- 96.0% quarter-end occupancy compared to prior quarter of
97.8% and prior year of 97.9%
- 96.5% quarter-end same-store occupancy compared to prior
quarter of 98.0% and prior year of 97.7%
- 38.2% increase in cash rents on new and renewed leases;
28.9% increase year-to-date
- $10.1 million of acquisitions; $39.8 million
year-to-date
- Sold three properties for approximately $51.3
million
- 619,300 shares of common stock issued under ATM for gross
proceeds of $32.7 million; $55.5 million year-to-date
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 2020.
Operating
As of June 30, 2020, Terreno Realty Corporation owned 218
buildings aggregating approximately 13.1 million square feet and 22
improved land parcels consisting of approximately 85.0 acres. In
addition, Terreno Realty Corporation had two properties under
redevelopment that upon completion will contain approximately
454,000 square feet:
- The operating portfolio, excluding two properties under
redevelopment, was 96.0% leased at June 30, 2020 to 484 tenants as
compared to 97.8% at March 31, 2020 and 97.9% at June 30, 2019. The
decline in occupancy as compared to the prior quarter was driven
primarily by a 192,000 square foot lease expiration at the
Company’s 130 Interstate property and a 50,000 square foot lease
expiration at the Company’s Whelan property which was acquired in
fourth quarter of 2019 with a short-term lease;
- The same-store portfolio of approximately 12.0 million square
feet was 96.5% leased at June 30, 2020 as compared to 98.0% at
March 31, 2020 and 97.7% at June 30, 2019. The decline in occupancy
as compared to the prior quarter was driven primarily by a 192,000
square foot lease expiration at the Company’s 130 Interstate
property during the second quarter;
- The improved land portfolio of 22 parcels totaling
approximately 85.0 acres was 98.5% leased at June 30, 2020 as
compared to 96.7% at March 31, 2020 and 93.0% at June 30,
2019;
- Cash rents on new and renewed leases totaling approximately 0.5
million square feet commencing during the second quarter increased
approximately 38.2% with a tenant retention ratio of 18.4%. Cash
rents on new and renewed leases totaling 1.1 million square feet
commencing during the six months ending June 30, 2020 increased
approximately 28.9% with a tenant retention ratio of 52.3%;
and
- Executed a full-building lease with a leading manufacturer of
electric vehicles stabilizing a 51,000 square foot redevelopment
property in Seattle, Washington. The total investment cost was
approximately $15.9 million with an estimated stabilized cap rate
of 5.1%.
Terreno Realty Corporation continues to work with its customers
who have been forced to close or otherwise limit operations or
whose businesses have been adversely impacted during the pandemic
to, on a case-by-case basis, provide rent deferments. With regard
to rent billed for June 2020, the Company received, as of July 9,
2020, approximately 93% of such rent in cash and an additional 1%
by applying security deposits. As of July 9, 2020:
- 174 tenants, representing approximately 36.0% of the Company’s
total tenants had requested rent deferral or abatement. Such
requests aggregated 7.0% of the Company’s annualized base
rent;
- Of the 174 requests, the Company granted rent deferrals to 62
tenants aggregating 2.7% of annualized base rent (35.6% of total
requests by number and 39.3% by dollar amount) which represents
77.0% of the total dollar deferral requests (3.6% of annualized
base rent) from those tenants. The Company did not grant any rent
abatement;
- The Company denied 50 tenant requests aggregating 1.8% of
annualized base rent (28.7% of total requests by number and 25.7%
by dollar amount). 58 tenants aggregating 1.6% of annualized base
rent requesting rent deferral or abatement rescinded their requests
(33.3%% of requests by number and 22.5% by dollar amount);
- The Company is still in discussions with four tenants who are
requesting 0.05% of our annualized base rent in rent deferral or
abatement (2.3% of requests by number and 0.7% by dollar amount);
and
- The Company may in the future amend or enter into additional
rent deferral agreements.
Investment
During the second quarter of 2020, Terreno Realty Corporation
acquired two industrial properties consisting of one building
containing approximately 13,000 square feet and one improved land
parcel containing approximately 2.8 acres for an aggregate purchase
price of approximately $10.1 million. The second quarter investment
activity was as follows:
- 36 South Hudson Street: One industrial distribution building
containing approximately 13,000 square feet on 1.1 acres in
Seattle, Washington. The property is three blocks from Terreno
Realty Corporation’s SoDo Row redevelopment, provides three
grade-level loading positions and excess yard. The property was
acquired 100% leased to one tenant through December 2021 for a
purchase price of approximately $5.6 million and estimated
stabilized cap rate of 4.0%; and
- 20045 84th Ave South: One improved land parcel of approximately
2.8 acres in Kent, Washington. The property is in the northern Kent
Valley and adjacent to Terreno Realty Corporation’s Kent 202nd
property. The property was acquired 100% leased to one tenant on a
month-to-month basis for a purchase price of approximately $4.5
million and estimated stabilized cap rate of 5.7%. Subsequent to
acquisition, executed a full-property lease with a leading
e-commerce firm.
Year-to-date through the second quarter of 2020, Terreno Realty
Corporation acquired four properties consisting of two buildings
totaling approximately 79,000 square feet and two improved land
parcels totaling approximately 5.5 acres for an aggregate purchase
price of $39.8 million. During the second quarter of 2020, Terreno
Realty Corporation sold three properties in Maryland’s
Baltimore/Washington Corridor totaling approximately 340,000 square
feet for an aggregate sale price of approximately $51.3 million
generating an unleveraged internal rate of return of approximately
10.9%.
As of June 30, 2020, Terreno Realty Corporation had two
properties under redevelopment (SoDo Row and Kent 192, both in
Seattle) that upon completion will contain approximately 454,000
square feet with a total expected investment of approximately $97
million.
Terreno Realty Corporation has two acquisitions under contract
totaling approximately $13.6 million consisting of one 7.0-acre
improved land parcel and one building containing 22,000 square
feet. Additionally, the Company has one property under contract for
sale for approximately $22.2 million comprising approximately
192,000 square feet. There is no assurance that Terreno Realty
Corporation will acquire or dispose of properties under contract
because the proposed acquisitions and disposition are subject to
the completion of satisfactory due diligence and closing
conditions.
Capital Markets
During the second quarter of 2020, Terreno Realty Corporation
issued 619,300 shares of common stock with a weighted average
offering price of $52.81 per share, receiving gross proceeds of
$32.7 million under the Company’s at-the-market equity offering
program. Year-to-date through June 30, 2020, Terreno Realty
Corporation has issued 1,046,327 shares of common stock with a
weighted average offering price of $53.04 per share, receiving
gross proceeds of $55.5 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. The Company has a cash balance of
approximately $150 million, no balance outstanding on its $250
million revolving credit facility, and no remaining 2020 debt
maturities.
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, 2020 on
or about August 5, 2020.
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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version on businesswire.com: https://www.businesswire.com/news/home/20200709005915/en/
Terreno Realty Corporation W. Blake Baird or Michael A. Coke,
415-655-4580
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