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Terreno Realty (TRNO) Sells Industrial Property for $15.9M
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Terreno Realty Corporation (TRNO - Free Report) has announced the disposition of an industrial property consisting of one industrial distribution building encompassing roughly 58,000 square feet on 3 acres of land in Compton, CA. The sale was carried out for around $15.9 million on Dec 27, 2023.
The move is part of the company’s financing strategy, through which it aims to maintain financial flexibility to facilitate long-term growth.
The property, which is 100% leased to a single tenant, was purchased by Terreno Realty on Jul 21, 2017, for around $9.4 million. The investment yielded an unleveraged internal rate of 13%, making it a strategic fit.
Terreno Realty’s strategic dispositions are an integral part of its ongoing efforts to optimize its portfolio and enhance its financial performance. In December 2023, the company sold an industrial property spanning 93,000 square feet on 8.9 acres of land in West Caldwell, NJ, for $17.8 million. The property was purchased by TRNO in June 2013 for around $6.8 million and yielded an unleveraged internal rate of return of 11.2%. It is 100% leased to two tenants.
Moreover, the company remains focused on expanding its assets base in the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC, as demand for industrial real estate space remains buoyant. Growth in industries and an expanding e-commerce market coupled with companies’ endeavors to improve supply-chain efficiencies have aided the need for industrial and logistics infrastructure and efficient distribution networks.
These markets are characterized by strong demand generators, such as high population densities, high volume distribution points and logistics infrastructure, and constrained supply. Notably, TRNO has acquired properties worth $484 million from the beginning of the year through Oct 31, 2023.
On the development front, the industrial real estate investment trust (REIT) recently completed the development of a 191,000-square-foot, 32-foot clear-height rear-load industrial distribution building — Countyline Corporate Park Phase IV Building 41 — in Hialeah, FL.
The property, 100% leased to an international logistics services provider, is situated on 10.5 acres of land with 62 dock-high and two grade-level loading positions. It comes with a parking space to accommodate 196 cars. The total investment for the building, which is expected to achieve LEED certification, is $41.2 million with a stabilized cap rate of 5.1%.
With a solid balance sheet position and prudent capital management practices, TRNO remains well-positioned to capitalize on long-term growth opportunities. It had cash and cash equivalents of $96.2 million and no borrowings outstanding on the $400 million revolving credit facility as of Sep 30, 2023.
Analysts seem bullish on this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2023 funds from operations (FFO) per share has been raised almost 1% in the past two months.
Shares of the company have gained 7.4% in the past year compared with the industry’s growth of 4%.
Image Source: Zacks Investment Research
Nonetheless, the stabilization of e-commerce sales growth and a high interest rate environment pose key concerns for the company.
The consensus mark for Park Hotels & Resorts’ 2023 FFO per share has been raised nearly 1% over the past month to $2.03.
The Zacks Consensus Estimate for EastGroup Properties’ 2023 FFO per share has moved marginally upward in the past two months to $7.70.
The consensus estimate for Stag Industrial’s 2023 FFO per share has increased marginally over the past two months to $2.28.
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) Sells Industrial Property for $15.9M
Terreno Realty Corporation (TRNO - Free Report) has announced the disposition of an industrial property consisting of one industrial distribution building encompassing roughly 58,000 square feet on 3 acres of land in Compton, CA. The sale was carried out for around $15.9 million on Dec 27, 2023.
The move is part of the company’s financing strategy, through which it aims to maintain financial flexibility to facilitate long-term growth.
The property, which is 100% leased to a single tenant, was purchased by Terreno Realty on Jul 21, 2017, for around $9.4 million. The investment yielded an unleveraged internal rate of 13%, making it a strategic fit.
Terreno Realty’s strategic dispositions are an integral part of its ongoing efforts to optimize its portfolio and enhance its financial performance. In December 2023, the company sold an industrial property spanning 93,000 square feet on 8.9 acres of land in West Caldwell, NJ, for $17.8 million. The property was purchased by TRNO in June 2013 for around $6.8 million and yielded an unleveraged internal rate of return of 11.2%. It is 100% leased to two tenants.
Moreover, the company remains focused on expanding its assets base in the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC, as demand for industrial real estate space remains buoyant. Growth in industries and an expanding e-commerce market coupled with companies’ endeavors to improve supply-chain efficiencies have aided the need for industrial and logistics infrastructure and efficient distribution networks.
These markets are characterized by strong demand generators, such as high population densities, high volume distribution points and logistics infrastructure, and constrained supply. Notably, TRNO has acquired properties worth $484 million from the beginning of the year through Oct 31, 2023.
On the development front, the industrial real estate investment trust (REIT) recently completed the development of a 191,000-square-foot, 32-foot clear-height rear-load industrial distribution building — Countyline Corporate Park Phase IV Building 41 — in Hialeah, FL.
The property, 100% leased to an international logistics services provider, is situated on 10.5 acres of land with 62 dock-high and two grade-level loading positions. It comes with a parking space to accommodate 196 cars. The total investment for the building, which is expected to achieve LEED certification, is $41.2 million with a stabilized cap rate of 5.1%.
With a solid balance sheet position and prudent capital management practices, TRNO remains well-positioned to capitalize on long-term growth opportunities. It had cash and cash equivalents of $96.2 million and no borrowings outstanding on the $400 million revolving credit facility as of Sep 30, 2023.
Analysts seem bullish on this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2023 funds from operations (FFO) per share has been raised almost 1% in the past two months.
Shares of the company have gained 7.4% in the past year compared with the industry’s growth of 4%.
Image Source: Zacks Investment Research
Nonetheless, the stabilization of e-commerce sales growth and a high interest rate environment pose key concerns for the company.
Stocks to Consider
Some better-ranked stocks from the REIT sector are Park Hotels & Resorts (PK - Free Report) , EastGroup Properties (EGP - Free Report) and Stag Industrial (STAG - Free Report) . While PK sports a Zacks Rank #1 (Strong Buy), EGP and STAG carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Park Hotels & Resorts’ 2023 FFO per share has been raised nearly 1% over the past month to $2.03.
The Zacks Consensus Estimate for EastGroup Properties’ 2023 FFO per share has moved marginally upward in the past two months to $7.70.
The consensus estimate for Stag Industrial’s 2023 FFO per share has increased marginally over the past two months to $2.28.
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.