Fitch Ratings upgraded the long-term issuer default ratings of Terreno Realty Corp. and its Terreno Realty LLC subsidiary to BBB from BBB-, with a stable outlook.
The industrial real estate investment trust's portfolio concentration in strong markets, transparent operating strategy and strong credit metrics are some of the factors supporting the rating upgrade.
Fitch expects the REIT's leverage to remain within the 4x-5x range through 2021. The company's leverage was 4.9x for the trailing 12 months ended Sept. 30, 2018, suitable for the BBB rating, according to Fitch.
The outlook reflects the rating agency's expectation that Terreno Realty Corp.'s credit metrics will remain consistent with its BBB rating over the two-year outlook period given the company's asset concentration and limited seasoning.