Terreno Realty Corporation
) is on an acquisition spree. The company closed $99.6 million of
acquisitions spanning 680,000 square feet in the fourth quarter.
This included 8 industrial properties comprising 12 buildings and
one land parcel for extension of the existing building.
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The fourth-quarter acquisitions added properties in Carlstadt,
South Brunswick and Piscataway (New Jersey), Jessup, Landover and
Lanham (Maryland), Gardena (California) and Queens (New York) to
the company's portfolio base. For full-year 2013, Terreno Realty
purchased 18 industrial properties for $210.5 million. These
properties include 30 buildings spread over 1.9 million square
feet and a land parcel.
This series of acquisitions comes as this industrial real estate
investment trust (REIT) leverages on the improving fundamentals
of the industrial markets and focuses on growing its business in
key coastal U.S. markets - the high barriers-to-entry markets of
Los Angeles; Northern New Jersey/New York City; San Francisco Bay
Area; Seattle; Miami; and Washington, D.C./Baltimore.
According to a recent study by the
CBRE Group, Inc.
), the U.S. industrial market continued to exhibit improvements
in fourth-quarter 2013 with 8 of the 12 largest industrial
markets experiencing lower vacancy. This was driven by healthy
demand arising from third party logistic companies, the food
service sector, home construction and manufacturing sectors.
Higher automotive purchases and overall consumer spending in
recent times, which is essentially a reflection of a healthy
recovery in industrial production, is encouraging and is expected
to drive the demand for industrial real estates going forward.
Amid a low industrial new construction activity, we believe the
current owners of such properties would be able to leverage on it
and drive up their profitability in a number of quarters ahead.
On the other hand, Terreno Realty disposed an industrial property
in Totowa, N.J. during the fourth quarter for around $19.0
million. Notably, its strategic portfolio management efforts and
rising demand helped it exhibit improving leasing trends.
As a result, as of Dec 31, 2013, the same store leased percentage
moved north to 96.8% from 90.2% as of Sep 30, 2013 and 95.0% as
of Dec 31, 2012. The company had 96 buildings (around 6.8 million
square feet) as of Dec 31, 2013, that were leased to 214 tenants.
Terreno Realty currently has a Zacks Rank #3 (Hold). Some
better-ranked stocks in the REIT-Equity Trust - Other industry
Getty Realty Corp.
National Health Investors Inc.
). Both these stocks carry a Zacks Rank #1 (Strong Buy).