Terreno Realty Corporation TRNO recently issued an update on first-quarter 2025 operating, investment and capital activities. Per the first-quarter 2025 update, TRNO locked in higher rents on new and renewed leases, and occupancy improved year over year. This reflects the growing demand for the industrial real estate asset category in a rising e-commerce market.

Let’s gather insight on the line items on which the company has provided an update.

TRNO’s Operating Activity

In the first quarter of 2025, this industrial REIT witnessed a 34.2% increase in cash rents on new and renewed leases for the operating portfolio and 0.0% for the improved land portfolio. The leases that commenced in the first quarter totaled around 0.6 million square feet and 4.3 acres of improved land. The operating portfolio had a tenant retention ratio of 71.7%.

As of March 31, 2025, the occupancy for the operating portfolio was 96.6%, which marks an expansion of 40 basis points (bps) year over year while a contraction of 80 bps sequentially. For the same-store portfolio of around 15.6 million square feet, TRNO had 97.4% quarter-end occupancy, up 110 bps year over year but down 90 bps sequentially.

As of March 31, 2025, the occupancy for the improved land portfolio of 47 parcels encompassing 150.6 acres was 95.1% compared to 95.1% and 94.6% recorded as of Dec. 31, 2024 and March 31, 2024, respectively.

As of March 31, 2025, Terreno Realty’s portfolio included 298 buildings spanning around 19.3 million square feet and 47 improved land parcels encompassing 150.6 acres leased to 663 tenants.

TRNO’s Investment Activity

TRNO has been actively restructuring its portfolio by disposing of non-core assets and acquiring value-accretive investments. Such efforts will aid long-term revenue growth. In the first quarter of 2025, Terreno Realty sold two properties with two industrial distribution buildings spanning around 88,000 square feet at an aggregate sale value of around $24.9 million.

As of March 31, 2025, TRNO had acquisitions worth around $55.9 million under contract and nearly $16 million under letters of intent. The completion of these is subject to due diligence and closing conditions.

TRNO’s Development and Redevelopment Activity

As of March 31, 2025, Terreno had five properties under development or redevelopment. Post completion, these will comprise eight buildings spanning around 0.8 million square feet, which are 48% leased. The company also has around 22.4 acres of land dedicated to future developments at an estimated investment value of around $392.8 million.

TRNO’s Capital Market Activity

In the first quarter of 2025, Terreno Realty issued 3,506,371 shares of common stock at a weighted average offer price of $67.71 per share under the company’s at-the-market equity offering program for gross proceeds of $237.4 million. In the same period, the company did not repurchase any shares under its share repurchase authorization.

On the balance sheet front,as of March 31, 2025, the company had no borrowings outstanding under its $600 million revolving credit facility.  It has no debt maturities in 2025, while $50 million of debt is maturing in 2026.

Final Thoughts on TRNO Stock & Its Industry

With a solid operating platform, strategic expansion moves and a healthy balance sheet position, TRNO seems well-positioned to capitalize on long-term growth opportunities amid favorable industry fundamentals.

In a rising e-commerce market, the industrial real estate asset category is playing a pivotal role, transforming the way how consumers shop and receive their goods. Companies are making immense efforts to improve supply-chain efficiencies, propelling demand for logistics infrastructure and efficient distribution networks. Given Terreno’s solid capacity to offer modern logistics facilities, it is well-poised to bank on this trend.

Shares of this Zacks Rank #3 (Hold) company have fallen 11.6% over the past three months compared with the industry’s decline of 1.4%.

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Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Welltower WELL and W.P. Carey WPC, each carrying a Zacks Rank of #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 2025 funds from operations (FFO) has been moved marginally upward to $4.93 per share over the past month.

The Zacks Consensus Estimate for W.P. Carey’s full-year FFO has been revised marginally northward to $4.85 per share over the past two months.

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

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