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

Rhea-AI Summary

Terreno Realty Corporation (NYSE:TRNO) reported strong first-quarter 2022 results with a quarter-end occupancy of 96.9% and same-store occupancy of 98.4%, reflecting an increase from the previous quarter and year. The company achieved a 34.8% rise in cash rents on new and renewed leases and a tenant retention ratio of 47.7%. They completed the Americas Gateway 5 redevelopment with an estimated stabilized cap rate of 6.6%. Year-to-date acquisitions totaled $86.1 million, with $293.6 million under contract or letter of intent.

Positive

• 96.9% quarter-end occupancy, up from 95.5% last quarter and 96.1% year-over-year.
• 98.4% same-store occupancy, an increase from 98.2% last quarter and 97.4% year-over-year.
• 34.8% increase in cash rents on new and renewed leases.
• Completed redevelopment at Americas Gateway 5 with an estimated stabilized cap rate of 6.6%.
• $86.1 million of acquisitions year-to-date; $293.6 million under contract or letter of intent.

Negative

• Tenant retention ratio of 47.7% may indicate potential challenges in maintaining long-term leases.
• Improved land portfolio occupancy decreased to 94.9% from 97.9% year-over-year.

• 96.9% quarter-end occupancy compared to prior quarter of 95.5% and prior year of 96.1%
• 98.4% quarter-end same-store occupancy compared to prior quarter of 98.2% and prior year of 97.4%
• 34.8% increase in cash rents on new and renewed leases and tenant retention ratio of 47.7%
• Completed redevelopment of Americas Gateway 5; estimated stabilized cap rate is 6.6%
• Entered agreements to host rooftop solar projects in Washington, D.C.
• $86.1 million of acquisitions year-to-date; $293.6 million under contract or letter of intent

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 first quarter of 2022.

Operating

As of March 31, 2022, Terreno Realty Corporation owned 256 buildings aggregating approximately 15.1 million square feet and 37 improved land parcels consisting of approximately 128.3 acres. In addition, Terreno Realty Corporation had four properties under redevelopment that upon completion will consist of four buildings aggregating approximately 536,000 square feet and two improved land parcels of approximately 12.1 acres:

• The operating portfolio, excluding two properties under redevelopment, was 96.9% leased at March 31, 2022 to 565 tenants as compared to 95.5% at December 31, 2021 and 96.1% at March 31, 2021. Occupancy at March 31, 2022 included acquired vacancy of 141,000 square feet (approximately 90bps) that was acquired pre-leased and is expected to commence prior to June 30, 2022;
• The same-store portfolio of approximately 12.4 million square feet was 98.4% leased at March 31, 2022 as compared to 98.2% at December 31, 2021 and 97.4% at March 31, 2021;
• The improved land portfolio of 37 parcels, excluding two parcels under redevelopment, totaling approximately 128.3 acres was 94.9% leased at March 31, 2022 as compared to 94.8% at December 31, 2021 and 97.9% at March 31, 2021;
• Cash rents on new and renewed leases totaling approximately 0.7 million square feet and 4.2 acres of improved land commencing during the first quarter increased approximately 34.8% with a tenant retention ratio of 47.7%;
• The Americas Gateway 5 redevelopment property, which was 100% leased to four tenants, moved to the operating portfolio. The total cost of the redeveloped property was approximately $7.5 million and the estimated stabilized cap rate is 6.6%;
• Entered agreements to host rooftop solar projects in Washington, D.C., with an aggregate power generating capacity of 8.4 MW - equivalent capacity to power over 700 homes. The Company expects the projects to be operational in 2023 as part of Terreno Realty Corporation’s sustainability goal of rooftop solar on at least 5% of total rooftop area by year-end 2024; and
• Achieved LEED certification at 4021-4071 West 108th Street in Hialeah, Florida totaling 274,000 square feet.

Investment

During the first quarter of 2022, Terreno Realty Corporation acquired four properties consisting of four buildings containing approximately 434,000 square feet and one improved land parcel of approximately 1.2 acres for an aggregate purchase price of approximately $86.1 million. The first quarter investment activity was as follows:

• 11113 NE 33rd Place, 11110 Northup Way and 11135 NE 33rd Place: Three properties consisting of one industrial distribution building containing approximately 20,000 square feet on 0.9 acres with two dock-high and two grade-level loading positions and parking for 21 cars, one flex building containing approximately 9,000 square feet on 0.8 acres with two dock-high and two grade-level loading positions and parking for 26 cars, and one approximately 1.2-acre improved land parcel. The properties are in Bellevue, Washington, adjacent to the intersection of I-405 and Washington SR 520. The properties were acquired 100% leased to three tenants for a purchase price of approximately $13.0 million and an estimated stabilized cap rate of 3.4%; and
• 4281-4341 West 108th Street: Two rear-load 32-foot clear industrial distribution buildings under development containing approximately 407,000 square feet on 19.8 acres in Hialeah, Florida, immediately adjacent to Terreno Realty Corporation’s five existing buildings on West 108th Street and adjacent to Florida’s Turnpike and the southern terminus of I-75. The property provides 124 dock-high and four grade-level loading positions and parking for 359 cars and is expected to obtain LEED certification. The buildings are expected to be completed by the third quarter of 2022 and are 100% pre-leased to two tenants. The property is included in the redevelopment pool with a total expected investment of approximately $75.5 million, net of free-rent credits and including capitalized interest, and an estimated stabilized cap rate of 3.8%.

As of March 31, 2022, Terreno Realty Corporation had four properties under redevelopment (NW 73^rd and 4281-4341 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 four buildings aggregating approximately 536,000 square feet and two improved land parcels of approximately 12.1 acres, with a total expected investment of approximately $144.4 million.

Terreno Realty Corporation has approximately $193.2 million of acquisitions under contract and approximately $100.4 million of acquisitions under letters of intent. Terreno Realty Corporation has one property under contract for sale for approximately $110.4 million aggregating approximately 580,000 square feet. There is no assurance that Terreno Realty Corporation will acquire or dispose of the properties under contract or letters of intent because the proposed acquisitions and disposition 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 2022, Terreno Realty Corporation did not issue any shares of common stock 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.

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, 2022 on or about May 4, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220407006029/en/

Terreno Realty Corporation

Jaime Cannon, 415-655-4580

Source: Terreno Realty Corporation

FAQ

What is the current occupancy rate for Terreno Realty Corporation (TRNO)?

Terreno Realty Corporation (TRNO) reported a quarter-end occupancy rate of 96.9% as of March 31, 2022.

How much did Terreno Realty Corporation (TRNO) increase cash rents by in Q1 2022?

Terreno Realty Corporation (TRNO) experienced a 34.8% increase in cash rents on new and renewed leases in Q1 2022.

What is the tenant retention ratio for TRNO?

As of Q1 2022, the tenant retention ratio for Terreno Realty Corporation (TRNO) is 47.7%.

What was the estimated stabilized cap rate for the Americas Gateway 5 redevelopment?

The estimated stabilized cap rate for the Americas Gateway 5 redevelopment is 6.6%.

How much has Terreno Realty Corporation (TRNO) spent on acquisitions in 2022?

Terreno Realty Corporation (TRNO) has spent $86.1 million on acquisitions year-to-date in 2022.