Terreno Realty Corporation (NYSE:TRNO), an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, announced today its quarterly investment, operating and capital markets activity for the third quarter of 2015.

Acquisitions and Redevelopment

During the third quarter of 2015, Terreno Realty Corporation acquired two industrial properties consisting of eight buildings containing approximately 293,000 square feet for an aggregate purchase price of approximately $29.5 million. The third quarter acquisition activity was as follows:
  • Kent Corporate Park. Four industrial buildings totaling approximately 138,000 square feet in Kent, Washington in the northern Kent Valley. This property provides 50 dock-high and 18 grade-level loading positions and was 94% leased to 13 tenants at acquisition. The purchase price was approximately $12.25 million including the assumption of a mortgage loan with a principal balance of approximately $4.8 million. The mortgage loan matures in March 2016 and bears interest at approximately 5.7%; and
  • Miami International Trade Center ("MITC"). Four industrial buildings totaling approximately 155,000 square feet in Medley, Florida adjacent to the Palmetto Expressway and approximately four miles from Miami International Airport. MITC provides 56 dock-high loading positions and was 81% leased to 14 tenants at acquisition. The purchase price was approximately $17.25 million.

Year-to-date Terreno Realty Corporation acquired nine industrial properties consisting of 21 buildings containing approximately 1.6 million square feet for a purchase price of approximately $195.5 million with a weighted average stabilized cap rate of approximately 5.8%.

Terreno Realty Corporation has approximately $64.2 million of acquisitions under contract and $31.1 million under non-binding letters of intent. Terreno Realty Corporation has one property under contract for sale for approximately $11.2 million aggregating approximately 85,000 square feet.

There is no assurance that Terreno Realty Corporation will acquire or dispose of the properties under contract or letter of intent because the proposed acquisitions and disposition are subject to the completion of satisfactory due diligence, closing conditions and, in the case of letters of intent, contracts.

In addition, Terreno Realty Corporation began redevelopment of its South Main Street property in Carson, California that will demolish three buildings totaling 186,000 square feet, construct a new front-load industrial distribution building containing approximately 210,000 square feet and renovate an existing 34,000 square foot office building. The property is 73.8% pre-leased and the expected redevelopment cost is approximately $16.4 million for a total expected investment of approximately $38 million.

Operations

As of September 30, 2015, Terreno Realty Corporation owned 141 buildings aggregating approximately 10.5 million square feet. Key operating measures for the portfolio were as follows:
  • The total portfolio was 90.2% leased to 344 tenants as compared to 94.4% at June 30, 2015 and 93.8% at September 30, 2014;
  • The same store portfolio of approximately 6.4 million square feet was 93.3% leased at September 30, 2015 as compared to 96.8% at June 30, 2015 and 93.5% at September 30, 2014; and
  • Cash rents on new and renewed leases totaling approximately 1.6 million square feet commencing during the nine months ended September 30, 2015 increased approximately 6.6%.

The decrease in occupancy from June 30, 2015 was due primarily to increased vacancy of approximately 271,000 square feet at Terreno Realty Corporation's Interstate property and approximately 85,000 square feet at Sweitzer. Sweitzer is currently held for sale. The approximately 220,000 square feet related to the existing buildings at South Main was removed from the operating portfolio as a result of the redevelopment commencing.

Capital Markets Activity

During the third quarter of 2015, Terreno Realty Corporation announced the private placement of $100 million senior unsecured notes, consisting of $50 million with a seven-year term and $50 million with a 12-year term. The $50 million seven-year notes closed on September 1, 2015 and bear interest at a fixed annual interest rate of 4.23%. Terreno Realty Corporation expects the 12-year notes to close on October 13, 2015 and bear interest at a fixed annual rate of 4.65%.

During the third quarter of 2015, Terreno Realty Corporation issued no shares of stock under the Company's at-the-market equity offering program and did not repurchase any shares of 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 quarter ended September 30, 2015 on or about November 4, 2015.

Terreno Realty Corporation is an acquirer, owner and operator of 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, 2014 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.

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