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Terreno Realty (TRNO) Adds Rancho Dominguez Property, Stock Up

As part of its acquisition-driven growth strategy, Terreno Realty Corporation TRNO recently shelled out $32.1 million to purchase an industrial property in Rancho Dominguez, CA. The estimated stabilized cap rate of the property is 5.5%.

Shares of this industrial real estate investment trust (“REIT”) appreciated 1.6% in the last trading session following the announcement, reflecting positive sentiments.

Located at 19500 South Alameda Street, this 3.0-acre improved land parcel is currently 100% leased to two tenants on a short-term basis. It is south of the Gardena Freeway (SR 91) and west of the Long Beach Freeway (I-710), indicating an advantageous location and positioning it well to lure tenants.

Amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies, demand for industrial real estate space has been shooting up. Hence, TRNO is banking on such opportunities and is focused on expanding its portfolio through acquisitions. It is targeting functional assets at in-fill locations, which enjoy high-population densities and are located near high-volume distribution points.

With such expansion efforts, Terreno Realty is well-poised 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.

Recently, TRNO acquired an industrial property in Hawthorne, CA, for $6.5 million. Terreno Realty also continued to expand its portfolio through acquisitions during the April-June quarter. During the said period, TRNO shelled out a total of $203.3 million as the purchase price for the acquisition of 10 properties comprising 10 buildings containing roughly 330,000 square feet and five improved land parcels of 19.5 acres.

From the beginning of the year through Jul 7, 2022, Terreno Realty acquired 13 properties comprising 14 buildings containing roughly 766,000 square feet and seven improved land parcels of around 27.4 acres for a total purchase price of $309.5 million.

Apart from the fast adoption of e-commerce, industrial real estate space is anticipated to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruption. This will offer opportunities to industrial landlords, including TRNO, Prologis PLD and Rexford Industrial Realty REXR, to enjoy a favorable market environment.

Shares of Zacks Rank #3 (Hold) Terreno Realty have climbed 11.4% over the past month compared with the industry’s increase of 5.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Image Source: Zacks Investment Research

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

Rexford Industrial Realty holds a Zacks Rank of 3 at present. Rexford Industrial Realty’s 2022 revenues are expected to increase 36.9% year over year. REXR’s long-term growth rate is projected at 11.3%.

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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Prologis, Inc. (PLD): Free Stock Analysis Report
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