Terreno Realty Corp 10-Q for FY2025 Q3
Terreno Realty Corp (TRNO)
10-Q
2025-11-05
For: 2025-09-30
View Original
Added on
April 09, 2026
About this 10-Q
Terreno Realty Corp filed this 10-Q on November 5, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $116.25M
- up 16.7% from $99.64M a year earlier
- Net income
- $103.38M
- up 182.1% from net income of $36.64M a year earlier
- Diluted EPS
- $1.00
- up 170.3% from $0.37 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
Form 10-Q
_________________________
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from __________ to __________
Commission file number: 001-34603
_________________________
(Exact Name of Registrant as Specified in Its Charter)
_________________________
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: (415 ) 655-4580
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
_________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The registrant had 103,395,221 shares of its common stock, $0.01 par value per share, outstanding as of November 3, 2025.
Terreno Realty Corporation
Table of Contents
Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements of Terreno Realty Corporation
Terreno Realty Corporation
Consolidated Balance Sheets
(in thousands – except share and per share data)
| September 30, 2025 | December 31, 2024 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Investments in real estate | |||||||||||
| Land | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Construction in progress | |||||||||||
| Intangible assets | |||||||||||
| Total investments in properties | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Net investments in properties | |||||||||||
| Properties held for sale, net | |||||||||||
| Net investments in real estate | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities | |||||||||||
| Credit facility | $ | $ | |||||||||
| Term loans payable, net | |||||||||||
| Senior unsecured notes, net | |||||||||||
| Mortgage loan payable, net | |||||||||||
| Security deposits | |||||||||||
| Intangible liabilities, net | |||||||||||
| Dividends payable | |||||||||||
| Accounts payable and other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Equity | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock: $ | |||||||||||
Additional paid-in capital | |||||||||||
Common stock held in deferred compensation plan: | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying condensed notes are an integral part of these consolidated financial statements.
2
Terreno Realty Corporation
Consolidated Statements of Operations
(in thousands – except share and per share data)
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||||||||
| Rental revenues and tenant expense reimbursements | $ | $ | $ | $ | |||||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||||||||
| COSTS AND EXPENSES | |||||||||||||||||||||||||||||
| Property operating expenses | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||
| Acquisition costs and other | |||||||||||||||||||||||||||||
| Total costs and expenses | |||||||||||||||||||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||||||||||||
| Interest and other income | |||||||||||||||||||||||||||||
| Interest expense, including amortization | ( | ( | ( | ( | |||||||||||||||||||||||||
| Gain on sales of real estate investments | |||||||||||||||||||||||||||||
| Total other income (expense) | ( | ( | |||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
| Allocation to participating securities | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||||||||
| EARNINGS PER COMMON SHARE - BASIC AND DILUTED: | |||||||||||||||||||||||||||||
| Net income available to common stockholders - basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net income available to common stockholders - diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
| BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||||||||||||||||||
| DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||||||||||||||||||
The accompanying condensed notes are an integral part of these consolidated financial statements.
3
Terreno Realty Corporation
Consolidated Statements of Equity
(in thousands – except share data)
(Unaudited)
Nine months ended September 30, 2025:
| Common Stock | Additional Paid- in Capital | Common Shares Held in Deferred Compensation Plan | Deferred Compensation Plan | Retained Earnings | |||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares acquired related to employee awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Deposits to deferred compensation plan | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Forfeiture of common stock related to employee awards | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Common shares acquired related to employee awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Common shares acquired related to employee awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2024:
| Common Stock | Additional Paid- in Capital | Common Shares Held in Deferred Compensation Plan | Deferred Compensation Plan | Retained Earnings | |||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of common stock related to employee awards | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Common shares acquired related to employee awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of common stock related to employee awards | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Common shares acquired related to employee awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares acquired related to employee awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||
The accompanying condensed notes are an integral part of these consolidated financial statements.
4
Terreno Realty Corporation
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| For the Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||||||||||||||
| Straight-line rents | ( | ( | |||||||||||||||||||||
| Amortization of lease intangibles | ( | ( | |||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Gain on sales of real estate investments | ( | ( | |||||||||||||||||||||
| Deferred financing cost and mortgage fair value adjustment amortization | |||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
| Changes in assets and liabilities | |||||||||||||||||||||||
| Other assets | ( | ( | |||||||||||||||||||||
| Accounts payable and other liabilities | |||||||||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||||||
| Cash paid for property acquisitions | ( | ( | |||||||||||||||||||||
| Proceeds from sales of real estate investments, net | |||||||||||||||||||||||
| Additions to construction in progress | ( | ( | |||||||||||||||||||||
| Additions to buildings, improvements and leasing costs | ( | ( | |||||||||||||||||||||
Net cash used in investing activities | ( | ( | |||||||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||||||
| Issuance of common stock | |||||||||||||||||||||||
| Issuance costs on issuance of common stock | ( | ( | |||||||||||||||||||||
| Repurchase of common stock related to employee awards | ( | ( | |||||||||||||||||||||
| Borrowings on credit facility | |||||||||||||||||||||||
| Payments on credit facility | ( | ||||||||||||||||||||||
| Payments on senior unsecured notes | ( | ||||||||||||||||||||||
| Payment of deferred financing costs | ( | ||||||||||||||||||||||
| Dividends paid to common stockholders | ( | ( | |||||||||||||||||||||
Net cash provided by financing activities | |||||||||||||||||||||||
Net increase in cash and cash equivalents and restricted cash | |||||||||||||||||||||||
Cash and cash equivalents and restricted cash at beginning of period | |||||||||||||||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | $ | |||||||||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||||||||||||||||
| Cash paid for interest, net of capitalized interest | $ | $ | |||||||||||||||||||||
| Supplemental disclosures of non-cash transactions | |||||||||||||||||||||||
| Accounts payable related to capital improvements | |||||||||||||||||||||||
| Non-cash issuance of common stock to the deferred compensation plan | ( | ||||||||||||||||||||||
| Lease liability arising from recognition of right-of-use asset | |||||||||||||||||||||||
| Reconciliation of cash paid for property acquisitions | |||||||||||||||||||||||
| Acquisition of properties | $ | $ | |||||||||||||||||||||
| Assumption of other assets and liabilities | ( | ( | |||||||||||||||||||||
| Net cash paid for property acquisitions | $ | $ | |||||||||||||||||||||
The accompanying condensed notes are an integral part of these consolidated financial statements.
5
Terreno Realty Corporation
Condensed Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Organization
Terreno Realty Corporation (“Terreno”, and together with its subsidiaries, the “Company”) acquires, owns and operates industrial real estate in six major coastal U.S. markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these condensed notes to the consolidated financial statements are unaudited. As of September 30, 2025, the Company owned 307 buildings (including one property consisting of two buildings held for sale) aggregating approximately 20.2 million square feet, 44 improved land parcels consisting of approximately 146.4 acres, six properties under development or redevelopment and approximately 10.7 acres of land for future development.
The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2010.
Note 2. Significant Accounting Policies
Basis of Presentation. The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. In management’s opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The interim consolidated financial statements include all of the Company’s accounts and its subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. The financial statements should be read in conjunction with the financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the notes thereto, which was filed with the Securities and Exchange Commission on February 5, 2025.
Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Capitalization of Costs. The Company capitalizes costs directly related to the development, redevelopment, renovation and expansion of its investment in real estate. Costs associated with such projects are capitalized as incurred. If the project is abandoned, these costs are expensed during the period in which the development, redevelopment, renovation or expansion project is abandoned. Costs considered for capitalization include, but are not limited to, construction costs, interest, real estate taxes and insurance, if appropriate. These costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. Costs incurred for maintaining and repairing properties, which do not extend their useful lives, are expensed as incurred.
Interest is capitalized based on actual capital expenditures from the period when development, redevelopment, renovation or expansion commences until the asset is ready for its intended use, at the weighted average borrowing rate during the period.
Investments in Real Estate. Investments in real estate, including tenant improvements, leasehold improvements and leasing costs, are stated at cost, less accumulated depreciation, unless circumstances indicate that the cost cannot be recovered, in which case, an adjustment to the carrying value of the property is made to reduce it to its estimated fair value. The Company also reviews the impact of above and below-market leases, in-place leases and lease origination costs for acquisitions and records an intangible asset or liability accordingly.
Impairment. Carrying values for financial reporting purposes are reviewed for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. Examples of such events or changes in circumstances may include classifying an asset to be held for sale, changing the intended hold period or when an asset remains vacant significantly longer than expected. The intended use of an asset either held for sale or held for use can significantly impact how impairment is measured. If an asset is intended to be held for the long-term, the recoverability is based on the undiscounted future cash flows. If the asset carrying value is not supported on an undiscounted
6
Property Acquisitions. In accordance with Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not considered a business. To be a business, the set of acquired activities and assets must include inputs and one or more substantive processes that together contribute to the ability to create outputs. The Company has determined that its real estate property acquisitions will generally be accounted for as asset acquisitions under the clarified definition. Upon acquisition of a property the Company estimates the fair value of acquired tangible assets (consisting generally of land, buildings and improvements) and intangible assets and liabilities (consisting generally of the above and below-market leases and the origination value of all in-place leases). The Company determines fair values using Level 3 inputs such as replacement cost, estimated cash flow projections and other valuation techniques and applying appropriate discount and capitalization rates based on available market information. Mortgage loans assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the date of acquisition. Acquisition-related costs associated with asset acquisitions are capitalized to individual tangible and intangible assets and liabilities assumed on a relative fair value basis and acquisition-related costs associated with business combinations are expensed as incurred.
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
| In-place leases | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Above-market leases | ( | ( | |||||||||||||||||||||||||||||||||
| Below-market leases | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||
7
Depreciation and Useful Lives of Real Estate and Intangible Assets. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets or liabilities. The following table reflects the standard depreciable lives typically used to compute depreciation and amortization. However, such depreciable lives may be different based on the estimated useful life of such assets or liabilities.
| Description | Standard Depreciable Life | |||||||
| Land | Not depreciated | |||||||
| Building | ||||||||
| Building Improvements | ||||||||
| Tenant Improvements | Shorter of lease term or useful life | |||||||
| Leasing Costs | Lease term | |||||||
| In-place Leases | Lease term | |||||||
| Above/Below-Market Leases | Lease term | |||||||
Held for Sale Assets. The Company considers a property to be held for sale when it meets the criteria established under Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment (See “Note 5 - Held for Sale/Disposed Assets”). Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale.
Cash and Cash Equivalents. Cash and cash equivalents consists of cash held in a major banking institution and other highly liquid short-term investments with original maturities of three months or less. Cash equivalents are generally invested in U.S. government securities, government agency securities or money market accounts.
Restricted Cash. Restricted cash includes cash held in escrow in connection with property acquisitions and reserves for certain capital improvements, leasing, interest and real estate tax and insurance payments as required by certain mortgage loan obligations.
The following summarizes the reconciliation of cash and cash equivalents and restricted cash as presented in the accompanying consolidated statements of cash flows (dollars in thousands):
| For the Nine Months Ended September 30, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Beginning | |||||||||||||||||
Cash and cash equivalents at beginning of period | $ | $ | |||||||||||||||
| Restricted cash | |||||||||||||||||
| Cash and cash equivalents and restricted cash | |||||||||||||||||
| Ending | |||||||||||||||||
Cash and cash equivalents at end of period | |||||||||||||||||
| Restricted cash | |||||||||||||||||
| Cash and cash equivalents and restricted cash | |||||||||||||||||
| Net increase in cash and cash equivalents and restricted cash | $ | $ | |||||||||||||||
8
As of September 30, 2025 and December 31, 2024, approximately $73.4 million and $62.9 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $6.0 million and $3.4 million as of September 30, 2025 and December 31, 2024, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.
Income Taxes. The Company elected to be taxed as a REIT under the Code and operates as such beginning with its taxable year ended December 31, 2010. In addition, certain properties are held indirectly through subsidiaries that also elected to qualify as REITs under the Code and operate as such for federal income tax purposes. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. If it fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the IRS grants it relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes it is organized and operates in such a manner as to qualify for treatment as a REIT.
Stock-Based Compensation and Other Long-Term Incentive Compensation. The Company follows the provisions of ASC 718, Compensation-Stock Compensation, to account for its stock-based compensation plan, which requires that the compensation cost relating to stock-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The Company’s 2025 Equity Incentive Plan (the “2025 Plan”) provides, and the 2019 Equity Incentive Plan (the “2019 Plan”) previously provided, for the grant of restricted stock awards, performance share awards, unrestricted shares or any combination of the foregoing. Stock-based compensation is recognized as a general and administrative expense in the accompanying consolidated statements of operations and measured at the fair value of the award on the date of grant. The Company estimates the forfeiture rate based on historical experience as well as expected behavior. The amount of the expense may be subject to adjustment in future periods depending on the specific characteristics of the stock-based award.
