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Terreno (TRNO) Buys Industrial Asset in Seattle for $42M

Zacks

Industrial REIT Terreno Realty Corporation TRNO is continuing with its efforts to capitalize on the healthy fundamentals in the industrial markets through the purchase of strategic properties in core markets. As part of such moves, the company recently shelled out $42 million for the acquisition of an industrial property in Seattle, Washington. This comes after the acquisition of another industrial property in Woodside Queens, NY, for $25.2 million on Mar 7.

The recently-acquired property consists of one industrial distribution building, which will comprise approximately 235,000 square feet on 8.7 acres, following the renovation by the end of next year. It is favorably located near Seattle Port and SoDo district, at 4786 1st Avenue South. The property is 65% leased to three tenants and it offers 29 dock-high and two grade-level loading positions as well as a parking facility for 71 cars.

Terreno has a solid capacity to offer modern distribution properties and it remains well poised to capitalize on robust industry fundamentals. It aims to boost shareholder value through the acquisition of industrial assets and the company specifically targets functional buildings at in-fill locations, enjoying high population densities, near-high volume distribution points.

Notably, the industrial real estate asset category has grabbed attention due to elevated demand, the recovering economy and job market, strengthening of e-commerce market and a healthy manufacturing environment.

Particularly, Terreno is 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. — which depict solid demographic trends and have strong barriers to entry that limit new supply. Further, the company’s investment-driven growth strategy is highlighted by its active acquisition activities.

Encouragingly, in the past three months, shares of the company have outperformed the industry. While the stock depreciated 5.2%, the industry incurred a loss of 9.3% during this period.


However, Terreno currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Better-ranked stocks in the REIT space include Extra Space Storage Inc EXR, Arbor Realty Trust ABR and Derwent London Plc DWVYF. All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Extra Space Storage’s FFO per share estimates for the current year have moved up 0.9% to $4.52 in a month’s time. Over the past six months, the company’s shares have gained 9.2%.

Arbor Realty Trust’s 2018 FFO per share estimates inched up 2.3% to 90 cents over the past month. The stock has rallied 6.6% for the past six months.

Derwent London’s funds from operations (FFO) per share estimates for 2018 witnessed upward estimate revision of 8.5% to $1.41 over the past month. Its share price has increased 5.7% in six months’ time.

Note: All EPS numbers presented in this write up represents 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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