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Terreno Realty (TRNO) Buys Redmond Asset, Expands Portfolio

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As part of its acquisition-driven growth strategy, Terreno Realty Corporation (TRNO - Free Report) recently shelled out $9.8 million to purchase an industrial property in Redmond, WA. The estimated stabilized cap rate of the property is 4.1%.

Located at 14505-14515 NE 91st Street, this property comprises two industrial distribution buildings encompassing roughly 32,000 square feet on 2.0 acres.

The Redmond property is advantageously located between I-405 and SR 520 next to Terreno Realty’s property at 9045 Willows Road and is already 100% leased to one tenant.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for industrial real estate space has been shooting up. Hence, Terreno Realty is banking on such opportunities and is focused on expanding its portfolio through acquisitions. It is targeting functional assets at in-fill locations, which enjoy high-population densities and are located near high-volume distribution points.

Per its recent operating update, in the first quarter of 2022, TRNO shelled out a total of $86.1 million as the purchase price for the acquisition of four properties comprising four buildings containing roughly 434,000 square feet and one improved land parcel of 1.2 acres. Terreno Realty also completed the redevelopment of Americas Gateway 5 and the estimated stabilized cap rate is 6.6%.

With such expansion efforts, Terreno Realty is well-poised to enhance its portfolio in 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 estate.

Apart from the fast adoption of e-commerce, industrial real estate space is anticipated to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruption. This will offer opportunities to industrial landlords, including Terreno Realty, Prologis (PLD - Free Report) , Duke Realty (DRE - Free Report) and Rexford Industrial Realty (REXR - Free Report) , to enjoy a favorable market environment.

Terreno Realty currently carries a Zacks Rank #3 (Hold). In the past six months, TRNO shares have rallied 10.2% compared with the industry’s increase of 7.7%. 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 2 (Buy) at present. Prologis’ 2022 funds from operations (FFO) per share are expected to increase 21.9% year over year.

The Zacks Consensus Estimate for PLD’s 2022 FFO per share has been revised marginally upward in a month.

Duke Realty carries a Zacks Rank of 3 at present. The long-term growth rate for Duke Realty is projected at 6.7%.

The Zacks Consensus Estimate for DRE’s 2022 FFO per share of $1.90 calls for a 9.8% increase year over year.

The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved marginally north to $1.90 over the past month.

The Zacks Consensus Estimate for Rexford Industrial’s 2022 FFO per share suggests an increase of 15.9% year over year. Currently, REXR carries a Zacks Rank of 3.

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.