- Los Angeles (four buildings, 100% occupancy and 10.9% of annual base rent);
- Northern New Jersey/New York City (23 buildings, 93.2% occupancy and 44.9 % of annual base rent);
- San Francisco Bay area (nine buildings, 84.4% occupancy and 15.3% of annual base rent);
- Seattle (three buildings, 100% occupancy and 7.4% of annual base rent);
- Miami (six buildings, 98% occupancy and 14.6% of annual base rent); and
- Washington/Baltimore (three buildings, 80.2% occupancy and 6.9% of annual base rent).
ManagementSenior managers are veterans of AMB Property, which was acquired by Prologis ( PLD - Get Report). This bodes well for Terreno:
- W. Blake Baird, chairman and CEO. Prior to co-founding Terreno Realty Corporation, Blake was president and a director of AMB Property and chairman of its investment committee.
- Michael A. Coke, president and CFO. Before co-founding Terreno Realty Corporation, Mike was CFO at AMB.
Conservative ProfileTerreno has both a conservative operational platform as well as conservative financial policies, which should help ensure that growth in its property portfolio is profitable, sustainable and consistent. Among the policies in place that will help ensure that this REIT performs well for investors (i.e., a balanced risk/return profile) are:
- Majority independent directors with diverse expertise who serve annual terms. The board does not have staggered terms, which helps avoid blocks of corporate actions.
- Not structured as an UPREIT. This reduces the complexity of the business model.
- No ground-up development. This serves to reduce the risk of new development, which can tie up capital and reduce occupancy and funds from operations.
- No complex joint ventures. This simplifies the portfolio ownership and allows the company and the investors to access properties without dealing with complex partnership agreements.
- Limiting the sum of the outstanding principal amount of consolidated indebtedness and the liquidation preference of any outstanding perpetual preferred stock to less than 40% of the total enterprise value;
- Maintaining a fixed charge coverage ratio in excess of 2.0;
- Limiting the principal amount of outstanding floating-rate debt to less than 20% of total consolidated indebtedness; and
- Staggering debt maturities that are aligned to expected average lease terms (five to seven years), positioning Terreno to reprice parts of the capital structure as rental rates change with market conditions.