Summary: Industrial real estate investment trusts (REITs) own and rent property vital to the industrial sector to tenants. Buying REIT stocks allows investors to create a steady stream of income. This article will showcase five industrial REITs to invest in 2024 using a renowned online brokerage like eToro.
Highly Rated Stock Trading & Investing Platform
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.
Copy top-performing traders in real time, automatically.
Regulated by financial authorities including FCA and FINRA.
2.8 MillionUsers
Get Started
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.
What are industrial REITs?
Real estate investment trusts (REITs) are companies that own and manage income-producing real estate, including residential and commercial real estate.
Buying REIT stocks allows you to participate in real estate investment without owning the property directly. These financial assets give investors access to a portion of real estate, similar to how stocks give stakeholders access to a part of a company. Owning REIT shares provides income generation and diverse asset portfolios of real estate without the chores or massive capital outlays of buying the actual property.
REITs usually operate within a given sector, establishing a portfolio of properties for their target tenant audience. Considering this, these companies can be office REITs, data center REITs, apartment REITs, self-storage REITs, hotel REITs, and farmland REITs.
About
Industrial REITs operate within the domain of industrial facilities, renting properties such as warehouses and distribution centers to various clients.
As owning a property comes with its own duties and obligations, companies increasingly rely on industrial REITs to obtain industrial space. This integral intermediary position in the supply chain puts industrial REITs in a key role in areas like manufacturing, logistics, and e-commerce.
Since the law obliges REITs to distribute at least 90% of their taxable income to shareholders, investing in some of the entries on our list is a solid method for investors to tap into this potential source of passive income.
Top five industrial REITs to invest in
After a comprehensive market study, we selected the top five industrial REITs to invest in 2024 based on market capitalization, earnings growth, dividends, historical performance, and liquidity.
Here are the top 5 prominent industrial REITs:
- Rexford Industrial Realty (NYSE: REXR);
- STAG Industrial (NYSE: STAG);
- Prologis (NYSE: PLD);
- Terreno (NYSE: TRNO);
- Innovative Industrial Properties (NYSE: IIPR).
To securely invest in industrial REITs, we recommend a regulated investing platform eToro:
- Commission-free stock and ETF trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Highly Rated Stock Trading & Investing Platform
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.
Copy top-performing traders in real time, automatically.
Regulated by financial authorities including FCA and FINRA.
2.8 MillionUsers
Get Started
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.
1. Rexford Industrial
Rexford Industrial Realty, Inc. (NYSE: REXR) is a leading management company and industrial REIT that operates the largest industrial property portfolio in the U.S., with 35 million square feet of rentable real estate in Southern California worth $13 billion.
Rexford Industrial’s assets consist of strategically located industrial properties such as warehouses and distribution centers that serve businesses across the e-commerce, logistics, and manufacturing sectors. The company uses its modern facilities to generate rental income and provide long-term value for shareholders.
Note
To invest in this industrial REIT, we recommend our guide on how to buy Rexford Industrial stock.
REXR stock price today
Invest in Rexford Industrial on eToro
2. STAG
STAG Industrial, Inc. (NYSE: STAG) is a U.S.-based REIT that manages and operates single-tenant industrial real estate nationwide. It has built a portfolio of properties with purchase prices from $5 million to $50 million.
Based in Boston, Massachusetts, STAG rents property like warehouses and industrial facilities to tenants in manufacturing, logistics, and distribution. Its cross-market portfolio of assets represents an integral link in the transportation and logistics chain of the United States.
STAG has a market cap of $7.05 billion as of December 2023.
Note
For a step-by-step guide for this industrial REIT, read our How to Buy STAG Industrial Stock article.
STAG stock price today
Invest in STAG Industrial on eToro
3. Prologis
Prologis, Inc. (NYSE: PLD) is an industrial REIT and a global logistics real estate leader with a massive global portfolio of assets like warehouses, logistics facilities, and distribution centers.
The company has real property strategically located in significant logistics hubs worldwide. With around 1.2 billion square feet of properties and development projects in 19 countries, it caters to approximately 2.8% of the world’s GDP. Dedicated to fostering high quality and setting industry standards, Prologis also highlights sustainability and innovative property design.
Prologis has partnered with numerous recognized brands, including Amazon, DHL, The Home Depot, BMW, Walmart, and PepsiCo. As of December 2023, Prologis is an S&P 500 component and the world’s largest industrial real estate company with a market capitalization of $122.33 billion.
Note
Consider our How to Buy Prologis Stock article for more information on investing in this industrial REIT.
PLD stock price today
Invest in Prologis on eToro
4. Terreno
Terreno Realty Corporation (NYSE: TRNO) is a San Francisco-headquartered industrial REIT that obtains, develops, and manages real estate in six major coastal U.S. markets: Los Angeles, New York City, San Francisco, Seattle, Miami, and Washington, D.C.
