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Terreno Realty (TRNO) Announces Los Angeles Lease Deals

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Industrial real estate investment trust (“REIT”), Terreno Realty Corporation (TRNO - Free Report) is making all efforts to drive growth. The company recently declared the execution of leases in Los Angeles, following the disclosure of industrial property acquisitions in Lanham, MD and Miami, FL.  

Of the recent leasing activities, one is a full building lease for 90,000 square feet in Corona, CA, signed with an industrial importer, manufacturer and distributor. Beginning this month, the lease expires Apr 30, 2024.

The other one is also a full building lease for 73,000 square feet in Torrance, CA. This lease was signed with a designer, developer and manufacturer for the automotive industry. It, too, commences this month and expires on Dec 31, 2021.

A few days back, Terreno Realty announced the acquisition of an industrial property located in Lanham, MD. This property, comprising around 45,000 square feet on 5.8 acres, was purchased at a price of around $6.7 million. Also, the company acquired a property in Miami for around $6.3 million.

The latest leasing activities and the acquisitions are likely to boost Terreno Realty’s bottom line, going ahead. In addition, shares of Terreno Realty outperformed the Zacks categorized REIT and Equity Trust - Other industry, year to date, gaining 22.8% against 3.8% increase of the industry.



Notably, the company’s same-store portfolio of approximately 8.6 million square feet was 97.9% leased as of Sep 30, 2016, compared with 95.1% at the prior-quarter end. Further, cash rents on new and renewed leases climbed 20.9% for the quarter. The company enjoyed ownership of 159 buildings, spanning around 11.7 million square feet, together with four improved land parcels comprising 21.4 acres as of Sep 30, 2016.

However, Terreno Realty’s third-quarter funds from operations (FFO) per share of 20 cents missed the Zacks Consensus Estimate by 20% and also declined 23.1% from the prior year due to rising expenses. Moreover, over the past 60 days, its current year FFO per share estimate declined 6.2% to 90 cents.

Further, Terreno Realty’s Return on Equity (ROE) ratio is 5.30% compared with the industry average of 13.01%. This indicates that the company reinvests less efficiently compared to the industry. Its valuation at the current level is expensive as the stock is currently trading at a forward P/E ratio of 31.19, a significant premium to the industry average of 14.74.

Currently, Terreno Realty carries a Zacks Rank # 5 (Strong Sell).

Some better-ranked stocks in the real estate space include Mack-Cali Realty Corp. , DCT Industrial Trust Inc. and Seritage Growth Properties (SRG - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Mack-Cali’s 2016 FFO per share estimates ascended 1.4%, over the past 30 days, to $2.19.

DCT Industrial delivered an average positive surprise of 5.18%, over the trailing four quarters.

Seritage Growth Properties’ current-year FFO estimates inched up 0.9% to $2.34 per share, over the past 60 days.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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