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 second quarter of 2018.
Operating
As of June 30, 2018, Terreno Realty Corporation owned 195 buildings aggregating approximately 12.5 million square feet and 11 improved land parcels consisting of 51.4 acres. In addition, Terreno Realty Corporation had four buildings under redevelopment that upon completion will contain approximately 484,000 square feet with a total expected investment of $119.2 million, including redevelopment costs, leasing costs, and capitalized interest of approximately $32.9 million:
- The operating portfolio, excluding four properties under redevelopment, was 98.2% leased to 430 tenants as compared to 97.0% at March 31, 2018 and 96.9% at June 30, 2017;
- The same store portfolio of approximately 10.7 million square feet was 98.3% leased at June 30, 2018 as compared to 97.4% at March 31, 2018 and 97.8% at June 30, 2017; and
- Cash rents on new and renewed leases totaling approximately 0.3 million square feet commencing during the second quarter increased approximately 33.9%. Cash rents on new and renewed leases totaling approximately 0.9 million square feet commencing during the six months ended June 30, 2018 increased approximately 18.7%.
Investment
During the second quarter of 2018, Terreno Realty Corporation acquired three industrial properties consisting of two buildings containing approximately 50,000 square feet and one improved land parcel of approximately 3.5 acres for an aggregate purchase price of approximately $14.9 million. In addition, Terreno Realty Corporation made one senior secured loan of $55.0 million. The second quarter investment activity was as follows:
- 14275 Wicks Boulevard: One light industrial building containing approximately 11,000 square feet on 1.3 acres in San Leandro, California, west of Interstate 880 and approximately three miles south of Oakland International Airport. The property has three grade-level loading positions, parking for 60 cars, and is 100% leased to one tenant. The purchase price was $2.6 million with an estimated stabilized cap rate of 5.2%;
- 85 Doremus Avenue: One improved land parcel of approximately 3.5 acres in Newark, New Jersey, immediately adjacent to Exit 15E of the New Jersey Turnpike. The property is 100% leased to one tenant. The purchase price was $6.3 million with an estimated stabilized cap rate of 5.1%;
- 2701 East Valley Road: One industrial distribution building containing approximately 39,000 square feet on 2.3 acres in Renton, Washington, adjacent to the intersection of Interstate 405 and Highway 167 in the northern Kent Valley. The property has four dock-high and three grade-level loading positions, parking for 42 cars, and is 100% leased to one tenant. The property was acquired for $6.0 million with an estimated stabilized cap rate of 5.2%; and
- Senior Secured Loan: The Company made a senior secured loan of $55.0 million with a two-year term and interest rate of 8.0%. The loan is secured by nine improved land parcels located primarily in Newark and Kearny, New Jersey. One of the properties securing the loan may be put to Terreno Realty Corporation as partial payment of the loan. This property, and two others, may be called by Terreno Realty Corporation as partial or full payment of the loan.
In addition, Terreno Realty Corporation placed 10100 NW 25th Street in Miami into redevelopment during the second quarter of 2018 that upon completion will contain approximately 107,000 square feet with a total expected investment of $12.9 million, including redevelopment costs, leasing costs, and capitalized interest of approximately $2.9 million.
During the second quarter of 2018, Terreno Realty Corporation sold one 302,000 square-foot industrial distribution building in Hialeah, Florida for approximately $24.3 million, generating an unleveraged internal rate of return of approximately 11.5%. The property was purchased in December 2010 for approximately $9.0 million and was 100% leased to one tenant at disposition. Capital from this sale will be recycled into properties that Terreno Realty Corporation expects to provide better prospective returns.
Year-to-date through the second quarter of 2018, Terreno Realty Corporation acquired six industrial properties consisting of five buildings containing approximately 468,000 square feet and one improved land parcel of approximately 3.5 acres for an aggregate purchase price of approximately $99.5 million, and made one senior secured loan of $55.0 million. Year-to-date through the second quarter of 2018, Terreno Realty Corporation sold two properties containing 441,000 square feet for $44.6 million generating an unleveraged internal rate of return of approximately 10.0%.
Terreno Realty Corporation has approximately $98.6 million of acquisitions under contract aggregating approximately 622,000 square feet. There is no assurance that Terreno Realty Corporation will acquire properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and closing conditions.
Capital Markets
During the second quarter of 2018, Terreno Realty Corporation issued 2,826,167 shares of common stock with a weighted average offering price of $37.48 per share, receiving gross proceeds of $105.9 million under the Company’s at-the-market equity offering program. Year-to-date through the second quarter of 2018, Terreno Realty Corporation issued 2,885,401 shares of common stock with a weighted average offering price of $37.43 per share, receiving gross proceeds of $108.0 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.
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 June 30, 2018 on or about August 2, 2018.
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 and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2017 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.
