Terreno Picks Up Newark Industrial Asset for $6M
- May 10, 2018
Terreno Realty Corp. has acquired an industrial property located in Newark, N.J., for approximately $6.3 million. The company funded the purchase with a $55 million senior secured loan.
Located at 85 Doremus Ave., the property also consists of an improved land parcel of roughly 3.5 acres and is currently 100 percent leased to Hertz. The facility is adjacent to Exit 15E of the New Jersey Turnpike and has an estimated stabilized cap rate of 5.1 percent.
The acquisition loan has a two-year term and an interest rate of 8.0 percent. It is secured by a portfolio of nine improved parcels mostly located in the New Jersey cities of Newark and Kearny. According to the terms of the loan, Terreno has the option to utilize one of the properties from the portfolio as partial payment for the mortgage. The recently acquired property and two others may be put as partial or full payment of the loan.
In March, Terreno Realty Corp. acquired a 235,000-square-foot industrial property in southern Seattle from a group of private investors and plans to renovate the property. The building traded for $34 million, public records show.
The Jersey industrial scene
According to JLL’s first-quarter Industrial Insight report in 2018, overwhelming demand for logistics space since 2013 has caused the state to see its lowest level of availability in its most recent quarter. Statewide, there are just four existing and under construction Class A and B properties that could offer at least 500,000 square feet. As a result, tenants in the area should expect to pay a premium as prices are expected to reach a high watermark in the next several months.
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