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Terreno Realty Closes Redevelopment Efforts at Seattle Property

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Terreno Realty Corporation (TRNO - Free Report) recently announced the completion of the redevelopment of its property on 6th Avenue South in Seattle, WA. Per the company, it has leased the entire property to a leading manufacturer of electric vehicles.

The redeveloped property comprises a revamped industrial distribution building spanning an area of 51,000 square foot on 1.7 acres. This property is situated about two miles from downtown Seattle, near the Port and SoDo districts. The total cost of the revamped property is $15.9 million and the estimated stabilized cap rate is 5.1%.

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 May, Terreno completed the acquisition of another industrial property in Seattle, WA, for $5.6 million. The improved land parcel, spanning 13,000 square feet at 36 South Hudson Street, 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, the estimated stabilized cap rate being 4%.

Amid the 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 the fast adoption of e-commerce. Moreover, over the long term, apart from the accelerated adoption of e-commerce, logistics real estate is anticipated to benefit from the likely increase in inventory levels post the coronavirus crisis. This will open up solid 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) .

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 appreciated 5.8% over the past year, as against the 12.0% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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