In addition, the Company has awarded long-term incentive target awards (the “Performance Share awards”) under its Amended and Restated Long-Term Incentive Plan (the “LTIP”) to its executives that may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period, which is generally three years . The amount that may be earned is variable depending on the relative total shareholder return of the Company’s common stock as compared to the total shareholder return of the MSCI U.S. REIT Index (RMS) and the FTSE Nareit Equity Industrial Index over the pre-established performance measurement period. Under the LTIP, each participant’s Performance Share award granted will be expressed as a number of shares of common stock and settled in shares of common stock. The grant date fair value of the
9
Fair Value of Financial Instruments. ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) (See “Note 8 - Fair Value Measurements”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. ASC 820 requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3).
Segment Disclosure. ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company acquires, owns and operates industrial real estate in six major coastal U.S. markets. The Company invests in several types of industrial real estate, including warehouse/distribution, flex, transshipment, and improved land. The Company’s assets engage in leasing activities that generate revenues and incur operating expenses. Lease terms typically range from to ten years . As each of the Company’s assets has similar economic characteristics, the assets have been aggregated into one reportable segment.
The accounting policies for the reportable segment are the same as those described above. The Chief Operating Decision Maker (“CODM”) assesses segment performance and decides how to allocate resources based on net income, which is reported on the Consolidated Statements of Operations. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets.
The CODM is comprised of the CEO and the President. The CODM reviews net income on an individual asset level and on a consolidated level and uses this information to monitor budget versus actual results, to evaluate returns on assets and to determine how to reinvest profits.
The revenue, costs and expenses, and net income for the reportable segment are the same as those presented on the Consolidated Statements of Operations.
New Accounting Standards. In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities to disaggregate certain expense captions on the income statement into specific categories in a tabular format in the notes to the financial statements. This standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating ASU 2024-03 and expects to provide additional information related to its income statement in the footnotes as required.
Note 3. Concentration of Credit Risk
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company may maintain deposits in federally insured financial institutions in excess of federally insured limits. However, the Company’s management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
As of September 30, 2025, the Company owned 68 buildings aggregating approximately 4.1 million square feet and 13 improved land parcels consisting of approximately 62.3 acres located in New York City/Northern New Jersey, which accounted for a combined percentage of approximately 28.1 % of its annualized base rent. Such annualized base rent is based on contractual monthly base rent per the leases, for all buildings and improved land parcels, excluding any partial or full rent abatements as of September 30, 2025, multiplied by 12.
Other real estate companies compete with the Company in its real estate markets. This results in competition for tenants to occupy space. The existence of competing properties could have a material impact on the Company’s ability to lease space and on the level of rent that can be achieved. The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of September 30, 2025.
Note 4. Investments in Real Estate
10
During the three months ended September 30, 2025, the Company acquired two industrial properties and one 485.5 million, of which $319.0 million was recorded to land, $146.4 million to buildings and improvements, and $20.1 million to intangible assets. Additionally, the Company assumed $7.4 million in liabilities.
During the nine months ended September 30, 2025, the Company acquired eight industrial properties and one 638.3 million, of which $438.7 million was recorded to land, $171.3 million to buildings and improvements, and $28.3 million to intangible assets. Additionally, the Company assumed $34.3 million in liabilities.
The Company recorded revenues and net income for the three months ended September 30, 2025 of approximately $4.9 million and $2.2 million, respectively, and recorded revenues and net income for the nine months ended September 30, 2025 of approximately $5.4 million and $2.4 million, respectively, related to the 2025 acquisitions.
During the three months ended September 30, 2024, the Company acquired one industrial property with a total initial investment, including acquisition costs, of approximately $7.9 million, of which $5.2 million was recorded to land and $2.7 million to buildings and improvements.
During the nine months ended September 30, 2024, the Company acquired four industrial properties and one portfolio of industrial properties, with a total initial investment, including acquisition costs, of approximately $499.4 million, of which $318.2 million was recorded to land, $149.8 million to buildings and improvements, and $31.4 million to intangible assets. Additionally, the Company assumed $22.4 million in liabilities.
The Company recorded revenues and net income for the three months ended September 30, 2024 of approximately $9.1 million and $2.8 million, respectively, and recorded revenues and net income for the nine months ended September 30, 2024 of approximately $15.6 million and $5.6 million, respectively, related to the 2024 acquisitions.
The above assets and liabilities were recorded using fair value, which uses Level 3 inputs. The purchase price for each acquisition was allocated to the individual acquired assets and liabilities based on their relative fair values. The properties were acquired from unrelated third parties using existing cash on hand, proceeds from property sales and issuances of common stock and borrowings on the revolving credit facility.
As of September 30, 2025, the Company had six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet. Additionally, the Company owned approximately 10.7 acres of land for future development that, upon completion, will consist of one building of approximately 0.2 million square feet. The following table summarizes certain information with respect to the properties under development or redevelopment and the land for future development as of September 30, 2025:
11
| Property Name | Location | Total Expected Investment (in thousands) 1 | Estimated Post-Development Square Feet | |||||||||||||||||||||||||||||||||||
| Properties under development or redevelopment: | ||||||||||||||||||||||||||||||||||||||
Countyline Phase IV 2 | ||||||||||||||||||||||||||||||||||||||
Countyline Building 32 | Hialeah, FL | $ | ||||||||||||||||||||||||||||||||||||
Countyline Building 34 | Hialeah, FL | |||||||||||||||||||||||||||||||||||||
Countyline Building 36 | Hialeah, FL | |||||||||||||||||||||||||||||||||||||
Paterson Plank III | Carlstadt, NJ | |||||||||||||||||||||||||||||||||||||
27th Street | Queens, NY | |||||||||||||||||||||||||||||||||||||
139th Street 3 | Gardena, CA | |||||||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||||||||
| Land for future development: | ||||||||||||||||||||||||||||||||||||||
Countyline Phase IV 2 | ||||||||||||||||||||||||||||||||||||||
Countyline Phase IV Land | Hialeah, FL | $ | ||||||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||||||||
1Excludes below-market lease adjustments recorded at acquisition. Total expected investment for the properties includes the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.
2“Countyline Phase IV” is a 121 -acre project entitled for 2.2 million square feet of industrial distribution buildings located in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to the Company’s seven buildings within Countyline. Countyline Phase IV, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is expected to contain ten LEED-certified industrial distribution buildings at completion.
3This redevelopment property was initially acquired in 2017 for a total initial investment, including closing costs and acquisition costs, of approximately $39.9 million. The property was in the operating portfolio until January 2024 when redevelopment commenced. The amount spent to date includes the total initial investment and capital expenditures incurred prior to redevelopment and excludes accumulated depreciation recorded since acquisition. The Company expects a total incremental investment of approximately $64.0 million.
During 2025, the Company completed the development or redevelopment of two properties. The following table summarizes certain information with respect to the development and redevelopment properties completed during the nine months ended September 30, 2025:
| Property Name | Location | Total Expected Investment (in thousands) 1 | Post-Development Square Feet | Completion Quarter | ||||||||||||||||||||||||||||
| East Garry Avenue | Santa Ana, CA | $ | Q1 2025 | |||||||||||||||||||||||||||||
| Countyline Building 33 | Hialeah, FL | Q3 2025 | ||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||
1Total investment for the properties includes the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.
The Company capitalized interest associated with development, redevelopment, renovation or expansion activities of approximately $1.4 million and $2.7 million during the three months ended September 30, 2025 and 2024, respectively, and approximately $3.8 million and $8.7 million during the nine months ended September 30, 2025 and 2024, respectively.
Note 5. Held for Sale/Disposed Assets
12
The Company considers a property to be held for sale when it meets the criteria established under ASC 360, Property, Plant, and Equipment. Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. As of September 30, 2025, the Company had one property held for sale. The property consists of two buildings located in the New York City/Northern New Jersey market (net book value of approximately $30.4 million and net liabilities of approximately $0.2 million) and was sold on October 6, 2025 for a sales price of approximately $144.2 million.
The following table summarizes the properties sold by the Company during the nine months ended September 30, 2025 (dollars in thousands):
| Market | Number of Properties | Number of Buildings | Total Sales Price | Total Gain | ||||||||||||||||||||||
| Los Angeles | $ | $ | ||||||||||||||||||||||||
| Miami | ||||||||||||||||||||||||||
| San Francisco Bay Area | ||||||||||||||||||||||||||
| Seattle | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
The following table summarizes the properties sold by the Company during the nine months ended September 30, 2024 (dollars in thousands):
| Market | Number of Properties | Number of Buildings | Total Sales Price | Total Gain | ||||||||||||||||||||||
| Seattle | $ | $ | ||||||||||||||||||||||||
Note 6. Debt
| September 30, 2025 | December 31, 2024 | Margin Above SOFR | Interest Rate 1 | Contractual Maturity Date | ||||||||||||||||||||||||||||
| Unsecured Debt: | ||||||||||||||||||||||||||||||||
| Credit Facility | $ | $ | % | 1/15/2029 | ||||||||||||||||||||||||||||
| % | 1/15/2027 | |||||||||||||||||||||||||||||||
| % | 1/15/2028 | |||||||||||||||||||||||||||||||
$ | n/a | % | 7/7/2026 | |||||||||||||||||||||||||||||
$ | n/a | % | 10/31/2027 | |||||||||||||||||||||||||||||
$ | n/a | % | 7/15/2028 | |||||||||||||||||||||||||||||
$ | n/a | % | 12/3/2029 | |||||||||||||||||||||||||||||
$ | n/a | % | 8/17/2030 | |||||||||||||||||||||||||||||
$ | n/a | % | 7/15/2031 | |||||||||||||||||||||||||||||
| Total Unsecured Debt | ||||||||||||||||||||||||||||||||
| Secured Debt: | ||||||||||||||||||||||||||||||||
| 280 Richards Street | n/a | % | 3/1/2028 | |||||||||||||||||||||||||||||
| Total Secured Debt | ||||||||||||||||||||||||||||||||
| Total Unsecured and Secured Debt | ||||||||||||||||||||||||||||||||
| Less: Unamortized fair value adjustment and debt issuance costs | ( | ( | ||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||
13
1Reflects the contractual interest rate under the terms of each loan as of September 30, 2025. Excludes the effects of unamortized debt issuance costs.
2The interest rates on these loans are the Secured Overnight Financing Rate (“SOFR”) plus a SOFR margin. The SOFR margins will range from 1.10 % to 1.55 % (1.10 % as of September 30, 2025) for the revolving credit facility and 1.25 % to 1.75 % (1.25 % as of September 30, 2025) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.
3Collectively, the “Senior Unsecured Notes”.
The Company’s Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) consists of a $600.0 million revolving credit facility that matures in January 2029, a $100.0 million term loan that matures in January 2027 and a $100.0 million term loan that matures in January 2028. As of September 30, 2025, there were $280.0 million of borrowings outstanding on the revolving credit facility and $200.0 82.0 million of borrowings outstanding on the revolving credit facility and $200.0
The aggregate amount of the Amended Facility may be increased by up to an additional $450.0 million to a maximum aggregate amount not to exceed $1.25 billion, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts. Outstanding borrowings under the Amended Facility are limited to the lesser of (i) the sum of the $600.0 million revolving credit facility, the $100.0 million term loan maturing in January 2027 and the $100.0 million term loan maturing in January 2028, or (ii) 60.0 % of the value of the unencumbered properties. Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at the Company’s option, either (i) SOFR plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50 % above the federal funds effective rate, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25 %, or 1.25 % per annum. The applicable SOFR margin will range from 1.10 % to 1.55 % (1.10 % as of September 30, 2025) for the revolving credit facility and 1.25 % to 1.75 % (1.25 % as of September 30, 2025) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment. The Amended Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15 % to 0.30 %, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.
The Amended Facility and the Senior Unsecured Notes are guaranteed by the Company and by substantially all of the current and to-be-formed subsidiaries of the Company that own an unencumbered property. The Amended Facility and the Senior Unsecured Notes are not secured by the Company’s properties or by interests in the subsidiaries that hold such properties. The Amended Facility and the Senior Unsecured Notes include a series of financial and other covenants with which the Company must comply. The Company was in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of September 30, 2025 and December 31, 2024.
As of September 30, 2025, the Company had one 70.0 million, net of deferred financing costs of $0.1 million and unamortized fair value adjustment of approximately $2.7 million, which bore interest at a weighted average fixed annual rate of 3.9 %. The mortgage loan payable is collateralized by one property, is non-recourse and requires monthly interest payments until it matures in March 2028. As of December 31, 2024, the Company had one 69.1 million, net of deferred financing costs of $0.2 million and unamortized fair value adjustment of approximately $3.6 million.
14
The scheduled principal payments of the Company’s debt as of September 30, 2025 were as follows (dollars in thousands):
| Credit Facility | Term Loan | Senior Unsecured Notes | Mortgage Loan Payable | Total Debt | |||||||||||||||||||||||||
| Remainder of 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| 2026 | |||||||||||||||||||||||||||||
| 2027 | |||||||||||||||||||||||||||||
| 2028 | |||||||||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||||||||
| Thereafter | |||||||||||||||||||||||||||||
| Subtotal | |||||||||||||||||||||||||||||
| Unamortized fair value adjustment | ( | ( | |||||||||||||||||||||||||||
| Total Debt | |||||||||||||||||||||||||||||
| Deferred financing costs, net | ( | ( | ( | ( | |||||||||||||||||||||||||
| Total Debt, net | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Weighted average interest rate | |||||||||||||||||||||||||||||
Note 7. Leasing
The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of September 30, 2025. The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements (dollars in thousands):
| Remainder of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total | $ | ||||
Note 8. Fair Value Measurements
ASC 820 requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3).
