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Terreno (TRNO) Acquires $12.9M Industrial Asset in Carson


Terreno Realty Corporation TRNO is positioning itself to benefit from the improving fundamentals of the industrial markets by acquiring strategic assets in core markets. Recently, the company added another industrial property to its portfolio through the acquisition of an improved land parcel in Carson, CA.

Terreno purchased the 5.4-acre land parcel for approximately $12.9 million. The property is 100% leased on a short-term basis and its estimated stabilized cap rate is 5.2%.

Situated on the 2315 E Dominguez Street, this industrial space is just a mile away from the intersection of Interstates 405 and 710 in the South Bay submarket. It offers easy accessibility to the ports of Los Angeles and Long Beach, as well as the Los Angeles International Airport. This is likely to drive demand for the property, which makes it a strategic buyout for Terreno.

The company’s investment-driven growth strategy is highlighted by its active acquisition activities. On Nov 1, 2017, it acquired another industrial asset buyout, consisting of an industrial distribution building, for approximately $8.4 million. In fact, during the third quarter Terreno added six industrial properties, spanning 258,000 square feet of space, and a 1.1-acre improved land parcel to its roster. It shelled out approximately $51.6 million for these buyouts.

Notably, the industrial asset category has grabbed attention on the back of elevated demand, recovering economy and job market, strengthening e-commerce market and a healthy manufacturing environment. Given Terreno’s solid capacity to offer modern, bulk distribution properties, the company remains well poised to capitalize on robust industry fundamentals.

Encouragingly, year to date, shares of Terreno have outperformed the industry. While the company’s shares have gained 31.3%, the industry has recorded growth of 6.9% during this period.

Terreno currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the real estate investment trust (REIT) space include Franklin Street Properties FSP, Columbia Property Trust CXP and Easterly Government Properties DEA. All three carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Franklin Street Properties’ funds from operations (FFO) per share estimates for 2017 remained unchanged at $1.05 over the past month. Its share price has declined 7.9% in six months’ time.

Columbia Property Trust’s FFO per share estimates for the current year have moved up to $1.15 in a month’s time. Over the past six months, the company’s shares have gained 4.1%.

Easterly Government Properties’ FFO per share estimates for 2017 remained unchanged at $1.26 over the last 60 days. Its shares have gained 3.4% in the past six months.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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