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Terreno Realty (TRNO) Buys Elizabeth Property, Boosts Portfolio

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Terreno Realty Corporation (TRNO - Free Report) recently shelled out $15.4 million to purchase an industrial property in Elizabeth, NJ. The move comes as part of the company’s acquisition-driven growth strategy.

Located at 629 Henry Street, this property comprises one industrial distribution building containing roughly 23,000 square feet on 1.8 acres. It is 100% leased on a short-term basis.

The property’s advantageous location — adjacent to the Newark Liberty International Airport and Exit 13A of the New Jersey Turnpike — is likely to lure tenants. The estimated stabilized cap rate is 5.4%.

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. TRNO is banking on such opportunities and is focused on expanding its portfolio through acquisitions.

Further, the company is targeting functional assets at in-fill locations. Such assets enjoy high-population densities and are located near high-volume distribution points.

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. These markets display solid demographic trends and witness healthy demand for industrial real estate.

Since the beginning of the year through Oct 6, 2022, Terreno Realty acquired 16 properties comprising 14 buildings containing roughly 766,000 square feet and ten improved land parcels of around 32.9 acres. The total purchase price was $355.4 million.

Moreover, in recent months, Terreno Realty shelled out $17 million to purchase an industrial property in Los Angeles, CA. Also, TRNO acquired an industrial property in Miami, FL, for $4.7 million.

Apart from the fast adoption of e-commerce, industrial real estate space is poised 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 TRNO, Prologis (PLD - Free Report) and Rexford Industrial Realty (REXR - Free Report) , to enjoy a favorable market environment.

Shares of Zacks Rank #2 (Buy) Terreno Realty have climbed 10.6% quarter to date compared with the industry’s increase of 6.1%. 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 (Hold) at present. Prologis’ long-term growth rate is projected at 8.6%.

Rexford Industrial Realty carries a Zacks Rank of 3 at present. Rexford Industrial Realty’s 2022 revenues are expected to increase 38.1% year over year.

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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