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Terreno Realty (TRNO) Boosts Portfolio With Property Buyout
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Terreno Realty Corporation (TRNO - Free Report) recently shelled out around $14.8 million for the buyout of an industrial property spanning 4.9 acres in Santa Ana, CA. The move aligns with the company’s efforts to bolster its acquisition-driven growth strategy.
Shares of this industrial real estate investment trust (REIT) witnessed a marginal loss on the Sep 8 normal trading session on the NYSE.
Strategically located at 1720 East Garry Avenue, the property is situated immediately adjacent to the Costa Mesa Freeway (CA 55) and is less than two miles from the intersection of CA 55 and I-405 and the John Wayne Airport in Orange County.
Terreno Realty intends to demolish and redevelop the property, presently comprising three multi-tenant office buildings leased on a short-term basis, into a 92,000-square foot rear-load industrial distribution building for an expected investment of $40.6 million. The company anticipates to finish redeveloping the building in the first quarter of 2025.
The redeveloped building will be equipped with 10 dock-high and two grade-level loading positions and have a parking space capable of accommodating 145 cars. The space has been 100% pre-leased to a provider of temperature-controlled life sciences supply chain solutions. Additionally, it is expected to achieve LEED certification and an estimated stabilized cap rate of 5.1%.
The demand for industrial real estate space is escalating, given the growth in industries and an e-commerce boom. Also, companies’ endeavors to improve supply-chain efficiencies amid the rising demand for logistics infrastructure and efficient distribution networks have aided the need for industrial real estate space.
Against this backdrop, TRNO’s expansion efforts into the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — seem prudent. These markets are characterized by strong demand generators such as high population densities, high volume distribution points and logistics infrastructure, and low supply.
Notably, in the six months ended Jun 30, 2023, TRNO purchased four industrial properties for around $420.5 million, inclusive of acquisition costs.
Terreno Realty is also focused on investing in functional assets at in-fill locations. Such assets are located in areas surrounded by high concentrations of already developed land and existing buildings. It allows the company to cater to submarket tenant demands, including last-mile distribution.
Hence, with solid balance sheet strength, TRNO is well-positioned to capitalize on long-term growth opportunities amid favorable industry fundamentals.
Shares of this Zacks Rank #3 (Hold) company have gained 5.2% in the past three months against the industry’s fall of 1.4%.
Nonetheless, the stabilization of e-commerce sales growth and a high interest rate environment are concerning.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past week to $3.54.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past month to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 3.3% over the past month to $1.26.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Terreno Realty (TRNO) Boosts Portfolio With Property Buyout
Terreno Realty Corporation (TRNO - Free Report) recently shelled out around $14.8 million for the buyout of an industrial property spanning 4.9 acres in Santa Ana, CA. The move aligns with the company’s efforts to bolster its acquisition-driven growth strategy.
Shares of this industrial real estate investment trust (REIT) witnessed a marginal loss on the Sep 8 normal trading session on the NYSE.
Strategically located at 1720 East Garry Avenue, the property is situated immediately adjacent to the Costa Mesa Freeway (CA 55) and is less than two miles from the intersection of CA 55 and I-405 and the John Wayne Airport in Orange County.
Terreno Realty intends to demolish and redevelop the property, presently comprising three multi-tenant office buildings leased on a short-term basis, into a 92,000-square foot rear-load industrial distribution building for an expected investment of $40.6 million. The company anticipates to finish redeveloping the building in the first quarter of 2025.
The redeveloped building will be equipped with 10 dock-high and two grade-level loading positions and have a parking space capable of accommodating 145 cars. The space has been 100% pre-leased to a provider of temperature-controlled life sciences supply chain solutions. Additionally, it is expected to achieve LEED certification and an estimated stabilized cap rate of 5.1%.
The demand for industrial real estate space is escalating, given the growth in industries and an e-commerce boom. Also, companies’ endeavors to improve supply-chain efficiencies amid the rising demand for logistics infrastructure and efficient distribution networks have aided the need for industrial real estate space.
Against this backdrop, TRNO’s expansion efforts into the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — seem prudent. These markets are characterized by strong demand generators such as high population densities, high volume distribution points and logistics infrastructure, and low supply.
Notably, in the six months ended Jun 30, 2023, TRNO purchased four industrial properties for around $420.5 million, inclusive of acquisition costs.
Terreno Realty is also focused on investing in functional assets at in-fill locations. Such assets are located in areas surrounded by high concentrations of already developed land and existing buildings. It allows the company to cater to submarket tenant demands, including last-mile distribution.
Hence, with solid balance sheet strength, TRNO is well-positioned to capitalize on long-term growth opportunities amid favorable industry fundamentals.
Shares of this Zacks Rank #3 (Hold) company have gained 5.2% in the past three months against the industry’s fall of 1.4%.
Nonetheless, the stabilization of e-commerce sales growth and a high interest rate environment are concerning.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , SBA Communications (SBAC - Free Report) and Americold Realty Trust (COLD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past week to $3.54.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past month to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 3.3% over the past month to $1.26.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.