DCT Industrial Trust Inc.DCT

Morningstar Rating

Stock Research and Analysis

by Joung Park

DCT Industrial Trust is an industrial real estate investment trust (REIT) that owns bulk distribution and light industrial properties scattered throughout the United States and Mexico. The company has not earned a moat in our opinion because historical Read more

Bulls Say

DCT cut its dividend in late 2008, bringing its FFO coverage to an estimated 10-year average in the low 60s. We think this is a sustainable payout.

The company is well-diversified geographically--no single market exceeds 10% of base rent--reducing the likelihood that a regional economic downturn will hamper profitability.

The company has an undrawn capacity of almost $285 million on its credit facility that does not mature until late 2010. This, combined with a pullback in development spending, should give DCT enough liquidity for the remainder of 2009. Read more

Bears Say

Mexico could see a greater impact from the global economic recession than the U.S., reducing DCT's initial returns on its newly acquired Monterrey-based assets.

The company's developments are only 20% pre-leased. As the leasing environment slows, it may become increasingly more difficult to find tenants for this space, reducing DCT's returns.

Depending on the company's ability to manage its 2010 and 2011 maturities, we think further dividend cuts and equity issuances are possible.

If long-term interest rates rise, in addition to already-increased credit spreads, this firm's cost of capital would increase, pressuring asset values and reducing cash flow. Read more

Strategy

DCT's portfolio consists of bulk distribution and light industrial contributing nearly 78% and 22% to rental revenues, respectively. The company both acquires and develops new properties, choosing to Read more

Management

Philip L. Hawkins assumed the role of CEO following DCT's internalization of management in October 2006. He has a resume totaling almost 15 years of real estate experience with CarrAmerica and Jones Lang LaSalle JLL. Thomas G. Wattles acts as executive Read more

Profile

DCT Industrial Trust is an industrial real estate investment trust headquartered in Denver and founded in 2002. The company owns, develops, and manages bulk distribution Read more

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