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

Rhea-AI Summary

Terreno Realty Corporation (NYSE:TRNO) reported its Q1 2021 operational and financial activities. As of March 31, the company owned 228 buildings totaling 13.7 million square feet and 25 land parcels. The operating portfolio was 96.1% leased, down from 97.8% in Q4 2020. The company acquired four properties for approximately $110.1 million. Following the quarter, TRNO secured a 5.8-acre land parcel for redevelopment. Additionally, it raised $41.1 million through an equity offering, ending Q1 with $29 million in cash and no debt maturities for 2021.

Positive

• Acquired four industrial properties for approximately $110.1 million, enhancing the portfolio.
• Cash rents on new and renewed leases increased by approximately 16.0%.
• Raised $41.1 million through an equity offering, strengthening cash reserves.

Negative

• Operating portfolio occupancy decreased to 96.1%, down from 97.8% in the prior quarter.
• Total acquisition under contract and letter of intent remains uncertain and subject to due diligence.

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 first quarter of 2021.

Operating

As of March 31, 2021, Terreno Realty Corporation owned 228 buildings aggregating approximately 13.7 million square feet and 25 improved land parcels consisting of approximately 92.5 acres. In addition, Terreno Realty Corporation had two properties under redevelopment that upon completion will contain approximately 286,000 square feet:

• The operating portfolio, excluding two properties under redevelopment, was 96.1% leased at March 31, 2021 to 519 tenants as compared to 97.8% at December 31, 2020 and 97.8% at March 31, 2020. The decline in occupancy as compared to the prior quarter was driven primarily by acquired vacancy of 202,000 square feet (approximately 140bps);
• The same-store portfolio of approximately 12.7 million square feet was 97.4% leased at March 31, 2021 as compared to 97.8% at December 31, 2020 and 97.0% at March 31, 2020;
• The improved land portfolio of 25 parcels totaling approximately 92.5 acres was 97.9% leased at March 31, 2021 as compared to 98.6% at December 31, 2020 and 96.7% at March 31, 2020;
• Cash rents on new and renewed leases totaling approximately 0.3 million square feet commencing during the first quarter increased approximately 16.0% with a tenant retention ratio of 82.3%; and
• Executed a 94,000 square foot lease with a biopharmaceutical company in Union City, California that will commence May 1, 2021 and expire July 31, 2031. The space was leased through March 31, 2021 to a logistics provider.

Investment

During the first quarter of 2021, Terreno Realty Corporation acquired four industrial properties consisting of seven buildings containing approximately 529,000 square feet for an aggregate purchase price of approximately $110.1 million. The first quarter investment activity was as follows:

• 2002-2150 Edison Avenue: Three industrial distribution buildings totaling approximately 112,000 square feet on 7.8 acres in San Leandro, California, adjacent to Terreno Realty Corporation’s three-building Whitney Street portfolio. The property provides 25 dock-high and 17 grade-level loading positions and parking for 152 cars. The property was acquired 100% leased to 13 tenants, all of which expire by June 2023, for a purchase price of approximately $17.6 million and an estimated stabilized cap rate of 5.6%;
• 4021-4071 West 108^th Street: Two recently developed rear-load 32-foot clear industrial distribution buildings containing approximately 274,000 square feet on 15.9 acres in Hialeah, Florida, adjacent to Florida’s Turnpike and the southern terminus of I-75. The property provides 92 dock-high and four grade-level loading positions, parking for 287 cars, and is expected to obtain LEED certification. The property is 100% pre-leased to five tenants with leases that will commence between March and July 2021. The property was acquired for a purchase price of approximately $48.1 million, net of free-rent credits, and an estimated stabilized cap rate of 3.7%;
• 10822-10856 117th Place NE: One industrial distribution building containing approximately 127,000 square feet on 7.2 acres in Kirkland, Washington, adjacent to I-405. The property provides 20 dock-high and seven grade-level loading positions and parking for 252 cars. The property was acquired 100% leased to five tenants, all of which expire by December 2026, for a purchase price of approximately $33.8 million and an estimated stabilized cap rate of 2.9%; and
• 256 Paterson Plank: One 16,000 square foot transshipment building on 4.3 acres in Carlstadt, New Jersey. The property is adjacent to Exit 16W of the New Jersey Turnpike and the Meadowlands Sports Complex, provides 33 dock-high and one grade-level loading positions and parking for 38 cars. The property was acquired vacant for a purchase price of approximately $10.6 million and an estimated stabilized cap rate of 5.2%.

Subsequent to March 31, 2021, Terreno Realty Corporation acquired one 5.8-acre improved land parcel in Miami, Florida for approximately $5.8 million. This improved land parcel will be redeveloped into two LEED-certified industrial distribution buildings totaling 129,000 square feet for a total expected investment of approximately $20.0 million and an estimated stabilized cap rate of 5.1%.

As of March 31, 2021, Terreno Realty Corporation had two properties under redevelopment (SoDo Row in Seattle, and America’s Gateway 5 in Miami) that upon completion will contain approximately 286,000 square feet with a total expected investment of approximately $71.5 million.

Terreno Realty Corporation has approximately $41.5 million of acquisitions under contract and approximately $78.4 million of acquisitions under letter of intent. There is no assurance that Terreno Realty Corporation will acquire 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 first quarter of 2021, Terreno Realty Corporation issued 706,524 shares of common stock with a weighted average offering price of $58.20 per share, receiving gross proceeds of $41.1 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. As of March 31, 2021, the Company had a cash balance of approximately $29 million, no balance outstanding on its $250 million revolving credit facility, and no 2021 debt maturities.

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 March 31, 2021 on or about May 5, 2021.

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, 2020 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210408005878/en/

FAQ

What are the Q1 2021 results for Terreno Realty Corporation (TRNO)?

Terreno Realty's Q1 2021 results show an operating portfolio leased at 96.1%, down from 97.8% in Q4 2020, and four acquisitions totaling $110.1 million.

How much did Terreno Realty Corporation (TRNO) raise through its equity offering in Q1 2021?

Terreno Realty raised $41.1 million through an equity offering during Q1 2021.

What is the current cash position of Terreno Realty Corporation (TRNO)?

As of March 31, 2021, Terreno Realty had approximately $29 million in cash and no debt maturities for 2021.

How many properties does Terreno Realty Corporation (TRNO) own as of Q1 2021?

Terreno Realty Corporation owned 228 buildings totaling approximately 13.7 million square feet as of March 31, 2021.

What percentage of Terreno Realty Corporation (TRNO)'s improved land portfolio is leased?

As of March 31, 2021, Terreno's improved land portfolio was 97.9% leased.