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Terreno (TRNO) Makes Private Placement of $125M Senior Notes

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Terreno Realty Corporation (TRNO - Free Report) announced private placement of $125 million of 2.38% nine-year senior unsecured notes, which is expected to close on or around Oct 28, 2021.

The move comes as part of the company’s efforts to bolster its financial position and capitalize on growth opportunities. The company intends to use the net proceeds to fund future acquisitions and for other corporate needs.

Recently Terreno Realty shelled out $50 million for the purchase of three industrial properties in Seattle, WA. The company also acquired an industrial property in Orange, CA, for $9.3 million. The moves come as part of its acquisition-driven growth strategy.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for logistics infrastructure and efficient distribution networks has been shooting up. This is aiding the industrial real estate market to prosper.

In addition, apart from the fast adoption of e-commerce, logistics real estate is anticipated to benefit from a likely increase in inventory levels post the global health crisis, offering scope to industrial landlords, including Terreno Realty, Duke Realty , Prologis (PLD - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) , among others, to enjoy a favorable market environment.

Terreno Realty is also banking on such scopes and 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.

The company is well poised on the back of these efforts to enhance 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.

Nevertheless, with the asset category being attractive in these challenging times, there is a development boom in a number of markets. This high supply is likely to intensify competition and curb pricing power.

Terreno Realty currently carries a Zacks Rank #3 (Hold). In the past six months, the company’s shares have gained 13%, underperforming its industry's growth of 17.8%. You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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