INVESTOR RELATIONS

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

Company Release - 1/10/2019 4:05 PM ET
  • 98.4% quarter end occupancy compared to prior quarter of 98.5% and prior year of 97.3%
  • 99.1% quarter end same store occupancy compared to prior quarter of 98.9% and prior year of 98.1%
  • 28.5% increase in cash rents on new and renewed leases for the quarter; 19.2% increase for the full year 2018
  • $52.2 million of acquisitions during the quarter; full year 2018 investments of $274.5 million including one $55 million secured loan
  • Sold two properties for approximately $37.5 million during the quarter; full year 2018 dispositions of $82.1 million
  • 1,877,639 shares of common stock issued under ATM during the fourth quarter for gross proceeds of $73.1 million; 5,492,707 shares of common stock issued under ATM during the full year 2018 for gross proceeds of $208.9 million

SAN FRANCISCO--(BUSINESS WIRE)-- 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 2018.

Operating

As of December 31, 2018, Terreno Realty Corporation owned 205 buildings aggregating approximately 12.8 million square feet and 16 improved land parcels consisting of 55.2 acres. In addition, Terreno Realty Corporation had five properties under redevelopment that upon completion will contain approximately 671,000 square feet with a total expected investment of $136.3 million, including redevelopment costs, leasing costs, and capitalized interest of approximately $49.9 million:

  • The operating portfolio, excluding five properties under redevelopment, was 98.4% leased to 454 tenants as compared to 98.5% at September 30, 2018 and 97.3% at December 31, 2017;
  • The same store portfolio of approximately 10.4 million square feet was 99.1% leased at December 31, 2018 as compared to 98.9% at September 30, 2018 and 98.1% at December 31, 2017;
  • The improved land portfolio of 16 parcels totaling approximately 55.2 acres was 76.5% leased at December 31, 2018 as compared to 73.6% at September 30, 2018 and 78.0% at December 31, 2017;
  • Cash rents on new and renewed leases totaling approximately 0.2 million square feet commencing during the fourth quarter increased approximately 28.5%. Cash rents on new and renewed leases totaling approximately 1.4 million square feet commencing during the full year ended December 31, 2018 increased approximately 19.2%; and
  • Executed a 10-year lease with a leading e-commerce firm stabilizing an 83,000 square foot redevelopment property in Woodside Queens, New York. The total expected investment cost was approximately $32.1 million with an estimated stabilized cap rate of 6.3%.

Investment

During the fourth quarter of 2018, Terreno Realty Corporation acquired six industrial properties consisting of four buildings containing approximately 164,000 square feet and three improved land parcels totaling approximately 15.0 acres for an aggregate purchase price of approximately $52.2 million. The fourth quarter investment activity was as follows:

