Terreno Realty Corporation Announces Redevelopment Completion in Hawthorne, CA

Rhea-AI Summary

Terreno Realty (NYSE:TRNO) has completed the redevelopment and stabilization of Terreno 147th Street in Hawthorne, California. The 31,000 square foot industrial distribution building sits on 1.3 acres and features four dock-high and one grade-level loading positions, plus parking for 35 cars including four electric charging stations. The property is 100% leased to an atomic energy company from completion through April 2028. The building, expected to achieve LEED certification, represents a total investment of $15.6 million with an estimated stabilized cap rate of 5.6%.

Positive

• 100% pre-leased at completion to atomic energy company
• Long-term lease secured through April 2028
• Expected LEED certification adds value to property
• Strategic location in Hawthorne, California coastal market

Negative

• Relatively low 5.6% estimated stabilized cap rate
• Significant capital investment of $15.6 million

Insights

Real Estate Investment Analyst

The completion and immediate full lease of this $15.6 million redevelopment project in Hawthorne, CA represents a strategic win for Terreno Realty. The 5.6% stabilized cap rate, while moderate in today's market, is reasonable for a new Class A industrial asset in the competitive Los Angeles market. The property's features, including EV charging stations and pending LEED certification, align with modern tenant demands and ESG requirements.

The secured long-term lease through 2028 with an atomic energy tenant provides stable income visibility. The project's location in Hawthorne, known for its proximity to aerospace and technology companies, positions it well for potential rent growth. The 31,000 square foot facility's modern specifications and sustainable features should support strong tenant retention and value appreciation.

-New development 100% leased at building completion

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 completed the redevelopment and stabilization of Terreno 147th Street in Hawthorne, California effective November 15, 2024. Terreno 147th Street, formerly an improved land parcel, is a 31,000 square foot industrial distribution building on 1.3 acres with four dock-high and one grade-level loading positions and parking for 35 cars, including four electric car charging positions. The property is 100% leased to an atomic energy company commencing with building completion and ending April 2028. The building is expected to achieve LEED certification, the total expected investment is $15.6 million and the estimated stabilized cap rate is 5.6%.

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: Northern New Jersey/New York City; 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/20241112950264/en/

Jaime Cannon

415-655-4580

Source: Terreno Realty Corporation

FAQ

What is the size and features of Terreno's new Hawthorne, CA development (TRNO)?

The development is a 31,000 square foot industrial distribution building on 1.3 acres, featuring four dock-high and one grade-level loading positions, plus parking for 35 cars with four electric charging stations.

What is the total investment and cap rate for Terreno's Hawthorne project (TRNO)?

The total expected investment is $15.6 million with an estimated stabilized cap rate of 5.6%.

Who is the tenant and what is the lease term for Terreno's Hawthorne property (TRNO)?

The property is 100% leased to an atomic energy company from completion through April 2028.