Terreno Realty (TRNO) Secures Lease for Property in Inglewood
Terreno Realty TRNO recently announced the execution of a lease with a commercial electric-vehicle (EV) service provider for fleet operators for an improved land parcel in Inglewood, CA.
The lease for this 1.9-acreland parcel will commence upon completion of site improvements, which is likely to be in third-quarter 2021, and will expire 12 years after commencement.
As of Mar 31, 2021, the company’s operating portfolio, exclusive of two properties under redevelopment, was 96.1% leased. Also, the same-store portfolio (spanning 12.7 million square feet) was 97.4% leased at the end of the quarter. The company was able to lock in higher rents on new and renewed leases, reflecting resilience in its portfolio. Cash rents on new and renewed leases (commenced during the first quarter) — aggregating 0.3 million square feet — grew 16%, with a tenant retention ratio of 82.3%.
The leasing and renewal activities reflect the solid demand for Terreno Realty’s well-positioned properties. The industrial asset class has grabbed the limelight for showing resilience amid the coronavirus pandemic with low vacancy rates, high asking rents and robust rent collections. There has been a notable increase in e-commerce’s share of total retail sales, spurring demand for warehouses and distribution spaces. Apart from the fast adoption of e-commerce, the industrial real estate space is anticipated to benefit from a likely rise in the inventory levels post the global health crisis, opening up scope for industrial landlords, including Terreno Realty, Duke Realty DRE, Prologis PLD and Rexford Industrial Realty, Inc. REXR , to enjoy a favorable market environment.
In such a favorable environment, Terreno Realty is focused on expanding its portfolio on acquisitions. It targets functional assets at in-fill locations, which enjoy high-population densities and are located near high-volume distribution points. Through such efforts, the company is well poised to fortify its portfolio in the six major coastal U.S. markets — 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. Recently as part of its acquisition-driven growth strategy, Terreno Realty shelled out $7.6 million for the purchase of an industrial property in Renton, WA.
Nevertheless, the high supply due to the development boom in a number of markets is likely to intensify competition and curb pricing power.
Terreno Realty currently carries a Zacks Rank #3 (Hold). The company’s shares have appreciated 13.1% compared with the industry's rally of 10.5% over the past three months. In addition, the Zacks Consensus Estimate for 2021 funds from operations (FFO) per share moved up marginally to $1.65 over the past month. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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