Terreno Realty acquires $16m industrial property in Queens to boost NYC logistics footprint

Terreno Realty Corporation (NYSE: TRNO), a real estate investment trust (REIT) specializing in industrial properties across six major U.S. coastal markets, has acquired a logistics asset in Long Island City, Queens, New York, for approximately $16.0 million. The acquisition, finalized on June 18, 2025, adds a 36,000-square-foot distribution facility to the company’s high-demand urban real estate portfolio. The fully leased property is located at 11-40 Borden Avenue, near the entrance of the Queens-Midtown Tunnel and Pulaski Bridge, offering strategic access to critical transportation routes and dense population centers.

Terreno Realty Corporation’s move aligns with its ongoing strategy of acquiring urban last-mile logistics assets in supply-constrained markets, which has become an increasingly competitive segment in the post-pandemic real estate cycle. The acquisition also reinforces the REIT’s confidence in the New York City industrial corridor, one of the most expensive and tightly held logistics markets in the United States.

Why is Terreno Realty Corporation investing $16 million in Long Island City’s industrial logistics real estate market?

The Queens acquisition demonstrates Terreno Realty Corporation’s continued pursuit of urban logistics assets with stabilized income and high proximity to transportation infrastructure. The Borden Avenue property comprises one industrial distribution building on a 1.0-acre plot, with two dock-high and one van-level loading positions. It is 100% leased through May 2028 to an insulation distribution tenant, providing medium-term rental income security.

The estimated stabilized capitalization rate (cap rate) is 3.9%, based on annualized cash basis net operating income adjusted to market occupancy levels, which Terreno typically estimates at 95%. This cap rate reflects both the prime location and the growing competition for urban logistics properties among institutional buyers.

The company has stated that the total acquisition cost includes more than just the purchase price. It encompasses buyer’s due diligence expenses, transaction closing costs, short-term capital and leasing expenditures, and any adjustments related to marking assumed debt to market. This comprehensive approach ensures a stabilized return calculation that aligns with institutional underwriting standards.

How does this acquisition fit Terreno Realty Corporation’s broader coastal market strategy across the United States?

Terreno Realty Corporation focuses exclusively on six key coastal markets in the U.S.: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. These metros represent major logistics hubs with strong e-commerce demand, limited land availability, and high barriers to new construction—factors that combine to preserve long-term asset value and drive up rental growth.

The Long Island City site stands out due to its logistical connectivity and infill location, which is ideal for last-mile delivery. Demand for such assets has increased significantly in the aftermath of the COVID-19 pandemic, driven by accelerated adoption of e-commerce and heightened expectations for rapid delivery in urban settings.

Historically, Terreno Realty Corporation has shown discipline in deploying capital towards properties that already generate income or can be quickly stabilized. This approach minimizes vacancy risk and enhances predictability for REIT investors.

What are institutional investors and analysts saying about Terreno Realty Corporation’s current strategy in logistics-focused urban real estate?

Institutional sentiment around Terreno Realty Corporation remains constructive, particularly given its focused mandate on high-density urban logistics, which has outperformed other industrial subsectors in terms of rental rate growth and tenant retention. Analysts view the REIT’s recent acquisitions as aligned with an overarching trend toward asset aggregation in last-mile logistics, especially as large e-commerce and retail operators shift to decentralized fulfillment models.

With New York City industrial vacancy rates trending below 2% in core submarkets like Queens and Brooklyn, investors believe that assets like the Borden Avenue property offer strong downside protection and inflation-resistant cash flow. Additionally, leasing through 2028 ensures short-term stability while leaving upside potential for rental rate renegotiation.

The 3.9% cap rate—while lower than suburban industrial yields—reflects the scarcity premium attached to urban land and is consistent with Terreno’s prior urban acquisitions.

What makes this Long Island City property especially valuable in the competitive logistics investment landscape?

The Long Island City property is distinguished by its central location, which sits adjacent to key regional infrastructure like the Queens-Midtown Tunnel and the Pulaski Bridge. This allows tenants to access Manhattan, Brooklyn, and Long Island within minutes, supporting same-day and next-day delivery capabilities. The configuration of dock-high and van-level loading doors makes the facility adaptable to multiple distribution and light manufacturing uses.

Urban infill locations with these logistical advantages are increasingly rare due to restrictive zoning, high land costs, and community resistance to industrial development. By securing such a facility with a lease in place, Terreno Realty Corporation mitigates entitlement risk and positions itself for strong capital appreciation.

Real estate observers note that the site’s location could also support higher redevelopment value in the long term, depending on city planning trends and industrial-to-mixed-use conversions, although Terreno has not publicly indicated such intentions.

What is the long-term outlook for Terreno Realty Corporation’s expansion in urban logistics assets?

Looking forward, analysts expect Terreno Realty Corporation to continue acquiring stabilized or near-stabilized urban industrial assets, particularly those with existing leases that provide initial yield alongside potential for re-leasing at higher rates. The REIT’s acquisition discipline and market-specific focus offer predictable cash flow for yield-oriented investors while providing exposure to long-term asset value growth.

In addition to its coastal strategy, Terreno has historically focused on modest leverage and conservative underwriting, both of which remain appealing in a macroeconomic environment characterized by rising interest rates and credit tightening. Its recent investments, including the Long Island City property, indicate that the REIT is still finding attractive opportunities despite increased competition for core industrial real estate.

Future acquisitions may continue to prioritize urban proximity and tenant mix resiliency, ensuring that properties are aligned with high-demand sectors such as third-party logistics, construction materials, and cold storage. Institutional investors anticipate further asset purchases in the $15–$25 million range, similar to the Borden Avenue transaction.

Will Terreno Realty Corporation face any headwinds from the broader real estate investment climate?

Although industrial real estate remains among the strongest-performing commercial real estate segments, there are still potential headwinds that could affect future acquisition activity. These include rising borrowing costs, declining transaction volume, and a tightening supply of available assets in gateway markets.

However, Terreno Realty Corporation’s strategy of acquiring income-producing properties in supply-constrained markets positions it favorably compared to REITs with exposure to development or speculative leasing. With inflationary pressures pushing up replacement costs, existing industrial assets in prime locations are likely to retain a pricing premium.

Institutional investors believe that REITs like Terreno, with operational agility and a long-term hold philosophy, will continue to outperform peers that rely on greenfield development or capital recycling through asset sales.