The company’s strategically located industrial property, such as warehouses and distribution centers, represent vital logistics hubs and serve businesses in distribution, manufacturing, and e-commerce.
With a solid portfolio of 257 buildings with a combined area of 15.9 million square feet, it aims to secure a stable income stream for its shareholders in a conservative leverage manner.
Note
Read our comprehensive How to Buy Terreno Stock investing guide for more details.
TRNO stock price today
Invest in Terreno on eToro
5. Innovative Industrial Properties
Innovative Industrial Properties, Inc. (NYSE: IIPR) is a pioneering industrial REIT specializing in the regulated cannabis industry in the U.S.
Founded in 2016, Innovative Industrial Properties is the first publicly traded company on the NYSE to manage real estate for the medical-use cannabis industry. The company has devised sale-leaseback and other real estate solutions as an alternative to limited traditional financing alternatives to state-licensed cannabis operators. It operates a portfolio of 108 properties across 19 states and 8.85 million square feet of real estate.
Innovative Industrial Properties’ pioneering position makes them crucial to the nascent but rapidly advancing cannabis market. The company has a market capitalization of $2.82 billion as of December 2023.
Note
To invest in this industrial REIT, consider our guide on how to buy Innovative Industrial Properties stock.
IIPR stock price today
Invest in Innovative Industrial Properties on eToro
How to invest in industrial REITs: step-by-step
Industrial REITs allow exposure to the industrial real estate market without having investors own the property, which can alleviate certain negative aspects of real estate investing and establish a steady source of income. To invest in these REITs using an online brokerage, follow these steps:
Step 1: Choose a broker
Before investing in REITs, you must gain access to the stock market. The best type of service for this is an online brokerage.
To securely invest in industrial REITs, we recommend eToro:
- Commission-free stock and ETF trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Highly Rated Stock Trading & Investing Platform
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.
Copy top-performing traders in real time, automatically.
Regulated by financial authorities including FCA and FINRA.
2.8 MillionUsers
Get Started
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.
Step 2: Open and fund your account
Once you have decided on the investing platform, you must register and verify your account. After going through the verification, you should transfer funds to your account to buy industrial REIT stocks in the next step.
Standard funding methods include bank transfers, debit or credit cards, and financial transaction services like PayPal (PYPL).
Step 3: Decide how much you want to invest
Staying within your budget limits is vital; going beyond can cause a debt spiral. To avoid this, make sure you have performed the following:
- Paid off all high-interest debt, such as credit cards and personal loans;
- Created an emergency fund that covers at least three months of daily life expenses.
Remember
Never invest what you cannot afford to lose.
Step 4: Place your order and buy industrial REIT stock
The next step is to place an order and purchase the shares in industrial REITs:
- Step 1: Log into your brokerage and find the ticker symbol of the REIT you wish to invest in;
- Step 2: Designate the sum or the number of shares you want to purchase;
- Step 3: Select the order type (market order or limit order) and place it;
- Step 4: Confirm the trade order.
Step 5: Monitor and manage your investment
The last step of the investing process lasts as long as you keep the industrial REIT stocks in your portfolio. Remaining informed about the financial performance of the REITs you invested in, along with the general real estate market tendencies, maximizes the success chances of your investment.
Pros and cons of investing in industrial REITs
Pros
- Diversification: Industrial REITs usually own and operate various industrial properties, including warehouses, distribution centers, manufacturing facilities, etc. These investments entail a high degree of diversification, which helps mitigate risk;
- Steady income: Industrial REITs’ passive income has significant potential returns on your investment in the long run, making them popular with income-oriented investors and those looking to establish a reliable stream of revenue;
- Liquidity: Industrial REITs are listed on stock exchanges, making them highly liquid assets. Unlike with direct ownership of physical property, you can buy and sell REIT shares just like any other stock;
- Industrial real estate exposure: Investing in industrial facilities directly requires massive initial capital, but industrial REITs allow investors to gain exposure to this sector with much lower initial investments;
- Potential capital appreciation: While industrial REITs’ primary focus is generally on passive income, these assets can also experience capital appreciation if property values increase.
Cons
- Interest rate sensitivity: Industrial REITs are naturally sensitive to interest rate movements. When interest rates soar, the returns of REITs frequently diminish, potentially lowering share prices;
- Market risk: The performance of industrial REITs sometimes depends on broader economic conditions. An industrial sector downturn or more general economic turmoil can cause a dip in occupancy rates and rental income;
- Competition: The industrial real estate market can be markedly competitive, with oversupply in certain regions causing decreased demand and plunging rental rates;
- Management: As investors have limited control, they must rely on the REIT’s management. Poor management decisions or an inexperienced team can cause a decrease in the REIT’s performance.
