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Terreno Realty (TRNO) Leases Seattle Property, Acquires Asset

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Terreno Realty (TRNO - Free Report) recently announced the execution of a lease with a provider of student transportation for 4.4 acres of improved land in Seattle, WA. The leasing will start on Jun 30, 2022 and expire in July 2025.

Recently, this industrial REIT also shelled out $19.9 million to purchase an industrial property in Redmond, WA. The estimated stabilized cap rate of the property is 4.3%. Located between I-405 and SR 520 and less than one-half mile from Terreno Realty’s properties at 9045 Willows Road and 14505-14515 NE 91st Street, this 3.5-acre improved land parcel at 8660 Willows Road enjoys an advantageous location and is well-poised to lure tenants.

The industrial real estate market is witnessing solid fundamentals as the demand for the logistics infrastructure and efficient distribution networks has been shooting up amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. In addition to the fast adoption of e-commerce, a rise in the inventory levels of companies as a precautionary measure for any supply-chain disruption is expected to lead to long-term growth momentum for this sector.

This offers opportunities to industrial landlords, including Terreno 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 witnessing solid leasing activities, which reflect the healthy demand for its well-positioned properties. Recently, TRNO announced the execution of a lease with a third-party logistics provider for a property in Kent, WA. It involves a full-building lease for roughly 138,000 square feet of space. The leasing will start on Jun 30, 2022 and expire in October 2027.

Also, the company announced the execution of an early lease renewal and extension for 7.2 acres of improved land in Newark, NJ. This lease with a manufacturer and direct importer of stone products, which was to expire in February 2023, will now expire in February 2028.

Terreno Realty is also banking on growth opportunities and is focused on expanding its portfolio through acquisitions. Recently, TRNO shelled out $13.0 million to purchase an industrial property in Newark, NJ and $34.6 million for the buyout of an industrial property in San Leandro, CA. Also, it purchased two industrial properties in Los Angeles and Inglewood, CA for $27.2 million.

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.

Shares of Zacks Rank #3 (Hold) Terreno Realty have declined 6.1% over the past month, narrower than the industry’s fall of 8.3%. 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 at present. Prologis’ long-term growth rate is projected at 9.8%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in the past two months.

Rexford Industrial Realty holds a Zacks Rank of 2 (Buy) at present. Rexford Industrial Realty’s 2022 revenues are expected to increase 34% year over year. The Zacks Consensus Estimate for REXR’s 2022 FFO per share has been revised more than 1% upward in the past two months.

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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