Bullish indicating open at $55-$60, IPO prices at $37
BELLEVUE, Wash. - Terreno Realty Corporation (NYSE:TRNO), a company specializing in the acquisition, ownership, and operation of industrial real estate in major U.S. coastal markets, has expanded its portfolio with the purchase of an industrial property in Redmond, Washington. The transaction, which took place on Sunday, was valued at approximately $9.3 million. With a market capitalization of $5.6 billion and an impressive track record of maintaining dividend payments for 15 consecutive years, Terreno continues to demonstrate strong market presence. According to InvestingPro data, the company has achieved an 18.2% revenue growth in the last twelve months.
The acquired asset is a 33,000-square-foot industrial distribution building situated on 1.5 acres at 9660 153rd Avenue NE, part of the Seattle Eastside area. The facility features two dock-high and one grade-level loading positions, along with parking for 30 cars. Currently, the property is fully leased on a short-term basis.
Plans for the property include a renovation after the current tenant vacates, which will reduce the building's size to roughly 26,000 square feet. Terreno Realty estimates a stabilized capitalization rate, or cap rate, of 5.5% post-renovation. The stabilized cap rate is a key metric used in commercial real estate to estimate the potential return on an investment, factoring in the net operating income of the property and its total acquisition cost.
The total acquisition cost encompasses not only the initial purchase price but also accounts for debt adjustments, due diligence, closing costs, and anticipated capital and leasing expenditures necessary to achieve the property's stabilization, typically defined as 95% occupancy.
Terreno Realty Corporation's strategic focus lies in key coastal markets of the United States, including New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. The company's activities are followed closely by investors interested in the industrial real estate sector, which has seen growth due to the rise in e-commerce and changes in global supply chains.
While the company has expressed optimism about the acquisition, it has also issued forward-looking statements that caution investors about potential risks and uncertainties that could impact future performance. These include market conditions and the company's ability to meet forecasted financial metrics.
The information on this acquisition is based on a press release statement from Terreno Realty Corporation.
In other recent news, Terreno Realty Corporation has garnered attention following its fourth-quarter 2024 financial results, which reported funds from operations (FFO) of $0.62, aligning with analyst expectations. Goldman Sachs upgraded Terreno Realty's stock rating from Neutral to Buy, raising the price target to $77.00, citing a forecasted average annual growth rate of 9.1% from 2025 through 2027. Meanwhile, BMO Capital Markets adjusted its price target for Terreno Realty from $71.00 to $73.00, maintaining a Market Perform rating, reflecting a neutral outlook on the stock's performance relative to the broader market. JMP Securities also maintained a positive stance, reaffirming a Market Outperform rating with a $72.00 price target, highlighting the company's strong financial position and strategic market focus. The firm's low leverage and absence of near-term debt obligations are seen as strengths. Piper Sandler analysts, while focusing on the broader REIT sector, noted Terreno Realty's increasing tenant demand for infill warehouses, emphasizing its potential to outperform the industrial market. These recent developments indicate a mix of optimism and caution among analysts regarding Terreno Realty's future growth and market positioning.
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