Terreno Realty Corporation (TRNO - Free Report) recently announced that it has sold an industrial building in Hialeah, FL, on Jun 25, 2018. The property has been sold for approximately $24.3 million. Through this sale, Terreno recognized an unleveraged internal rate of return of approximately 11.5%.
The property is situated at 215 SE 10th Avenue, on approximately 10.5 acres. It consists of an industrial distribution building, spanning around 302,000 square feet. It is 100% leased to a single tenant. The company shelled out nearly $9 million to purchase this property on Dec 20, 2010.
Notably, a recovering economy and job market, strengthening e-commerce market, and a healthy manufacturing environment have led to the rise in demand for the industrial real estates. This is offering significant scope to industrial real estate investment trusts (REIT), like Prologis, Inc. (PLD - Free Report) , DCT Industrial Trust (DCT - Free Report) , Duke Realty Corporation (DRE - Free Report) and Terreno to flourish.
Amid these, Terreno remains well poised to capitalize on robust industry fundamentals by making selective dispositions and strategic acquisitions. In fact, selective dispositions would help the company unlock value and redeploy the sale proceeds in acquiring high-yielding assets. Specifically, Terreno targets functional buildings at in-fill locations, with high population density and which are situated near high volume-distribution points. The company is currently fortifying its portfolio in six major port cities — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, D.C. — which depict solid demographic trends and have strong barriers to entry that limit new supply.
In fact, on May 7, the company shelled out $6 million to purchase an industrial property in Renton, WA. In addition, on May 4, it acquired another industrial property in Newark, NJ, for $6.3 million. Further, Terreno acquired three industrial properties in the first quarter of 2018.
Moreover, the company’s acquisition activities in 2017 included 23 industrial properties, comprising 35 buildings, with around 1.7 million square feet, and five improved land parcels, aggregating around 25.1 acres for $292.7 million. On the other hand, during 2017, the company’s dispositions comprised four properties sold at a sales price of around $77.3 million, producing an unleveraged internal rate of return of 13.7%.
Encouragingly, over the past six months, shares of the company have outperformed the industry. While the stock has rallied 6.7%, the industry has declined 1.7% during this period.
Terreno currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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