Terreno Realty (TRNO) Sees Solid Demand, Continues Investment – June 22, 2023
The recent developments and investments of the industrial REIT Terreno Realty (TRNO – Free Report) reflect an impressive growth trajectory, the solid demand for its properties and a strong commitment to sustainability.
One of Terreno Realty’s latest ventures involved the redevelopment of its Berryessa improved land parcel in San Jose, CA. The company has executed a lease for 6.3 acres of improved land, which will host a program by the City of San Jose to provide supportive housing and safe RV parking for unhoused individuals.
The lease is set to commence on Jun 30, 2023, and run through August 2033. The property, which represents a total investment of approximately $26.3 million, boasts a stabilized cap rate of around 4.9%.
Operating across Los Angeles, Northern New Jersey/New York City, the San Francisco Bay Area, Seattle, Miami and Washington, D.C., Terreno Realty has a strong presence in key coastal markets. The company recently signed a 10-year lease for a 41,000-square-foot area in Hialeah, FL, with an international logistics service provider, further solidifying its position in these strategic markets.
Moreover, TRNO provided updates on its Countyline Corporate Park Phase IV, a 121-acre project expected to offer 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park. Upon completion in 2025, Countyline Corporate Park Phase IV will house 10 LEED-certified industrial distribution buildings, with an estimated total investment of around $492.7 million.
This investment will significantly enhance Terreno’s strategic positioning in the industrial real estate sector, likely drawing in tenants and maintaining high occupancy rates due to its advantageous location.
Terreno Realty’s leasing activities reflect the solid demand for under-construction buildings. In particular, Buildings 38 and 41, which are fully pre-leased, underline this trend. Building 41, a 191,000-square-foot rear-load industrial distribution building, is on track for LEED certification, demonstrating Terreno’s commitment to sustainability.
Meanwhile, Building 38, a cross-dock industrial distribution building of 506,000 square feet, is under construction. Also, in the second quarter of 2023, TRNO initiated the $84.6 million construction of Buildings 39 and 40, offering 364,000 square feet of space in aggregate, with plans to reach stabilization by the fourth quarter of 2024.
In conclusion, Terreno Realty’s current portfolio, strategic developments and commitment to sustainable practices underscore its solid performance in the industrial real estate sector. With Terreno’s Countyline Corporate Park Phase III and IV projected to encompass 17 industrial distribution buildings spanning over 3.5 million square feet, the company’s role as a significant player in the Miami industrial real estate sector is set to strengthen further.
Apart from the fast adoption of e-commerce, the industrial real estate space is poised to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruption. This will offer opportunities to industrial landlords, including TRNO, Rexford Industrial Realty (REXR – Free Report) and STAG Industrial (STAG – Free Report) , to enjoy a favorable market environment.
Shares of Terreno Realty, currently carrying a Zacks Rank #3 (Hold), have risen 2.3% year to date against the industry’s decline of 2.8%.
Image Source: Zacks Investment Research
Rexford Industrial Realty carries a Zacks Rank of 3 at present. Rexford Industrial Realty’s long-term growth rate is projected at 10.6%. The Zacks Consensus Estimate for REXR’s 2023 funds from operations (FFO) per share of $2.19 suggests an 11.7% year-over-year increase. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
STAG Industrial currently carries a Zacks Rank of 3. The Zacks Consensus Estimate for STAG’s 2023 FFO per share of $2.25 indicates a 1.8% year-over-year increase.
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.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
