Terreno Realty Corporation Announces Lease in Hialeah, FL

Rhea-AI Summary

Terreno Realty (NYSE:TRNO) has pre-leased 50% of its Countyline Corporate Park Phase IV Building 32 in Hialeah, Florida. The ten-year lease covers 82,000 square feet to an aircraft engine maintenance provider, starting June 2025. The 164,000-square-foot building is part of a larger 121-acre development project with a total expected investment of $41.9 million and an estimated 6.0% cap rate.

The complete Countyline Corporate Park Phase IV project will feature ten LEED-certified industrial buildings totaling 2.2 million square feet, with a total investment of approximately $511.5 million, expected to complete in 2027. Combined with Phase III, the development will encompass 17 buildings totaling 3.5 million square feet.

Positive

• Secured 10-year pre-lease for 50% of Building 32 before construction completion
• Project expected to achieve LEED certification
• Estimated stabilized cap rate of 6.0% for Building 32
• Strategic location near Florida's Turnpike and I-75 terminus

Negative

• Large capital commitment of $511.5 million for Phase IV development
• 50% of Building 32 remains unleased
• Construction and tenant improvement risks until 2025 completion

Insights

Financial Analyst

The pre-leasing of 50% of Building 32 at Countyline Corporate Park Phase IV represents a $41.9M strategic investment with an attractive 6.0% stabilized cap rate. This is particularly noteworthy given the current market environment where cap rates have been compressed. The 10-year lease commitment from an aircraft maintenance provider adds stability to the revenue stream and validates the location's appeal. The broader Phase IV development, with a total investment of $511.5M, demonstrates TRNO's significant expansion in the Miami market. The project's LEED certification focus aligns with growing ESG demands, potentially commanding premium rents and attracting quality tenants. The strategic location near major transportation arteries (Florida's Turnpike and I-75) enhances the property's long-term value proposition.

For investors, the pre-leasing success before construction completion indicates strong market demand and reduces lease-up risk. The development's scale will significantly boost TRNO's portfolio in Miami, one of the fastest-growing industrial markets in the U.S. The 6.0% cap rate suggests solid risk-adjusted returns in the current market context.

Real Estate Development Expert

The Countyline Corporate Park development showcases sophisticated land use strategy, transforming a former landfill into prime industrial space. The 36-foot clear height specification for Building 32 meets modern logistics requirements, while the loading dock ratio (53 dock-high and 2 grade-level positions) is optimized for high-volume operations.

The 121-acre Phase IV expansion, adding 2.2 million square feet across ten buildings, represents a masterful scaling of TRNO's presence in Miami's industrial corridor. The parking allocation (148 cars for Building 32, 1,875 for full development) suggests careful consideration of workforce density and operational needs. The project's infrastructure planning, particularly its proximity to major highways, positions it as a key last-mile delivery hub. The LEED certification pursuit across all buildings indicates forward-thinking design that should translate to lower operating costs and enhanced tenant attraction.

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 pre-leased 50% of Countyline Corporate Park Phase IV Building 32 in Hialeah, Florida. The ten-year lease for 82,000 square feet, with an aircraft engine maintenance, repair and overhaul provider, will commence upon completion of building construction and tenant improvements expected to be in June 2025. Currently under construction, 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. The building is expected to achieve LEED certification, the total expected investment is $41.9 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 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: 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, 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/20241127442325/en/

Jaime Cannon

415-655-4580

Source: Terreno Realty Corporation

FAQ

What is the size and value of Terreno's Countyline Corporate Park Phase IV Building 32?

Building 32 is a 164,000 square foot industrial distribution building with a total expected investment of $41.9 million.

When will TRNO's Countyline Corporate Park Phase IV project be completed?

The entire Phase IV project is expected to be completed in 2027.

What is the total square footage of TRNO's Countyline Corporate Park Phase III and IV combined?

Combined, Phases III and IV will contain 17 industrial distribution buildings totaling 3.5 million square feet.

What is the expected stabilized cap rate for TRNO's Building 32 in Hialeah?

The estimated stabilized cap rate for Building 32 is 6.0%.

How much of Building 32 has TRNO pre-leased and for how long?

TRNO has pre-leased 50% (82,000 square feet) of Building 32 for a ten-year term.