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Terreno Realty Corporation (TRNO), a real estate investment trust (REIT), has recently provided an update of the various acquisitions, operating and other capital market activities it has executed in the third quarter of 2012. The company expects to file its quarterly report for the quarter ended September 30, 2012 in the first week of November.
During the quarter, Terreno Realty acquired six industrial properties (577,000 square feet) comprising nine buildings for an aggregate purchase price of $74.4 million. These included the acquisition of three multi-tenant industrial buildings in Sunnyvale, California, spanning 172,000 square feet of space for $33.7 million. The company also acquired two additional properties in California – one in Redondo Beach (103,000 square feet) for $14.2 million, and one in South San Francisco spanning 24,000 square feet of industrial space for $3.6 million.
Furthermore, Terreno Realty acquired a 75,000 square foot industrial property in Doral, Florida for $4.2 million; a 66,000 square foot multi-tenant industrial property in Elkridge, Maryland for $6.7 million; and two industrial buildings in Miami, Florida totaling 138,000 square feet for $12.1 million.
The continuous acquisition spree is part of the long-term strategy of the company to abstain from pursuing ground-up development or land investments, and instead own functional and flexible buildings that can be modified to accommodate single and multiple tenants at discounts to replacement cost.
During the just-completed quarter, Terreno Realty issued over 1.8 million shares of 7.75% Series A Perpetual Preferred Stock to raise net proceeds of $44.3 million.
At quarter-end, Terreno Realty owned 63 buildings aggregating 4.8 million square feet in high barrier-to-entry markets of Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington D.C./Baltimore. The properties were approximately 92.6% leased to 97 tenants.
San Francisco-based Terreno Realty owns and operates industrial real estate properties primarily in six major coastal markets of the U.S. Each of the locations in which Terreno Realty has a significant presence is characterized by a well-established transportation network. This includes seaports, airports, highways and railways that are essential for the swift distribution of goods. In addition, available land in these markets is relatively scarce, resulting in steep barriers for the development of new and competing properties.
We have a Neutral rating on Terreno Realty, which presently has a Zacks #3 Rank that translates into a short-term Hold rating. However, we have an Underperform recommendation and a Zacks #5 Rank (short-term Strong Sell rating) for Winthrop Realty Trust (FUR), one of the peers of Terreno Realty.