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Terreno Realty (TRNO) Sells Industrial Property for $18M

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Terreno Realty Corporation (TRNO - Free Report) announced the disposition of an industrial property, which was 100% leased to a single tenant in Hanover, MD. The sale was carried out for around $18 million on Oct 4, 2023. The move comes as part of the company's capital-allocation strategy, which seeks to preserve financial flexibility to facilitate long-term growth.

The property, comprising a 13.4-acre improved land parcel, was purchased by Terreno Realty in July 2016, for around $8.2 million. The investment yielded an unleveraged internal rate of return of 17.5%.

Reflecting positive sentiments for both this industrial REIT and the broader real estate market, shares of TRNO witnessed a 1.85% increase on the Oct 5 normal trading session on the NYSE.

Strategic dispositions have been a part of Terreno’s ongoing efforts to optimize its portfolio and enhance its financial performance. In May 2023, TRNO sold one industrial property in North Bergen, NJ for approximately $25.5 million, resulting in a gain of about $12.3 million and generating an unleveraged IRR of 14.4%.

The demand for industrial real estate space is soaring, given the growth in industries, an e-commerce boom and companies striving to improve supply-chain efficiencies. TRNO is also experiencing solid demand for its properties.

In August 2023, the company executed a lease for 31,000 square feet in Carlstadt, NJ, with a North American distributor of grocery and non-food products. Scheduled for a start on Aug 1, this lease will expire in May 2028.

Moreover, Terreno Realty is expanding through acquisitions 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 exhibit solid demographic trends and witness healthy demand for industrial real estate. TRNO focuses on functional assets at in-fill locations that have a high population density and are close to high-volume distribution points.

In September 2023, TRNO acquired an industrial property in Santa Ana, CA, for approximately $14.8 million. Markedly, from the beginning of 2023 through Jun 30, 2023, TRNO completed acquisitions worth $420.5 million, inclusive of acquisition costs.

With a solid balance sheet position and capital-recycling efforts, TRNO remains well-positioned to capitalize on long-term growth opportunities.

In the past year, shares of this Zacks Rank #2 (Buy) company have gained 11.3% against the industry’s decline of 7.1%.

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Stocks to Consider

Some better-ranked stocks from the REIT sector are VICI Properties (VICI - Free Report) and Americold Realty Trust (COLD - Free Report) , each carrying a Zacks Rank #2 currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VICI Properties’ 2023 FFO per share has been raised marginally over the past three months to $2.13.

The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised nearly 1% over the past month to $1.26.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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