Financial Instruments Disclosed at Fair Value. As of September 30, 2025 and December 31, 2024, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs. The fair values of the Company’s mortgage loan and Senior Unsecured Notes were estimated by calculating the present value of principal and interest payments, based on borrowing rates available to the Company, which are Level 2 inputs, adjusted with a credit spread, as applicable, and assuming the loans are outstanding through maturity. The fair value of the Company’s Amended Facility approximated its carrying value because the variable interest rates approximate market borrowing rates available to the Company, which are Level 2 inputs.
15
The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of September 30, 2025 and December 31, 2024 (dollars in thousands):
| Fair Value Measurement Using | |||||||||||||||||||||||||||||
| Total Fair Value | Quoted Price in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Carrying Value | |||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Debt at: | |||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Note 9. Stockholders’ Equity
The Company’s authorized capital stock consists of 400,000,000 shares of common stock, $0.01 par value per share, and 100,000,000 shares of preferred stock, $0.01 par value per share. The Company has an at-the-market equity offering program (the “$500 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500.0 million (approximately $200.8 million remaining as of September 30, 2025) in amounts and at times to be determined by the Company from time to time. Prior to the implementation of the $500 Million ATM Program, the Company had a previous at-the-market equity offering program (the “Previous $500 Million ATM Program”), which was substantially utilized as of August 27, 2024 and is no longer active. Actual sales under the $500 Million ATM Program, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock, determinations by the Company of the appropriate sources of funding for the Company and potential uses of funding available to the Company. During the three months ended September 30, 2025, the Company did not issue any common stock under the $500 Million ATM Program. During the nine months ended September 30, 2025, the Company issued an aggregate of 3,506,371 shares of common stock at a weighted average offering price of $67.71 per share under the $500 Million ATM Program, resulting in net proceeds of approximately $234.0 million and paying total compensation to the applicable sales agents of approximately $3.4 million. During the three and nine months ended September 30, 2024, the Company issued an aggregate of 2,976,266 and 5,329,544 shares, respectively, of common stock at a weighted average offering price of $68.70 and $66.62 per share, respectively, under the Previous $500 Million ATM Program and the $500 Million ATM Program, resulting in net proceeds or approximately $201.5 million and $349.9 million, respectively, and paying total compensation to the applicable sales agents of approximately $3.0 million and $5.1 million, respectively.
On March 27, 2024, the Company completed a public offering of 6,325,000 shares of common stock at a price per share of $62.00 , which included the underwriters’ full exercise of their option to purchase an additional 825,000 shares. The net proceeds of the offering were approximately $387.1 million after deducting the underwriting discount and offering costs of approximately $5.0 million. The Company used the net proceeds for acquisitions.
In connection with the Annual Meeting of Stockholders on May 6, 2025, the Company granted a total of 14,195 unrestricted shares of the Company's common stock to its independent directors under the 2019 Plan with a grant date fair value per share of $56.36 . The grant date fair value of the common stock was determined using the closing price of the Company’s common stock on the date of the grant. The Company recognized approximately $0.8 million in compensation costs for the nine months ended September 30, 2025 related to this issuance.
The Company has a share repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its outstanding common stock from time to time through December 31, 2026. Purchases made pursuant to the program will be made in either the open market or in privately negotiated transactions as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. As of September 30, 2025, the Company had not repurchased any shares of common stock pursuant to its share repurchase program.
The Company has a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) maintained for the benefit of select employees and members of the Company’s Board of Directors, in which certain of their cash and equity-based compensation may be deposited. Deferred Compensation Plan assets are held in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of bankruptcy or insolvency. The shares held in the Deferred Compensation Plan are
16
classified within stockholders’ equity in a manner similar to the manner in which treasury stock is classified. Subsequent changes in the fair value of the shares are not recognized. During both the three months ended September 30, 2025 and 2024, no 36,233 and 0 shares of common stock, respectively, were deposited into the Deferred Compensation Plan. During each of the three and nine months ended September 30, 2025 and 2024, no
On May 6, 2025, the Company’s stockholders approved the 2025 Plan, which replaced the 2019 Plan. As of September 30, 2025, there were 2,258,368 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2025 Plan, of which 2,163,391 were remaining and available for issuance. The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to September 30, 2025 ranged from $14.20 to $78.33 . The fair value of the restricted stock that was granted during the three and nine months ended September 30, 2025 was approximately $4.7 million and $9.0 million, respectively, and the vesting period for the restricted stock is typically between and five years . As of September 30, 2025, the Company had approximately $18.4 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 3.1 years. The Company recognized compensation costs of approximately $2.0 million and $1.8 million for the three months ended September 30, 2025 and 2024, respectively, and approximately $5.7 million and $5.0 million for the nine months ended September 30, 2025 and 2024, respectively, related to the restricted stock issuances.
The following is a summary of the total restricted shares granted to the Company’s executive officers and employees with the related weighted average grant date fair value share prices for the nine months ended September 30, 2025:
Restricted Stock Activity:
| Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Non-vested shares outstanding as of December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Forfeited | ( | ||||||||||
| Vested | ( | ||||||||||
| Non-vested shares outstanding as of September 30, 2025 | $ | ||||||||||
The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of September 30, 2025:
| Non-vested Shares Vesting Schedule | Number of Shares | |||||||
| Remainder of 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
| Total Non-vested Shares | ||||||||
Long-Term Incentive Plan:
As of September 30, 2025, there were three open performance measurement periods for the Performance Share awards: January 1, 2023 to December 31, 2025, January 1, 2024 to December 31, 2026, and January 1, 2025 to December 31, 2027. During the nine months ended September 30, 2025, the Company issued 41,192 shares of common stock at a price of $58.51 per share related to the Performance Share awards for the performance period from January 1, 2022 to December 31, 2024.
The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2022 and includes the forfeiture of certain of the Performance Share awards during 2024 (dollars in thousands):
17
| Performance Share Period | Fair Value on Date of Grant 1 | Expense for the Three Months Ended September 30, | Expense for the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| January 1, 2022 - December 31, 2024 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| January 1, 2023 - December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| January 1, 2024 - December 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| January 1, 2025 - December 31, 2027 | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
1 Reflects the fair value on date of grant for all performance shares outstanding at September 30, 2025.
Dividends:
| For the Three Months Ended | Security | Dividend per Share | Declaration Date | Record Date | Date Paid | |||||||||||||||||||||||||||
| March 31, 2025 | Common Stock | $ | February 4, 2025 | March 27, 2025 | April 4, 2025 | |||||||||||||||||||||||||||
| June 30, 2025 | Common Stock | $ | May 6, 2025 | June 27, 2025 | July 11, 2025 | |||||||||||||||||||||||||||
| September 30, 2025 | Common Stock | $ | August 5, 2025 | September 29, 2025 | October 10, 2025 | |||||||||||||||||||||||||||
Note 10. Net Income (Loss) Per Share
Pursuant to ASC 260-10-45, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing earnings per share allocates earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s non-vested shares of restricted stock are considered participating securities since these share-based awards contain non-forfeitable rights to dividends irrespective of whether the awards ultimately vest or expire. The Company had no
In accordance with the Company’s policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the net income (loss) per common share is adjusted for earnings distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method. Under this method, allocations were made to 461,977 and 422,856 of weighted average unvested restricted shares outstanding for the three months ended September 30, 2025 and 2024, respectively, and 449,279 and 430,782 of weighted average unvested restricted shares outstanding for the nine months ended September 30, 2025 and 2024, respectively.
Performance Share awards which may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period are included as contingently issuable shares in the calculation of diluted weighted average common shares of stock outstanding assuming the reporting period is the end of the measurement period, and the effect is dilutive. Diluted shares related to the Performance Share awards were 223,796 and 309,002 for the three months ended September 30, 2025 and 2024, respectively, and 221,880 and 344,356 for the nine months ended September 30, 2025 and 2024, respectively.
Note 11. Commitments and Contingencies
Contractual Commitments. As of November 4, 2025, the Company had three outstanding contracts with third-party sellers to acquire three industrial properties for a total purchase price of approximately $82.3 million. There is no assurance that the Company will acquire the properties under contracts because the proposed acquisitions are subject to due diligence and various closing conditions.
18
As of November 4, 2025, the Company had executed one non-binding letter of intent with a third-party seller to acquire one industrial property for a total anticipated purchase price of approximately $11.4 million. In the normal course of its business, the Company enters into non-binding letters of intent to purchase properties from third parties that may obligate the Company to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters. There can be no assurance that the Company will enter into a purchase and sale agreement with respect to this property or otherwise complete any such prospective purchases on the terms described or at all.
Note 12. Subsequent Events
On October 6, 2025, the Company sold one industrial property in South Brunswick, NJ, for a total sales price of approximately $144.2 million (net book value of approximately $30.4 million). The property was held for sale as of September 30, 2025.
On October 15, 2025, the Company acquired one industrial property in South San Francisco, CA, for a total purchase price of approximately $5.6 million. The property was acquired from an unrelated third party using existing cash on hand.
On October 31, 2025, the Company executed a lease for 226,000 square feet in Newark, California. The lease commenced November 1, 2025 and will expire May 2036. To facilitate the new lease, the Company terminated, effective October 31, 2025, the in-place lease that was set to expire June 2030 and the Company received a $13.5 million early termination payment from the prior tenant. Additionally, for the three-months ended December 31, 2025, the write-off of the below-market lease and straight-line rent related to the early termination of the prior lease will result in a net increase in revenue of approximately $4.4 million and the write-off of intangible assets will result in a net increase in depreciation and amortization expense of approximately $4.8 million.
On November 4, 2025, the Company’s Board of Directors declared a cash dividend in the amount of $0.52 per share of its common stock payable on January 9, 2026 to the stockholders of record as of the close of business on December 15, 2025.
19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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”, “potential”, “future” 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. 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.
Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:
•the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission on February 5, 2025, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which was filed with the Securities and Exchange Commission on May 7, 2025, in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, which was filed with the Securities and Exchange Commission on August 6, 2025, in this Quarterly Report on Form 10-Q, and in our other public filings;
•our ability to identify and acquire industrial properties on terms favorable to us;
•general volatility of the capital markets and the market price of our common stock;
•adverse economic or real estate conditions or developments in the industrial real estate sector and/or in the markets in which we own properties;
•a decline in economic activity caused by ongoing changes and negotiations of trade polices, tariffs and related government actions;
•our dependence on key personnel and our reliance on third-party property managers;
•our inability to comply with the laws, rules and regulations applicable to companies, and in particular, public companies;
•our ability to manage our growth effectively;
•tenant bankruptcies and defaults on, or non-renewal of, leases by tenants;
•decreased rental rates or increased vacancy rates;
•elevated interest rates and operating costs;
•declining real estate valuations and impairment charges;
•our expected leverage, our failure to obtain necessary outside financing, and existing and future debt service obligations;
•our ability to make distributions to our stockholders;
•our failure to successfully hedge against interest rate increases;
•our failure to successfully operate acquired properties;
•risks relating to our real estate development, redevelopment, renovation and expansion strategies and activities (including elevated inflation, supply chain disruptions and construction delays);
•the impact of any future pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and on our business, financial condition and results of operations and that of our tenants;
20
•risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology networks and related systems;
•our failure to qualify or maintain our status as a real estate investment trust (“REIT”), and possible adverse changes to tax laws;
•uninsured or underinsured losses and costs relating to our properties or that otherwise result from future litigation;
•environmental uncertainties and risks related to natural disasters;
•financial market fluctuations; and
•changes in real estate and zoning laws and increases in real property tax rates.
Overview
Terreno Realty Corporation (“Terreno”, and together with its subsidiaries, “we”, “us”, “our”, “our Company”, or “the Company”) acquires, owns and operates industrial real estate in six major coastal U.S. markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. We invest in several types of industrial real estate, including warehouse/distribution (approximately 80.4% of our total annualized base rent as of September 30, 2025), flex (including light industrial and research and development, or R&D) (approximately 3.4%), transshipment (approximately 6.2%) and improved land (approximately 10.0%). We target functional properties in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate. Infill locations are geographic locations surrounded by high concentrations of already developed land and existing buildings. As of September 30, 2025, we owned a total of 307 buildings (including one property consisting of two buildings held for sale) aggregating approximately 20.2 million square feet, 44 improved land parcels consisting of approximately 146.4 acres, six properties under development or redevelopment and approximately 10.7 acres of land for future development. As of September 30, 2025, our buildings and improved land parcels were approximately 96.2% and 93.6% leased, respectively, to 676 customers, the largest of which accounted for approximately 5.0% of our total annualized base rent. See “Item 1 – Our Investment Strategy – Industrial Facility General Characteristics” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a general description of these types of industrial real estate.
We are an internally managed Maryland corporation and elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with our taxable year ended December 31, 2010.
