As part of its acquisition-driven growth strategy, Terreno Realty TRNO recently announced the acquisition of an industrial property in Maspeth Queens, NY, for $50.1 million. Presently, the property is 100% leased to a plumbing, heating, HVAC and industrial products distributor, and the estimated stabilized cap rate is 4.5%.
Located at 49-15 Maspeth Avenue, the property comprises one industrial transshipment building containing roughly 33,000 square feet on 2.6 acres. With an advantageous location that is less than one mile from the intersection of I-278 (Brooklyn-Queens Expressway) and I-495 (Queens Midtown/Long Island Expressway) and 40 dock-high and four grade-level loading positions, 50 additional trailer positions and parking for 31 cars, the property is likely to lure tenants, and its acquisition seems a strategic fit.
Most recently, TRNO shelled out $195.6 million to purchase an industrial property at 7725-7785 NW 41st Street in Doral, FL. The property — Terreno Doral Air Logistics — comprises three 36-foot clear-height rear-load industrial distribution buildings encompassing roughly 495,000 square feet on 23.4 acres. With a premium location — immediately next to the Palmetto Expressway, around one mile from the MIA Cargo Viaduct and two miles from the Dolphin Expressway and Miami International Airport — the property is 76% leased to six tenants, and the estimated stabilized cap rate is 4.6%.
Final Thoughts on TRNO Stock
Demand for industrial real estate space has been high amid an e-commerce boom, growth in industries and companies making efforts to improve supply-chain efficiencies. Banking on such opportunities, TRNO is expanding its portfolio through acquisitions. The company is targeting functional assets at in-fill locations. Such assets 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, namely, New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle and Washington, D.C. These markets display solid demographic trends and witness healthy demand for industrial real estate.
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 amid favorable industry fundamentals. With an advantageous location, the buildings are expected to lure tenants and enjoy high occupancy. However, the elevated supply of industrial real estate and broader market issues pose key concerns.
Over the past three months, shares of this Zacks Rank #3 (Hold) company have declined 9.2% compared with the industry’s fall of 10.4%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Crown Castle Inc. CCI 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 Crown Castle’s 2024 FFO per share has been raised marginally over the past two months to $7.
The Zacks Consensus Estimate for Cousins Properties’ current-year FFO per share has been revised marginally north in the past two months to $2.68.
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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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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