BELLEVUE, Wash. – Terreno Realty Corporation (NYSE:), a major owner and operator of industrial real estate in key U.S. coastal markets, has reported a series of positive operational and financial developments for the third quarter of 2024. The company’s portfolio showed increased occupancy and significant growth in cash rents for new and renewed leases.
As of September 30, 2024, Terreno’s operating portfolio was 97.0% leased, a slight decrease from 98.3% in the previous year but an improvement from 96.0% in the preceding quarter. The same-store portfolio was 97.3% leased, down from 98.4% year-over-year but up from 96.0% in the prior quarter. The company’s improved land portfolio maintained a steady 98.1% occupancy.
The company experienced a 24.1% increase in cash rents on new and renewed leases during the third quarter, with an impressive 40.5% increase year-to-date. Notably, Terreno executed several early lease renewals and new leases with key tenants in California and New Jersey, contributing to a tenant retention ratio of 67.3% for the operating portfolio.
Investment activities included the acquisition of an industrial property in Washington, D.C. for approximately $7.6 million and the completion of a new development in Hialeah, Florida, now fully leased. The company’s year-to-date acquisition totals reached approximately $474.9 million.
In the capital markets, Terreno issued nearly 3 million shares of common stock under its at-the-market equity offering program, raising gross proceeds of $204.5 million. Additionally, the company increased its revolving credit facility borrowing capacity by $200 million to $600 million and extended the term.
Terreno Realty also declared an 8.9% increase in its quarterly dividend, reflecting confidence in its financial position and commitment to shareholder returns.
This information is based on a press release statement from Terreno Realty Corporation, which also noted that the company has no acquisitions under contract but has approximately $7.6 million of acquisitions under letters of intent. These potential acquisitions are subject to satisfactory due diligence and various closing conditions.
Terreno Realty Corporation specializes in acquiring and operating industrial properties in markets including Northern New Jersey/New York City, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. The company is expected to file its quarterly report on Form 10-Q for the quarter ended September 30, 2024, around November 6, 2024.
In other recent news, Terreno Realty Corporation has increased its borrowing capacity to $800 million, up from the previous $600 million credit line. This strategic financial restructuring, which extends the maturity of its revolving credit facility to January 2029, was facilitated by a consortium of banks, including KeyBanc Capital Markets and KeyBank National Association. These recent developments provide Terreno Realty with enhanced financial flexibility for potential growth and operational expansion.
In further developments, Barclays has maintained its Overweight rating on Terreno Realty, attributing this to the company’s efficient operations and solid financial foundation, which are seen as advantageous for future property acquisitions. The firm has set a steady price target of $69 for the company.
Contrastingly, Mizuho Securities has downgraded Terreno Realty from Neutral to Underperform, maintaining a price target of $62. This downgrade was accompanied by Mizuho’s projection of a deceleration in Terreno Realty’s total growth, predicting 8-9% funds from operations growth over the next two years. The firm also suggested that Terreno Realty could face an increase in vacancy rates within its sub-markets, potentially impacting its ability to command higher prices. These recent developments present a mixed outlook for Terreno Realty.
InvestingPro Insights
Terreno Realty Corporation’s strong performance in Q3 2024 is further supported by data from InvestingPro. The company’s revenue growth of 15.84% over the last twelve months and 18.5% in Q2 2024 aligns with the reported increases in cash rents and portfolio occupancy. This growth trajectory is particularly impressive given the company’s focus on key coastal markets.
InvestingPro Tips highlight Terreno’s commitment to shareholder value. The company has raised its dividend for 10 consecutive years and maintained dividend payments for 14 years straight. This is consistent with the recently announced 8.9% increase in quarterly dividend mentioned in the article. The dividend yield currently stands at 3.01%, offering a steady income stream for investors.
Despite trading at high valuation multiples, Terreno’s profitability remains strong. With a gross profit margin of 75.12% and an operating income margin of 40.51% in the last twelve months, the company demonstrates efficient management of its industrial real estate portfolio.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. There are 7 more InvestingPro Tips available for Terreno Realty Corporation, providing a deeper understanding of the company’s financial health and market position.
Terreno Realty Corporation (NYSE:TRNO), a major owner and operator of industrial real estate in key U.S. coastal markets, has reported a series of positive operational and financial developments for the third quarter of 2024. The company’s portfolio showed increased occupancy and significant growth in cash rents for new and renewed leases.
As of September 30, 2024, Terreno’s operating portfolio was 97.0% leased, a slight decrease from 98.3% in the previous year but an improvement from 96.0% in the preceding quarter. The same-store portfolio was 97.3% leased, down from 98.4% year-over-year but up from 96.0% in the prior quarter. The company’s improved land portfolio maintained a steady 98.1% occupancy.
The company experienced a 24.1% increase in cash rents on new and renewed leases during the third quarter, with an impressive 40.5% increase year-to-date. Notably, Terreno executed several early lease renewals and new leases with key tenants in California and New Jersey, contributing to a tenant retention ratio of 67.3% for the operating portfolio.
Investment activities included the acquisition of an industrial property in Washington, D.C. for approximately $7.6 million and the completion of a new development in Hialeah, Florida, now fully leased. The company’s year-to-date acquisition totals reached approximately $474.9 million.
In the capital markets, Terreno issued nearly 3 million shares of common stock under its at-the-market equity offering program, raising gross proceeds of $204.5 million. Additionally, the company increased its revolving credit facility borrowing capacity by $200 million to $600 million and extended the term.
Terreno Realty also declared an 8.9% increase in its quarterly dividend, reflecting confidence in its financial position and commitment to shareholder returns.
This information is based on a press release statement from Terreno Realty Corporation, which also noted that the company has no acquisitions under contract but has approximately $7.6 million of acquisitions under letters of intent. These potential acquisitions are subject to satisfactory due diligence and various closing conditions.
Terreno Realty Corporation specializes in acquiring and operating industrial properties in markets including Northern New Jersey/New York City, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. The company is expected to file its quarterly report on Form 10-Q for the quarter ended September 30, 2024, around November 6, 2024.
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