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

Rhea-AI Summary

Terreno Realty Corporation (NYSE:TRNO) reported its fourth quarter 2020 operating and investment activities. As of December 31, 2020, the company owned 222 buildings totaling 13.2 million square feet, with an operating portfolio 97.8% leased. In Q4 2020, Terreno acquired six industrial properties for $50.5 million. The company’s full-year acquisitions reached 11 properties for $96.7 million. In capital markets, Terreno issued 1,197,597 shares, raising $64.8 million. The company maintained a strong cash position of approximately $83 million with no debt maturities in 2021.

Positive

• Operating portfolio was 97.8% leased, improving from 97.3% at Q3 2020.
• Acquired six industrial properties for $50.5 million during Q4 2020.
• Full-year acquisition totaled 11 properties for $96.7 million.
• Cash rents on new and renewed leases increased by 10.9% in Q4 2020.
• No 2021 debt maturities and $83 million cash balance.

Negative

• Same-store portfolio leasing decreased from 98.5% in Q3 2020 to 98.0% in Q4 2020.

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 of 2020.

Operating

As of December 31, 2020, Terreno Realty Corporation owned 222 buildings aggregating approximately 13.2 million square feet and 25 improved land parcels consisting of approximately 91.5 acres. In addition, Terreno Realty Corporation had one property under redevelopment that upon completion will contain approximately 234,000 square feet:

• The operating portfolio, excluding one property under redevelopment, was 97.8% leased at December 31, 2020 to 488 tenants as compared to 97.3% at September 30, 2020 and 96.8% at December 31, 2019;
• The same-store portfolio of approximately 12.0 million square feet was 98.0% leased at December 31, 2020 as compared to 98.5% at September 30, 2020 and 97.8% at December 31, 2019;
• The improved land portfolio of 25 parcels totaling approximately 91.5 acres was 98.6% leased at December 31, 2020 as compared to 98.5% at September 30, 2020 and 92.0% at December 31, 2019;
• Cash rents on new and renewed leases totaling approximately 0.6 million square feet commencing during the fourth quarter increased approximately 10.9% with a tenant retention ratio of 64.3%. Cash rents on new and renewed leases totaling 2.6 million square feet commencing during the full year 2020 increased approximately 22.1% with a tenant retention ratio of 57.7%;
• Executed three renewals totaling 527,000 square feet previously scheduled to expire in 2021. These renewals include a seven-year extension for 221,000 square feet with a transportation and logistics services provider in South Brunswick, New Jersey, now expiring November 30, 2028, a five-year extension for 203,000 square feet with a third-party logistics provider in Commerce, California, now expiring June 30, 2026, and a five-year extension for 103,000 square feet with a leading aerospace manufacturer in Redondo Beach, California, now expiring December 31, 2025; and
• Executed a lease with a regional provider of trucking services stabilizing a recently acquired 2.5-acre improved land parcel in Rancho Dominguez, California with a December 31, 2020 commencement date and February 28, 2026 expiration date.

Investment

During the fourth quarter of 2020, Terreno Realty Corporation acquired six industrial properties consisting of three buildings containing approximately 63,000 square feet and three improved land parcels containing approximately 6.5 acres for an aggregate purchase price of approximately $50.5 million. The fourth quarter investment activity was as follows:

• 8331 Aviation Boulevard: One 1.9-acre improved land parcel adjacent to Los Angeles International Airport and west of I-405 in Inglewood, California. The property was acquired vacant for a purchase price of approximately $10.0 million and estimated stabilized cap rate of 5.7%;
• 2425 Porter Street: One 13,000 square foot industrial distribution building on 0.8 acres in Los Angeles, California. The property is adjacent to I-10 in downtown Los Angeles, provides seven dock-high loading positions and parking for 64 cars. The property was acquired 100% leased to a single tenant for a purchase price of approximately $4.4 million and estimated stabilized cap rate of 4.5%;
• 13150 SE 32^nd Street: One 39,000 square foot industrial flex building on 2.1 acres in Bellevue, Washington. The property is adjacent to the intersection of I-90 and I-405, provides one dock-high loading position and parking for 80 cars. The property was acquired 100% leased to one tenant for a purchase price of approximately $11.7 million and estimated stabilized cap rate of 4.9%;
• 14732 S. Maple Avenue: One 2.5-acre improved land parcel located between Los Angeles International Airport and the Ports of Los Angeles and Long Beach in Rancho Dominguez, California. The property was acquired vacant for approximately $9.8 million and estimated stabilized cap rate of 5.7%;
• 12119 East Marginal Way S: One 2.1-acre improved land parcel adjacent to State Routes 99 and 599 and I-5 in Tukwila, Washington. The property was acquired 100% leased to one tenant for a purchase price of approximately $6.6 million and estimated stabilized cap rate of 4.6%; and
• 12 McLaren: One 11,000 square foot transshipment building on 2.1 acres in Irvine, California. The property is adjacent to the intersection of Interstates 5 and 405, provides 14 dock-high and two grade-level loading positions and parking for 151 cars. The property was acquired 100% lease to one tenant for a purchase price of approximately $8.0 million and estimated stabilized cap rate of 4.0%.

Terreno Realty Corporation’s acquisition activity for the full year 2020 included 11 industrial properties consisting of six buildings containing approximately 164,000 square feet and five improved land parcels totaling approximately 12.0 acres for an aggregate purchase price of approximately $96.7 million.

As of December 31, 2020, Terreno Realty Corporation had one property under redevelopment (SoDo Row in Seattle) that upon completion will contain approximately 234,000 square feet with a total expected investment of approximately $64 million.

For the full year 2020, Terreno Realty Corporation sold four properties totaling 532,000 square feet for an aggregate sale price of $73.4 million generating an unleveraged internal rate of return of approximately 9.3%.

Terreno Realty Corporation has approximately $67.8 million of acquisitions under contract containing approximately 266,000 square feet and 5.8 acres of improved land, and approximately $18.0 million of acquisitions under letter of intent containing approximately 67,000 square feet and 2.2 acres of improved land. 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 fourth quarter of 2020, Terreno Realty Corporation issued 143,020 shares of common stock with a weighted average offering price of $61.39 per share, receiving gross proceeds of $8.8 million under the Company’s at-the-market equity offering program. For the full year 2020, Terreno Realty Corporation issued 1,197,597 shares of common stock with a weighted average offering price of $54.08 per share, receiving gross proceeds of $64.8 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. Subsequent to December 31, 2020, the Company paid off its last secured mortgage loan with an $11.2 million balance and 5.49% interest rate and all outstanding debt is now unsecured. The Company has a cash balance of approximately $83 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 annual report on Form 10-K for the period ended December 31, 2020 on or about February 10, 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, 2019 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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FAQ

What was Terreno Realty Corporation's portfolio size as of December 31, 2020?

Terreno Realty Corporation owned 222 buildings totaling approximately 13.2 million square feet.

What was the leasing percentage of Terreno's operating portfolio at the end of Q4 2020?

The operating portfolio was 97.8% leased as of December 31, 2020.

How much did Terreno Realty Corporation acquire in Q4 2020?

Terreno Realty Corporation acquired six industrial properties for an aggregate price of approximately $50.5 million in Q4 2020.

What was the cash balance of Terreno Realty Corporation as of December 31, 2020?

Terreno Realty Corporation had a cash balance of approximately $83 million.

Did Terreno Realty Corporation issue any shares in 2020?

Yes, Terreno Realty Corporation issued 1,197,597 shares of common stock during 2020, raising $64.8 million.