The following table summarizes by type our investments in real estate as of September 30, 2025:
| Type | Number of Buildings or Improved Land Parcels | Annualized Base Rent (in thousands) 1 | % of Total | |||||||||||||||||
| Warehouse/distribution | 270 | $ | 281,756 | 80.4 | % | |||||||||||||||
| Flex | 16 | 11,782 | 3.4 | % | ||||||||||||||||
| Transshipment | 21 | 21,888 | 6.2 | % | ||||||||||||||||
| Improved land | 44 | 35,081 | 10.0 | % | ||||||||||||||||
| Total | 351 | $ | 350,507 | 100.0 | % | |||||||||||||||
1Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of September 30, 2025, multiplied by 12.
21
The following table summarizes by market our investments in real estate as of September 30, 2025:
| New York City/Northern New Jersey | Los Angeles | Miami | San Francisco Bay Area | Seattle | Washington, D.C. | Total/Weighted Average | |||||||||||||||||
Investments in Real Estate | |||||||||||||||||||||||
| Number of Buildings | 68 | 61 | 41 | 56 | 53 | 28 | 307 | ||||||||||||||||
| Rentable Square Feet | 4,059,909 | 2,626,153 | 4,659,694 | 3,190,139 | 3,435,775 | 2,180,643 | 20,152,313 | ||||||||||||||||
| % of Total | 20.2 | % | 13.0 | % | 23.2 | % | 15.8 | % | 17.0 | % | 10.8 | % | 100.0 | % | |||||||||
Occupancy % as of September 30, 2025 | 95.4 | % | 98.7 | % | 93.3 | % | 98.8 | % | 96.8 | % | 96.4 | % | 96.2 | % | |||||||||
Annualized Base Rent (in thousands) 1 | $ | 84,246 | $ | 44,529 | $ | 55,746 | $ | 52,451 | $ | 46,892 | $ | 31,562 | $ | 315,426 | |||||||||
| % of Total | 26.7 | % | 14.1 | % | 17.7 | % | 16.6 | % | 14.9 | % | 10.0 | % | 100.0 | % | |||||||||
Annualized Base Rent 1 Per Occupied Square Foot | $ | 21.75 | $ | 17.18 | $ | 12.83 | $ | 16.65 | $ | 14.10 | $ | 15.02 | $ | 16.27 | |||||||||
Weighted Average Remaining Lease Term (Years) 2 | 3.7 | 5.9 | 5.4 | 3.4 | 3.1 | 2.4 | 4.1 | ||||||||||||||||
Investments in Improved Land | |||||||||||||||||||||||
| Number of Land Parcels | 13 | 13 | 3 | 4 | 9 | 2 | 44 | ||||||||||||||||
| Acres | 62.3 | 28.8 | 9.9 | 14.3 | 23.8 | 7.3 | 146.4 | ||||||||||||||||
| % of Total | 42.5 | % | 19.6 | % | 6.8 | % | 9.8 | % | 16.3 | % | 5.0 | % | 100.0 | % | |||||||||
Occupancy % as of September 30, 2025 | 100.0 | % | 89.1 | % | 100.0 | % | 100.0 | % | 73.5 | % | 100.0 | % | 93.6 | % | |||||||||
Annualized Base Rent (in thousands) 1 | $ | 14,278 | $ | 9,319 | $ | 2,230 | $ | 3,021 | $ | 4,786 | $ | 1,447 | $ | 35,081 | |||||||||
| % of Total | 40.7 | % | 26.6 | % | 6.4 | % | 8.6 | % | 13.6 | % | 4.1 | % | 100.0 | % | |||||||||
Annualized Base Rent 1 Per Occupied Square Foot | $ | 5.26 | $ | 8.33 | $ | 5.18 | $ | 4.86 | $ | 6.29 | $ | 4.56 | $ | 5.86 | |||||||||
Weighted Average Remaining Lease Term (Years) 2 | 3.1 | 3.4 | 8.0 | 5.2 | 5.0 | 7.8 | 4.2 | ||||||||||||||||
Total Investments in Real Estate and Improved Land | |||||||||||||||||||||||
Annualized Base Rent (in thousands) 1 | $ | 98,524 | $ | 53,848 | $ | 57,976 | $ | 55,472 | $ | 51,678 | $ | 33,009 | $ | 350,507 | |||||||||
% of Total Annualized Base Rent 1 | 28.2 | % | 15.4 | % | 16.5 | % | 15.8 | % | 14.7 | % | 9.4 | % | 100.0 | % | |||||||||
Gross Book Value (in thousands) 3 | $ | 1,469,224 | $ | 891,487 | $ | 1,227,318 | $ | 843,807 | $ | 856,852 | $ | 431,914 | $ | 5,720,602 | |||||||||
| % of Total Gross Book Value | 25.5 | % | 15.6 | % | 21.5 | % | 14.8 | % | 15.0 | % | 7.6 | % | 100.0 | % | |||||||||
1Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of September 30, 2025, multiplied by 12.
2Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of September 30, 2025, weighted by the respective square footage.
3Includes six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and approximately 10.7 acres of land for future development and one property consisting of two buildings held for sale with a gross book value of approximately $42.6 million.
As of September 30, 2025, we owned six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and approximately 10.7 acres of land for future development, with a total expected investment of approximately $391.2 million, including redevelopment costs, capitalized interest and other costs.
22
The following table summarizes our capital expenditures incurred during the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Operating portfolio: | ||||||||||||||||||||||||||
| Recurring capital expenditures | $ | 10,583 | $ | 10,170 | $ | 29,627 | $ | 26,287 | ||||||||||||||||||
Non-recurring capital expenditures 1 | 3,795 | 4,498 | 8,083 | 10,961 | ||||||||||||||||||||||
Total | 14,378 | 2 | 14,668 | 2 | 37,710 | 3 | 37,248 | 3 | ||||||||||||||||||
| Properties under development and redevelopment: | ||||||||||||||||||||||||||
| Development, redevelopment, renovation and expansion expenditures | 11,729 | 34,814 | 47,913 | 101,959 | ||||||||||||||||||||||
Capitalized interest 4 | 1,391 | 2,722 | 3,809 | 8,656 | ||||||||||||||||||||||
Total | $ | 13,120 | 5 | $ | 37,536 | 5 | $ | 51,722 | 6 | $ | 110,615 | 6 | ||||||||||||||
1Consists of costs incurred related to leasing acquired vacancy, renovation, and expansion projects (stabilization capital).
2Includes a net increase in accrued capital expenditures for the operating portfolio of approximately $0.3 million during the three months ended September 30, 2025 and a net increase of approximately $0.9 million during the three months ended September 30, 2024.
3Includes a net decrease in accrued capital expenditures for the operating portfolio of approximately $5.2 million during the nine months ended September 30, 2025 and a net increase of approximately $6.7 million during the nine months ended September 30, 2024.
4Consists of capitalized interest associated with development, redevelopment, renovation and expansion activities. We do not capitalize any general and administrative costs associated with these activities.
5Includes a net decrease in accrued capital expenditures for properties under development and redevelopment of approximately $2.8 million during the three months ended September 30, 2025 and a net increase of approximately $0.9 million during the three months ended September 30, 2024.
6Includes a net decrease in accrued capital expenditures for properties under development and redevelopment of approximately $6.9 million during the nine months ended September 30, 2025 and a net increase of approximately $2.5 million during the nine months ended September 30, 2024.
Our industrial properties are typically subject to leases on a “triple net basis,” in which tenants pay their proportionate share of real estate taxes, insurance and operating costs, or are subject to leases on a “modified gross basis,” in which tenants pay expenses over certain threshold levels. In addition, approximately 96.6% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years. We monitor the liquidity and creditworthiness of our tenants on an ongoing basis by reviewing outstanding accounts receivable balances, and as provided under the respective lease agreements, review the tenant’s financial condition periodically as appropriate. As needed, we hold discussions with the tenant’s management about their business and we conduct site visits of the tenant’s operations.
23
Our top 20 customers based on annualized base rent as of September 30, 2025 are as follows:
| Customer | Leases | Rentable Square Feet | % of Total Rentable Square Feet | Improved Land Acreage | Annualized Base Rent (in thousands) 1 | % of Total Annualized Base Rent 2 | |||||||||||||||||||||||||||||||||||
| 1 | Amazon.com | 5 | 783,880 | 3.9 | % | — | $ | 17,457 | 5.0 | % | |||||||||||||||||||||||||||||||
| 2 | FedEx Corporation | 6 | 308,889 | 1.5 | % | 7.7 | 7,738 | 2.2 | % | ||||||||||||||||||||||||||||||||
| 3 | Danaher | 3 | 171,707 | 0.9 | % | — | 4,739 | 1.4 | % | ||||||||||||||||||||||||||||||||
| 4 | Imperial Bag & Paper Co LLC | 1 | 505,729 | 2.5 | % | — | 4,729 | 1.3 | % | ||||||||||||||||||||||||||||||||
| 5 | United States Government | 8 | 316,796 | 1.6 | % | — | 4,627 | 1.3 | % | ||||||||||||||||||||||||||||||||
| 6 | O'Neill Logistics | 2 | 429,692 | 2.1 | % | — | 4,626 | 1.3 | % | ||||||||||||||||||||||||||||||||
| 7 | Meta Platforms, Inc. | 2 | 299,775 | 1.5 | % | — | 4,583 | 1.3 | % | ||||||||||||||||||||||||||||||||
| 8 | District of Columbia | 8 | 245,888 | 1.2 | % | — | 3,722 | 1.1 | % | ||||||||||||||||||||||||||||||||
| 9 | Fisica Inc. (previously L3 Harris Applied Technologies, Inc.) | 1 | 181,022 | 0.9 | % | 2.3 | 3,640 | 1.0 | % | ||||||||||||||||||||||||||||||||
| 10 | MD Turbines Inc. | 2 | 284,161 | 1.4 | % | — | 3,580 | 1.0 | % | ||||||||||||||||||||||||||||||||
| 11 | International Cargo Terminals Inc. | 1 | 31,601 | 0.2 | % | — | 3,501 | 1.0 | % | ||||||||||||||||||||||||||||||||
| 12 | Motivate LLC | 3 | 101,234 | 0.5 | % | — | 3,169 | 0.9 | % | ||||||||||||||||||||||||||||||||
| 13 | Home Depot U.S.A., Inc. | 1 | 134,400 | 0.7 | % | — | 2,905 | 0.8 | % | ||||||||||||||||||||||||||||||||
| 14 | Costco-Innovel Solutions LLC | 2 | 219,910 | 1.1 | % | 2.8 | 2,760 | 0.8 | % | ||||||||||||||||||||||||||||||||
| 15 | Lucid USA, Inc. | 1 | 161,680 | 0.8 | % | 2,756 | 0.8 | % | |||||||||||||||||||||||||||||||||
| 16 | Sentury Tire USA Inc. | 1 | 161,787 | 0.8 | % | — | 2,710 | 0.8 | % | ||||||||||||||||||||||||||||||||
| 17 | Port Kearny Security, Inc. | 1 | — | — | % | 16.9 | 2,546 | 0.7 | % | ||||||||||||||||||||||||||||||||
| 18 | Sarcona Management Corporation | 2 | 28,124 | 0.1 | % | 4.9 | 2,413 | 0.7 | % | ||||||||||||||||||||||||||||||||
| 19 | F. W. Webb Company | 1 | 33,414 | 0.2 | % | — | 2,400 | 0.7 | % | ||||||||||||||||||||||||||||||||
| 20 | Triton Logistics Inc. | 1 | 190,907 | 0.9 | % | — | 2,349 | 0.7 | % | ||||||||||||||||||||||||||||||||
| Total | 52 | 4,590,596 | 22.8 | % | 34.6 | $ | 86,950 | 24.8 | % | ||||||||||||||||||||||||||||||||
1Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of September 30, 2025, multiplied by 12.
2Total annualized base rent is calculated as contractual monthly base rent per the leases, for all buildings and improved land parcels, excluding any partial or full rent abatements, as of September 30, 2025, multiplied by 12.
