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Terreno Realty (TRNO) Buys Hialeah Asset, Boosts Portfolio

Terreno Realty's (TRNO) recent spate of acquisitions of industrial properties is likely to aid it to ride the robust industrial real-estate market tailwinds.

This story originally appeared on Zacks

As part of its acquisition-driven growth strategy, Terreno Realty Corporation TRNO recently shelled out $74.1 million net of free-rent credits to purchase an industrial property in Hialeah, FL. The estimated stabilized cap rate of the property is 3.8%.

Located at 4181-4241 West 108th Street, this property comprises two recently developed rear-load 32-foot clear industrial distribution buildings, encompassing roughly 402,000 square feet on 19.0 acres.

The Hialeah property is adjacent to Terreno Realty’s three existing buildings on West 108th Street, and beside Florida’s Turnpike and the southern terminus of I-75. Hence, it is poised to lure tenants. It is already fully pre-leased to seven tenants, with one lease expected to begin in December 2021 and the remaining before Jun 30, 2022.

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

Recently, Terreno Realty acquired an industrial property in Bladensburg, MD for $11.9 million. The company also shelled out $60.8 million to purchase an industrial property at 5150-5236 Eisenhower Avenue, inside the Capital Beltway in Alexandria, VA. Further, TRNO acquired an industrial property in Rancho Dominguez, CA for $13.8 million.

With such expansion efforts, Terreno Realty is well poised to enhance its portfolio 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 — which display solid demographic trends and witness healthy demand for industrial real estate.

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

Terreno Realty currently carries a Zacks Rank #2 (Buy). In the past three months, the company’s shares have rallied 24.3% compared with the industry’s increase of 6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Zacks Investment ResearchImage Source: Zacks Investment Research

Prologis carries a Zacks Rank of 2 at present. 2021 FFO per share for Prologis is expected to increase 8.4% year over year.

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

Duke Realty carries a Zacks Rank of 3 (Hold) at present. The long-term growth rate for Duke Realty is projected at 7.80%.

The Zacks Consensus Estimate for DRE’s 2021 FFO per share has been revised marginally upward in a month to $1.74.

The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved 4.5% north to $1.63 over the past two months.

The Zacks Consensus Estimate for Rexford Industrial’s 2021 FFO per share suggests an increase of 23.5% year over year. Currently, REXR carries a Zacks Rank of 2.

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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Prologis, Inc. (PLD): Free Stock Analysis Report


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