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

Rhea-AI Summary

Terreno Realty Corporation (NYSE:TRNO) reported a strong second quarter of 2022 with 97.9% quarter-end occupancy, an increase from 96.9% in the prior quarter. The cash rents on new and renewed leases rose by 55.4% in Q2. The firm invested $203.3 million in acquisitions and expanded its credit facility by $150 million to $400 million. Additionally, LEED certification was achieved for several properties, enhancing its sustainability profile. Overall, year-to-date acquisitions totaled $309.5 million.

Positive

• 97.9% quarter-end occupancy compared to 96.9% in the previous quarter
• 55.4% increase in cash rents on new and renewed leases
• $203.3 million of acquisitions in Q2; $309.5 million year-to-date
• Increased unsecured credit facility borrowing capacity by $150 million to $400 million
• Achieved LEED certification for three buildings totaling 495,000 square feet

Negative

• 98.0% quarter-end same-store occupancy compared to 98.4% in the previous quarter

• 97.9% quarter-end occupancy compared to prior quarter of 96.9% and prior year of 97.5%
• 98.0% quarter-end same-store occupancy compared to prior quarter of 98.4% and prior year of 97.9%
• 55.4% increase in cash rents on new and renewed leases; 42.8% increase year-to-date
• $203.3 million of acquisitions; $309.5 million year-to-date
• Increased Unsecured Credit Facility Borrowing Capacity by $150 million to $400 million
• LEED certification achieved at 4151 West 108th Street; three buildings totaling 495,000 square feet LEED certified year-to-date

 

BELLEVUE, Wash.--(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 second quarter of 2022.

Operating

As of June 30, 2022, Terreno Realty Corporation owned 249 buildings aggregating approximately 15.1 million square feet and 42 improved land parcels consisting of approximately 147.7 acres. In addition, Terreno Realty Corporation had four properties under redevelopment that upon completion will consist of three buildings aggregating approximately 334,000 square feet and two improved land parcels of approximately 12.1 acres:

• The operating portfolio, excluding two properties under redevelopment, was 97.9% leased at June 30, 2022 to 568 tenants as compared to 96.9% at March 31, 2022 and 97.5% at June 30, 2021;
• The same-store portfolio of approximately 12.4 million square feet was 98.0% leased at June 30, 2022 as compared to 98.4% at March 31, 2022 and 97.9% at June 30, 2021;
• The improved land portfolio of 42 parcels, excluding two parcels under redevelopment, totaling approximately 147.7 acres was 97.0% leased at June 30, 2022 as compared to 94.9% at March 31, 2022 and 98.0% at June 30, 2021;
• Cash rents on new and renewed leases totaling approximately 0.5 million square feet and 7.2 acres of improved land commencing during the second quarter increased approximately 55.4% with a tenant retention ratio of 27.5% for the operating portfolio and 100% for the improved land portfolio. Cash rents on new and renewed leases totaling approximately 1.2 million square feet and 11.3 acres of improved land commencing during the six months ended June 30, 2022 increased approximately 42.8% with a tenant retention ratio of 38.6% for the operating portfolio and 87.4% for the improved land portfolio;
• Executed an early lease renewal for 7.2 acres of improved land in Newark, New Jersey with a manufacturer and direct importer of stone products. The lease, which was to expire in February 2023, will now expire February 2028;
• Executed a full-building lease for approximately 138,000 square feet in Kent, Washington with a third-party logistics provider. The lease commenced June 30, 2022 and expires October 2027;
• Executed a lease for 4.4 acres of improved land in Seattle, Washington with a provider of student transportation. The lease commenced June 30, 2022 and expires July 2025;
• Executed a full-building lease for approximately 117,000 square feet in Kent, Washington with a nationwide building products distributor. The lease commenced June 30, 2022 and expires December 2029; and
• Achieved LEED certification at 4151 West 108th Street in Hialeah, Florida totaling 221,000 square feet. Year-to-date LEED certification has been achieved at three buildings totaling 495,000 square feet.