The following tables summarize the anticipated lease expirations for leases in place as of September 30, 2025, without giving effect to the exercise of unexercised renewal options or termination rights, if any, at or prior to the scheduled expirations:
| Buildings: | ||||||||||||||||||||||||||||||||
| Year | Rentable Square Feet | % of Total Rentable Square Feet | Annualized Base Rent (in thousands) 2 | % of Total Annualized Base Rent 3 | ||||||||||||||||||||||||||||
Remainder of 2025 1 | 554,830 | 2.8 | % | $ | 11,271 | 2.8 | % | |||||||||||||||||||||||||
| 2026 | 3,434,024 | 17.0 | % | 54,619 | 13.8 | % | ||||||||||||||||||||||||||
| 2027 | 2,838,704 | 14.1 | % | 48,264 | 12.2 | % | ||||||||||||||||||||||||||
| 2028 | 2,928,024 | 14.5 | % | 57,157 | 14.4 | % | ||||||||||||||||||||||||||
| 2029 | 2,386,681 | 11.8 | % | 48,692 | 12.3 | % | ||||||||||||||||||||||||||
| Thereafter | 7,246,079 | 36.0 | % | 137,044 | 34.4 | % | ||||||||||||||||||||||||||
| Total | 19,388,342 | 96.2 | % | $ | 357,047 | 89.9 | % | |||||||||||||||||||||||||
24
| Improved Land Parcels: | ||||||||||||||||||||||||||||||||
| Year | Improved Land Acreage | % of Total Improved Land Acreage | Annualized Base Rent (in thousands) 2 | % of Total Annualized Base Rent 3 | ||||||||||||||||||||||||||||
Remainder of 2025 4 | 2.3 | 1.6 | % | $ | 990 | 0.2 | % | |||||||||||||||||||||||||
| 2026 | 17.9 | 12.2 | % | 4,819 | 1.2 | % | ||||||||||||||||||||||||||
| 2027 | 14.1 | 9.6 | % | 3,906 | 1.0 | % | ||||||||||||||||||||||||||
| 2028 | 26.4 | 18.0 | % | 7,430 | 1.9 | % | ||||||||||||||||||||||||||
| 2029 | 12.1 | 8.3 | % | 2,964 | 0.7 | % | ||||||||||||||||||||||||||
| Thereafter | 64.1 | 43.9 | % | 20,012 | 5.1 | % | ||||||||||||||||||||||||||
| Total | 136.9 | 93.6 | % | $ | 40,121 | 10.1 | % | |||||||||||||||||||||||||
Total Buildings and Improved Land Parcels: | ||||||||||||||
| Year | Total Annualized Base Rent (in thousands)3 | % of Total Annualized Base Rent 3 | ||||||||||||
Remainder of 2025 5 | $ | 12,261 | 3.0 | % | ||||||||||
| 2026 | 59,438 | 15.0 | % | |||||||||||
| 2027 | 52,170 | 13.2 | % | |||||||||||
| 2028 | 64,587 | 16.3 | % | |||||||||||
| 2029 | 51,656 | 13.0 | % | |||||||||||
| Thereafter | 157,056 | 39.5 | % | |||||||||||
| Total | $ | 397,168 | 100.0 | % | ||||||||||
1Includes leases that expire on or after September 30, 2025 and month-to-month leases totaling approximately 89,554 square feet. Approximately 0.3 million square feet of the space expiring during 2025 has either been renewed or pre-leased as of September 30, 2025.
2Annualized base rent is calculated as contractual monthly base rent per the leases at expiration, excluding any partial or full rent abatements, as of September 30, 2025, multiplied by 12.
3Total annualized base rent is calculated as contractual monthly base rent per the leases at expiration, for all buildings and/or improved land parcels, excluding any partial or full rent abatements, as of September 30, 2025, multiplied by 12.
4Includes leases that expire on or after September 30, 2025 and month-to-month leases totaling approximately 2.4 acres.
5Includes leases that expire on or after September 30, 2025 and month-to-month leases disclosed in footnotes 1 and 4 of the table.
Our ability to re-lease or renew expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations. As of September 30, 2025, leases representing approximately 3.0% of the total annualized base rent of our portfolio are scheduled to expire during the remainder of the year ending December 31, 2025. We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our remaining 2025 expirations will be above the rates currently being paid for the same space. Cash rent changes on new and renewed leases totaling approximately 0.6 million square feet and 8.0 acres of improved land commencing during the three months ended September 30, 2025 were approximately 17.2% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 2.0 million square feet and 21.5 acres commencing during the nine months ended September 30, 2025 were approximately 23.8% higher as compared to the previous rental rates for that same space. We had a tenant retention ratio for the operating portfolio of 68.7% and 70.8%, respectively, for the three and nine months ended September 30, 2025. We had a tenant retention ratio for the improved land portfolio of 100.0% and 74.1%, respectively, for the three and nine months ended September 30, 2025. We define tenant retention ratio as the square footage or acreage of all leases commenced during the period that are rented by existing tenants divided by the square footage or acreage of all expiring leases during the reporting period. The square footage or acreage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year are not included in the calculation.
25
Our past performance may not be indicative of future results, and we cannot assure you that leases will be renewed or that our properties will be re-leased at all or at rental rates equal to or above the current average rental rates. Further, re-leased/renewed rental rates in a particular market may not be consistent with rental rates across our portfolio as a whole and re-leased/renewed rental rates for particular properties within a market may not be consistent with rental rates across our portfolio within a particular market, in each case due to a number of factors, including local real estate conditions, local supply and demand for industrial space, the condition of the property, the impact of leasing incentives, including free rent and tenant improvements, and whether the property, or space within the property, has been redeveloped.
Recent Developments
Acquisition Activity
During the three months ended September 30, 2025, we acquired two industrial properties and one portfolio of industrial properties, for a total purchase price of approximately $472.6 million. The properties were acquired from unrelated third parties using existing cash on hand and proceeds from dispositions. The following table sets forth the industrial properties we acquired during the three months ended September 30, 2025:
| Property Name | Location | Acquisition Date | Number of Buildings | Square Feet | Purchase Price (in thousands) 1 | Stabilized Cap Rate 2 | ||||||||||||||||||||||||||||||||||||||
| 3700 & 3730 Redondo Beach Ave | Redondo Beach, CA | August 8, 2025 | 2 | 100,000 | $ | 35,500 | 5.8 | % | ||||||||||||||||||||||||||||||||||||
| Multi-market portfolio | Various | August 12, 2025; September 9, 2025 | 12 | 1,200,000 | 426,900 | 5.0 | % | |||||||||||||||||||||||||||||||||||||
| 258 Littlefield Ave | South San Francisco, CA | September 5, 2025 | 1 | 32,000 | 10,200 | 5.8 | % | |||||||||||||||||||||||||||||||||||||
| Total/Weighted Average | 15 | 1,332,000 | $ | 472,600 | 5.1 | % | ||||||||||||||||||||||||||||||||||||||
1Excludes intangible liabilities. The total aggregate initial investment was approximately $485.5 million, including $9.3 million in capitalized closing costs and acquisition costs, $5.2 million in assumed intangible liabilities and $1.6 million in other credits related to near term capital expenditures and tenant improvements at multiple properties.
2Stabilized capitalization rates, referred to herein as stabilized cap rates, are calculated, at the time of acquisition, as annualized cash basis net operating income for the property stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property. Total acquisition cost basis for the property includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization. We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles. These stabilized cap rates 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, 2024 and in our other public filings.
26
Development and Redevelopment Activity
As of September 30, 2025, we had six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet. Additionally, we owned approximately 10.7 acres of land for future development that, upon completion, will consist of one building of approximately 0.2 million square feet. The following table summarizes certain information with respect to the properties under development or redevelopment and the land for future development as of September 30, 2025:
| Property Name | Total Expected Investment (in thousands) 1 | Amount Spent to Date (in thousands) 2 | Estimated Stabilized Cap Rate 3 | Estimated Post-Development Square Feet | Estimated Stabilization Quarter | % Pre-leased September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Properties under development or redevelopment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Countyline Phase IV 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Countyline Building 32 | $ | 43,400 | $ | 37,400 | 6.0 | % | 164,300 | Q1 2026 | 100.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Countyline Building 34 | 55,300 | 50,400 | 5.7 | % | 219,900 | Q1 2026 | 100.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Countyline Building 36 | 54,100 | 19,900 | 5.8 | % | 213,600 | Q2 2027 | 50.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Paterson Plank III | 35,200 | 34,200 | 3.0 | % | 47,300 | Q4 2025 | — | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
27th Street | 40,200 | 32,600 | 5.5 | % | 47,500 | Q1 2027 | — | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
139th Street5 | 104,600 | 42,000 | 6.1 | % | 223,500 | Q2 2028 | — | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total/Weighted Average | $ | 332,800 | $ | 216,500 | 5.6 | % | 916,100 | 53.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Land for future development: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Countyline Phase IV 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Countyline Phase IV Land | 58,400 | 23,400 | 6.0 | % | 219,700 | 2027 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 58,400 | $ | 23,400 | 6.0 | % | 219,700 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
1Excludes below-market lease adjustments recorded at acquisition. Total expected investment for the properties includes the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.
2Excludes below-market lease adjustments recorded at acquisition.
3Estimated stabilized cap rates, referred to herein as estimated stabilized cap rates, are calculated as estimated annualized cash basis net operating income for the property stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property. We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles. These stabilized cap rates 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, 2024 and in our other public filings.
4“Countyline Phase IV” is a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings located in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to our seven buildings within Countyline. Countyline Phase IV, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is expected to contain ten LEED-certified industrial distribution buildings at completion.
5This redevelopment property was initially acquired in 2017 for a total initial investment, including closing costs and acquisition costs, of approximately $39.9 million. The property was in the operating portfolio until January 2024 when redevelopment commenced. The amount spent to date includes the total initial investment and capital expenditures incurred prior to redevelopment and excludes accumulated depreciation recorded since acquisition. We expect a total incremental investment of approximately $64.0 million.
During the nine months ended September 30, 2025, we completed the development and redevelopment of two properties. The following table summarizes certain information with respect to those development and redevelopment properties completed during the nine months ended September 30, 2025:
27
| Property Name | Location | Total Expected Investment (in thousands) 1 | Estimated Stabilized Cap Rate 2 | Post-Development Square Feet | Completion Quarter | |||||||||||||||||||||||||||||||||
| East Garry Avenue | Santa Ana, CA | $ | 41,300 | 5.1 | % | 91,500 | Q1 2025 | |||||||||||||||||||||||||||||||
| Countyline Building 33 | Hialeah, FL | 39,900 | 5.9 | % | 158,000 | Q3 2025 | ||||||||||||||||||||||||||||||||
| Total/Weighted Average | $ | 81,200 | 5.5 | % | 249,500 | |||||||||||||||||||||||||||||||||
1Total investment for the properties include the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.
2Estimated stabilized cap rates are calculated as estimated annualized cash basis net operating income for the properties stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property. We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles. These stabilized cap rates 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, 2024 and in our other public filings.
We capitalized interest associated with development, redevelopment and expansion activities of approximately $1.4 million and $2.7 million during the three months ended September 30, 2025 and 2024, respectively, and approximately $3.8 million and $8.7 million during the nine months ended September 30, 2025 and 2024, respectively.
Disposition Activity
The following table summarizes the properties we sold during the nine months ended September 30, 2025 (dollars in thousands):
| Market | Number of Properties | Number of Buildings | Total Sales Price | Total Gain | ||||||||||||||||||||||
| Los Angeles | 2 | 5 | 108,000 | 54,170 | ||||||||||||||||||||||
| Miami | 1 | 6 | 82,300 | 55,534 | ||||||||||||||||||||||
| San Francisco Bay Area | 2 | 2 | 24,880 | 11,842 | ||||||||||||||||||||||
| Seattle | 2 | 1 | 27,000 | 7,351 | ||||||||||||||||||||||
| Total | 7 | 14 | $ | 242,180 | $ | 128,897 | ||||||||||||||||||||
The following summarizes the condensed results of operations of the properties sold during the three and nine months ended September 30, 2025 (dollars in thousands):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| Rental revenues | $ | 469 | $ | 3,572 | $ | 6,321 | $ | 10,330 | |||||||||||||||||||||
| Tenant expense reimbursements | 79 | 919 | 1,579 | 2,564 | |||||||||||||||||||||||||
| Property operating expenses | (99) | (976) | (1,884) | (2,926) | |||||||||||||||||||||||||
| Depreciation and amortization | (14) | (639) | (1,462) | (2,012) | |||||||||||||||||||||||||
| Income from operations | $ | 435 | $ | 2,876 | $ | 4,554 | $ | 7,956 | |||||||||||||||||||||
28
ATM Program
We have an at-the-market equity offering program (the “$500 Million ATM Program”) pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $500.0 million ($200.8 million remaining as of September 30, 2025) in amounts and at times as we determine from time to time. We intend to use the net proceeds from the offering of the shares under the $500 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions, redevelopments and repayment of indebtedness, including borrowings under our revolving credit facility. During the three months ended September 30, 2025, we did not issue any common stock under the $500 Million ATM Program. During the nine months ended September 30, 2025, we issued an aggregate of 3,506,371 shares of common stock at a weighted average offering price of $67.71 per share under the $500 Million ATM Program, resulting in net proceeds of approximately $234.0 million and paying total compensation to the applicable sales agents of approximately $3.4 million.
Share Repurchase Program
We have a share repurchase program authorizing us to repurchase up to 3,000,000 shares of our outstanding common stock from time to time through December 31, 2026. Purchases made pursuant to this program, if any, will be made in either the open market or in privately negotiated transactions as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. As of September 30, 2025, we had not repurchased any shares of our common stock pursuant to our share repurchase program.
Dividend and Distribution Activity
On November 4, 2025, our Board of Directors declared a cash dividend in the amount of $0.52 per share of our common stock payable on January 9, 2026 to the stockholders of record as of the close of business on December 15, 2025.
Contractual Commitments
As of November 4, 2025, we had three outstanding contracts with third-party sellers to acquire three industrial properties for a total purchase price of approximately $82.3 million. There is no assurance that we will acquire the properties under contracts because the proposed acquisitions are subject to due diligence and various closing conditions.
As of November 4, 2025, we had executed one non-binding letter of intent with a third-party seller to acquire one industrial property for a total anticipated purchase price of approximately $11.4 million. In the normal course of its business, we enter into non-binding letters of intent to purchase properties from third parties that may obligate us to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters. There can be no assurance that we will enter into a purchase and sale agreement with respect to this property or otherwise complete any such prospective purchases on the terms described or at all.
