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Terreno Realty Corporation Announces Quarterly Operating, Investment and Capital Markets Activity

  • 96.8% quarter-end occupancy compared to prior quarter of 97.2% and prior year of 98.4%
  • 98.4% quarter-end same-store occupancy compared to prior quarter of 99.0% and prior year of 99.1%
  • 15.3% increase in cash rents on new and renewed leases; 17.3% increase for the full year 2019
  • $21.6 million of acquisitions during the fourth quarter; full year 2019 acquisitions of $273.6 million
  • 241,875 shares of common stock issued under ATM during the fourth quarter for gross proceeds of $13.7 million; 6,064,576 shares of common stock issued in the full year of 2019 for gross proceeds of $278.1 million
  • Closed private placement of $100 million of senior unsecured notes with a ten-year term at 3.14%

Terreno Realty Corporation (NYSE:TRNO), an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, announced today its operating, investment and capital markets activity for the fourth quarter and full year of 2019.

Operating

As of December 31, 2019, Terreno Realty Corporation owned 220 buildings aggregating approximately 13.3 million square feet and 19 improved land parcels consisting of approximately 77.6 acres. In addition, Terreno Realty Corporation had four properties under redevelopment that upon completion will contain approximately 505,000 square feet:

  • The operating portfolio, excluding four properties under redevelopment, was 96.8% leased at December 31, 2019 to 493 tenants as compared to 97.2% at September 30, 2019 and 98.4% at December 31, 2018;
  • The same-store portfolio of approximately 11.8 million square feet was 98.4% leased at December 31, 2019 as compared to 99.0% at September 30, 2019 and 99.1% at December 31, 2018;
  • The improved land portfolio of 19 parcels totaling approximately 77.6 acres was 92.0% leased at December 31, 2019 as compared to 93.2% at September 30, 2019 and 76.5% at December 31, 2018; and
  • Cash rents on new and renewed leases totaling approximately 0.5 million square feet commencing during the fourth quarter increased approximately 15.3%. Cash rents on new and renewed leases totaling approximately 2.4 million square feet commencing during the full year ended December 31, 2019 increased approximately 17.3%.

Investment

During the fourth quarter of 2019, Terreno Realty Corporation acquired three industrial properties consisting of 2 buildings containing approximately 91,000 square feet and one improved land parcel containing approximately 0.9 acres for an aggregate purchase price of approximately $21.6 million. The fourth quarter investment activity was as follows:

  • 917 Valley Avenue NW: One industrial building containing approximately 41,000 square feet on 2.3 acres in Puyallup, Washington. The property is less than four miles from the Port of Tacoma and provides ten dock-high and four grade-level loading positions, and parking for 50 cars. The property was acquired 100% leased to two tenants for a purchase price of approximately $6.7 million with an estimated stabilized cap rate of 5.4%;
  • 46 Whelan Road: One industrial building containing approximately 50,000 square feet on 3.5 acres in East Rutherford, New Jersey. The property is less than two miles west of the Meadowlands Sports Complex and Exit 16W of the New Jersey Turnpike, provides seven dock-high and one grade-level loading positions, parking for 38 cars, and 30-foot clear height. The property is 100% leased to one tenant on a short-term basis and was acquired for a purchase price of approximately $12.0 million with an estimated stabilized cap rate of 5.0%; and
  • 5200 East Marginal Way South: One improved land parcel of approximately 0.9 acres immediately adjacent to Terreno Realty Corporation’s property at 53 South Dawson and Seattle’s Port and SoDo District. The property was acquired vacant for a purchase price of approximately $2.9 million with an estimated stabilized cap rate of 5.6%.

Terreno Realty Corporation’s acquisition activity for the full year 2019 included 13 industrial properties consisting of 17 buildings containing approximately 699,000 square feet and four improved land parcels totaling approximately 22.6 acres for an aggregate purchase price of approximately $273.6 million.

As of December 31, 2019, Terreno Realty Corporation had four properties under redevelopment (SoDo Row North, SoDo Row South, 6th Avenue South, and Kent 192, all in Seattle) that upon completion will contain approximately 505,000 square feet with a total expected investment of approximately $120 million.

During the fourth quarter of 2019, Terreno Realty Corporation sold one 97,000 square foot industrial R&D building in Annapolis Junction, Maryland for approximately $15.0 million generating an unleveraged internal rate of return of approximately 7.6%, and one 88,000 square foot industrial building in Jessup, Maryland for approximately $7.5 million generating an unleveraged internal rate of return of approximately 7.5%. For the full year 2019, Terreno Realty Corporation sold four properties containing an aggregate 382,000 square feet for approximately $48.9 million generating an unleveraged internal rate of return of approximately 8.6%.

Terreno Realty Corporation has one acquisition of approximately $18.0 million under letter of intent comprising approximately 66,000 square feet. There is no assurance that Terreno Realty Corporation will acquire the property under letter of intent because the proposed acquisition is subject to the completion of a contract and satisfactory due diligence and closing conditions.

Capital Markets

During the fourth quarter of 2019, Terreno Realty Corporation issued 241,875 shares of common stock with a weighted average offering price of $56.61 per share, receiving gross proceeds of $13.7 million under the Company’s at-the-market equity offering program. For the full year 2019, Terreno Realty Corporation issued 6,064,576 shares of common stock with a weighted average offering price of $45.85 per share, receiving gross proceeds of $278.1 million under the Company’s at-the-market equity offering program. Terreno Realty Corporation did not repurchase any shares of common stock pursuant to the Company’s share repurchase authorization.

During the fourth quarter of 2019, Terreno Realty Corporation closed on the private placement of $100 million of senior unsecured notes with a ten-year term that bears interest at a fixed annual rate of 3.14%. The Company used the proceeds to repay a $50 million term loan with a 2021 maturity and, subsequent to December 31, 2019, a $32 million mortgage loan with a 2020 maturity.

Additional information is available on the Company’s website at www.terreno.com. Terreno Realty Corporation expects to file its annual report on Form 10-K for the period ended December 31, 2019 on or about February 6, 2020.

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. We caution investors that forward-looking statements are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "result," "should," "will," "seek," "target," "see," "likely," "position," "opportunity," "outlook," and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2018 and our other public filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

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Contacts

Terreno Realty Corporation
W. Blake Baird or Michael A. Coke, 415-655-4580