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Terreno (TRNO) Executes Early Lease Renewal for Kent Property

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Terreno Realty (TRNO - Free Report) is witnessing healthy demand for its properties. The company executed an early lease renewal for 158,000 square feet in Kent, WA. This renewal with a leading e-commerce firm will now result in the lease expiry in January 2029 instead of January 2024.

Recently, TRNO executed a lease for 45,000 square feet in Long Island City, Queens, NY. This lease with a bike share provider in New York City will start on Sep 1, 2023 and expire in June 2029.

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 high. Terreno Realty is also experiencing solid demand for its properties.

As of Mar 31, 2023, Terreno’s operating portfolio was 98.1% leased. This marked an expansion of 120 bps year over year. The same-store portfolio (spanning 13.2 million square feet) was 98.5% leased at the end of the quarter, up 120 bps year over year. Moreover, the improved land portfolio of 46 parcels, aggregating roughly 161.4 acres, was 98.9% leased as of Mar 31, 2023, up significantly from 92.5% at the prior quarter-end.

TRNO was also able to lock in higher rents on new and renewed leases. These reflected solid industrial real estate market fundamentals and portfolio strength. For the first quarter, this industrial REIT witnessed a 69.3% increase in cash rents on new and renewed leases, with a tenant retention ratio of 54.4% for the operating portfolio and 0.0% for the improved land portfolio.

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 (REXR - Free Report) and STAG Industrial (STAG - Free Report) , to enjoy a favorable market environment.

Shares of Terreno Realty, currently carrying a Zacks Rank #3 (Hold), have risen 4.5% in the past six months against the industry’s decline of 10.5%.

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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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