Terreno Realty (TRNO) Acquires Redmond Property, Stock Rises
Amid the robust industrial real estate market tailwinds, Terreno Realty's (TRNO) recent acquisitions of industrial properties poise it to ride the growth curve.
Shares of Terreno Realty Corporation TRNO have rallied more than 3% during the last two trading sessions. This industrial REIT is on a buyout spree and recently acquired an industrial property in Redmond, WA for $3.5 million. The move comes as part of its acquisition-driven growth strategy.
This latest acquisition comes after the company shelled out $33.5 million to purchase an industrial property in Woodinville, WA and expended $74.1 million net of free-rent credits to acquire an industrial property in Hialeah, FL.
The Redmond property, 100% leased to one tenant on a short-term basis, is a 0.8-acre improved land parcel at 9045 Willows Road. It is between I-405 and SR 520, representing an advantageous location and positioning it well to lure tenants. The estimated stabilized cap rate of the property is 4.9%.
Demand for industrial real estate space has been shooting up amid an e-commerce boom, with growth in industries and companies making efforts to improve supply-chain efficiencies. Terreno Realty is also banking on such opportunities. It is focused on expanding its portfolio on acquisitions. TRNO is targeting functional assets at in-fill locations, which enjoy high-population densities and are located near the high-volume distribution points.
Terreno Realty’s latest spate of acquisitions also include purchasing an industrial property in Bladensburg, MD for $11.9 million and shelling of $60.8 million to acquire an industrial property at 5150-5236 Eisenhower Avenue, inside the Capital Beltway in Alexandria, VA.
With such expansion efforts, Terreno Realty is 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, TRNO’s shares have rallied 34.4% compared with the industry’s growth of 14.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Prologis carries a Zacks Rank of 2 at present. Prologis’ 2021 FFO per share 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 two months.
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 two months to $1.74.
The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved 1.2% 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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