Terreno Realty Corporation
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Terreno Realty Corporation is a REIT which specializes in industrial real estate. Their New York Stock Exchange stock trading symbol is TRNO. It incorporated November 6, 2009. Its Initial Public Offering (IPO) had to be delayed from January 2010 to February 2010.
Terreno buys, owns and manages its portfolio in only six United States coastal markets, which it likes because they have high barriers to entry: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, D.C./Baltimore. They also have other strong advantages because distribute many goods and have large populations.
They focus on acquiring pre-existing properties. They do not invest in land or ground up developments. They are based in San Francisco California. W. Blake Baird is Chairman and Chief Executive Officer, formerly of AMB Property. And so is Michael A. Coke, President and Chief Financial Officer.
Their portfolio includes warehouses (distribution buildings), flex (light industrial and R&D), and trans-shipment.
Terrena Realty Corporation is Still Buying Properties
Terreno Realty is still new. They have issued a lot of press releases in 2010 announcing all the buildings they're buying: in South San Francisco, San Bernadino, Totowa New Jersey, Bound Brook New Jersey, South Brunswick New Jersey, Kent Washington, Union City California Hialeah Florida, and Miami Lakes Florida.
They were a "blind" investment when they had their initial public offering in February 9, 2010. At that time they didn't own any property. This has been surprisingly successful during this economic downtown. Managers with good track records form a new company to buy properties at prices that are much higher than at the 2007 peak. They're taking advantage of the distress of established real estate companies.
They'll be starting out with high value properties acquired on the cheap. Having a management team with a good record is vital to give investors confident they can find and manage profitable commercial real estate. But they can't start buying until they've raised cash through the IPO.
Terreno Realty Own Properties With a Lower Cost Basis Than Older REITs
It appears their first property was two industrial buildings with about 140,000 square feet bought March 26, 2010. They have been buying through this year.
It will be interesting to see how this works. Older REITs are at a disadvantage in today's market because they own property acquired for higher prices.
So long as they can keep tenants occupying their buildings, Terreno Realty Corporation appears to be a new REIT taking advantage of the financial crisis to position themselves with a low-cost but high quality portfolio of industrial properties.
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