ATTENTION: Buy 1 High-Growth Industrial Stock in 2021

Through strategic relationships with institutional investors, WPT Industrial Real Estate Investment Trust (TSX:WIR.U) is pursuing value-adding and development investments

WPT Industrial Real Estate Investment Trust (TSX:WIR.U) acquires, develops, manages, and owns distribution and logistics properties located in the United States. It owns or manages a portfolio of properties across 20 U.S. states consisting of approximately 35.6 million square feet of gross leasable area (GLA) and 108 properties.

Robust internal growth

The real estate investment trust (REIT) seeks to improve the performance, value, and long-term cash flow of its existing portfolio through a number of activities, including increasing rental rates. The in-place leases at the properties provide for contractual increases in base rental rates of approximately 1.6% in 2021. These rent steps and those in future years will result in increasing rental revenues for the REIT over time.

In addition, management expects rental rates in the markets in which the REIT’s properties are located to increase in future years as a result of improving economic conditions and growing demand for state-of-the-art, functional industrial tenancies. There is also significant opportunity for the company to strategically refinance existing mortgage debt. Certain in-place financing at the properties exist that contain mortgage debt with interest rates above current market interest rates. If the REIT refinances these loans at current market interest rates, the result may be a reduction in the overall interest expense incurred by the REIT.

Capitalizing on expansion opportunities

Management is also focused on capitalizing on expansion opportunities. Some of the company’s properties contain vacant land, which management anticipates will support expansions or new construction totaling at least 3,200,000 square feet of GLA. This excess vacant land may in the future be developed or sold by the REIT.

The company also focuses on understanding tenants’ space needs and developing and nurturing tenant relationships that will provide expansion opportunities with existing tenants in additional markets. This maximizes the likelihood of future lease renewals and minimizes the costs associated with tenant turnover in the REIT’s portfolio.

Intelligent acquisition strategy

The REIT’s acquisition strategy is facilitated by management’s extensive experience in the sourcing and execution of acquisition and development transactions in the United States. The company focuses acquisition efforts on functional warehouse and distribution properties with characteristics and amenities that are in high demand among retailers, distributors, and third-party logistics companies.

The REIT also makes investments in properties where rental rates are below current market levels. This has enabled the REIT to achieve organic growth in rental revenues as tenant leases expire, providing an opportunity to adjust the rent to market levels.

Strategic partnerships

Management has utilized the company’s long-term relationships with strategic capital partners to facilitate off-market investment opportunities by exploring, from time to time, potential co-investment opportunities involving the REIT and one or more co-investors. Such co-investment opportunities have allowed the REIT to generate additional third-party fee income, enhance the company’s cost of capital, and participate in the acquisition of larger portfolios than it would otherwise be able to acquire acting as a sole investor.

Through strategic relationships with institutional investors, the REIT is pursuing value-adding and development investments, creating an enhanced proprietary acquisition pipeline for the REIT.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

More on Investing

GettyImages-1352607170 (1)
Tech Stocks

Why Shopify Stock Is Skyrocketing Today

Shopify published its Q3 report this morning, and it gave investors plenty to be excited about.

Read more »

Hand Protecting Senior Couple
Dividend Stocks

3 Blue-Chip Stocks So Safe Canadians Can Hold Them Until They Die

Canadian National Railway (TSX:CNR) is a stock worth owning for life.

Read more »

stock research, analyze data
Dividend Stocks

14.7% Dividend Yield? Buy Up This Passive-Income Stock in Bulk!

That dividend yield is high, but it still comes with some strong reasons to consider the stock outside of a…

Read more »

calculate and analyze stock
Stock Market

Chewy vs. Pet Valu: Which Growth Stock Is a Better Buy?

Chewy and Pet Valu are two beaten-down pet stocks that trade at a reasonable valuation in November 2024.

Read more »

Forklift in a warehouse
Investing

Canadian Industrial Stocks to Buy Now

Canadian industrial stocks offer a comprehensive variety of safety, dividend, and growth combinations. This ensures that all kinds of investors…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Tuesday, November 12

Sliding metals prices amid a strengthening U.S. dollar could continue to weigh on TSX mining stocks today.

Read more »

rising arrow with flames
Investing

2 TSX Stocks With Market-Beating Potential

Fairfax Financial Holdings (TSX:FFH) stock has been soaring of late but remains cheap from a valuation perspective.

Read more »

Canadian Dollars bills
Dividend Stocks

1 Dividend Stock That Could Create $5,000 in Tax-Free Passive Income in 10 Years

Here's why Fortis (TSX:FTS) certainly looks like a top dividend stock with outsized total return upside worth buying right now.

Read more »