SAN FRANCISCO--(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 third quarter of 2016.
As of September 30, 2016, Terreno Realty Corporation owned 159 buildings aggregating approximately 11.7 million square feet and four improved land parcels consisting of 21.4 acres. Key operating measures for the portfolio were as follows:
- The total portfolio was 96.4% leased to 374 tenants as compared to 92.7% at June 30, 2016 and 90.2% at September 30, 2015;
- The same store portfolio of approximately 8.6 million square feet was 97.9% leased at September 30, 2016 as compared to 95.1% at June 30, 2016 and 92.0% at September 30, 2015; and
- Cash rents on new and renewed leases totaling approximately 0.5 million square feet commencing during the third quarter increased approximately 20.9%, and approximately 1.3 million square feet commencing during the nine months ending September 30, 2016 increased approximately 13.2%.
Occupancy increased from June 30, 2016 primarily due to the commencement of a 221,000 square foot lease in South Brunswick, New Jersey and a 158,000 square foot lease in Kent, Washington.
During the third quarter of 2016, Terreno Realty Corporation acquired four industrial properties consisting of five buildings containing approximately 240,000 square feet and a 13.4 acre improved land parcel for an aggregate purchase price of approximately $36.5 million. The third quarter investment activity was as follows:
- New Ridge: Improved land parcel of 13.4 acres, of which 8.7 acres are paved, in Hanover, Maryland adjacent to Baltimore Washington International Airport, the Baltimore Washington Parkway (MD Highway 295) and MD Route 100. The property includes approximately 18,300 square feet of existing building improvements, and was 100% leased to one tenant at acquisition. The purchase price was approximately $8.2 million with an estimated stabilized cap rate of 7.9%;
- Hampton Overlook: Two industrial distribution buildings and one light industrial flex building containing approximately 135,000 square feet on 12.1 acres in Capital Heights, Maryland inside the Capital Beltway (I-95) at MD State Route 214. The property provides 31 dock-high and 11 grade-level loading positions and was 81% leased to nine tenants at acquisition. The purchase price was approximately $14.1 million with an estimated stabilized cap rate of 6.9%;
- Schoolhouse: One rear-load industrial distribution building in Somerset, New Jersey containing approximately 86,000 square feet on 6.9 acres. Providing 12 dock-high and one grade-level loading positions and parking for 61 cars, the property was 100% leased to one tenant at acquisition. The purchase price was approximately $9.1 million with an estimated stabilized cap rate of 5.5%; and
- 709 Hindry: One industrial distribution building on 0.9 acres in Inglewood, California west of Interstate 405 and adjacent to Los Angeles International Airport. The property provides eight dock-high and one grade-level loading positions, parking for 33 cars and was 100% leased to one tenant at acquisition. The purchase price was approximately $5.2 million with an estimated stabilized cap rate of 3.5%.
Terreno Realty Corporation has approximately $76.6 million of acquisitions under contract aggregating approximately 611,000 square feet and approximately $7.8 million under letter of intent aggregating approximately 45,000 square feet. There is no assurance that Terreno Realty Corporation will acquire the 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.
During the third quarter of 2016, Terreno Realty Corporation completed the redevelopment of its property on South Main Street in Carson, California. The redeveloped property, 100% leased to two tenants, consists of a newly constructed front-load industrial distribution building containing approximately 210,000 square feet and a renovated office building of approximately 34,000 square feet. The total cost of the redeveloped property was approximately $39.2 million with an estimated stabilized cap rate of 6.2%.
During the third quarter of 2016, Terreno Realty Corporation sold one industrial property for an aggregate sale price of approximately $6.1 million. 39th Street in Miami contained approximately 40,000 square feet on approximately 1.6 acres. The property was 100% leased to one tenant with an expiration date of August 31, 2016 and was purchased by Terreno Realty Corporation on August 19, 2011 for approximately $4.4 million. The estimated unleveraged internal rate of return generated by the investment was approximately 12.1%. Capital from such sales is recycled into properties that Terreno Realty Corporation expects to provide better prospective returns or is returned to shareholders.
During the third quarter of 2016, Terreno Realty Corporation issued an aggregate of 361,351 shares of common stock with a weighted average offering price of $27.44 per share, receiving gross proceeds of approximately $9.9 million under the Company’s at-the-market equity offering program. Year-to-date, Terreno Realty Corporation issued an aggregate of 2,990,959 shares of common stock with a weighted average offering price of $24.64 per share, receiving gross proceeds of approximately $73.7 million. The Company did not repurchase any shares of common stock pursuant to the Company’s share repurchase authorization.
On July 7, 2016, Terreno Realty Corporation completed the previously announced private placement of $50 million ten-year unsecured notes that bear interest at a fixed annual interest rate of 3.99%.
On August 1, 2016, Terreno Realty Corporation closed a $350 million amended and restated senior unsecured credit facility to replace its existing $300 million senior unsecured credit facility. The previously outstanding $50 million term loan that was to mature in May 2021 was repaid upon closing. Additional highlights are as follows:
- $200 Million Revolving Credit Facility. The unsecured revolving credit facility was increased from $100 million to $200 million and the maturity was extended to August 2020. The interest rate on the unsecured revolving credit facility decreased to LIBOR plus 1.35%-1.90% (previously 1.50% to 2.05%), depending on leverage;
- $50 Million Term Loan. The maturity date of the $50 million unsecured term loan was extended by approximately two years to August 2021. The interest rate on the $50 million unsecured term loan decreased to LIBOR plus 1.30%-1.85% (previously 1.50% to 2.05%), depending on leverage; and
- $100 Million Term Loan. The maturity date of the $100 million unsecured term loan was extended by approximately two years to January 2022. The interest rate on the $100 million unsecured term loan decreased to LIBOR plus 1.30%-1.85% (previously 1.50%-2.05%), depending on leverage.
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 September 30, 2016 on or about November 2, 2016.
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.
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.