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

Acquisitions

During the fourth quarter of 2015, Terreno Realty Corporation acquired five industrial properties consisting of eight buildings containing approximately 634,000 square feet for an aggregate purchase price of approximately $73.0 million. The aggregate occupancy of the fourth quarter acquisitions was approximately 83.1%, including approximately 107,000 square feet of acquired vacancy. The fourth quarter acquisition activity was as follows:
  • 180 Manor. One industrial building totaling approximately 84,500 square feet in East Rutherford, New Jersey adjacent to Routes 3 and 17 and Exit 16W of the New Jersey Turnpike and approximately eight miles from Manhattan. This property provides nine dock-high and three grade level loading positions and was 100% leased to one tenant on a short-term basis at acquisition. The purchase price was approximately $9.3 million with an estimated stabilized cap rate of 6.1%;
  • 4225 2 nd Avenue South. One industrial building totaling approximately 51,000 square feet in Seattle, Washington adjacent to Seattle's Port and SoDo District. The property provides seven dock-high loading positions and was 100% leased to one tenant on a short-term basis at acquisition. The purchase price was approximately $8.3 million with an estimated stabilized cap rate of 5.8%;
  • 22 Madison. One industrial building totaling approximately 40,000 square feet in Fairfield, New Jersey adjacent to I-80 and U.S. Route 46. This property provides two grade level loading positions and was 100% leased to one tenant at acquisition. The purchase price was approximately $3.2 million with an estimated stabilized cap rate of 5.8%;
  • Kent 202. One industrial building totaling approximately 158,000 square feet in Kent, Washington in the Kent Valley. This property provides 22 dock-high loading positions and was 100% leased to one tenant on a short-term basis at acquisition. The purchase price was approximately $14.9 million with an estimated stabilized cap rate of 6.0%; and
  • Central Pacific Business Park. Four recently constructed industrial buildings totaling approximately 300,500 square feet in Union City, California adjacent to Interstate 880 between California Highways 92 and 84. The property provides 80 dock-high loading positions, six grade level loading positions and was 64.4% leased to three tenants at acquisition. The purchase price was approximately $37.3 million with an estimated stabilized cap rate of 5.5%.

For the full year 2015, Terreno Realty Corporation acquired 14 industrial properties consisting of 29 buildings containing approximately 2.3 million square feet for a purchase price of approximately $268.5 million with a weighted average stabilized cap rate of approximately 5.8%.

Terreno Realty Corporation has approximately $15.9 million of acquisitions under contract and $24.3 million under non-binding letters of intent. 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.

Redevelopment

In 2015 Terreno Realty Corporation commenced the redevelopment of its South Main property in Carson, California with an expected redevelopment cost of approximately $16.4 million. When complete the property will contain two buildings totaling approximately 244,000 square feet with a total expected investment of approximately $38.0 million.

Dispositions

During the fourth quarter of 2015, Terreno Realty Corporation sold one industrial property in Laurel, Maryland for a sale price of approximately $11.2, generating an estimated unlevered internal rate of return of approximately 21.5%. This property was acquired by Terreno Realty Corporation for approximately $7.0 million in October 2010. For the full year 2015, Terreno Realty Corporation sold two industrial properties for a sale price of approximately $24.6 million.

Terreno Realty Corporation has one property under contract for sale for approximately $8.2 million aggregating approximately 72,000 square feet. There is no assurance that Terreno Realty Corporation will dispose of the property under contract because the proposed disposition is subject to the completion of satisfactory due diligence and closing conditions.

Capital from such sales is recycled into properties that Terreno Realty Corporation expects to provide better prospective returns or is returned to shareholders.

Operations

As of December 31, 2015, Terreno Realty Corporation owned 148 buildings aggregating approximately 11.1 million square feet. Key operating measures for the portfolio were as follows:
  • The total portfolio was 91.5% leased to 352 tenants as compared to 90.2% at September 30, 2015 and 93.7% at December 31, 2014;
  • The same store portfolio of approximately 6.3 million square feet was 94.4% leased at December 31, 2015 as compared to 93.2% at September 30, 2015 and 95.4% at December 31, 2014; and
  • Cash rents on new and renewed leases totaling approximately 1.8 million square feet commencing during the twelve months ended December 31, 2015 increased approximately 9.0%.

Capital Markets Activity

During the fourth quarter of 2015, Terreno Realty Corporation closed the previously announced private placement of $50 million 12-year senior unsecured notes that bear interest at a fixed annual rate of 4.65%.

During the fourth 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-K for the year ended December 31, 2015 on or about February 10, 2016.

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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