  • 130 Commerce: One industrial distribution building containing approximately 24,000 square feet on 1.2 acres less than two miles from the Meadowlands Sports Complex and Exit 16W of the New Jersey Turnpike in Carlstadt, New Jersey. The property provides four dock-high and one grade-level loading positions and parking for 20 cars. The purchase price was approximately $3.5 million and the property is 100% leased to one tenant with an estimated stabilized cap rate of 5.2%;
  • Kent 192: One improved land parcel of approximately 12.7 acres adjacent to Washington State Route 167 in Kent, Washington. The site is under development and upon completion will be one 220,000 square foot rear-load industrial distribution building with 47 dock-high and two grade-level loading positions, 36-foot clear height, and parking for 137 cars and 30 trailers. The property was purchased for approximately $12.4 million with a total expected investment of $33.9 million and estimated stabilized cap rate of 5.6%;
  • 2200 6th Ave: One industrial distribution building containing approximately 50,000 square feet on 1.7 acres two miles from downtown Seattle adjacent to Seattle’s Port and SoDo district in Seattle, Washington. The property provides nine dock-high loading positions and parking for seven cars. The property was purchased for approximately $12.6 million and is 100% leased through February 2019. The property will be redeveloped with a total expected investment of $15.3 million and estimated stabilized cap rate of 5.1%;
  • 1100 W Walnut: One industrial distribution building containing approximately 60,000 square feet on 2.8 acres adjacent to CA Route 91 (Artesia Freeway) between Los Angeles International Airport and the Ports of LA and Long Beach in Compton, California. The property provides six dock-high and one grade-level loading positions, parking for 40 cars, and is 38% leased to one tenant on a short-term basis. The property was purchased for approximately $11.1 million with an estimated stabilized cap rate of 4.8%;
  • 10918-10936 Shoemaker Ave: Two improved land parcels totaling approximately 2.3 acres located east of the intersection of I-5 and I-605 in Santa Fe Springs, California. The property was purchased for $6.4 million and is 100% leased to two tenants with an estimated stabilized cap rate of 5.4%; and
  • 45897 Hotchkiss: One industrial distribution building containing approximately 29,000 square feet on 1.5 acres between Interstates 880 and 680 and immediately adjacent to Terreno Realty Corporation’s 45861 Hotchkiss Street property in Fremont, California. The property provides four dock-high and two grade-level loading positions, parking for 54 cars, and is 42% leased to one tenant. The property was purchased for approximately $6.2 million with an estimated stabilized cap rate of 5.2%.

Terreno Realty Corporation’s investment activity for the full year 2018 included 15 industrial properties consisting of 17 buildings with approximately 1.0 million square feet and six improved land parcels of approximately 19.8 acres for an aggregate purchase price of approximately $219.5 million, and one senior secured loan of $55.0 million.

During the fourth quarter of 2018, Terreno Realty Corporation sold one 25,000 square foot light industrial building in Miami, Florida for approximately $4.3 million generating an unleveraged internal rate of return of approximately 14.3%, and one 266,000 square foot industrial distribution building in Fontana, California for approximately $33.2 million generating an unleveraged internal rate of return of approximately 14.5%. For the full year 2018, Terreno Realty Corporation sold four properties containing an aggregate 731,000 square feet for approximately $82.1 million generating an unleveraged internal rate of return of approximately 11.6%.

Terreno Realty Corporation has approximately $49.1 million of acquisitions under contract comprising approximately 16,400 square feet and one improved land parcel of approximately 16.8 acres, and approximately $39.4 million of acquisitions under letter of intent comprising approximately 140,000 square feet. There is no assurance that Terreno Realty Corporation will acquire the properties under contract or letter of intent because the proposed acquisitions are subject to the completion of satisfactory due diligence, closing conditions and, in the case of letters of intent, contracts.

Capital Markets

During the fourth quarter of 2018, Terreno Realty Corporation issued 1,877,639 shares of common stock with a weighted average offering price of $38.92 per share, receiving gross proceeds of $73.1 million under the Company’s at-the-market equity offering program. For the full year 2018, Terreno Realty Corporation issued 5,492,707 shares of common stock with a weighted average offering price of $38.04 per share, receiving gross proceeds of $208.9 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.

On October 19, 2018, Terreno Realty Corporation closed a $400 million amended and restated senior unsecured credit facility to replace its existing $350 million senior unsecured credit facility. Interest rates on the senior unsecured credit facility depend on Terreno Realty Corporation’s total debt as a percentage of total asset value as defined by the facility. Additional highlights are as follows:

  • $250 Million Revolving Credit Facility. The unsecured revolving credit facility was increased from $200 million to $250 million and the maturity was extended approximately two years to October 2022. The new current interest rate on the unsecured revolving credit facility decreased to LIBOR plus 1.05% and a facility fee of 15 basis points (previously 1.35% plus an unused fee of 20 basis points); and
  • $150 Million Term Loans. The new interest rate on the outstanding unsecured term loans decreased to LIBOR plus 1.20% currently, a reduction of 10 basis points. The maturity dates of the outstanding term loans are unchanged.

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, 2018 on or about February 6, 2019.

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, 2017 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.

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

Source: Terreno Realty Corporation