Terreno Realty on Acquisition Spree

Terreno Realty Corporation (TRNO) is on an acquisition spree. The company acquired land in South Brunswick, NJ on Dec 31, 2013. The company shelled out $5.0 million for this purchase.

This follows the recent purchase of four buildings (about 229,000 square feet) and an adjacent land parcel (0.2 acre) in JFK Airgate in Queens, NY, which is 98.6% leased to 18 well-known international air cargo and logistics firms, for around $53.1 million.

In particular, this South Brunswick buyout involves a land parcel of approximately 10.15 acres. It is positioned adjacent to Terreno Realty’s current 413,000 square foot facility at 130 Interstate Boulevard within the New Jersey Turnpike Exit 8A submarket.

Terreno Realty plans to build an approximately 190,000 square foot expansion to the existing facility in 2014. This will lead to the construction of a multi-tenant front-load distribution building spanning 603,000 square foot. The assets’ estimated stabilized cap rate is 5.8% for the expanded part.

We believe these acquisitions suit the company’s growth needs. These portfolio additions help boost its tenant mix and are expected to enhance the company’s bottom line, going forward.

As a matter of fact, Terreno Realty, which mainly focuses on industrial real estate properties in 6 major coastal markets of the U.S. – the high barriers-to-entry markets of Los Angeles; Northern New Jersey/New York City; San Francisco Bay Area; Seattle; Miami; and Washington, D.C./Baltimore, has been active in capitalizing on opportunities to expand its foothold in these areas.

Accordingly, in recent times, this real estate investment trust (REIT) disclosed the buyout of an industrial property in Landover, MD for about $7.0 million. Also, the company bought Gardena, CA-based and Lanham, MD-based industrial assets for roughly $6.0 million and $5.6 million, respectively. These moves are poised to strengthen the company’s growth prospects going forward.

Terreno Realty currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the REIT-Equity Trust – Other industry include Getty Realty Corp. (GTY), National Health Investors Inc. (NHI) and Pebblebrook Hotel Trust (PEB). All these stocks carry a Zacks Rank #1 (Strong Buy).