Terreno Realty Corporation
), a real estate investment trust (REIT), has recently acquired an
industrial property in Commerce, California, for approximately
$52.4 million. 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 5-building acquired property spanning 545,000 square feet of
space is presently 79% leased to 14 tenants. The property is
strategically located in close proximity to the interstate
highways, and consequently offers unmatched distribution space to
the lessee with easy access to transportation facilities.
The estimated stabilized cap rate of the asset is 6.0%. 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. However,
we have an Outperform recommendation and a Zacks #1 Rank
(short-term Strong Buy rating) for
Winthrop Realty Trust
), one of the peers of Terreno Realty.
WINTHROP REALTY (FUR): Free Stock Analysis
TERRENO REALTY (TRNO): Free Stock Analysis
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