Terreno Realty Corporation Acquires Property in Bellevue, WA for $6.5 Million

Rhea-AI Summary

Terreno Realty Corporation (TRNO) acquired an industrial property in Bellevue, Washington for $6.5 million on January 5, 2024. The property consists of a 16,000 square feet industrial distribution building on 1.8 acres. It provides three dock-high and two grade-level loading positions and parking for 22 cars. The estimated stabilized cap rate is 5.8%. Terreno Realty Corporation operates in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

Insights

Real Estate Investment Analyst

The acquisition of the industrial property by Terreno Realty Corporation represents a strategic expansion of their portfolio in a key logistics area. Bellevue, Washington, positioned at the nexus of two major highways, I-90 and I-405, is a critical distribution point for the Pacific Northwest. This location provides strategic value due to its potential to facilitate efficient distribution and logistics operations for future tenants. The purchase price of $6.5 million for approximately 16,000 square feet translates to a per-square-foot cost that is indicative of the current market in high-demand coastal regions.

The estimated stabilized cap rate of 5.8% is a vital metric for investors, reflecting the expected yield of the property once it reaches a market occupancy of 95%. This rate is comparable to cap rates in other similar markets, suggesting that Terreno's investment is aligned with market expectations. However, investors should monitor the company’s ability to quickly lease the vacant property to achieve the estimated cap rate, as prolonged vacancies could impact returns.

Financial Analyst

Terreno Realty Corporation's recent acquisition should be analyzed in the context of its impact on the company's financial health and stock performance. The initial outlay of $6.5 million will affect the company's cash reserves and debt levels, depending on how the purchase was financed. Investors should evaluate the company's balance sheet post-acquisition to understand the impact on leverage and liquidity ratios.

Moreover, the acquisition's success hinges on Terreno's ability to stabilize the property at the projected cap rate. Achieving stabilization involves not only leasing the currently vacant space but also managing near-term capital expenditures and leasing costs. These factors will influence the company's operating income and, consequently, its earnings per share (EPS). If the stabilization occurs as projected, it could lead to an increase in shareholder value over time.

Market Research Analyst

Industrial real estate, particularly in coastal markets, has seen robust demand due to the rise of e-commerce and the need for efficient supply chain logistics. Terreno Realty Corporation's focus on these markets positions it well to capitalize on this trend. The acquisition in Belleville adds to their strategic presence in the Seattle market, which is a significant gateway for trade with Asia and a hub for technology companies.

It is essential to consider broader market trends, such as the potential for increased demand for industrial space in the region, which could drive rental rates up and improve the property's value over time. Conversely, any downturns in the industrial market or broader economic shifts that affect the logistics sector could pose risks to the projected income from the property.

BELLEVUE, Wash.--(BUSINESS WIRE)-- Terreno Realty Corporation (NYSE:TRNO), an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, acquired an industrial property located in Bellevue, Washington on January 5, 2024 for a purchase price of approximately $6.5 million.

The property consists of one industrial distribution building containing approximately 16,000 square feet on 1.8 acres. The property is at 13045 SE 32nd Street adjacent to the intersection of I-90 and I-405, provides three dock-high and two grade-level loading positions and parking for 22 cars. The property is vacant and the estimated stabilized cap rate is 5.8%.

Estimated stabilized cap rates are calculated as annualized cash basis net operating income stabilized to market occupancy (generally 95%) divided by total acquisition cost. Total acquisition cost includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization.

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

Additional information about Terreno Realty Corporation is available on the company’s web site at www.terreno.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. We caution investors that forward-looking statements are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “result,” “should,” “will,” “seek,” “target,” “see,” “likely,” “position,” “opportunity,” “outlook,” “potential,” “enthusiastic,” “future” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates, and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2022 and our other public filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240105529687/en/

Jaime Cannon

415-655-4580

Source: Terreno Realty Corporation

FAQ

What property did Terreno Realty Corporation (TRNO) acquire in Bellevue, Washington?

Terreno Realty Corporation (TRNO) acquired an industrial property in Bellevue, Washington.

When did the acquisition take place?

The acquisition took place on January 5, 2024.

What is the purchase price of the property?

The purchase price of the property is approximately $6.5 million.

What are the key features of the property?

The property consists of a 16,000 square feet industrial distribution building on 1.8 acres. It provides three dock-high and two grade-level loading positions and parking for 22 cars.

In which U.S. markets does Terreno Realty Corporation operate?

Terreno Realty Corporation operates in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.