Terreno Real Estate Company TRNO recently announced a $27.2 million shelling out for the acquisition of two industrial properties in Los Angeles and Inglewood, California. The properties are located west of I-405 adjacent to Los Angeles International Airport.
Shares of these industrial real estate investment trusts (REITs) rose 2.43% in the May 27 trading session after the announcement, reflecting positive sentiments.
The distribution building in Inglewood covers approximately 19,000 square feet by 0.9 acres and is located at 332 Hindry Avenue. It is currently 70% let to a single tenant and has a stabilized capitalization rate estimated at 2.4%.
The second Industrial Distribution Building located at 8320-8400 Isis Avenue in Los Angeles is approximately 40,000 square feet on 2.1 acres. It is currently 100% let to four tenants with a stabilized capitalization rate estimated at 3.2%.
The demand for industrial real estate space is skyrocketing given the growth of industries, the boom in e-commerce and companies striving to improve supply chain efficiency. Additionally, an increase in corporate inventory levels as a precautionary measure for any supply chain disruptions should contribute to the long-term growth momentum of this sector, thereby serving a favorable market for industrial lessors.
The company is taking steps to expand through acquisitions to enhance its portfolio in six major US coastal markets – Los Angeles, Northern New Jersey/New York, San Francisco Bay Area, Seattle, Miami and Washington, D.C. . These markets are showing strong demographic trends and strong demand for industrial real estate. It targets functional assets in infill locations, which benefit from high population densities and are located near high-volume distribution points. The company is well positioned to capitalize on such opportunities.
Terreno Realty recently added a few industrial properties to its portfolio in the second quarter of 2022. During the month of May, it purchased an industrial property in Anaheim, California for $15.0 million that is currently vacant and whose stabilized capitalization rate is estimated at 4.7. %. During the same month, the company completed the acquisition of industrial property at 127-167 and 147-163 Doremus Avenue in Newark, NJ, for $11.9 million. The building is 100% leased on a short-term basis to a tenant and has a stabilized capitalization rate estimated at 6.9%.
Terreno Realty currently carries a Zacks Rank #2 (Buy). Over the past three months, TRNO shares are down 9% from the industrygrowth of 0.3%. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image source: Zacks Investment Research
Other actions to consider
Some other top-ranked stocks in the REIT sector are Prologis PLD, Rexford Industrial Building REXR and Cedar Estate Trust CDR.
The Zacks consensus estimate for Prologis funds from operations (FFO) in 2022 per share has risen 2.6% over the past two months to $5.15. PLD currently carries a Zacks rank of 2.
The Zacks consensus estimate for Rexford Industrial Realty’s FFO per share for the current year has risen 1.6% over the past two months to $1.93. REXR wears a Zacks Rank #2, currently.
The Zacks consensus estimate for Cedar Realty Trust’s FFO per share for the current year has risen 3.6% north over the past month to $2.59. CDR carries a Zacks rank of 2 at present.
Note: Everything related to earnings presented in this description represents funds from operations (FFO) – a metric widely used to assess the performance of REITs.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.