San Francisco, California-based
Terreno Realty Corporation
), a real estate investment trust (REIT), has announced the
acquisition of three industrial properties in Sunnyvale,
California, for approximately $33.7 million. The acquisition is a
part of the company's long-term strategy of abstaining from
pursuing ground-up development or land investments, and instead
owning functional and flexible buildings in infill locations that
can be modified to accommodate single and multiple tenants at
discounts to replacement cost.
The multi-tenant properties are 100% leased to two tenants. Of
the three acquired buildings, two are R&D properties, spanning
101,000 square feet and are situated at 904 East Caribbean Drive
and 1339 Moffett Park Drive, respectively. The properties are
) and RAE Systems Inc. The third property is a distribution
building, spanning 71,000 square feet and is located at 914-918
East Caribbean Drive.
The properties are strategically located and are in close
proximity to the interstate highways. Consequently, these
properties offer unmatched distribution space to the lessee with
easy access to the transportation facilities.
The estimated stabilized cap rate of the asset is 7.1%. The
total acquisition cost of the properties included the initial
purchase price, estimated near-term capital expenditures and the
effects of marking assumed debt to market, due diligence and
closing costs, and leasing costs necessary to achieve
The Terreno Realty is on an expansion mode. Recently, the
company has also acquired two industrial properties in California,
spanning 162,000 square feet and 545,000 square feet,
Terreno Realty owns and operates industrial real estate
properties primarily in six major coastal markets across 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.
Terreno Realty will likely release its second quarter 2012
earnings on August 8, 2012. The Zacks Consensus Estimate for second
quarter 2012 FFO (fund from operations) is pegged at 16 cents per
share. We presently have a long-term Neutral recommendation on the
stock. Also, it retains a Zacks #3 Rank (short-term Hold rating).
One of its competitors,
DCT Industrial Trust Inc.
), holds a Zacks #2 Rank, which translates into a short-term Buy
CEPHEID INC (CPHD): Free Stock Analysis Report
DCT INDUSTRIAL (DCT): Free Stock Analysis
TERRENO REALTY (TRNO): Free Stock Analysis
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