Terreno Realty Corporation Acquires Property in Redmond, WA for $9.3 Million

Rhea-AI Summary

Terreno Realty (NYSE:TRNO) has acquired an industrial property in Redmond, Washington for $9.3 million. The property, located at 9660 153rd Avenue NE on Seattle's Eastside, includes a 33,000 square foot industrial distribution building on 1.5 acres.

The facility features two dock-high and one grade-level loading positions, with parking for 30 cars. While currently 100% leased on a short-term basis, the property will undergo renovation after the existing tenant vacates, reducing its size to approximately 26,000 square feet. The estimated stabilized cap rate post-renovation is 5.5%.

Positive

• 100% current occupancy with existing tenant
• Strategic location in Seattle's Eastside market
• Property improvement plan to optimize space utilization
• Expected 5.5% stabilized cap rate after renovation

Negative

• Short-term lease indicates imminent vacancy
• Renovation will reduce rentable space by 7,000 sq ft
• Additional capital expenditure required for renovation

Insights

Real Estate Investment Analyst

Terreno's $9.3 million acquisition in Redmond represents strategic expansion in their Seattle portfolio, one of their six target coastal markets. The property's location on Seattle's Eastside positions it in a tech-heavy corridor with strong demand fundamentals, though the purchase is relatively small at just 0.15% of Terreno's $6.4 billion market cap.

The planned renovation strategy reveals a value-add approach, with the unusual decision to reduce the property's footprint from 33,000 to 26,000 square feet after the short-term tenant vacates. This suggests optimization for higher-value usage rather than maximizing gross leasable area, likely targeting higher per-square-foot rents in this premium submarket.

The 5.5% projected stabilized cap rate aligns with compressed yields typical for industrial assets in supply-constrained coastal markets, particularly in tech-centric submarkets. The structure of acquiring a fully-leased property on a short-term basis provides immediate cash flow while enabling planned renovations without prolonged vacancy periods.

This transaction exemplifies Terreno's disciplined approach to portfolio building - targeting small, high-quality assets in land-constrained markets where new development remains While unremarkable in size, it reinforces their consistent execution of a focused investment strategy that has historically delivered premium returns compared to broader industrial REIT peers.

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 Redmond, Washington on April 9, 2025 for a purchase price of approximately $9.3 million.

The property consists of one industrial distribution building containing approximately 33,000 square feet on 1.5 acres. The property is at 9660 153rd Avenue NE on Seattle’s Eastside, provides two dock-high and one grade-level loading positions and parking for 30 cars. The property is 100% leased on a short-term basis. After the existing tenant vacates, the property will be renovated to contain approximately 26,000 square feet. The estimated stabilized cap rate after renovation is 5.5%.

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: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle 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, 2024 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/20250402288266/en/

Jaime Cannon

415-655-4580

Source: Terreno Realty Corporation

FAQ

What is the purchase price and location of TRNO's latest property acquisition?

Terreno Realty acquired a property in Redmond, Washington for $9.3 million, located at 9660 153rd Avenue NE on Seattle's Eastside.

What are the current specifications of TRNO's newly acquired Redmond property?

The property includes a 33,000 sq ft industrial distribution building on 1.5 acres, with two dock-high and one grade-level loading positions, plus parking for 30 cars.

What changes will TRNO make to the Redmond property after the current tenant leaves?

After the existing tenant vacates, TRNO will renovate the property, reducing its size from 33,000 to approximately 26,000 square feet.

What is the expected stabilized cap rate for TRNO's Redmond property after renovation?

The estimated stabilized cap rate after renovation is 5.5%, based on annualized cash basis net operating income at market occupancy.

How does TRNO calculate the stabilized cap rate for its properties?

TRNO calculates stabilized cap rates as annualized cash basis net operating income at market occupancy (95%) divided by total acquisition cost, including purchase price and related expenses.