Industrial REIT Terreno Realty Corporation TRNO is continuing with its efforts to capitalize on the healthy fundamentals in the industrial markets through purchase of strategic properties in core markets. As part of such moves, the company recently shelled out $27.6 million for the acquisition of an industrial property — Hawthorne Business Park — in Hawthorne, CA.
Comprising of one distribution and seven flex industrial buildings, containing around 152,000 square feet on 6.9 acres, this property is advantageously located at 3355-3437 W. El Segundo Boulevard. It is situated near Interstate 105 and enjoys proximity to Los Angeles International Airport. The property is in high demand, which is reflected by its 100% leasing to 19 tenants, and is anticipated to drive Terreno’s bottom line in the near future.
Notably, the industrial real estate asset category has grabbed attention due to elevated demand, recovering economy and job market, strengthening e-commerce market and a healthy manufacturing environment.
Amid this, Terreno has solid capacity to offer modern distribution properties and remains well poised to capitalize on robust industry fundamentals. The company aims to boost shareholder value through acquisition of industrial assets and specifically targets functional buildings at in-fill locations, enjoying high population densities and near high volume distribution points.
As such, the company is fortifying its portfolio in six major port cities — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. — that depict solid demographic trends and have strong barriers to entry which limit new supply.
The company’s investment-driven growth strategy is highlighted by its active acquisition activities. On Dec 15, Terreno acquired an industrial property in Gardena, CA, for around $37.6 million. It is 100% leased to one tenant.
Terreno currently carries a Zacks Rank #3 (Hold). Encouragingly, in the year so far, shares of the company have outperformed the industry. While the stock has gained 24.4%, the industry has recorded growth of 3.7% during this period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better-ranked stocks in the REIT space include Franklin Street Properties FSP, Columbia Property Trust CXP and MedEquities Realty Trust MRT. All three carry a Zacks Rank of 2 (Buy).
Franklin Street Properties’ Zacks Consensus Estimates for 2017 FFO per share remained unchanged at $1.05 over the past month. Its share price has ascended 2.1% in three months’ time.
Columbia Property Trust’s FFO per share estimates for the current year have moved up 1.8% to $1.15 in a month’s time. Its shares have gained 5.4% over the past three months.
MedEquities Realty’s FFO per share estimates for 2017 inched up 1.8% to $1.12 over the past two months. Its shares have lost 3.0% during the past three months.
Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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