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

  • 97.4% quarter end occupancy compared to prior quarter of 96.4% and prior year of 91.5%
  • 99.0% quarter end same store occupancy compared to prior quarter of 97.9% and prior year of 92.6%
  • 29.0% increase in cash rents on new and renewed leases for the quarter; 19.2% for the full year 2016
  • $44.7 million of acquisitions during the fourth quarter comprising approximately 322,000 square feet; full year acquisitions of $129.2 million and $39.2 million of total investment in a completed and stabilized redevelopment project

SAN FRANCISCO--()--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 2016.

Operations

As of December 31, 2016, Terreno Realty Corporation owned 166 buildings aggregating approximately 12.0 million square feet and five improved land parcels consisting of 22.8 acres. Key operating measures were as follows:

  • The total portfolio was 97.4% leased to 376 tenants as compared to 96.4% at September 30, 2016 and 91.5% at December 31, 2015;
  • The same store portfolio of approximately 8.6 million square feet was 99.0% leased at December 31, 2016 as compared to 97.9% at September 30, 2016 and 92.6% at December 31, 2015; and
  • Cash rents on new and renewed leases totaling approximately 0.6 million square feet commencing during the fourth quarter increased approximately 29.0%, and approximately 1.8 million square feet commencing during the twelve months ending December 31, 2016 increased approximately 19.2%.

Occupancy increased from September 30, 2016 primarily due to the commencement of two leases for a total of 163,000 square feet in the Los Angeles market and an 85,000 square feet lease in East Rutherford, New Jersey. Fourth quarter occupancy gains were partially offset by approximately 125,000 square feet due to acquired vacancies.

Investment

During the fourth quarter of 2016, Terreno Realty Corporation acquired six industrial properties consisting of seven buildings containing approximately 322,000 square feet for an aggregate purchase price of approximately $44.7 million. The fourth quarter investment activity was as follows:

  • West 140th: Two industrial distribution buildings on approximately 8.2 acres, including three acres of excess improved yard, located west of Interstate 880 and approximately three miles south of Oakland International Airport. The property includes approximately 100,500 square feet of existing building improvements, and was acquired vacant. The purchase price was approximately $15.9 million with an estimated stabilized cap rate of 5.2%;
  • 74th North Bergen: One transshipment industrial building containing approximately 25,000 square feet on 3.6 acres approximately three miles from Exit 16E of the New Jersey Turnpike and the Lincoln Tunnel. The property provides 37 dock-high loading positions, parking for 37 cars and was vacant at acquisition. The purchase price was approximately $4.8 million with an estimated stabilized cap rate of 5.7%;
  • NW 70th Ave III: One industrial distribution building containing approximately 55,000 square feet on approximately 2.0 acres immediately adjacent to Miami International Airport. The property provides ten dock-high and one grade-level loading positions and was 100% leased to one tenant at acquisition. The purchase price was approximately $6.1 million with an estimated stabilized cap rate of 5.3%;
  • Paterson Plank: One transshipment industrial distribution building containing approximately 31,000 square feet on approximately 5.2 acres adjacent to Exit 16W of the New Jersey Turnpike and the Meadowlands Sports Complex. The property provides 64 dock-high and two grade-level loading positions, parking for 25 cars, trailer storage and was 100% leased to two tenants at acquisition. The purchase price was approximately $5.0 million with an estimated stabilized cap rate of 6.6%;
  • NW 74th Ave: One industrial distribution building containing approximately 64,500 square feet on approximately 2.7 acres in Miami-Dade County adjacent to the Palmetto Expressway and approximately four miles from Miami International Airport. The property provides ten dock-high and two grade-level loading positions, parking for 60 cars and was 100% leased to two tenants at acquisition. The purchase price was approximately $6.3 million with an estimated stabilized cap rate of 5.4%; and
  • Business Parkway: One rear-load industrial distribution building containing approximately 45,000 square feet on approximately 5.8 acres near the intersection of I-495 (the Capital Beltway) and I-595. The property provides seven dock-high and four grade-level loading positions, parking for 81 cars, excess yard for trailer storage and was 100% leased to one tenant at acquisition. The purchase price was approximately $6.7 million with an estimated stabilized cap rate of 6.1%.

Investment activity for the full year 2016 included $129.2 million in acquisitions and $39.2 million of total investment in a completed and stabilized redevelopment project.

Terreno Realty Corporation has approximately $71.5 million of acquisitions under contract aggregating approximately 763,000 square feet. There is no assurance that Terreno Realty Corporation will acquire the properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and closing conditions.

For the full year 2016, Terreno Realty Corporation disposed of three industrial properties for an aggregate sales price of approximately $22.5 million, generating an estimated unleveraged internal rate of return of 12.0%. Capital from such sales is recycled into properties that Terreno Realty Corporation expects to provide better prospective returns or is returned to shareholders.

Capital Markets

During the fourth quarter of 2016, Terreno Realty Corporation issued an aggregate of 1,000,871 shares of common stock with a weighted average offering price of $27.65 per share, receiving gross proceeds of approximately $27.7 million under the Company’s at-the-market equity offering program. For the full year 2016, Terreno Realty Corporation issued an aggregate of 3,991,830 shares of common stock with a weighted average offering price of $25.39 per share, receiving gross proceeds of approximately $101.4 million. The Company 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 annual report on Form 10-K for the year ended December 31, 2016 on or about February 8, 2017.

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./Baltimore.

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,” 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, 2015 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.

Contacts

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

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