Investment

During the second quarter of 2022, Terreno Realty Corporation acquired ten properties consisting of ten buildings containing approximately 330,000 square feet and five improved land parcels of approximately 19.5 acres for an aggregate purchase price of approximately $203.3 million. The second quarter investment activity was as follows:

• 14505-14515 NE 91st Street: Two industrial distributions building containing approximately 32,000 square feet on 2.0 acres in Redmond, Washington, between I-405 and SR 520 adjacent to Terreno Realty Corporation’s properties at 8660 and 9045 Willows Road. The property provides 13 grade-level loading positions and parking for 58 cars. The property was acquired 100% leased to one tenant for a purchase price of approximately $9.8 million and an estimated stabilized cap rate of 4.1%;
• 87 Doremus Avenue: One 9.7-acre improved land parcel in Newark, New Jersey, adjacent to Exit 15E of the New Jersey Turnpike and Terreno Realty Corporation’s 85, 127-167 and 147-163 Doremus Avenue and 293 Roanoke Avenue properties. The property was acquired 100% leased to two tenants, one of which is on a short-term basis, for a purchase price of approximately $17.3 million and an estimated stabilized cap rate of 5.3%;
• 3660 Thomas Road: One industrial distribution building containing approximately 135,000 square feet on 6.5 acres in Santa Clara, California, adjacent to US 101. The property provides 13 dock-high and five grade-level loading positions and parking for 91 cars. The property was acquired 100% leased to four tenants, which expire between 2022 and 2027, for a purchase price of approximately $54.6 million and an estimated stabilized cap rate of 2.5%;
• 127-167 and 147-163 Doremus Avenue: One 2.4-acre improved land parcel in Newark, New Jersey, adjacent to Exit 15E of the New Jersey Turnpike and Terreno Realty Corporation’s 85 and 87 Doremus Avenue and 293 Roanoke Avenue properties. The property was acquired 100% leased on a short-term basis to one tenant for a purchase price of approximately $11.9 million and an estimated stabilized cap rate of 6.9%;
• 1160 Fee Ana Street: One 2.1-acre improved land parcel in Anaheim, California, adjacent to CA SR 91 (The Riverside Freeway). The property was acquired vacant for a purchase price of approximately $15.0 million and an estimated stabilized cap rate of 4.7%;
• 332 Hindry Avenue: One industrial distribution building containing approximately 19,000 square feet on 0.9 acres in Inglewood, California, west of I-405 adjacent to Los Angeles International Airport. The property provides 12 dock-high and one grade-level loading positions and parking for 26 cars. The property was acquired 70% leased to one tenant for a purchase price of approximately $9.3 million and an estimated stabilized cap rate of 2.4%;
• 8320-8400 Isis Avenue: One industrial distribution building containing approximately 40,000 square feet on 2.1 acres in Los Angeles, California, west of I-405 adjacent to Los Angeles International Airport. The property provides ten dock-high and six grade-level loading positions and parking for 59 cars. The property was acquired 100% leased to four tenants for a purchase price of approximately $17.9 million and an estimated stabilized cap rate of 3.2%;
• 2953-2999 and 3041-3057 Teagarden Street: Five industrial distribution buildings containing approximately 104,000 square feet on 4.2 acres in San Leandro, California, adjacent to I-880 and Oakland International Airport. The property provides 12 dock-high and eight grade-level loading positions and parking for 119 cars. The property was acquired 100% leased to 13 tenants, all of which expire by 2027, for a purchase price of approximately $34.6 million and an estimated stabilized cap rate of 3.5%;
• 293 Roanoke Avenue: One 1.8-acre improved land parcel in Newark, New Jersey, adjacent to Exit 15E of the New Jersey Turnpike and Terreno Realty Corporation’s 85, 87, 127-167 and 147-163 Doremus Avenue properties. The property was acquired 100% leased to one tenant on a short-term basis for a purchase price of approximately $13.0 million and an estimated stabilized cap rate of 5.4%; and
• 8660 Willows Road: One 3.5-acre improved land parcel in Redmond, Washington, between I-405 and SR 520 and less than one-half mile from Terreno Realty Corporation’s properties at 9045 Willows Road and 14505-14515 NE 91st Street. The property was acquired 38% leased to one tenant for a purchase price of approximately $19.9 million and an estimated stabilized cap rate of 4.3%.

