Terreno Makes Acquisitions of $99.6M in Q4 - Analyst Blog

By Zacks Equity Research,

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Terreno Realty Corporation ( TRNO ) 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.

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. ( CBG ), 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 include Getty Realty Corp. ( GTY ) and National Health Investors Inc. ( NHI ). Both these stocks carry a Zacks Rank #1 (Strong Buy).

CBRE GROUP INC (CBG): Free Stock Analysis Report

GETTY REALTY CP (GTY): Free Stock Analysis Report

NATL HEALTH INV (NHI): Free Stock Analysis Report

TERRENO REALTY (TRNO): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CBG , GTY , NHI , TRNO

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