Terreno Realty On Buyout Spree, Adds Assets In California

Terreno Realty Corporation (NYSE:TRNO) recently shelled out approximately $6.4 million for the purchase of an industrial property in Santa Fe Springs, CA. This acquisition comes as part of the company’s concerted efforts to capitalize on robust fundamentals of the industrial real estate sector through purchase of potential properties in core markets.

The buyout comprises 2.3-acre improved land parcel which is conveniently located at 10918-10936 Shoemaker Avenue, and is east of the intersection of I-5 and I-605. It is currently fully leased to two tenants. Further, its stabilized cap rate has been estimated at 5.4%, which highlights decent earning potential of the property.

Apart from the latest acquisition, the company recently added an industrial distribution building containing around 60,000 square feet on 2.8 acres in Compton, CA for approximately $11.1 million, to its portfolio. In addition, during third-quarter 2018, Terreno Realty acquired three industrial properties, comprising eight buildings and encompassing roughly 407,000 square feet of space, for approximately $67.8 million. With such efforts, Terreno Realty looks poised to benefit from robust market fundamentals in the industrial real estate segment.

Notably, high-consumer spending, e-commerce boom, as well as healthy manufacturing environment amid recovering economy and job market are spurring demand for the industrial real estate category. This elevated demand is expected to significantly drive performance of Terreno Realty, as well as other industrial REITs like Duke Realty Corp. (NYSE:DRE) , Prologis (NYSE:PLD) and Liberty Property Trust (NYSE:LPT) .

Particularly, Terreno Realty is aimed at boosting shareholders’ value through opportunistic acquisition. It targets functional buildings at in-fill locations which enjoy high-population densities and are situated near high volume-distribution points. In fact, the company is focused 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, D.C. — that display solid demographic trends and experience healthy demand for industrial real estates.

Additionally, the company’s shares have gained 2.4% in the past three months, as against the industry’s decline of 2.1%. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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