Inflation
The U.S. economy experienced a significant increase in inflation rates in recent years. A wide variety of industries and sectors have been, and may continue to be, affected by increasing commodity prices. In recent years, inflation has increased construction costs, including tenant improvements and capital projects, goods and labor, and operating costs. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, leases with respect to approximately 60.5% of our total rentable square feet and improved land acreage expire within five years, which enables us to seek to replace existing leases with new leases at the then-existing market rate.
Trade Policies, Tariffs and Related Government Actions
There have been significant changes, and continue to be ongoing discussion and commentary regarding potential significant changes, to U.S. and foreign trade policies, tariffs, non-tariff barriers and related government actions. Such changes and potential changes have created significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, tariffs and related government actions. These developments, or the perception that certain potential developments could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between certain foreign countries and the United States. Any of these impacts could depress economic activity, including consumption, and have a material adverse effect on the businesses of our current and future tenants as well as on our business, financial condition and results of
29
operations. See Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for additional disclosure regarding trade policies, tariffs and related government actions.
Financial Condition and Results of Operations
We derive substantially all of our revenues from rents received from tenants under existing leases on each of our properties. These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants. Approximately 96.6% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years.
Our primary cash expenses consist of our property operating expenses, which include: real estate taxes, repairs and maintenance, management expenses, insurance, utilities, general and administrative expenses, which include compensation costs, office expenses, professional fees and other administrative expenses, acquisition costs, which include third-party costs paid to brokers and consultants, and interest expense, primarily on our revolving credit facility, term loans, mortgage loan and senior unsecured notes.
Our consolidated results of operations often are not comparable from period to period due to the impact of property acquisitions at various times during the course of such periods. The results of operations of any acquired property are included in our financial statements as of the date of its acquisition.
The analysis of our results below for the three and nine months ended September 30, 2025 and 2024 includes the changes attributable to same store properties. The same store pool for the comparison of the three and nine months ended September 30, 2025 and 2024 includes all properties that were owned and in operation as of September 30, 2025 and since January 1, 2024 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of September 30, 2025. As of September 30, 2025, the same store pool consisted of 237 buildings aggregating approximately 14.1 million square feet representing approximately 70.0% of our total square feet owned and 42 improved land parcels consisting of approximately 142.5 acres representing approximately 97.3% of our total acreage owned. As of September 30, 2025, the non-same store properties, which we acquired, developed or redeveloped, or sold during 2025 and 2024 or were held for sale or in development or redevelopment as of September 30, 2025, consisted of 70 buildings aggregating approximately 6.0 million square feet, two improved land parcels consisting of approximately 3.9 acres, six properties under development or redevelopment and approximately 10.7 acres of land for future development. As of September 30, 2025 and 2024, our consolidated same store pool occupancy was approximately 98.6% and 97.1%, respectively.
Our future financial condition and results of operations, including rental revenues, straight-line rents and amortization of lease intangibles, may be impacted by the acquisitions of additional properties, and expenses may vary materially from historical results.
30
Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024:
| For the Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
Rental revenues 1 | |||||||||||||||||||||||
| Same store | $ | 65,535 | $ | 62,357 | $ | 3,178 | 5.1 | % | |||||||||||||||
Non-same store operating properties 2 | 26,752 | 16,408 | 10,344 | 63.0 | % | ||||||||||||||||||
| Total rental revenues | 92,287 | 78,765 | 13,522 | 17.2 | % | ||||||||||||||||||
Tenant expense reimbursements 1 | |||||||||||||||||||||||
| Same store | 18,531 | 17,655 | 876 | 5.0 | % | ||||||||||||||||||
Non-same store operating properties 2 | 5,430 | 3,215 | 2,215 | 68.9 | % | ||||||||||||||||||
| Total tenant expense reimbursements | 23,961 | 20,870 | 3,091 | 14.8 | % | ||||||||||||||||||
| Total revenues | 116,248 | 99,635 | 16,613 | 16.7 | % | ||||||||||||||||||
| Property operating expenses | |||||||||||||||||||||||
| Same store | 20,591 | 20,411 | 180 | 0.9 | % | ||||||||||||||||||
Non-same store operating properties 2 | 7,641 | 5,188 | 2,453 | 47.3 | % | ||||||||||||||||||
| Total property operating expenses | 28,232 | 25,599 | 2,633 | 10.3 | % | ||||||||||||||||||
Net operating income 3 | |||||||||||||||||||||||
| Same store | 63,475 | 59,601 | 3,874 | 6.5 | % | ||||||||||||||||||
Non-same store operating properties 2 | 24,541 | 14,435 | 10,106 | 70.0 | % | ||||||||||||||||||
| Total net operating income | $ | 88,016 | $ | 74,036 | $ | 13,980 | 18.9 | % | |||||||||||||||
| Other costs and expenses | |||||||||||||||||||||||
| Depreciation and amortization | 28,376 | 24,058 | 4,318 | 17.9 | % | ||||||||||||||||||
| General and administrative | 11,581 | 10,775 | 806 | 7.5 | % | ||||||||||||||||||
| Acquisition costs and other | 97 | 11 | 86 | 781.8 | % | ||||||||||||||||||
| Total other costs and expenses | 40,054 | 34,844 | 5,210 | 15.0 | % | ||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest and other income | 1,369 | 2,347 | (978) | (41.7) | % | ||||||||||||||||||
| Interest expense, including amortization | (8,367) | (4,900) | (3,467) | 70.8 | % | ||||||||||||||||||
| Gain on sales of real estate investments | 62,412 | — | 62,412 | n/a | |||||||||||||||||||
| Total other income (expense) | 55,414 | (2,553) | 57,967 | n/a | |||||||||||||||||||
| Net income | $ | 103,376 | $ | 36,639 | $ | 66,737 | 182.1 | % | |||||||||||||||
1Accounting Standards Update (“ASU”) No. 2018-11, Leases (Topic 842), allows us to elect not to separate lease and non-lease rental income. All rental income earned pursuant to tenant leases is reflected as one line, “Rental revenues and tenant expense reimbursements” on our accompanying consolidated statements of operations. We believe that the above presentation of rental revenues and tenant expense reimbursements is not, and is not intended to be, a presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and a reconciliation to total revenue is provided above. We believe this information is frequently used by management, investors, and other interested parties to evaluate our performance. See “Note 2 - Significant Accounting Policies” in our condensed notes to consolidated financial statements for more information regarding our adoption of this standard.
2Includes 2025 and 2024 acquisitions and dispositions, two improved land parcels, six properties under development or redevelopment and approximately 10.7 acres of land for future development and one property consisting of two buildings held for sale as of September 30, 2025.
3Includes straight-line rents and amortization of lease intangibles. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of net operating income and same store net operating income from net income and a discussion of why we believe net operating income and same store net operating income are useful supplemental measures of our operating performance.
31
Revenues. Total revenues increased approximately $16.6 million for the three months ended September 30, 2025 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases during 2025 and 2024, property acquisitions during 2025 and 2024 and increased occupancy in the same store pool. The increase in total revenues was partially offset by property dispositions during 2025. Cash rents on new and renewed leases totaling approximately 0.6 million square feet and 8.0 acres of improved land commencing during the three months ended September 30, 2025 increased approximately 17.2% compared to the previous rental rates. For the three months ended September 30, 2025 and 2024, approximately $3.5 million and $2.1 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.1 million and $10,000, respectively, was recorded in lease termination revenue. Additionally, total revenues for the three months ended September 30, 2025 were partially offset by approximately $0.8 million of bad debt expense.
Property operating expenses. Total property operating expenses increased approximately $2.6 million during the three months ended September 30, 2025 compared to the same period from the prior year. The increase in total property operating expenses was primarily due to an increase of approximately $2.5 million attributable to property acquisitions during 2025 and 2024 as well as increases in real estate taxes. The increase in total property operating expenses was partially offset by property dispositions during 2025.
Depreciation and amortization. Depreciation and amortization increased approximately $4.3 million during the three months ended September 30, 2025 compared to the same period from the prior year primarily due to property acquisitions during 2025 and 2024, partially offset by property dispositions during 2025.
General and administrative expenses. General and administrative expenses increased approximately $0.8 million during the three months ended September 30, 2025 compared to the same period from the prior year primarily due to increased compensation expenses, including increased restricted stock amortization and LTIP expense, and an increase in the number of employees and salaries compared to the same period from the prior year.
Interest and other income. Interest and other income decreased approximately $1.0 million for the three months ended September 30, 2025 compared to the same period from the prior year primarily due to lower cash and cash equivalent balances and lower interest rates on those balances.
Interest expense, including amortization. Interest expense increased approximately $3.5 million for the three months ended September 30, 2025 compared to the same period from the prior year. This was primarily due to higher outstanding debt during the three months ended September 30, 2025 compared to the same period from the prior year, as well as a decrease in capitalized interest for the development and redevelopment properties.
Gain on sales of real estate investments. Gain on sales of real estate investments increased approximately $62.4 million for the three months ended September 30, 2025 compared to the same period from the prior year. We recognized an aggregate gain of approximately $62.4 million from the sale of three properties during the three months ended September 30, 2025. We did not sell any properties during the three months ended September 30, 2024.
32
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024:
| For the Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
Rental revenues 1 | |||||||||||||||||||||||
| Same store | $ | 191,493 | $ | 183,248 | $ | 8,245 | 4.5 | % | |||||||||||||||
Non-same store operating properties 2 | 75,530 | 36,318 | 39,212 | 108.0 | % | ||||||||||||||||||
| Total rental revenues | 267,023 | 219,566 | 47,457 | 21.6 | % | ||||||||||||||||||
Tenant expense reimbursements 1 | |||||||||||||||||||||||
| Same store | 55,894 | 52,207 | 3,687 | 7.1 | % | ||||||||||||||||||
Non-same store operating properties 2 | 15,985 | 7,139 | 8,846 | 123.9 | % | ||||||||||||||||||
| Total tenant expense reimbursements | 71,879 | 59,346 | 12,533 | 21.1 | % | ||||||||||||||||||
| Total revenues | 338,902 | 278,912 | 59,990 | 21.5 | % | ||||||||||||||||||
| Property operating expenses | |||||||||||||||||||||||
| Same store | 62,321 | 59,727 | 2,594 | 4.3 | % | ||||||||||||||||||
Non-same store operating properties 2 | 22,586 | 10,534 | 12,052 | 114.4 | % | ||||||||||||||||||
| Total property operating expenses | 84,907 | 70,261 | 14,646 | 20.8 | % | ||||||||||||||||||
Net operating income 3 | |||||||||||||||||||||||
| Same store | 185,066 | 175,728 | 9,338 | 5.3 | % | ||||||||||||||||||
Non-same store operating properties 2 | 68,929 | 32,923 | 36,006 | 109.4 | % | ||||||||||||||||||
| Total net operating income | $ | 253,995 | $ | 208,651 | $ | 45,344 | 21.7 | % | |||||||||||||||
| Other costs and expenses | |||||||||||||||||||||||
| Depreciation and amortization | 83,329 | 68,009 | 15,320 | 22.5 | % | ||||||||||||||||||
| General and administrative | 35,665 | 31,828 | 3,837 | 12.1 | % | ||||||||||||||||||
| Acquisition costs and other | 328 | 47 | 281 | 597.9 | % | ||||||||||||||||||
| Total other costs and expenses | 119,322 | 99,884 | 19,438 | 19.5 | % | ||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest and other income | 4,536 | 9,572 | (5,036) | (52.6) | % | ||||||||||||||||||
| Interest expense, including amortization | (23,331) | (15,660) | (7,671) | 49.0 | % | ||||||||||||||||||
| Gain on sales of real estate investments | 128,897 | 5,715 | 123,182 | 2155.4 | % | ||||||||||||||||||
| Total other income (expense) | 110,102 | (373) | 110,475 | n/a | |||||||||||||||||||
| Net income | $ | 244,775 | $ | 108,394 | $ | 136,381 | 125.8 | % | |||||||||||||||
1ASU No. 2018-11, Leases (Topic 842), Targeted Improvements, allows us to elect not to separate lease and non-lease rental income. All rental income earned pursuant to tenant leases is reflected as one line, “Rental revenues and tenant expense reimbursements” on our accompanying consolidated statements of operations. We believe that the above presentation of rental revenues and tenant expense reimbursements is not, and is not intended to be, a presentation in accordance with GAAP. We believe this information is frequently used by management, investors, and other interested parties to evaluate our performance. See “Note 2 - Significant Accounting Policies” in our notes to consolidated financial statements for more information regarding our adoption of this standard.
2Includes 2025 and 2024 acquisitions and dispositions, two improved land parcels, six properties under development or redevelopment, approximately 10.7 acres of land for future development and one property consisting of two buildings held for sale as of September 30, 2025.
3Includes straight-line rents and amortization of lease intangibles. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of net operating income and same store net operating income from net income and a discussion of why we believe net operating income and same store net operating income are useful supplemental measures of our operating performance.
