Terreno Realty TRNO has announced the shelling of $156.3 million for the acquisition of industrial property in Red Hook, Brooklyn, NY. Included in the above acquisition price is a $72.9 million, 3.85% interest-only loan, set to mature in March 2028. The transaction marks an estimated stabilized cap rate of 4.8% and it comes after the recent purchase of a property in Long Island City Queens, NY, for around $7.6 million with an estimated stabilized cap rate of 5.7%.

The Brooklyn property under consideration is a 36-foot-high industrial distribution building spanning 3.1 million leasable square feet on 16.0 acres at 280 Richards Street. It is entirely leased to a leading e-commerce firm.

To facilitate efficient dispersal, the property is equipped with five dock-high and five grade-level loading positions and has parking availability for 349 cars, inclusive of 179 rooftop parking slots. The property has easy riparian access, making it an ideal warehousing and logistics end solution.

The REIT, which focuses on the acquisition, ownership and operation of industrial real estate in six major coastal U.S. markets, has purchased four industrial properties and one portfolio of industrial properties for $499.4 million, inclusive of acquisition costs, in the first nine months of 2024.

TRNO: In a Nutshell

Apart from acquisitions, Terreno Realty is making prudent development and redevelopment efforts. In November, it announced the completion and stabilization of Countyline Corporate Park Phase IV Building 39 in Hialeah, FL, which has been 100% leased to one tenant. Also, TRNO disclosed a redevelopment completion at Terreno 147^th Street in Hawthorne, CA, which is fully leased to an atomic energy company.

This industrial REIT has been experiencing healthy demand for its properties from both existing and new tenants. Recently, TRNO announced the execution of a lease for 82,000 square feet in Avenel, NJ. Earlier, the company announced the execution of an early lease renewal in Jamaica, Queens, NY, with a manufacturer of pre-cooked meals.

As part of its strategic portfolio rebalancing efforts, TRNO has been actively carrying out value-accretive investments by disposing of its non-core assets. In effect to this, the company recently disposed of an industrial property in Newark, NJ, for around $29.8 million.

With a solid operating platform, a healthy balance sheet position and strategic expansion moves, TRNO seems well-positioned to capitalize on long-term growth opportunities. However, subdued demand and elevated supply of industrial real estate in some markets are concerns for the near term.

Shares of this Zacks Rank #3 (Hold) company have gained 8.1% in the past six months compared with the industry’s 7.9% growth.

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Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Welltower WELL and Cousins Properties CUZ, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Welltower’s 2024 FFO per share is pegged at $4.26, suggesting year-over-year growth of 17%.

The Zacks Consensus Estimate for Cousins Properties 2024 FFO per share stands at $2.68, indicating an increase of 2.3% from the year-ago reported figure.

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

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