Terreno Realty (TRNO) Leases Kent Property, Sees Solid Demand

Terreno Realty TRNO recently announced the execution of a lease with a third-party logistics provider for a property in Kent, WA. It involves a full-building lease for roughly 138,000 square feet of space. The leasing will start on Jun 30, 2022 and expire in October 2027.

Recently, the company also announced the execution of an early lease renewal and extension for 7.2 acres of improved land in Newark, NJ. This lease with a manufacturer and direct importer of stone products, which was to expire in February 2023, will now expire in February 2028.

The abovementioned leasing activities reflect the healthy demand for Terreno Realty’s well-positioned properties.

The industrial real estate market is witnessing solid fundamentals as the demand for the logistics infrastructure and efficient distribution networks has been shooting up amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. In addition to the fast adoption of e-commerce, a rise in the inventory levels of companies as a precautionary measure for any supply-chain disruption is expected to lead to long-term growth momentum for this sector.

This offers opportunities to industrial landlords, including Terreno Realty, Prologis PLD and Rexford Industrial Realty, Inc. REXR, among others, to enjoy a favorable market environment.

Terreno Realty is also banking on such opportunities and is focused on expanding its portfolio through acquisitions. Recently, TRNO announced shelling out $34.6 million for the buyout of an industrial property in San Leandro, CA. The latest buyout in San Leandro comes after the company’s recent purchase of two industrial properties in Los Angeles and Inglewood, CA for $27.2 million.

This REIT is well-poised due to its efforts to enhance its portfolio in six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — which display solid demographic trends and witness healthy demand for industrial real estate.

Shares of Zacks Rank #2 (Buy) TRNO have declined 5.5% over the past year, narrower than the industry’s fall of 5.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Prologis carries a Zacks Rank of 2 at present. Prologis’ long-term growth rate is projected at 9.8%. The Zacks Consensus Estimate for PLD’s 2022 funds from operations (FFO) per share has been revised marginally upward in a month.

Rexford Industrial Realty holds a Zacks Rank of 2 at present. Rexford Industrial Realty’s 2022 revenues are expected to increase 34% year over year. The Zacks Consensus Estimate for REXR’s 2022 FFO per share has been revised 1.6% upward in the past two months.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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

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