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Terreno (TRNO) Leases San Leandro Property, Sees Decent Demand

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Terreno Realty (TRNO - Free Report) is witnessing healthy demand for its properties. Recently, the company executed a lease for 69,000 square feet in San Leandro, CA. This lease with an ocean freight provider will commence on Sep 30, 2024 and is slated for expiry in January 2030.

This industrial REIT has been experiencing healthy demand for its properties and recently announced the execution of an early lease renewal in Torrance, CA, with a global supplier of automotive parts, components and technologies. The 99,000-square-foot lease, which was originally set to expire in January 2025, has been extended until January 2030.

Apart from these, 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.

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 from both existing and new tenants.

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. 

Terreno Realty 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.

With a solid operating platform, a robust balance sheet position and strategic expansion moves, TRNO seems well-positioned to capitalize on long-term growth opportunities amid favorable industry fundamentals.

Shares of Terreno Realty, currently carrying a Zacks Rank #2 (Buy), have risen 17% in the past three months, outperforming the industry’s growth of 10.3%.

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Other Stocks to Consider

Some other top-ranked stocks from the REIT sector are Cousins Properties Incorporated (CUZ - Free Report) and Gladstone Commercial Corporation (GOOD - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Cousins Properties’ ongoing year’s FFO per share has increased marginally over the past month to $2.66.

The Zacks Consensus Estimate for Gladstone Commercial’s 2024 FFO per share has moved marginally northward in the past month to $1.37.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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