Terreno Realty Corporation
), a real estate investment trust (REIT), has recently acquired two
properties spanning 138,000 square feet of industrial space in
Miami, Florida, for approximately $12.1 million. In concurrence
with the transaction, Terreno Realty assumed a $6.2 million
mortgage loan scheduled to mature in March 2014 with a fixed annual
interest rate of 5.84%.
DCT INDUSTRIAL (DCT): Free Stock Analysis
TERRENO REALTY (TRNO): Free Stock Analysis
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The acquisition is part of the long-term strategy of the company to
abstain from pursuing ground-up development or land investments,
and instead own functional and flexible buildings in infill
locations that can be modified to accommodate single and multiple
tenants at discounts to replacement cost.
The acquired properties are presently 100% leased to a single
tenant. The industrial buildings are strategically located in
Miami's Airport West submarket, in close proximity to the west
cargo area of the Miami International Airport. Consequently, the
properties bring on board unmatched distribution space for the
The estimated stabilized cap rate of the asset is 7.4%. Total
acquisition cost of the property included the initial purchase
price, the effects of marking assumed debt to market, due diligence
and closing costs, estimated near-term capital expenditures, and
leasing costs necessary to achieve stabilization.
San Francisco-based Terreno Realty owns and operates industrial
real estate properties primarily in six major coastal markets of
the U.S. These include the high barrier-to-entry markets of Los
Angeles, Northern New Jersey/New York City, San Francisco Bay Area,
Seattle, Miami and Washington D.C./Baltimore.
Each of the locations in which Terreno Realty has a significant
presence is characterized by a well-established transportation
network - seaports, airports, highways and railways that are
essential for the swift distribution of goods. In addition,
available land in these markets is scarce, resulting in steep
barriers for the development of new and competing properties.
We have a Neutral rating on Terreno Realty, which presently has a
Zacks #3 Rank translating into a short-term Hold rating. We also
have a Neutral recommendation and a Zacks #3 Rank for
DCT Industrial Trust Inc.
), one of the competitors of Terreno Realty.