RDOG - Industrial REITs: Virus Exposes Frail Supply Chains

• The "hub of e-commerce" and the hottest property sector of the last half-decade, Industrial REITs have been unfazed by the coronavirus-induced pain that has encumbered much of the REIT sector.
• The dramatic acceleration in e-commerce adoption has pulled forward the "retail apocalypse" trends as retailers divert more of their capital away from malls and into distribution supply chains.
• While much of the REIT sector was slashing dividends this year, nearly half of industrial REITs have raised dividends in 2020. Rent collection has averaged more than 97% since April.
• Underscoring the sector's favorable supply/demand conditions, Amazon's rumored interest in converting malls into last-mile distribution hubs has turned some heads, but the impact on industrial REITs will be immaterial.
• Recent earnings reports confirmed that fundamentals are back in-line with pre-pandemic expectations with positive growth expected in 2020. With the pandemic exposing deficiencies in supply chains, we believe the logistics-boom is back in the early-innings.

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