Terreno Realty Corporation Announces Development Starts in Hialeah, FL

Rhea-AI Summary

Terreno Realty Corporation (TRNO) has started construction on Countyline Corporate Park Phase IV buildings 32 and 33 in Hialeah, Florida, with an expected investment of $79.1 million. The project aims to create LEED-certified industrial distribution buildings totaling approximately 2.2 million square feet by 2027.

Insights

Market Research Analyst

The commencement of the construction of Countyline Corporate Park Phase IV by Terreno Realty Corporation represents a significant expansion in their industrial real estate portfolio. The investment in high-clearance, rear-load distribution buildings highlights a strategic focus on logistics and distribution, which is a growing segment due to the rise in e-commerce and the demand for efficient supply chain solutions. The location of the park, being adjacent to major transportation routes such as Florida's Turnpike and I-75, is critical for distribution logistics, potentially reducing transportation costs and delivery times for future tenants.

The projected LEED certification for the buildings indicates a commitment to sustainability, which can be a draw for environmentally conscious tenants and may result in operational cost savings due to energy efficiency. Additionally, the estimated stabilized cap rate of 6.0% is a key figure for investors as it suggests the expected yield on the investment once the property reaches market occupancy. This figure is within the typical range for industrial investments, indicating a competitive return potential in the current market.

Financial Analyst

An estimated total investment of $79.1 million for the initial phase and $511.5 million for the complete project is a substantial outlay that reflects confidence in the industrial real estate market, particularly in the Miami area. Investors should consider the scale of the project and the long-term horizon for completion and stabilization. The estimated stabilized cap rate provides a glimpse into the expected profitability and risk profile of the project. A cap rate of 6.0% is generally considered attractive in today's low-interest-rate environment, suggesting the project could offer a solid income stream once fully leased.

It's important to note that the actual return could vary based on the final leasing rates, occupancy levels and operating costs. The project's success will depend on market conditions at the time of completion, including the supply and demand dynamics for industrial space in the Miami market. Investors should also consider the potential risks associated with construction delays, cost overruns and changes in market conditions over the multi-year development period.

Environmental Consultant

The pursuit of LEED certification for the new buildings is indicative of a broader industry trend towards sustainable development. LEED-certified buildings are designed to be resource-efficient and have a reduced carbon footprint. For Terreno Realty Corporation, this could mean lower operating costs and a competitive advantage in attracting tenants who prioritize sustainability. From a broader perspective, such developments can also contribute positively to the company's environmental, social and governance (ESG) profile, which is increasingly relevant to investors.

However, the actual environmental impact of the development will depend on various factors, including the specifics of the LEED certification achieved and the operational practices implemented. Investors with an interest in sustainable development should look for additional details on the types of LEED credits Terreno is targeting, as these will determine the extent to which the buildings meet high environmental performance standards.

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, announced today that it has commenced construction of Countyline Corporate Park Phase IV Buildings 32 and 33 in Hialeah, Florida. Building 32 of Terreno Realty Corporation’s Countyline Corporate Park is a 164,000 square foot 36-foot clear height rear-load industrial distribution building on 8.3 acres with 53 dock-high and two grade-level loading positions and parking for 148 cars. Building 33 of Terreno Realty Corporation’s Countyline Corporate Park is a 158,000 square foot 36-foot clear height rear-load industrial distribution building on 9.0 acres with 53 dock-high and two grade-level loading positions and parking for 136 cars. The buildings are expected to be completed in 2025 and achieve LEED certification, the total expected investment is $79.1 million and the estimated stabilized cap rate is 6.0%.

Countyline Corporate Park Phase IV consists of a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to Terreno Realty Corporation’s seven fully-leased buildings within Countyline (Countyline Corporate Park Phase III). Countyline is a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75 located at the intersection of NW 170th Street and NW 107th Avenue. At expected completion in 2027, Countyline Corporate Park Phase IV is expected to contain ten LEED-certified industrial distribution buildings totaling approximately 2.2 million square feet providing 660 dock-high and 22 grade-level loading positions and parking for 1,875 cars for a total expected investment of approximately $511.5 million.

Taken together, Terreno Realty Corporation’s Countyline Corporate Park Phase III and IV will contain 17 industrial distribution buildings and 3.5 million square feet.

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, 2023 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/20240222594846/en/

Jaime Cannon

415-655-4580

Source: Terreno Realty Corporation

FAQ

What is Terreno Realty Corporation's ticker symbol?

Terreno Realty Corporation's ticker symbol is TRNO.

Where is Countyline Corporate Park Phase IV being constructed?

Countyline Corporate Park Phase IV buildings 32 and 33 are being constructed in Hialeah, Florida.

What is the total expected investment for Countyline Corporate Park Phase IV?

The total expected investment for Countyline Corporate Park Phase IV is approximately $511.5 million.

What is the estimated stabilized cap rate for the project?

The estimated stabilized cap rate for the project is 6.0%.

How many industrial distribution buildings will Countyline Corporate Park Phase IV contain upon completion?

Countyline Corporate Park Phase IV is expected to contain ten LEED-certified industrial distribution buildings totaling approximately 2.2 million square feet.