Terreno Realty (TRNO) Sells Industrial Property For $20.3M

Terreno Realty Corporation (NYSE:TRNO) recently announced that it has sold an industrial property in Capitol Heights, MD, on Feb 26. The property has been sold for approximately $20.3 million.

This property at 1000 Hampton Park Boulevard consists of an industrial distribution building, spanning around 139,000 square feet, on approximately 7.7 acres. It is 44% leased to a single tenant. The company shelled out nearly $18.1 million for the purchase of this property on May 13, 2014. Through this sale, Terreno recognized an unleveraged internal rate of return of approximately 6.9%.

As a matter of fact, elevated demand, recovering economy and job market, strengthening e-commerce market and a healthy manufacturing environment are driving the fundamentals of the industrial real estate market, and offering scope to industrial real estate investment trusts (REIT), including Prologis, Inc. (NYSE:PLD) , DCT Industrial Trust (NYSE:DCT) , Duke Realty Corporation (NYSE:DRE) and Terreno.

In fact, Terreno remains well poised to capitalize on robust industry fundamentals as it has solid capacity to offer modern distribution properties. The company aims to boost shareholders’ value through acquisition of industrial assets. It specifically targets functional buildings at in-fill locations which enjoy high population densities and are situated near high volume-distribution points.

Particularly, Terreno 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. In fact, on Jan 31, the company shelled out $17.5 million for the purchase of an industrial property in Torrance, CA. Further, the company’s 2017 acquisition activity included 23 industrial properties comprising 35 buildings, with around 1.7 million square feet and five improved land parcels, aggregating around 25.1 acres for a total of $292.7 million.

Amid these, Terreno’s efforts to shed non-core properties is aimed at enhancing its overall portfolio mix and provide capital for strategic acquisitions. In fact, during 2017, the company’s dispositions comprised four properties sold at a total sales price of around $77.3 million, producing an unleveraged internal rate of return of 13.7%. The company intends to redeploy the sale proceeds in acquiring high-yielding assets.

The stock has rallied 20.6% over the past year, outperforming the 7.5% loss incurred by the industry it belongs to.

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Prologis, Inc. (PLD): Free Stock Analysis Report

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