33
Revenues. Total revenues increased approximately $60.0 million for the nine months ended September 30, 2025 compared to the same period from the prior year primarily due to property acquisitions during 2025 and 2024, increased revenue on new and renewed leases, and increased occupancy in the same store pool. The increase in total revenues was partially offset by property dispositions during 2025. Cash rents on new and renewed leases totaling approximately 2.0 million square feet and 21.5 acres commencing during the nine months ended September 30, 2025 increased approximately 23.8% compared to the previous rental rates. For the nine months ended September 30, 2025 and 2024, approximately $10.0 million and $5.4 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.7 million and $0.5 million, respectively, was recorded in lease termination revenue. Total revenues for the nine months ended September 30, 2025 and 2024 were partially offset by approximately $4.0 million and $1.7 million, respectively, of bad debt expense.
Property operating expenses. Total property operating expenses increased approximately $14.6 million during the nine months ended September 30, 2025 compared to the same period from the prior year. The increase in total property operating expenses was primarily due to property acquisitions during 2025 and 2024 as well as increases in real estate taxes. The increase in total property operating expenses was partially offset by property dispositions during 2025.
Depreciation and amortization. Depreciation and amortization increased approximately $15.3 million during the nine months ended September 30, 2025 compared to the same period from the prior year primarily due to property acquisitions during 2025 and 2024, partially offset by property dispositions during 2025.
General and administrative expenses. General and administrative expenses increased approximately $3.8 million for the nine months ended September 30, 2025 compared to the same period from the prior year primarily due to increased compensation expenses, including increased restricted stock amortization, LTIP expense and bonus expense, and an increase in the number of employees and salaries compared to the same period from the prior year.
Interest and other income. Interest and other income decreased approximately $5.0 million during the nine months ended September 30, 2025 compared to the same period from the prior year primarily due to lower cash and cash equivalent balances throughout 2025.
Interest expense, including amortization. Interest expense increased approximately $7.7 million for the nine months ended September 30, 2025 compared to the same period from the prior year. This was primarily due to higher outstanding debt during the nine months ended September 30, 2025, as well as a decrease in capitalized interest for the development and redevelopment properties.
Gain on sales of real estate investments. Gain on sales of real estate investments increased approximately $123.2 million for the nine months ended September 30, 2025 compared to the same period from the prior year. We recognized an aggregate gain of approximately $128.9 million from the sale of seven properties during the nine months ended September 30, 2025, as compared to an aggregate gain of approximately $5.7 million from the sale of one property during the same period from the prior year.
Liquidity and Capital Resources
The primary objective of our financing strategy is to maintain financial flexibility with a conservative capital structure using retained cash flows, proceeds from dispositions of properties, long-term debt and the issuance of common and perpetual preferred stock to finance our growth. Over the long-term, we intend to:
•limit the sum of the outstanding principal amount of our consolidated indebtedness and the liquidation preference of any outstanding perpetual preferred stock to less than 35% of our total enterprise value;
•maintain a fixed charge coverage ratio in excess of 2.0x;
•maintain a net debt-to-adjusted EBITDA ratio below 5.0x;
•limit the principal amount of our outstanding floating rate debt to less than 20% of our total consolidated indebtedness; and
•have staggered debt maturities that are aligned to our expected average lease term (five to seven years), positioning us to re-price parts of our capital structure as our rental rates change with market conditions.
We intend to preserve a flexible capital structure with a long-term goal to maintain our investment grade rating and be in a position to issue additional unsecured debt and perpetual preferred stock. We may also assume debt in connection with property acquisitions which may have a higher loan-to-value ratio.
34
We expect to meet our short-term liquidity requirements generally through net cash provided by operations, existing cash balances and, if necessary, short-term borrowings under our revolving credit facility. We believe that our net cash provided by operations will be adequate to fund operating requirements, pay interest on any borrowings and fund distributions in accordance with the REIT requirements of the federal income tax laws. In the near-term, we intend to fund future investments in properties, property developments and redevelopments and scheduled debt maturities with cash on hand, term loans, senior unsecured notes, borrowings under our revolving credit facility, perpetual preferred and common stock issuances and, from time to time, property dispositions. We expect to meet our long-term liquidity requirements, including with respect to other investments in industrial properties, property acquisitions, property developments and redevelopments, renovations and expansions and scheduled debt maturities, through borrowings under our revolving credit facility, periodic issuances of common stock, perpetual preferred stock, and long-term unsecured and secured debt, and, from time to time, with proceeds from the disposition of properties. The success of our acquisition strategy may depend, in part, on our ability to obtain and borrow under our revolving credit facility and to access additional capital through issuances of equity and debt securities.
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Equity Sources of Liquidity
The following sets forth certain information regarding our current at-the-market common stock offering program as of September 30, 2025:
| ATM Stock Offering Program | Date Implemented | Maximum Aggregate Offering Price (in thousands) | Aggregate Common Stock Available (in thousands) | |||||||||||||||||
| $500 Million ATM Program | August 28, 2024 | $ | 500,000 | $ | 200,836 | |||||||||||||||
The tables below set forth the activity under our at-the-market common stock offering programs during the three and nine months ended September 30, 2025 and 2024, respectively:
| For the Three Months Ended | Shares Sold | Weighted Average Price Per Share | Net Proceeds (in thousands) | Sales Commissions (in thousands) | ||||||||||||||||||||||
| September 30, 2025 | — | $ | — | $ | — | $ | — | |||||||||||||||||||
| September 30, 2024 | 2,976,266 | $ | 68.70 | $ | 201,495 | $ | 2,964 | |||||||||||||||||||
For the Nine Months Ended | Shares Sold | Weighted Average Price Per Share | Net Proceeds (in thousands) | Sales Commissions (in thousands) | ||||||||||||||||||||||
| September 30, 2025 | 3,506,371 | $ | 67.71 | $ | 233,980 | $ | 3,443 | |||||||||||||||||||
| September 30, 2024 | 5,329,544 | $ | 66.62 | $ | 349,919 | $ | 5,148 | |||||||||||||||||||
Debt Sources of Liquidity
As of September 30, 2025, we had $50.0 million of senior unsecured notes that mature in July 2026, $50.0 million of senior unsecured notes that mature in October 2027, $100.0 million of senior unsecured notes that mature in July 2028, $100.0 million of senior unsecured notes that mature in December 2029, $125.0 million of senior unsecured notes that mature in August 2030, and $50.0 million of senior unsecured notes that mature in July 2031 (collectively, the “Senior Unsecured Notes”).
The Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) consists of a $600.0 million revolving credit facility that matures in January 2029, a $100.0 million term loan that matures in January 2027 and a $100.0 million term loan that matures in January 2028. As of September 30, 2025, there were $280.0 million of borrowings outstanding on the revolving credit facility and $200.0 million of borrowings outstanding on the term loans. As of December 31, 2024, there were $82.0 million of borrowings outstanding on the revolving credit facility and $200.0 million of borrowings outstanding on the term loans.
The aggregate amount of the Amended Facility may be increased by up to an additional $450.0 million to a maximum aggregate amount not to exceed $1.25 billion, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts. Outstanding borrowings under the Amended Facility are limited to the lesser of (i) the sum of the $600.0 million revolving credit facility, the $100.0 million term loan maturing in January 2027 and the $100.0 million term loan maturing in January 2028, or (ii) 60.0% of the value of the unencumbered properties. Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at our option, either (i) the Secured
35
Overnight Financing Rate (“SOFR”) plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50% above the federal funds effective rate, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25%, or 1.25% per annum. The applicable SOFR margin will range from 1.10% to 1.55% (1.10% as of September 30, 2025) for the revolving credit facility and 1.25% to 1.75% (1.25% as of September 30, 2025) for the term loans, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value and includes a 10 basis points SOFR credit adjustment. The Amended Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15% to 0.30%, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value.
The Amended Facility and the Senior Unsecured Notes are guaranteed by us and by substantially all of the current and to-be-formed subsidiaries of the borrower that own an unencumbered property. The Amended Facility and the Senior Unsecured Notes are not secured by our properties or by interests in the subsidiaries that hold such properties. The Amended Facility and the Senior Unsecured Notes include a series of financial and other covenants with which we must comply. We were in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of September 30, 2025 and December 31, 2024.
As of September 30, 2025 and December 31, 2024, we had a mortgage loan payable with a total contractual principal amount of approximately $72.9 million which bears interest at a contractual fixed interest rate of 3.9% and matures in March 2028. The mortgage was assumed in an acquisition and was recorded at fair value in the amount of $69.2 million using an effective interest rate of 5.6%. The unamortized fair value adjustment as of September 30, 2025 and December 31, 2024 was approximately $2.7 million and $3.6 million, respectively.
As of September 30, 2025 and December 31, 2024, we held cash and cash equivalents totaling approximately $26.2 million and $18.1 million, respectively.
The following tables summarize our debt maturities and principal payments as of September 30, 2025 and our market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the nine months ended September 30, 2025 and 2024 (dollars in thousands, except per share data):
| Credit Facility | Term Loan | Senior Unsecured Notes | Mortgage Loan Payable | Total Debt | |||||||||||||||||||||||||
| Remainder of 2025 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
| 2026 | — | — | 50,000 | — | 50,000 | ||||||||||||||||||||||||
| 2027 | — | 100,000 | 50,000 | — | 150,000 | ||||||||||||||||||||||||
| 2028 | — | 100,000 | 100,000 | 72,879 | 272,879 | ||||||||||||||||||||||||
| 2029 | 280,0001 | — | 100,000 | — | 380,000 | ||||||||||||||||||||||||
| Thereafter | — | — | 175,000 | — | 175,000 | ||||||||||||||||||||||||
| Subtotal | 280,000 | 200,000 | 475,000 | 72,879 | 1,027,879 | ||||||||||||||||||||||||
| Unamortized fair value adjustment | — | — | — | (2,739) | (2,739) | ||||||||||||||||||||||||
| Total Debt | 280,000 | 200,000 | 475,000 | 70,140 | 1,025,140 | ||||||||||||||||||||||||
| Deferred financing costs, net | — | (443) | (1,696) | (140) | (2,279) | ||||||||||||||||||||||||
| Total Debt, net | $ | 280,000 | $ | 199,557 | $ | 473,304 | $ | 70,000 | $ | 1,022,861 | |||||||||||||||||||
| Weighted average interest rate | 5.3% | 5.5% | 3.0% | 3.9% | 4.2% | ||||||||||||||||||||||||
1As of November 4, 2025, there were $192.5 million of borrowings outstanding on the revolving credit facility.
36
| As of September 30, 2025 | As of September 30, 2024 | ||||||||||
| Total Debt, net | $ | 1,022,861 | $ | 672,157 | |||||||
| Less: Cash and cash equivalents | (26,153) | (243,670) | |||||||||
| Net Debt | $ | 996,708 | $ | 428,487 | |||||||
| Equity | |||||||||||
| Common Stock | |||||||||||
Shares Outstanding 1 | 103,395,221 | 99,735,692 | |||||||||
Market Price 2 | $ | 56.75 | $ | 66.83 | |||||||
| Total Equity | 5,867,679 | 6,665,336 | |||||||||
| Total Market Capitalization | $ | 6,890,540 | $ | 7,337,493 | |||||||
Total Debt-to-Total Investments in Properties 3 | 17.9% | 14.3% | |||||||||
Total Debt-to-Total Market Capitalization 4 | 14.8% | 9.2% | |||||||||
Floating Rate Debt as a % of Total Debt 5 | 46.9% | 29.7% | |||||||||
| Net Income | $ | 244,775 | $ | 108,394 | |||||||
Adjusted EBITDA 6 | $ | 236,264 | $ | 197,516 | |||||||
Interest Coverage 7 | 10.1 | x | 12.6 | x | |||||||
Fixed Charge Coverage 8 | 8.7 | x | 8.1 | x | |||||||
Net Debt-to-Adjusted EBITDA 9 | 3.0 | x | 1.5 | x | |||||||
| Weighted Average Maturity of Total Debt (years) | 3.1 | 4.1 | |||||||||
1Includes 473,905 and 426,887 shares of unvested restricted stock outstanding as of September 30, 2025 and 2024, respectively. Also includes 533,423 and 508,663 shares held in the Deferred Compensation Plan as of September 30, 2025 and 2024, respectively.
2Closing price of a share of our common stock on the New York Stock Exchange on September 30, 2025 and 2024, respectively, in dollars per share.
3Total debt-to-total investments in properties is calculated as total debt, net of deferred financing costs, divided by total investments in properties, including one property consisting of two buildings held for sale as of September 30, 2025.
4Total debt-to-total market capitalization is calculated as total debt, net of deferred financing costs, divided by total market capitalization.
5Floating rate debt as a percentage of total debt is calculated as floating rate debt, net of deferred financing costs, divided by total debt, net of deferred financing costs.
6Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the nine months ended September 30, 2025 and 2024, respectively. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.
7Interest coverage is calculated as Adjusted EBITDA divided by interest expense, including amortization. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.
8Fixed charge coverage is calculated as Adjusted EBITDA divided by interest expense, including amortization plus capitalized interest. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.
9Net debt-to-Adjusted EBITDA is calculated as net debt divided by annualized Adjusted EBITDA for the three months ended September 30, 2025 and 2024, respectively. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for the definitions of Adjusted EBITDA and net debt, a reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA and net debt are useful supplemental measures of our operating performance.