As of June 30, 2022, Terreno Realty Corporation had four properties under redevelopment (NW 73^rd and 4341 West 108th Street in Miami, 245 Paterson Plank Road in Northern New Jersey, and Berryessa Road in San Francisco) that upon completion will consist of three buildings aggregating approximately 334,000 square feet and two improved land parcels of approximately 12.1 acres, with a total expected investment of approximately $106.7 million.

Subsequent to June 30, 2022, Terreno Realty Corporation acquired a property at 8050 NW 90th Street in Medley, Florida. The property consists of one 6.7-acre improved land parcel adjacent to the intersection of the Palmetto Expressway and West Okeechobee Road. The property was acquired vacant for a purchase price of approximately $20.0 million and an estimated stabilized cap rate of 5.6%.

Year-to-date, Terreno Realty Corporation acquired 13 properties consisting of 14 buildings containing approximately 766,000 square feet and seven improved land parcels of approximately 27.4 acres for an aggregate purchase price of $309.5 million.

Terreno Realty Corporation has approximately $58.2 million of acquisitions under contract and approximately $65.5 million of acquisitions under letters of intent. There is no assurance that Terreno Realty Corporation will acquire the properties under contract or letters 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.

During the second quarter of 2022, Terreno Realty Corporation sold one property in New Jersey containing approximately 581,000 square feet for a sale price of approximately $110.4 million generating an unleveraged internal rate of return of approximately 15.2%. The property was acquired by Terreno Realty Corporation in September 2010 for approximately $27.0 million.

Capital Markets

During the second quarter of 2022, Terreno Realty Corporation issued 27,087 shares of common stock with a weighted average offering price of $76.03 per share, receiving gross proceeds of $2.1 million under the Company’s at-the-market equity offering program. Year-to-date through June 30, 2022, Terreno Realty Corporation has issued 27,087 shares of common stock with a weighted average offering price of $76.03 per share, receiving gross proceeds of $2.1 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 second quarter of 2022, Terreno Realty Corporation announced an increase in borrowing capacity under its unsecured revolving credit facility (the “Facility”) by $150 million to $400 million. The balance outstanding on the Facility at June 30, 2022 was approximately $12 million.

Additional information is available on the Company’s website at www.terreno.com. Terreno Realty Corporation expects to file its quarterly report on Form 10-Q for the period ended June 30, 2022 on or about August 3, 2022.

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, the impact of the COVID-19 pandemic on our business, our tenants and the national and local economies, and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2021 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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Terreno Realty Corporation

Jaime Cannon, 415-655-4580

Source: Terreno Realty Corporation

FAQ

What is the current occupancy rate for TRNO as of June 2022?

The current occupancy rate for Terreno Realty Corporation (TRNO) is 97.9% as of June 30, 2022.

How much did TRNO invest in acquisitions during the second quarter of 2022?

Terreno Realty Corporation (TRNO) invested approximately $203.3 million in acquisitions during the second quarter of 2022.

What changes were made to TRNO's unsecured credit facility?

Terreno Realty Corporation (TRNO) increased its unsecured credit facility borrowing capacity by $150 million to $400 million.

What was the increase in cash rents on leases for TRNO in Q2 2022?

Cash rents on new and renewed leases for Terreno Realty Corporation (TRNO) increased by 55.4% in the second quarter of 2022.

How many properties did TRNO acquire year-to-date by June 2022?

By June 30, 2022, Terreno Realty Corporation (TRNO) had acquired 13 properties year-to-date.