Terreno Realty Corporation Announces Quarterly Operating, Investment and Capital Markets Activity

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 first quarter of 2018.

Operating

As of March 31, 2018, Terreno Realty Corporation owned 195 buildings aggregating approximately 12.9 million square feet and ten improved land parcels consisting of 47.9 acres. In addition, Terreno Realty Corporation had three buildings under redevelopment that upon completion will contain approximately 377,000 square feet with a total expected investment of $98.5 million, including redevelopment costs of approximately $22.3 million:

• The operating portfolio, excluding three properties under redevelopment, was 97.0% leased to 420 tenants as compared to 97.3% at December 31, 2017 and 97.4% at March 31, 2017;
• The same store portfolio of approximately 11.1 million square feet was 97.5% leased at March 31, 2018 as compared to 98.3% at December 31, 2017 and 97.2% at March 31, 2017; and
• Cash rents on new and renewed leases totaling approximately 0.6 million square feet commencing during the first quarter increased approximately 12.5%.

Investment

During the first quarter of 2018, Terreno Realty Corporation acquired three industrial properties consisting of three buildings containing approximately 418,000 square feet for an aggregate purchase price of approximately $84.7 million. The first quarter investment activity was as follows:

• 19801 S Vermont Avenue: One cross-dock industrial distribution building containing approximately 100,000 square feet on 4.7 acres in Torrance, California, west of Interstate 405 and between Los Angeles International Airport and the ports of LA and Long Beach. The property has 12 dock-high and three grade-level loading positions, parking for 121 cars, and is 100% leased to one tenant. The purchase price was approximately $17.5 million with an estimated stabilized cap rate of 3.3%;
• 1 Bulova Avenue: One industrial distribution building that upon completion of redevelopment will contain approximately 83,000 square feet on 3.7 acres in Woodside, Queens, New York. The property is adjacent to the intersection of the Brooklyn-Queens Expressway and the Grand Central Parkway, and is approximately one mile from LaGuardia Airport. The property provides six dock-high and one grade-level loading positions, parking for 168 cars and is 23% leased to one tenant on a short-term basis. The purchase price was approximately $25.2 million with an estimated stabilized cap rate of 5.7%; and
• 4786 1st Avenue South: One industrial distribution building that upon completion of redevelopment will contain approximately 235,000 square feet on 8.7 acres in Seattle, Washington. The property is adjacent to Seattle’s Port and SoDo district, and provides 29 dock-high and two grade-level loading positions, parking for 71 cars and is 65% leased to three tenants. The purchase price was approximately $42.0 million with an estimated stabilized cap rate of 5.1%.

During the first quarter of 2018, Terreno Realty Corporation sold one 139,000 square-foot distribution building in Capitol Heights, Maryland for approximately $20.3 million generating an unleveraged internal rate of return of approximately 6.9%. The property was purchased in 2014 for approximately $18.1 million, and was 44% leased to one tenant at disposition. Capital from this sale was recycled into properties that Terreno Realty Corporation expects to provide better prospective returns.

Terreno Realty Corporation has approximately $40.3 million of acquisitions under contract aggregating approximately 258,000 square feet and an improved land parcel of approximately 3.5 acres. In addition, Terreno Realty Corporation has a commitment to fund a senior secured loan of $55 million secured by a portfolio of improved land parcels. At its option, the Company may acquire certain of the improved land parcels in-lieu of loan repayment. In addition, Terreno Realty Corporation has approximately $12.2 million of acquisitions under letter of intent aggregating approximately 45,000 square feet. The Company has one property under contract for sale for approximately $24.3 million aggregating approximately 302,000 square feet. There is no assurance that Terreno Realty Corporation will acquire or dispose of 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.

Capital Markets

During the first quarter of 2018, Terreno Realty Corporation issued 59,234 shares of common stock with a weighted average offering price of $35.02 per share, receiving gross proceeds of $2.1 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 March 31, 2018 on or about May 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,” 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.

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