Terreno pays $939/sf for a Red Hook waterfront warehouse

Terreno Realty Corp. has paid roughly $26.3 million for the industrial distribution building at 659 Court St. in Red Hook, Brooklyn, Connect CRE first reported. The building totals 28,000 square feet. The seller was not identified, and the tenant, described only as a maritime goods and services provider, was not named.

The property sits on 1.5 acres. It has two grade-level loading positions. Parking is available for 70 cars. The building also carries riparian access — water frontage — and is fully leased. The estimated stabilized cap rate on the deal is 5.2 percent.

Terreno, based in Bellevue, Washington, owns and operates industrial properties in six coastal U.S. markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. Its New York/New Jersey portfolio now has 69 buildings, the largest of the six by building count, according to the report. The portfolio totals nearly 3.6 million square feet. At 28,000 square feet, the Red Hook building is well below the portfolio average. That average is roughly 52,000 square feet per property.

Neither the seller nor the tenant is named, so the public record holds only the numbers. The price is about $939 per square foot. The stabilized cap rate is an estimated 5.2 percent on a fully leased building with water frontage. On an acre, that price is about $17.5 million. At that cap rate, net operating income comes to roughly $1.37 million.

Investors will carry these numbers into the next Brooklyn industrial negotiation, and the next Red Hook waterfront trade will be priced against them. The premium is the water access and the fully leased maritime use — easy to identify, hard to replicate.