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Terreno Realty (TRNO) Grows Inorganically, Buys $13.8M Property

Amid the robust industrial real estate market tailwinds, Terreno Realty's (TRNO) recent acquisitions of industrial properties poise it well to ride the growth curve.

This story originally appeared on Zacks

Terreno Realty Corporation TRNO acquired an industrial property in Rancho Dominguez, CA for $13.8 million. This latest acquisition comes after the company shelled out $8 million to purchase an industrial property at 5380 Tuxedo Road, Hyattsville, MD.

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Reflecting positive sentiments, shares of TRNO gained 2.56% during Thursday’s trading session.

The Rancho Dominguez property, leased on a short-term basis through March 2022, is a 2.3-acre improved land parcel at 14725 S. Maple Avenue. It is between Los Angeles International Airport, and the Ports of Los Angeles and Long Beach, next to Terreno Realty’s improved land parcel at 14732 S. Maple Avenue, representing an advantageous location and positioning it well to lure the tenants. The estimated stabilized cap rate of the property is 4.9%.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for industrial real estate space continues to be high. Terreno Realty is banking on such scope and is focused on expanding its portfolio on acquisitions. It targets the functional assets at in-fill locations, which enjoy high-population densities and are located near the high-volume distribution points.

Recently, TRNO shelled out $7.7 million to purchase an industrial property in Los Angeles, CA. Also, it announced the buyout of an industrial property in Alexandria, VA for $9 million and another in Elizabeth, NJ for $44 million.

Apart from the fast adoption of e-commerce, industrial real estate is anticipated to benefit from an increase in the inventory levels post the global health crisis, offering scope to industrial landlords, including Terreno Realty and other industrial REITs to enjoy a favorable market environment.

Terreno Realty currently carries a Zacks Rank #2 (Buy). In the past six months, TRNO’s shares have gained 19.9% compared with the industry’s increase of 4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Key Picks

Some other key picks from the REIT sector include Prologis Inc. PLD, CubeSmart CUBE and Rexford Industrial Realty REXR.

Prologis holds a Zacks Rank of 2 at present. Prologis’s  2021 FFO per share is expected to increase 8.2% year over year.

The Zacks Consensus Estimate for PLD’s 2021 FFO per share has been revised marginally upward in a month.

The Zacks Consensus Estimate for CubeSmart’s ongoing-year FFO per share has moved 1.4% north to $2.10 over the past week. Its long-term growth rate is projected to be 9.8%.

The Zacks Consensus Estimate for CubeSmart’s 2021 FFO per share suggests an increase of 22.1% year over year. Currently, CUBE carries a Zacks Rank of 2.

Rexford Industrial holds a Zacks Rank of 2 at present. Rexford Industrial’s long-term growth rate is projected at 12.8%.

The Zacks Consensus Estimate for REXR’s 2021 FFO per share has been revised 1.2% upward in a month to $1.63.

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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