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Terreno (TRNO) Boosts Portfolio With Washington, D.C. Property

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Terreno Realty Corporation (TRNO - Free Report) shelled out $13.4 million to purchase an industrial property in Washington, D.C. The move comes as part of the company’s acquisition-driven growth strategy.  

Located at 2266 25th Place NE, the property comprises one newly built industrial distribution building containing roughly 33,000 square feet on 1.3 acres. The property’s advantageous location — one-half mile from TRNO’s V Street portfolio in northeast Washington and U.S. Route 50/New York Avenue NE — is likely to attract tenants. Currently, it is 100% leased and the estimated stabilized cap rate is 5.3%.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, the 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, namely, 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.

During the January-March quarter, Terreno Realty continued to expand its portfolio on acquisitions. It acquired three properties comprising five buildings, encompassing roughly 648,000 square feet, and a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings for a total of $382.6 million. TRNO also had $62.9 million of acquisitions under contract.

Apart from the fast adoption of e-commerce, the 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, Rexford Industrial Realty, Inc. (REXR - Free Report) and STAG Industrial, Inc. (STAG - Free Report) , to enjoy a favorable market environment.

Shares of Terreno Realty, currently carrying a Zacks Rank #3 (Hold), have gained 4.7% in the past six months against the industry’s decline of 8.3%.

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Rexford Industrial Realty carries a Zacks Rank of 2 (Buy) at present. Rexford Industrial Realty’s long-term growth rate is projected at 10.6%. The Zacks Consensus Estimate for REXR’s 2023 funds from operations (FFO) per share of $2.19 suggests an 11.7% year-over-year increase. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

STAG Industrial currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for STAG’s 2023 FFO per share of $2.25 indicates a 1.8% year-over-year increase.

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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