Terreno Realty Corporation (TRNO - Free Report) provided insights on its second-quarter operating, investment and capital market activities.
In sync with its strategy of acquiring industrial properties in strategic locations, this San Francisco-based real estate investment trust (REIT) purchased three industrial properties in the second quarter for $14.9 million.
These properties, comprising two buildings — spanning 50,000 square feet, are located in San Leandro, CA; and Renton, WA. Also, the company purchased a land parcel, spanning 3.5 acres in Newark, NJ. Further, Terreno has about $98.6 million of acquisitions under contract for approximately 622,000 square feet.
On the disposition front, Terreno sold one distribution building — situated in Hialeah, FL — covering around 302,000 square feet for $24.3 million.
During the quarter, Terreno raised $105.9 million by issuing 282,167 shares of common stock. No shares were repurchased by the company. Additionally, the company made a senior secured loan worth $55 million, carrying an interest rate of 8% and a term of two-years.
Terreno’s assets experienced a solid demand for space on the back of improving fundamentals of industrial markets. This helped the company improve its leasing metrics on a year-over-year (y/y) basis.
The same-store portfolio of approximately 10.7 million square feet was 98.3% leased as of Jun 30, 2018, compared with 97.4% at the end of the prior quarter. Further, cash rents on new and renewed leases increased 33.9% for the quarter.
The company enjoyed the ownership of 195 buildings — spanning around 12.5 million square feet, together with 11 improved land parcels, comprising 51.4 acres as of Jun 30, 2018. Additionally, four buildings are under redevelopment and will span across 484,000 square feet on completion. After considering redevelopment costs of $32.9 million, the total value comes up to $119.2 million.
Notably, industrial REITs are sure to scale new heights, with a recovering economy and job market gains as well as elevated consumption levels. Moreover, with a healthy manufacturing environment and high business inventories, the demand for warehouse and logistics real estate is anticipated to be healthy, giving a significant impetus to industrial REITs like Terreno, Duke Realty (DRE - Free Report) , Prologis Inc. (PLD - Free Report) and Liberty Property Trust (LPT - Free Report) .
Encouragingly, in the past year, shares of Terreno have outperformed the industry. While its shares have gained 11%, the industry rallied 2% during this period.
Further, in the last 60 days, Terreno’s full-year 2018 funds from operations per share estimates witnessed rise of 1.6%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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