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Terreno Acquires Fully-Leased Industrial Property for $4.5M

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Zacks Equity Research
·3 min read
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Terreno Realty Corporation TRNO recently completed the acquisition of an industrial property in Kent, WA. The company has shelled out $4.5 million for this purchase.

The improved land parcel spanning 2.8 acres at 20045 84th Avenue South is situated in the northern Kent Valley near the company’s Kent 202nd property. The property is fully leased to one tenant on a month-to-month basis and the estimated stabilized cap rate is 5.7%.

Terreno is focused on an acquisition-driven growth strategy. It targets functional buildings at in-fill locations, which enjoy high-population densities and are located near high volume-distribution points. Through such efforts, the company is well poised to fortify its portfolio in 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 estates.

Continuing its acquisition spree, the company shelled $29.7 million, in total, for the buyout of two industrial properties in the first quarter, comprising one building containing 66,000 square feet and 2.7-acre improved land parcel. Further, as of Mar 31, 2020, the company had four properties under redevelopment, which upon completion will comprise 505,000 square feet of space, with a total expected investment of $111 million.

Amid the e-commerce boom and supply-chain strategy transformations, demand for industrial real estate remains solid. While the overall impact from the coronavirus pandemic is yet to be seen, warehouse operations have become more essential, with quarantines resulting in more e-commerce customers. This opens up prospects for Terreno Realty and other industrial REITs.

However, the adverse impact of the pandemic on the economy will likely thwart demand for space in the near term. Currently, the company is working with its tenants who have been compelled to shut to provide them rent deferments, on a case-by-case basis.

Currently, Terreno Realty carries a Zacks Rank #3 (Hold). Its shares have gained 24.1%, as against the industry decline of 7.6% over the past 12 months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Stocks to Consider

SBA Communications Corporation
’s SBAC funds from operations (FFO) per share estimate for the ongoing year moved up 1.3% to $9.37 over the past two months. The stock currently carries a Zacks Rank of 2 (Buy).

Plymouth Industrial REIT’s PLYM Zacks Consensus Estimate for 2020 FFO per share climbed marginally to $2.05 over the past two months. The stock currently holds a Zacks Rank of 2.

Gladstone Land Corp’s LAND FFO per share estimate for the current year moved 1.6% north to 62 cents in the past month. The stock currently carries a Zacks Rank #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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