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Terreno Realty (TRNO) on Buyout Spree, Acquires $8M Property

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·3 min read
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  • TRNO
  • REXR-PC
  • DRE

As part of its acquisition-driven growth strategy, Terreno Realty Corporation TRNO recently shelled out $8 million to purchase an industrial property at 5380 Tuxedo Road, Hyattsville, MD. The Hyattsville property is a 2.9-acre improved land parcel, fully leased to two tenants, 89% on a short-term basis.

It is less than one mile outside Washington, D.C., next to the intersection of U.S. Route 50 and the Baltimore-Washington Parkway, indicating an advantageous location and positioning it well to lure the tenants. The estimated stabilized cap rate of the property is 5.6%.

Demand for industrial real estate space has been shooting up amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. 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, Duke Realty DRE, Prologis PLD and Rexford Industrial Realty, Inc. REXR to enjoy a favorable market environment.

Terreno Realty is banking on such scope and is focused on expanding its portfolio on acquisitions. It is targeting 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.

However, with the asset category being attractive in these challenging times, there is a development boom in several markets, which is likely to intensify competition and curb pricing power. New supply is likely to put pressure on the vacancy level, which is likely to increase to some extent in the upcoming quarters.

Terreno Realty currently carries a Zacks Rank #2 (Buy). In the past six months, the company’s shares have gained 20% compared with the industry’s increase of 6.4%. 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 3 (Hold) at present. Its 2021 FFO per share is expected to increase 8.2% year over year.

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

Duke Realty holds a Zacks Rank of 3 at present. Its long-term growth rate is projected at 7.90%.

The Zacks Consensus Estimate for Duke Realty’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 1.2% north to $1.63 over the past month.

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

Duke Realty Corporation (DRE) : 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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