We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Terreno (TRNO) Announces Lease Renewal, Sees Decent Demand
Read MoreHide Full Article
Terreno Realty Corporation (TRNO - Free Report) recently announced the execution of an early lease renewal in Torrance, CA, with a global supplier of automotive parts, components and technologies. This reflects the healthy demand for its properties from existing tenants. The 99,000-square-foot lease, which was originally set to expire in January 2025, has been extended until January 2030.
Earlier this month, Terreno also announced that it has pre-leased 67% of Countyline Corporate Park Phase IV Building 33 in Hialeah, FL. The lease, which will run for seven years with a third-party logistics provider and encompass 105,000 square feet of space, will start upon the completion of building construction and tenant improvements expected to be in March 2025.
Countyline Corporate Park Phase IV comprises a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park. Moreover, Building 33 of Countyline Corporate Park is a 158,000-square-foot, 36-foot clear-height rear-load industrial distribution building on 9.0 acres and is currently under construction.
The demand for industrial real estate space has been high amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. Terreno Realty is also experiencing healthy demand for its properties.
TRNO’s operating portfolio was 96% leased to 668 tenants as of Jun 30, 2024. Its same-store portfolio of 14.7 million square feet was 96% leased on Jun 30, 2024. For the company’s improved land portfolio of 45 parcels spanning 152.4 acres, the leased rate was 98.1% as of Jun 30, 2024 compared to 94.6% and 96.3% recorded as of Mar 31, 2024 and Jun 30, 2023, respectively.
The company was able to lock in higher rents on new and renewed leases during the quarter. The cash rents on new and renewed leases climbed 45.9%. The tenant retention ratio was 56.4% for the operating portfolio and 61.2% for the improved land portfolio.
Per a Cushman & Wakefield (CWK - Free Report) report, although the U.S. industrial market recently decelerated, it continued to perform well. In the second quarter, net demand increased, asking rental rates continued to rise, and the influx of vacant sublet space slowed for the second consecutive quarter.
There was a reacceleration of industrial demand in the second quarter. Following a dull first quarter, overall net absorption more than doubled to 46.3 million square feet (msf) in the second quarter of 2024, per the report. While news leasing activity was 137.2 msf in the second quarter, down 2.8% since the first quarter, it came 11.2% ahead of the 10-year pre-pandemic average of 126.9 msf.
The vacancy has continued to normalize from historically low levels, with the vacancy rate edging higher to 6.1%, up 40 basis points (bps), as 121.1 msf of new construction deliveries were completed. While it marks the highest vacancy rate in almost nine years, it is still below the 10-year, pre-pandemic (2010-2019) average of 7%. Amid this, asking rents crept higher to $9.97 per square foot, reflecting an increase of only 3.7% year over year, the lowest growth rate since 2020.
However, the construction pipeline continues to diminish. The pipeline ended the second quarter at 343.3 msf, down 14% quarter over quarter. This spells good for industrial landlords, including TRNO, Prologis (PLD - Free Report) and EastGroup Properties (EGP - Free Report) , and these REITs are likely to enjoy a favorable market environment in the upcoming quarters.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Terreno (TRNO) Announces Lease Renewal, Sees Decent Demand
Terreno Realty Corporation (TRNO - Free Report) recently announced the execution of an early lease renewal in Torrance, CA, with a global supplier of automotive parts, components and technologies. This reflects the healthy demand for its properties from existing tenants. The 99,000-square-foot lease, which was originally set to expire in January 2025, has been extended until January 2030.
Earlier this month, Terreno also announced that it has pre-leased 67% of Countyline Corporate Park Phase IV Building 33 in Hialeah, FL. The lease, which will run for seven years with a third-party logistics provider and encompass 105,000 square feet of space, will start upon the completion of building construction and tenant improvements expected to be in March 2025.
Countyline Corporate Park Phase IV comprises a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park. Moreover, Building 33 of Countyline Corporate Park is a 158,000-square-foot, 36-foot clear-height rear-load industrial distribution building on 9.0 acres and is currently under construction.
The demand for industrial real estate space has been high amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. Terreno Realty is also experiencing healthy demand for its properties.
TRNO’s operating portfolio was 96% leased to 668 tenants as of Jun 30, 2024. Its same-store portfolio of 14.7 million square feet was 96% leased on Jun 30, 2024. For the company’s improved land portfolio of 45 parcels spanning 152.4 acres, the leased rate was 98.1% as of Jun 30, 2024 compared to 94.6% and 96.3% recorded as of Mar 31, 2024 and Jun 30, 2023, respectively.
The company was able to lock in higher rents on new and renewed leases during the quarter. The cash rents on new and renewed leases climbed 45.9%. The tenant retention ratio was 56.4% for the operating portfolio and 61.2% for the improved land portfolio.
Per a Cushman & Wakefield (CWK - Free Report) report, although the U.S. industrial market recently decelerated, it continued to perform well. In the second quarter, net demand increased, asking rental rates continued to rise, and the influx of vacant sublet space slowed for the second consecutive quarter.
There was a reacceleration of industrial demand in the second quarter. Following a dull first quarter, overall net absorption more than doubled to 46.3 million square feet (msf) in the second quarter of 2024, per the report. While news leasing activity was 137.2 msf in the second quarter, down 2.8% since the first quarter, it came 11.2% ahead of the 10-year pre-pandemic average of 126.9 msf.
The vacancy has continued to normalize from historically low levels, with the vacancy rate edging higher to 6.1%, up 40 basis points (bps), as 121.1 msf of new construction deliveries were completed. While it marks the highest vacancy rate in almost nine years, it is still below the 10-year, pre-pandemic (2010-2019) average of 7%. Amid this, asking rents crept higher to $9.97 per square foot, reflecting an increase of only 3.7% year over year, the lowest growth rate since 2020.
However, the construction pipeline continues to diminish. The pipeline ended the second quarter at 343.3 msf, down 14% quarter over quarter. This spells good for industrial landlords, including TRNO, Prologis (PLD - Free Report) and EastGroup Properties (EGP - Free Report) , and these REITs are likely to enjoy a favorable market environment in the upcoming quarters.