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Terreno Realty Corporation (TRNO - Free Report) recently issued an update on second-quarter 2023 operating, investment and capital activities. While TRNO was able to lock in higher rents on new and renewed leases, occupancy declined, mainly due to a 45,000-square-foot short-term sale-leaseback expiration at the company’s recently acquired Long Island City property.
For the second quarter, this industrial REIT witnessed a 59.2% increase in cash rents on new and renewed leases, with a tenant retention ratio of 51.7% for the operating portfolio and 0.0% for the improved land portfolio.
This industrial REIT had 97.8% quarter-end occupancy, which marks a contraction of 30 basis points (bps) sequentially and 10 bps year over year. For the same-store portfolio, TRNO had 98.4% quarter-end occupancy, down 10 bps sequentially but up 130 bps year over year.
As of Jun 30, 2023, Terreno Realty’s portfolio included 257 buildings spanning 15.8 million square feet and 46 improved land parcels encompassing 165.8 acres.
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.
During the April-June quarter, Terreno Realty continued to expand its portfolio on acquisitions. It acquired one property comprising one building, encompassing roughly 33,000 square feet for $13.4 million.
During the first half of the year, TRNO acquired four properties comprising six buildings and encompassing 681,000 square feet of space and a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings for a total of $396.1 million. The company also has $49.5 million of acquisitions under contract and around $14.8 million of acquisitions under letters of intent.
Finally, as of Jun 30, 2023, Terreno Realty had seven properties under development or redevelopment. Upon completion, these will comprise six buildings totaling 1.1 million square feet and one 2.8-acre improved land parcel, with a total expected investment of $295.4 million, excluding land for future development.
During the June-end quarter, Terreno Realty issued 617,106 shares of common stock under the company’s at-the-market equity offering program for gross proceeds of $38.7 million. As of Jun 30, 2023, there were no borrowings outstanding under its $400 million revolving credit facility, and the company has no debt maturities in 2023.
Terreno Realty’s efforts to expand and strengthen its portfolio with acquisitions are a strategic fit. These indicate that the company is financially sound to execute such deals.
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. However, a high interest rate environment remains a major concern.
Shares of this Zacks Rank #4 (Sell) company have increased 2.5% in the year-to-date period against the industry’s decline of 0.6%.
The Zacks Consensus Estimate for EastGroup Properties’ current-year funds from operations (FFO) per share has moved marginally north over the past two months to $7.56.
The Zacks Consensus Estimate for Innovative Industrial Properties’ 2023 FFO per share has moved 3.6% upward in the past two months to $8.66.
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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Terreno Realty (TRNO) Issues Q2 Operation & Investment Update
Terreno Realty Corporation (TRNO - Free Report) recently issued an update on second-quarter 2023 operating, investment and capital activities. While TRNO was able to lock in higher rents on new and renewed leases, occupancy declined, mainly due to a 45,000-square-foot short-term sale-leaseback expiration at the company’s recently acquired Long Island City property.
For the second quarter, this industrial REIT witnessed a 59.2% increase in cash rents on new and renewed leases, with a tenant retention ratio of 51.7% for the operating portfolio and 0.0% for the improved land portfolio.
This industrial REIT had 97.8% quarter-end occupancy, which marks a contraction of 30 basis points (bps) sequentially and 10 bps year over year. For the same-store portfolio, TRNO had 98.4% quarter-end occupancy, down 10 bps sequentially but up 130 bps year over year.
As of Jun 30, 2023, Terreno Realty’s portfolio included 257 buildings spanning 15.8 million square feet and 46 improved land parcels encompassing 165.8 acres.
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.
During the April-June quarter, Terreno Realty continued to expand its portfolio on acquisitions. It acquired one property comprising one building, encompassing roughly 33,000 square feet for $13.4 million.
During the first half of the year, TRNO acquired four properties comprising six buildings and encompassing 681,000 square feet of space and a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings for a total of $396.1 million. The company also has $49.5 million of acquisitions under contract and around $14.8 million of acquisitions under letters of intent.
Finally, as of Jun 30, 2023, Terreno Realty had seven properties under development or redevelopment. Upon completion, these will comprise six buildings totaling 1.1 million square feet and one 2.8-acre improved land parcel, with a total expected investment of $295.4 million, excluding land for future development.
During the June-end quarter, Terreno Realty issued 617,106 shares of common stock under the company’s at-the-market equity offering program for gross proceeds of $38.7 million. As of Jun 30, 2023, there were no borrowings outstanding under its $400 million revolving credit facility, and the company has no debt maturities in 2023.
Terreno Realty’s efforts to expand and strengthen its portfolio with acquisitions are a strategic fit. These indicate that the company is financially sound to execute such deals.
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. However, a high interest rate environment remains a major concern.
Shares of this Zacks Rank #4 (Sell) company have increased 2.5% in the year-to-date period against the industry’s decline of 0.6%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are EastGroup Properties (EGP - Free Report) and Innovative Industrial Properties (IIPR - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for EastGroup Properties’ current-year funds from operations (FFO) per share has moved marginally north over the past two months to $7.56.
The Zacks Consensus Estimate for Innovative Industrial Properties’ 2023 FFO per share has moved 3.6% upward in the past two months to $8.66.
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.