Terreno Realty Completes Santa Ana Redevelopment: A Strategic Pivot in Orange County

Terreno Realty Corporation (NYSE:TRNO) has successfully completed the redevelopment of a property in Santa Ana, California, transforming three multi-tenant office buildings into a 92,000 square foot rear-load industrial distribution building. The strategic pivot capitalizes on key market trends, positioning the property as a high-utility industrial facility in a supply-constrained market.

The redeveloped property, located at 1720 East Garry Avenue, is now LEED Silver certified, featuring ten dock-high and two grade-level loading positions, along with parking for 145 cars. The total investment amounted to $41.3 million, with an estimated stabilized cap rate of 5.1%. The property is fully leased to a provider of temperature-controlled life sciences supply chain solutions, further enhancing its long-term value proposition.

The strategic significance of the property's location within two miles of I-405 and CA-55 intersection cannot be overstated. This proximity provides important last-mile delivery access, enabling tenants to efficiently serve their customers in the surrounding area. Additionally, the location near the John Wayne Airport offers access to air cargo services, further enhancing the property's value as a logistics hub. The prime coastal market positioning, coupled with the defensive positioning in the growing life sciences sector, contributes to the asset's value proposition.

The LEED Silver certification of the redeveloped property is expected to reduce operating costs by 25-30% compared to conventional buildings. This certification not only enhances the property's long-term value but also offers potential environmental benefits, such as reduced energy consumption, water savings, and lower greenhouse gas emissions.

In conclusion, Terreno Realty Corporation's redevelopment project in Santa Ana, California, represents a strategic pivot that capitalizes on key market trends. The conversion of multi-tenant office buildings to industrial space, the property's strategic location, and the LEED Silver certification all contribute to the asset's value proposition. As the demand for industrial real estate continues to grow, driven by e-commerce and the need for last-mile delivery facilities, this redevelopment project positions Terreno Realty Corporation to capitalize on these trends and create significant value for its stakeholders.