Terreno Realty Corporation (TRNO), a real estate investment trust (REIT), has recently declared a first quarter 2012 dividend of 10 cents per share or 40 cents on an annualized basis. The dividend is payable in cash on April 19, 2012 to shareholders of record as on April 5, 2012.
A steady dividend payout facilitates the long-term strategy of Terreno Realty to provide attractive risk-adjusted returns to its stockholders. Investors looking for high dividend yields are increasingly favoring REITs. Solid dividend payouts are arguably the biggest enticement for REIT investors as the U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders.
San Francisco-based Terreno Realty owns and operates industrial real estate properties primarily in six major coastal markets of the U.S. These include the high barrier-to-entry markets of Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington D.C./Baltimore.
Each of the locations in which Terreno Realty has a significant presence is characterized by a well-established transportation network – seaports, airports, highways and railways that are essential for the swift distribution of goods. In addition, available land in these markets is scarce, resulting in steep barriers for the development of new and competing properties.
Over the years, Terreno Realty has resisted from pursuing ground-up development or land investments and instead focused on acquiring high-quality assets. The continuous acquisition binge is also part of the long-term strategy of the company to own functional and flexible buildings in infill locations that can be modified to accommodate single and multiple tenants at discounts to replacement cost.
We have a Neutral rating on Terreno Realty, which presently has a Zacks #2 Rank translating into a short-term Buy rating. We also have a Neutral recommendation and a Zacks #3 Rank (short-term Hold) for Winthrop Realty Trust (FUR), one of the peers of Terreno Realty.
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