Use Transmit 5 to open in iTerm (instead of Terminal.app) as mentioned here https://library.panic.com/transmit5/open-in-terminal/

TransmitOpenTerminal.txt

on openTerminal(location, remoteHost, serverPort)
	
	tell application "System Events"
		-- some versions might identify as "iTerm2" instead of "iTerm"
		set isRunning to (exists (processes where name is "iTerm")) or (exists (processes where name is "iTerm2"))
	end tell
	
	tell application "iTerm"
		activate
		set targetTab to ""
		set sshCommand to ""

		if ((count of remoteHost) is greater than 0) then
			set cdCommand to "cd " & location
			set sshCommand to "ssh " & remoteHost
		else
			set cdCommand to "standalone"
		end if

		if (serverPort is greater than 0) then
			set sshCommand to sshCommand & " -p " & serverPort
		end if

		set command to sshCommand

		set hasNoWindows to ((count of windows) is 0)
		if isRunning and hasNoWindows then
			create window with default profile
		end if
		select first window
		
		tell the first window
			if isRunning and hasNoWindows is false then
				create tab with default profile
			end if
			if ((count of sshCommand) is greater than 0) then
				tell current session to write text sshCommand
				tell current session to write text cdCommand
		end if

		end tell
	end tell

end openTerminal