Terreno Realty Makes $233M Acquisition of Woodinville Industrial Portfolio
Terreno Realty Corp. has acquired nine industrial distribution buildings in Woodinville, Washington, for $232.6 million, while announcing its intent to purchase more properties.
The assets on Woodinville-Redmond Road take up roughly 720,000 square feet on 42.8 acres. The buildings are occupied by 26 tenants, and are 91 percent leased.
Also, Terreno noted that these properties are a part of a larger multi-market portfolio that includes two additional industrial buildings — one in Miami and the other in Northern New Jersey. Terreno anticipates striking a deal to acquire the two buildings in September, which would take the total price for the entire portfolio up to a forecasted $426.9 million, which is calculated based on factors including the initial purchase price, closing costs, buyer's diligence, leasing costs, short-term capital expenditures and assumed debt to the market.
The Bellevue, Washington-based firm estimates that the stabilized cap rate for the entire portfolio is five percent.
"Estimated stabilized cap rates are calculated as annualized cash basis net operating income stabilized to market occupancy (generally 95%) divided by total acquisition cost," Terreno explained.
The Woodinville adds to Terreno's Seattle holdings, where it currently manages 44 buildings spanning over 2.7 million square feet, with occupancy averaging 97.6 percent.
Moreover, the company operates industrial assets in New York City, Los Angeles, the San Francisco Bay Area and Washington, D.C.
As for industrial as a whole, the market is in a period of disruption, led by a slowdown of construction and shifting patterns in leasing and occupancy, a recent report from CBRE highlights. As a result, CBRE expects industrial net absorption to hit its lowest levels since 2010.
Source: GlobeSt/ALM