Terreno Realty Corporation (TRNO - Free Report) recently completed the acquisition of an industrial property in Seattle, WA. The company has shelled out $5.6 million for this purchase.
The industrial distribution building offers around 13,000 square feet of space on 1.1 acres. Situated at 36 South Hudson Street, this property is within three blocks of Terreno’s SoDo Row redevelopment property and three additional Terreno properties. The property is fully leased to one tenant through December 2021 and the estimated stabilized cap rate is 4.0%.
Terreno is focused on an acquisition-driven growth strategy. It targets functional buildings at in-fill locations, which enjoy high-population densities and are located near high volume-distribution points. Through such efforts, the company is well poised to fortify 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 — which display solid demographic trends and witness healthy demand for industrial real estates.
In April, Terreno completed the acquisition of an industrial property in Kent, WA, for $4.5 million. The improved land parcel, spanning 2.8 acres at 20045 84th Avenue South, is situated in the northern Kent Valley near the company’s Kent 202nd property. The property is fully leased to one tenant on a month-to-month basis and the estimated stabilized cap rate is 5.7%.
Continuing its acquisition spree, the company shelled $29.7 million, in total, for the buyout of two industrial properties in the first quarter, comprising one building containing 66,000 square feet and 2.7-acre improved land parcel. Further, as of Mar 31, 2020, the company had four properties under redevelopment, which upon completion will comprise 505,000 square feet of space, with a total expected investment of $111 million.
Amid e-commerce boom and supply-chain strategy transformations, demand for industrial real estate has been strong. In light of the coronavirus pandemic, warehouse operations have become more essential with more e-commerce customers. Over the long term, apart from the fast adoption of e-commerce, logistics real estate is expected to benefit from the likely increase in inventory levels post crisis. This will open up prospects for Terreno Realty and other industrial REITs like Duke Realty Corp. (DRE - Free Report) , Prologis (PLD - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) .
As such, Terreno Realty is focusing on fortifying its portfolio in six major port cities — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC. This is because these regions are witnessing solid demographic trends and healthy demand for industrial real estates.
However, the pandemic’s adverse impact on the economy will likely thwart demand for space in the near term. Rent relief and deferrals are added concerns.
Shares of this Zacks Rank #3 (Hold) company have inched up 1.5% over the past year, as against the 17.6% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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