Industrial real estate is one of the hottest commercial real estate subsectors right now, fueled by overwhelming demand from e-commerce and logistics companies. In this Fool Live video clip, recorded on Jan. 24, Fool.com contributors Marc Rapport and Matt Frankel discuss why Terreno Realty (TRNO 2.16%) could be a big winner of this trend.
Marc Rapport: Terreno is an interesting company. There are small fairly small there an industrial REIT. They own like last-mile properties, a lot of small warehouses, vacant land and infill properties in six major markets, all coastal markets on both sides of the country. They've been buying properties like crazy for $7 million, $14 million a pop. They've got a lot of clients that are using them for final mile delivery. I think it's still early solid company. Their stock got really run out. Do the latter part of there's really two most of 2021 and year-to-date. While in 2021, I went up 46% year-to-date. It's now down 15%. The only reason I put it last is its fees pretty high for a read and it's $73. I still think that the stock could go down. Could still go down. If you'd like that, maybe we could put up.
Matt Frankel: I put up a chart of Terreno on the screen.
Rapport: You could see here that where they were last April, look at the run-up from October to the start of the year, was really pretty dramatic. I should have sold at the top.
Frankel: Industrial real estate is one of the hottest real estate sectors in the market right now. It's essentially sold out. Which is a term you don't usually use with a whole commercial real estate sector. The pandemic just exploded demand for warehouse space. Companies like Amazon (AMZN 1.80%), all these e-commerce places need a lot of fulfillment space. With the labor shortage and supply chain disruptions like shortage of materials, they just haven't been able to build them fast enough. Which is why you saw that giant run up toward the end of the year when the supply chain disruptions really started kicking in.
Rapport: It did, and this one ran up more than a lot of. The reason I just ranked are pretty low right now. Because I really do feel it could still get back a lot of its share price. I intend to hold on to it. I think they've got a really good business model.
