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Terreno Realty (TRNO) Buys Newark Asset, Boosts Portfolio

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As part of its acquisition-driven growth strategy, Terreno Realty Corporation (TRNO - Free Report) recently shelled out $13.0 million to purchase an industrial property in Newark, NJ. The estimated stabilized cap rate of the property is 5.4%.

Located at 293 Roanoke Avenue, this 1.8-acre improved land parcel is 100% leased to one tenant on a short-term basis. It is adjacent to Exit 15E of the New Jersey Turnpike and Terreno Realty’s 85, 87, 127-167 and 147-163 Doremus Avenue properties, indicating an advantageous location and positioning it well to lure tenants.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for industrial real estate space has been shooting up. Hence, TRNO is banking on such opportunities and is focused on expanding its portfolio through acquisitions. It is targeting functional assets at in-fill locations, which enjoy high-population densities and are located near high-volume distribution points.

Recently, Terreno Realty announced shelling out $34.6 million for the buyout of an industrial property in San Leandro, CA. Also, it purchased two industrial properties in Los Angeles and Inglewood, CA for $27.2 million.

In addition to the abovementioned acquisitions, Terreno Realty recently acquired an industrial property in Anaheim, CA for $15.0 million and an industrial property at 127-167 and 147-163 Doremus Avenue in Newark, NJ for $11.9 million.

With such expansion efforts, Terreno Realty is well-poised to enhance its portfolio in six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — which display solid demographic trends and witness healthy demand for industrial real estate.

Apart from the fast adoption of e-commerce, industrial real estate space is anticipated to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruption. This will offer opportunities to industrial landlords, including Terreno Realty, Prologis (PLD - Free Report) and Rexford Industrial Realty (REXR - Free Report) , to enjoy a favorable market environment.

Shares of Zacks Rank #2 (Buy) TRNO have declined 9% over the past year compared with the industry’s fall of 5.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Image Source: Zacks Investment Research

Prologis carries a Zacks Rank of 2 at present. Prologis’ long-term growth rate is projected at 9.8%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in a month.

Rexford Industrial Realty holds a Zacks Rank of 2 at present. Rexford Industrial Realty’s 2022 revenues are expected to increase 34% year over year. The Zacks Consensus Estimate for REXR’s 2022 FFO per share has been revised 1.6% upward in the past two months.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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