Terreno Realty Corporation TRNO has spent $23.0 million to purchase an industrial property in Long Island City, Queens, NY. The move is part of the company’s acquisition-driven growth strategy.
The commercial park is located at 42-11 9th Street and includes an industrial distribution building covering approximately 45,000 square feet on 1.1 acres. The property’s advantageous location — adjacent to the Queensboro 59th Street Bridge, which connects Manhattan and Queens — is likely to attract renters. It is currently 100% short term leased and the estimated stabilized capitalization rate is 5.2%.
Amid an e-commerce boom, growing industries and companies scrambling to improve supply chain efficiencies, demand for industrial real estate has skyrocketed. TRNO capitalizes on such opportunities and focuses on expanding its portfolio through acquisitions.
In addition, the Company is targeting functional assets at infill locations. Such facilities are densely populated and located near high-volume distribution points.
With such expansion efforts, Terreno Realty is well positioned to expand its portfolio in six major coastal US markets – Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC. These markets show solid demographic trends and healthy demand for industrial real estate.
Recently, Terreno Realty acquired an industrial property in Hialeah, FL for $173.6 million. The commercial park is located in Miami’s Countyline Corporate Park adjacent to TRNO’s seven fully leased buildings within Countyline. It comprises a 121-acre project entitled to 2.2 million square feet of industrial distribution buildings. The project is expected to be completed in 2025 and will have an expected total investment of $491.4 million.
During the fourth quarter, TRNO acquired four properties consisting of three buildings totaling approximately 65,000 square feet and 2.8 acres of improved land for $59.4 million. For 2022, Terreno Realty’s acquisition activity included 20 properties. These included 17 buildings covering approximately 831,000 square feet and 11 improved lots covering 35.7 acres for $414.8 million.
Aside from the rapid adoption of e-commerce, the industrial real estate space is poised to gain prominence over the long term with a likely increase in corporate inventories as a precaution against supply chain disruptions. This offers opportunities for commercial landlords, including TRNO, prologue PLD and First Industrial Realty Trust, Inc. FR to enjoy a favorable market environment.
Terreno Realty shares, which currently holds a Zacks rank of #2 (Buy), are up 8.8% over the past three months compared to industry growth of 0.8%. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.
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Prologis currently has a Zacks Rank of 3. Prologis’ long-term growth rate is projected at 7.20%. Zacks consensus estimate for PLD’s 2023 funds from operations (FFO) per share of $5.53 points to a 7.2% year-over-year increase.
First Industrial Realty currently has a Zacks rank of 3. Zacks consensus estimate for FR 2023 Funds from Operations (FFO) per share of $2.40 indicates a 5.3% year-over-year increase.
Note: Everything related to the earnings presented in this summary represents funds from operations (FFO) — a widely used metric to measure REITs’ performance.
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