Boston, MA 10/07/2014 – According to reports, Terreno Realty Corporation (NYSE:TRNO) has decided to acquire a building in Renton, WA. As per the information, TRNO has paid $10 million for this property. It is one of the major land acquirers and operators of the area. It has industrial properties in six major coastal U.S. markets.
Insights of the matter:
The new property is an industrial distribution building, which contains around 113,000 square feet on 5.1 acres in Renton, WA. Terreno Realty Corporation (NYSE:TRNO) executed the transactions on October 3, 2014. TRNO did not want to pay the entire money from its pocket; therefore, it took a loan of $5.7 million with a fix interest rate method. As per the information, interest rate paid by the company on this loan is 6.06%. The maturity date of this loan is July 2016. The exact location of this property is 3401 Lind Avenue SW, which is right next to 701 SW 34th Street property of Terreno Realty Corporation. It is five miles away from the Sea-Tac International Airport. The entire building is 100% leased out to two tenants.
The building can easily provide four grade-level loading and 11 dock-high positions. As per the analysis of market experts appointed by Terreno Realty Corporation (NYSE:TRNO), its stabilized cap rate is 5.5%. There are different methods to calculate stabilized cap rate, but the most famous among all is the one in which market occupancy is taken into consideration. According to it, annualized cash operating income which is stabilized to market occupancy (normally 95%) is divided by total acquisition cost of the property. Things that are taken into consideration in total acquisition cost include buyer’s due diligence, effects of marking assumed debt to market, initial purchase price, closing costs, leasing costs, etc. Apart from these items, estimated near-term capital expenditures are also taken into consideration at the time of acquisition cost calculation.
