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Terreno Realty (TRNO) Continues Buyout Spree With $7.6M Buyout

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Terreno Realty Corporation (TRNO - Free Report) recently shelled out $7.6 million for the purchase of an industrial property in Renton, WA. The move comes as part of its acquisition-driven growth strategy.

The improved land parcel has an area of 3.4 acres and is advantageously located at 500 SW 16th Street. Notably, it is just next to I-405 between State Route 167 (Valley Freeway) and State Route 181 (West Valley Highway). The property is fully leased to one tenant and has an estimated stabilized cap rate of 1.5%.

Terreno Realty is focused on expanding its portfolio on acquisitions. It targets functional assets 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 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 estates.

In the last month, the company has purchased two industrial properties in Seattle, WA, and Torrance, CA, for $16.5 million and $6.3 million, respectively. Other notable acquisitions made in April include industrial property buyouts in San Jose and San Leandro in California for $8 million and $17.6 million respectively, Kent in Washington for $10 million and Miami in Florida for $5.8 million.

Markedly, the industrial asset class has grabbed the limelight for showing resilience amid the pandemic with low vacancy rates, high asking rents and robust rent collections. There has been a notable increase in e-commerce’s share of total retail sales, spurring demand for warehouse and distribution spaces. Apart from the fast adoption of e-commerce, the industrial real estate space is anticipated to benefit from a likely rise in the inventory levels post the global health crisis, offering scope to industrial landlords, including Terreno Realty, Duke Realty (DRE - Free Report) , Prologis (PLD - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) , to enjoy a favorable market environment.

Terreno Realty too has been witnessing decent demand from new and existing tenants, which are aiding its leasing and renewal activities. However, there is a development boom in a number of markets. The high supply is likely to fuel competition and curb pricing power.

Terreno Realty currently carries a Zacks Rank #3 (Hold). In the past three months, the company’s shares have gained 15.6% compared with its industry's rally of 13.4%. Also, the Zacks Consensus Estimate for 2021 funds from operations (FFO) per share moved up marginally to $1.65 over the past month. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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