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Terreno Continues to Expand, Buys East Rutherford Property

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Terreno Realty Corporation TRNO recently announced the acquisition of an industrial property in East Rutherford, NJ. The company has shelled out $12 million for this acquisition, which comes as part of its initiatives to capitalize on robust fundamentals of the industrial real estate sector through the purchase of properties with potential in core markets.

Comprising one industrial distribution building of about 50,000 square feet on 3.5 acres, this buyout at 46 Whelan Road is likely to witness solid demand. This is because of its strategic position. It is less than two miles west of the Meadowlands Sports Complex and Exit 16W of the New Jersey Turnpike. The facility offers seven dock-high and one grade-level loading positions as well as parking for 38 cars. Currently, the industrial property is fully leased to one tenant on a short-term basis. Further, its stabilized cap rate has been estimated at 5%, which highlights the property’s decent earning potential.

Notably, 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 port cities — 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.

In the first nine months of 2019, Terreno Realty acquired 10 industrial properties, comprising 15 buildings spanning around 608,000 square feet, and three improved land parcels of about 21.7 acres, for a total price of $252 million. In addition, in November, Terreno announced the acquisition of an industrial property in Seattle, WA, for $2.9 million.

Admittedly, the e-commerce boom, resilient consumer sentiment, low unemployment level and rising wages are playing key roles in maintaining the industrial and logistics sector’s health. Companies are making immense efforts to improve supply-chain efficiencies, spurring demand for logistics infrastructure and efficient distribution networks.

This is opening up ample opportunities for Terreno Realty and other industrial REITs like Duke Realty Corp. DRE, Prologis PLD and Rexford Industrial Realty, Inc. REXR. Nevertheless, rising supply and protectionist trade policies have the capability to mar the companies’ growth tempo to some extent.

Currently, Terreno Realty carries a Zacks Rank #3 (Hold). Its shares have gained 12.8% against the industry’s decline of 2.4% over the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



 

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Duke Realty Corporation (DRE) : Free Stock Analysis Report
 
Prologis, Inc. (PLD) : Free Stock Analysis Report
 
Terreno Realty Corporation (TRNO) : Free Stock Analysis Report
 
Rexford Industrial Realty, Inc. (REXR) : Free Stock Analysis Report
 
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