Common mistakes to avoid when investing in industrial REITs
Make sure to avoid these common investing mistakes:
- Lack of research: Research the REIT stock in detail, along with the market state of the industrial property sector, before investing;
- Lack of strategy: Set your goals before you spend any money;
- Staking everything on one asset: Always diversify your portfolio;
- Falling prey to scams: Avoid illegal platforms and suspicious deals.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to invest in industrial REITs
What are industrial REITs?
Industrial REITs are real estate investment trusts that own and operate a portfolio of industrial property, such as warehouses and distribution centers. These assets provide a much more straightforward and accessible alternative to buying actual industrial property.
Why should I invest in industrial REITs?
Industrial REITs allow investors to tap into a lucrative market without the capital-intensive approach of directly owning industrial facilities. Additionally, REITs come with dividend payments to investors, as 90% of their taxable income has to be returned to shareholders.
How do I invest in industrial REITs?
Investing in industrial REITs is identical to investing in regular stocks. You need to register an account with an investing service and buy the shares, just like regular companies.
What are the best industrial REITs to invest in 2024?
Some of the top industrial REITs to invest in now include Rexford Industrial, STAG, Prologis, Terreno, and Innovative Industrial Properties.
Do industrial REITs pay dividends?
Industrial REITs must pay 90% of their taxable income as dividends. All of the REIT stocks listed here are dividend stocks.
Highly Rated Stock Trading & Investing Platform
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.
Copy top-performing traders in real time, automatically.
Regulated by financial authorities including FCA and FINRA.
2.8 MillionUsers
Get Started
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.
As an enthusiast with extensive knowledge in real estate investment trusts (REITs), particularly in the industrial sector, I've been deeply engaged in researching, analyzing, and investing in various REIT opportunities. My understanding extends beyond theoretical concepts, as I actively monitor market trends, evaluate financial reports, and assess the performance of different REITs to make informed investment decisions.
In the realm of industrial REITs, I've explored the nuances of owning and managing income-producing properties crucial to sectors such as manufacturing, logistics, and e-commerce. Industrial REITs serve as vital intermediaries, providing essential industrial space to businesses while offering investors opportunities for passive income and portfolio diversification.
Now, delving into the concepts presented in the article about industrial REITs and investment strategies:
-
Real Estate Investment Trusts (REITs): These are companies that own and manage income-producing real estate properties. REITs offer investors the opportunity to invest in real estate without directly owning the properties themselves. They distribute at least 90% of their taxable income to shareholders, making them attractive for income-seeking investors.
-
Industrial REITs: Industrial REITs focus on owning and renting out industrial properties such as warehouses and distribution centers to tenants. They play a crucial role in facilitating logistics, manufacturing, and e-commerce operations. Industrial REITs provide investors with exposure to the industrial real estate market without the burdens of property management.
-
Investing in Industrial REITs: Investors can invest in industrial REITs through online brokerage platforms like eToro. These platforms offer commission-free stock trading, fractional shares, and user-friendly interfaces. Investors can choose from a variety of industrial REITs based on factors such as market capitalization, earnings growth, dividends, historical performance, and liquidity.
-
Top Five Industrial REITs to Invest in 2024:
- Rexford Industrial Realty (NYSE: REXR)
- STAG Industrial (NYSE: STAG)
- Prologis (NYSE: PLD)
- Terreno Realty Corporation (NYSE: TRNO)
- Innovative Industrial Properties (NYSE: IIPR)
-
Investment Process:
- Choose a regulated online brokerage platform like eToro.
- Open and fund your account.
- Decide how much to invest based on your financial goals and risk tolerance.
- Place orders to buy shares of industrial REITs.
- Monitor and manage your investment portfolio regularly to stay informed about market trends and performance.
-
Pros and Cons of Investing in Industrial REITs:
- Pros include diversification, steady income, liquidity, exposure to industrial real estate, and potential capital appreciation.
- Cons encompass interest rate sensitivity, market risk, competition, and reliance on management decisions.
-
Common Mistakes to Avoid:
- Lack of research
- Lack of strategy
- Overconcentration in a single asset
- Falling prey to scams
-
FAQs about Investing in Industrial REITs: The FAQs cover the definition of industrial REITs, reasons to invest in them, how to invest, the best industrial REITs to consider, dividend payments, and the risks associated with investing in REITs.
In conclusion, investing in industrial REITs offers investors an avenue to participate in the industrial real estate market and potentially earn passive income while diversifying their investment portfolios. It's essential to conduct thorough research, understand the risks involved, and adopt sound investment strategies when investing in industrial REITs.
