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Terreno Realty (TRNO) Grows Portfolio With California Property

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Terreno Realty Corporation (TRNO - Free Report) shelled out $22.4 million to purchase an industrial property in Rancho Dominguez, CA. The move comes as part of the company’s acquisition-driven growth strategy.

Located at 14805 S. Maple Avenue, the property comprises a 51,000-square-foot building, which is leased on a short-term basis through June 2023. The building will be demolished after that and the property will be redeveloped into a 2.8-acre improved land parcel.

The property’s advantageous location — between the Los Angeles International Airport and the Ports of Los Angeles and Long Beach, and adjacent to Terreno Realty’s improved land parcels at 14725 and 14732 S. Maple Avenue — is likely to attract tenants. The redeveloped property’s estimated stabilized cap rate is 6.2%.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, the demand for industrial real estate space has been shooting up. TRNO is banking on such opportunities and is focused on expanding its portfolio through acquisitions.

Further, the company is targeting functional assets at in-fill locations. Such assets enjoy high-population densities and are located near high-volume distribution points.

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. These markets display solid demographic trends and witness healthy demand for industrial real estate.

In recent months, Terreno Realty shelled out $15.4 million to purchase an industrial property in Elizabeth, NJ. Located at 629 Henry Street, the property comprises one industrial distribution building containing roughly 23,000 square feet on 1.8 acres. It is 100% leased on a short-term basis. The property is advantageously located adjacent to the Newark Liberty International Airport and Exit 13A of the New Jersey Turnpike. The estimated stabilized cap rate is 5.4%.

Terreno Realty expended $17 million to purchase an industrial property in Los Angeles, CA. Also, TRNO acquired an industrial property in Miami, FL, for $4.7 million.

Apart from the fast adoption of e-commerce, the industrial real estate space is poised 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 TRNO, Prologis (PLD - Free Report) and First Industrial Realty Trust, Inc. (FR - Free Report) , to enjoy a favorable market environment.

Shares of Terreno Realty, currently carrying a Zacks Rank #3 (Hold), have climbed 10.8% in the past three months compared with the industry’s growth of 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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Prologis carries a Zacks Rank of 3 at present. Prologis’ long-term growth rate is projected at 8.6%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share of $5.12 calls for a 23.4% year-over-year increase.

First Industrial Realty carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for First Industrial Realty’s 2022 FFO per share has moved 2 cents north to $2.26 over the past week.

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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