Terreno Realty Corporation Announces Lease in Hialeah, FL
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Insights
The announcement by Terreno Realty Corporation regarding the pre-leasing of Building 39 in Countyline Corporate Park Phase IV is a significant indicator of the company's strategic positioning within the industrial real estate market. The pre-leasing of 100% capacity, especially for a ten-year duration, underscores a robust demand for industrial spaces in prime locations. The tenant's expansion within Terreno's portfolio highlights the quality of the firm's assets and its ability to retain and grow tenant relationships.
From a market perspective, this development is indicative of the ongoing trend where industrial real estate, particularly in coastal markets, is in high demand due to the rise of e-commerce and the need for efficient distribution channels. The commitment to LEED certification reflects an increasing market preference for sustainable and energy-efficient buildings, which can command higher rents and attract quality tenants. The estimated stabilized cap rate of 5.8% is a critical figure, as it suggests a healthy return on investment compared to current market averages, which can vary based on geography and asset class.
The financial implications of the pre-leased building for Terreno Realty Corporation are multifaceted. The total expected investment of $43.8 million for Building 39, with an estimated stabilized cap rate of 5.8%, provides insight into the potential income generation and valuation of the property. A cap rate of 5.8% is generally considered favorable in the current economic climate, reflecting a balance between risk and return.
Furthermore, the larger investment of approximately $511.5 million for the completion of Countyline Corporate Park Phase IV by 2027 represents a significant capital commitment. Investors will be keen to monitor the progress of this development, as it will likely have a material impact on the company's balance sheet and future revenue streams. The pre-lease also mitigates some of the risks associated with new developments, as it ensures a steady cash flow upon completion.
The pursuit of LEED certification for Terreno Realty Corporation's industrial buildings, including the newly pre-leased Building 39, is a testament to the company's commitment to sustainability. LEED, or Leadership in Energy and Environmental Design, is a globally recognized green building certification system. It provides a framework for healthy, highly efficient and cost-saving green buildings. LEED-certified buildings are designed to reduce waste, conserve energy and decrease water consumption, which can lead to lower operating costs and increased asset value over time.
For stakeholders, the focus on sustainability can enhance the company's reputation and align with the growing investor interest in environmentally responsible real estate investments. This strategic move may not only attract tenants looking for sustainable options but also provide a competitive edge in a market that increasingly values corporate social responsibility.
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
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
Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal
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/20240123984530/en/
Jaime Cannon
415-655-4580
Source: Terreno Realty Corporation
FAQ
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