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Terreno Sells Property in California, Boosts Financial Flexibility

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Terreno Realty Corporation (TRNO - Free Report) announced the disposition of another asset, this time in South San Francisco, CA. The transaction was carried out on Jan. 16, 2025 for around $8 million. In early January, TRNO announced that it sold a vacant industrial distribution building encompassing around 66,000 square feet on 3.0 acres of land in Union City, CA, for $16.9 million.

The moves highlight the REIT’s strategy of doing away with non-core assets and building a more robust portfolio, which will aid future growth.

The industrial building under consideration spans around 22,000 square feet on 0.7 acres of land. It is 100% leased to a single tenant. Terreno Realty had purchased the property on July 10, 2020 for $6.3 million. The investment yielded an unleveraged internal rate of 7.5% to the company.

Tereno in a Snapshot

Terreno Realty’s dispositions are an integral part of its ongoing efforts to optimize its portfolio and enhance its financial performance. During the fourth quarter of 2024, the company disposed of three 112,000-square-foot industrial buildings for approximately $33.6 million and one 5.7-acre improved land parcel in Newark, NJ, for around $29.8 million.

Moreover, the company remains focused on expanding its asset base in the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — as demand for industrial real estate space remains buoyant.

In early January, TRNO acquired an industrial property in Maspeth Queens, NY, for $50.1 million. Presently, the property is 100% leased to a plumbing, heating, HVAC and industrial product distributor, and the estimated stabilized cap rate is 4.5%.

For the full year 2024, TRNO has acquired properties worth $884.5 million. On the development front, the industrial real estate investment trust (REIT) completed and stabilized six properties for $262.1 million in 2024.

With a solid operating platform, a healthy balance sheet position and prudent capital management practices, TRNO seems well-positioned to capitalize on long-term growth opportunities.

Analysts seem bullish on this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for its 2024 funds from operations (FFO) per share has been raised marginally over the past month to $2.42.

Shares of the company have declined 3.2% over the past three months compared with the industry’s fall of 8.9%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Cousins Properties (CUZ - Free Report) and OUTFRONT Media (OUT - Free Report) , each carrying Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share has moved marginally upward over the past month to $2.74.

The consensus estimate for OUTFRONT Media’s 2025 FFO per share has increased marginally over the past two months to $1.90.

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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