

Benefits from 25% of its portfolio being in Southern California, the distribution engine of the US. Trades at one of the biggest discount to NAV among pure-play peers in the US. Highest bottom-line earnings growth of any US industrial REIT. Thinks highly of management, great capital allocation. Yield is 3.32%.

Bullish on the space. Got really close to its NAV of ~%58, so he took the opportunity to exit. Reallocated proceeds to other industrial warehouse names that trade at a discount.

Hit his NAV target of $56-57 last fall, and he exited.

Strong industrial fundamentals, yet recent weakness because of new supply and slower leasing decisions. That's all priced in. One of the best portfolios in public markets. 27% discount to NAV. Cashflows go higher by 40-50% on each lease renewal. Right time to buy.

Concentrated in 15 of the top US markets. Outside of DIR.UN, his best idea for industrial warehousing globally. Over 20% discount to NAV. Southern California strong industrial hub. Inflation has muted new starts, yet demand is increasing, so pricing power should return next year. Expiring leases can be renewed higher. Yield is 3%.

If discount to NAV persists, possible takeout candidate.

In the 15 tightest markets in the US, with very low vacancy rates. Mostly in southern California, which benefits from being home to a #1 distribution hub. Leader in earnings growth in 2023 with lease renewal. Solid development pipeline. 20-25% discount to NAV. Expects 8% earnings growth this year. Could be an M&A target. Yield is 2.46%.

Fed is thinking of ending QE early which could take the bite out of silver. It is below its 20 and 50 day moving averages so it is a bit concerning. You might want to consider stepping aside.