Terreno Realty Corporation TRNO recently completed the acquisition of an industrial property located in Puyallup, WA. The company has shelled out nearly $6.7 million for this purchase.
The industrial distribution building offers around 41,000 square feet of space on 2.3 acres. The property is situated at 917 Valley Avenue NW and is less than four miles from the Port of Tacoma. Its strategic location has likely enabled the property to be fully-leased to two tenants. Further, the building features include 10 dock-high, four grade-level loading positions and parking for 50 cars.
The property’s estimated stabilized cap rate is 5.4%. Notably, this acquisition is in line with Terreno Realty’s acquisition-driven growth strategy. The company targets functional buildings at in-fill locations, which enjoy high-population densities and are located near high volume-distribution points.
Moreover, recently the company acquired another industrial property in East Rutherford, NJ, for $12 million. The industrial distribution building is less than two miles west of the Meadowlands Sports Complex and Exit 16W of the New Jersey Turnpike. It is 100% leased to a single tenant. (Read more: Terreno Continues to Expand, Buys East Rutherford Property)
Aided by acquisitions, the company is fortifying its presence in six major port cities — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, DC — which display solid demographic trends and witness healthy demand for industrial real estates.
These efforts will help it benefit from the industrial real estate sector’s robust fundamentals. The e-commerce boom, encouraging consumer sentiment, low unemployment level and increasing wages are playing key roles in maintaining the industrial and logistics sector’s health. In addition, the companies are making diligent efforts to improve their supply-chain efficiencies, which are spurring demand for logistics infrastructure and efficient distribution networks.
This is driving growth momentum for industrial REITs like Terreno Realty, Duke Realty Corp. DRE, Prologis, Inc. PLD, Rexford Industrial Realty, Inc. REXR and others. Nonetheless, rising supply and protectionist trade policies might mar the companies’ growth tempo to some extent.
Currently, Terreno Realty carries a Zacks Rank #3 (Hold). In the year-to-date period, its shares have surged 49.8% compared with the industry’s rally of 23.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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