37
The following table sets forth the cash dividends paid or payable per share during the nine months ended September 30, 2025:
| For the Three Months Ended | Security | Dividend per Share | Declaration Date | Record Date | Date Paid | |||||||||||||||||||||||||||
| March 31, 2025 | Common Stock | $ | 0.49 | February 4, 2025 | March 27, 2025 | April 4, 2025 | ||||||||||||||||||||||||||
| June 30, 2025 | Common Stock | $ | 0.49 | May 6, 2025 | June 27, 2025 | July 11, 2025 | ||||||||||||||||||||||||||
| September 30, 2025 | Common Stock | $ | 0.52 | August 5, 2025 | September 29, 2025 | October 10, 2025 | ||||||||||||||||||||||||||
Sources and Uses of Cash
Our principal sources of cash are cash from operations, borrowings under loans payable, draws on our Amended Facility, common and preferred stock issuances, proceeds from property dispositions and issuances of unsecured notes. Our principal uses of cash are asset acquisitions, developments and redevelopments, debt service, capital expenditures, operating costs, corporate overhead costs and common stock dividends.
Cash From Operating Activities. Net cash provided by operating activities totaled approximately $201.6 million for the nine months ended September 30, 2025 compared to approximately $181.4 million for the nine months ended September 30, 2024. This increase in cash provided by operating activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is primarily attributable to additional cash flows generated from the properties acquired during 2025 and 2024 and increased rents on new, renewed leases at our same store properties and increased occupancy in the same store pool.
Cash From Investing Activities. Net cash used in investing activities was approximately $471.8 million and $605.4 million for the nine months ended September 30, 2025 and 2024, respectively. Such amounts consisted primarily of cash paid for property acquisitions of approximately $604.2 million and $476.8 million, respectively, and additions to capital improvements of approximately $101.6 million and $138.8 million during the nine months ended September 30, 2025 and 2024, respectively. Such amounts were partially offset by proceeds from sales of real estate investments during the nine months ended September 30, 2025 and 2024 of approximately $234.1 million and $10.2 million, respectively.
Cash From Financing Activities. Net cash provided by financing activities was approximately $278.6 million for the nine months ended September 30, 2025, which consisted primarily of approximately $234.0 million in net proceeds from the issuance of common stock, and $360.0 million in revolving credit facility borrowings, partially offset by approximately $150.1 million in equity dividend payments, and repayment of $162.0 million of borrowings on the revolving credit facility. Net cash provided by financing activities was approximately $501.8 million for the nine months ended September 30, 2024, which consisted primarily of approximately $737.0 million in net proceeds from the issuance of common stock, partially offset by approximately $126.1 million in equity dividend payments and payment of a $100.0 million tranche of the Senior Unsecured Notes.
Critical Accounting Policies And Estimates
A summary of our critical accounting policies is set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 and in the condensed notes to consolidated financial statements in this Quarterly Report on Form 10-Q.
Material Cash Commitments
As of November 4, 2025, we had three outstanding contracts with third-party sellers to acquire three industrial properties for a total purchase price of approximately $82.3 million. There is no assurance that we will acquire the properties under contracts because the proposed acquisitions are subject to due diligence and various closing conditions.
38
The following table summarizes our material cash commitments due by period as of September 30, 2025 (dollars in thousands):
| Material Cash Commitments | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | |||||||||||||||||||||||||||
| Debt | $ | 50,000 | $ | 422,879 | $ | 505,000 | $ | 50,000 | $ | 1,027,879 | ||||||||||||||||||||||
| Debt interest payments | 17,071 | 27,352 | 13,500 | 1,420 | 59,343 | |||||||||||||||||||||||||||
| Operating lease commitments | 1,000 | 1,830 | 720 | — | 3,550 | |||||||||||||||||||||||||||
| Material construction contracts | 3,580 | — | — | — | 3,580 | |||||||||||||||||||||||||||
Purchase obligations 1 | 82,300 | — | — | — | 82,300 | |||||||||||||||||||||||||||
| Total | $ | 153,951 | $ | 452,061 | $ | 519,220 | $ | 51,420 | $ | 1,176,652 | ||||||||||||||||||||||
1As of November 4, 2025.
As of November 4, 2025, we had executed one non-binding letter of intent with a third-party seller to acquire one industrial property for a total anticipated purchase price of approximately $11.4 million. In the normal course of its business, we enter into non-binding letters of intent to purchase properties from third parties that may obligate us to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters. There can be no assurance that we will enter into a purchase and sale agreement with respect to this property or otherwise complete any such prospective purchases on the terms described or at all.
Non-GAAP Financial Measures
We use the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: funds from operations, or FFO, Adjusted EBITDA, net operating income, or NOI, same store NOI, cash-basis same store NOI and net debt. FFO, Adjusted EBITDA, NOI, same store NOI, cash-basis same store NOI and net debt should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. Further, our computation of FFO, Adjusted EBITDA, NOI, same store NOI, cash-basis same store NOI and net debt may not be comparable to FFO, Adjusted EBITDA, NOI, same store NOI, cash-basis same store NOI and net debt reported by other companies.
We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), which defines FFO as net income (loss) (determined in accordance with GAAP), excluding gains (losses) from sales of property and impairment write-downs of depreciable real estate, plus depreciation and amortization on real estate assets and after adjustments for unconsolidated partnerships and joint ventures (which are calculated to reflect FFO on the same basis). We believe that presenting FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets.
We believe that FFO is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting alone to be insufficient. As a result, we believe that the use of FFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance.
The following table reflects the calculation of FFO reconciled from net income for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands except per share data):
39
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 103,376 | $ | 36,639 | $ | 66,737 | 182.1 | % | $ | 244,775 | $ | 108,394 | $ | 136,381 | 125.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on sales of real estate investments | (62,412) | — | (62,412) | n/a | (128,897) | (5,715) | (123,182) | 2,155.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 28,376 | 24,058 | 4,318 | 17.9 | % | 83,329 | 68,009 | 15,320 | 22.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-real estate depreciation | (37) | (35) | (2) | 5.7 | % | (109) | (113) | 4 | (3.5) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation to participating securities 1 | (316) | (260) | (56) | 21.5 | % | (873) | (749) | (124) | 16.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FFO attributable to common stockholders | $ | 68,987 | $ | 60,402 | $ | 8,585 | 14.2 | % | $ | 198,225 | $ | 169,826 | $ | 28,399 | 16.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic FFO per common share | $ | 0.67 | $ | 0.62 | $ | 0.05 | 8.1 | % | $ | 1.94 | $ | 1.80 | $ | 0.14 | 7.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted FFO per common share | $ | 0.67 | $ | 0.62 | $ | 0.05 | 8.1 | % | $ | 1.94 | $ | 1.80 | $ | 0.14 | 7.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic weighted average common shares outstanding | 102,912,261 | 97,561,792 | 102,197,324 | 94,253,923 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted weighted average common shares outstanding | 103,136,057 | 97,870,794 | 102,419,204 | 94,598,279 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1To be consistent with our policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the FFO per common share is adjusted for FFO distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method. Under this method, allocations were made to 461,977 and 422,856 of weighted average unvested restricted shares outstanding for the three months ended September 30, 2025 and 2024, respectively, and 449,279 and 430,782 of weighted average unvested restricted shares outstanding for the nine months ended September 30, 2025 and 2024, respectively.
FFO increased by approximately $8.6 million and $28.4 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods from the prior year due primarily to property acquisitions during 2024 and 2025 as well as same store NOI growth of approximately $3.9 million and $9.3 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods from the prior year. The FFO increase was partially offset by increased weighted average common shares outstanding and increased general and administrative expenses due to increased restricted stock amortization and other compensation expenses, including an increase in LTIP expense and an increase in the number of employees and salaries for the three and nine months ended September 30, 2025 compared to the same period from the prior year. The increase in FFO was partially offset by approximately $0.8 million and $4.0 million of bad expense for the three and nine months ended September 30, 2025, respectively, and by property dispositions during 2025.
We compute Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, gain on sales of real estate investments, acquisition costs and stock-based compensation. We believe that presenting Adjusted EBITDA provides useful information to investors regarding our operating performance because it is a measure of our operations on an unleveraged basis before the effects of tax, gain (loss) on sales of real estate investments, non-cash depreciation and amortization expense, acquisition costs and stock-based compensation. By excluding interest expense, Adjusted EBITDA allows investors to measure our operating performance independent of our capital structure and indebtedness and, therefore, allows for more meaningful comparison of our operating performance between quarters and other interim periods as well as annual periods and for the comparison of our operating performance to that of other companies, both in the real estate industry and in other industries. As we are currently in a growth phase, acquisition costs are excluded from Adjusted EBITDA to allow for the comparison of our operating performance to that of stabilized companies.
The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):
40
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 103,376 | $ | 36,639 | $ | 66,737 | 182.1 | % | $ | 244,775 | $ | 108,394 | $ | 136,381 | 125.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on sales of real estate investments | (62,412) | — | (62,412) | n/a | (128,897) | (5,715) | (123,182) | 2,155.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 28,376 | 24,058 | 4,318 | 17.9 | % | 83,329 | 68,009 | 15,320 | 22.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, including amortization | 8,367 | 4,900 | 3,467 | 70.8 | % | 23,331 | 15,660 | 7,671 | 49.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 4,276 | 3,777 | 499 | 13.2 | % | 13,398 | 11,121 | 2,277 | 20.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition costs and other | 97 | 11 | 86 | 781.8 | % | 328 | 47 | 281 | 597.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 82,080 | $ | 69,385 | $ | 12,695 | 18.3 | % | $ | 236,264 | $ | 197,516 | $ | 38,748 | 19.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
We compute NOI as rental revenues, including tenant expense reimbursements, less property operating expenses. We compute same store NOI as rental revenues, including tenant expense reimbursements, less property operating expenses on a same store basis. NOI excludes depreciation, amortization, general and administrative expenses, acquisition costs and interest expense, including amortization. We compute cash-basis same store NOI as same store NOI excluding straight-line rents and amortization of lease intangibles. The same store pool includes all properties that were owned and in operation as of September 30, 2025 and since January 1, 2024 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of September 30, 2025. As of September 30, 2025, the same store pool consisted of 237 buildings aggregating approximately 14.1 million square feet representing approximately 70.0% of our total square feet owned and 42 improved land parcels containing approximately 142.5 acres representing approximately 97.3% of our total acreage owned. We believe that presenting NOI, same store NOI and cash-basis same store NOI provides useful information to investors regarding the operating performance of our properties because NOI excludes certain items that are not considered to be controllable in connection with the management of the properties, such as depreciation, amortization, general and administrative expenses, acquisition costs and interest expense. By presenting same store NOI and cash-basis same store NOI, the operating results on a same store basis are directly comparable from period to period.
41
The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income 1 | $ | 103,376 | $ | 36,639 | $ | 66,737 | 182.1 | % | $ | 244,775 | $ | 108,394 | $ | 136,381 | 125.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 28,376 | 24,058 | 4,318 | 17.9 | % | 83,329 | 68,009 | 15,320 | 22.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 11,581 | 10,775 | 806 | 7.5 | % | 35,665 | 31,828 | 3,837 | 12.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition costs and other | 97 | 11 | 86 | 781.8 | % | 328 | 47 | 281 | 597.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other income and expenses | (55,414) | 2,553 | (57,967) | n/a | (110,102) | 373 | (110,475) | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net operating income | 88,016 | 74,036 | 13,980 | 18.9 | % | 253,995 | 208,651 | 45,344 | 21.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less non-same store NOI 2 | (24,541) | (14,435) | (10,106) | 70.0 | % | (68,929) | (32,923) | (36,006) | 109.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Same store NOI | $ | 63,475 | $ | 59,601 | $ | 3,874 | 6.5 | % | $ | 185,066 | $ | 175,728 | $ | 9,338 | 5.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Less straight-line rents and amortization of lease intangibles 3 | (4,136) | (4,121) | (15) | 0.4 | % | (9,652) | (12,004) | 2,352 | (19.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash-basis same store NOI | $ | 59,339 | $ | 55,480 | $ | 3,859 | 7.0 | % | $ | 175,414 | $ | 163,724 | $ | 11,690 | 7.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less termination fee income | (70) | (11) | (59) | 536.4 | % | (485) | (511) | 26 | (5.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash-basis same store NOI excluding termination fees | $ | 59,269 | $ | 55,469 | $ | 3,800 | 6.9 | % | $ | 174,929 | $ | 163,213 | $ | 11,716 | 7.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
1Includes approximately $0.1 million and $10,000 of lease termination income for the three months ended September 30, 2025 and 2024, respectively, and approximately $0.7 million and $0.5 million of lease termination income for the nine months ended September 30, 2025 and 2024, respectively.
2Includes 2025 and 2024 acquisitions and dispositions, two improved land parcels, six properties under development or redevelopment and approximately 10.7 acres of land for future development and one property consisting of two buildings held for sale as of September 30, 2025.
3Includes straight-line rents and amortization of lease intangibles for the same store pool only.
Cash-basis same store NOI increased by approximately $3.9 million for the three months ended September 30, 2025 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases, contractual rent increases on pre-existing leases and increased occupancy in the same store pool. For the three months ended September 30, 2025 and 2024, total contractual rent abatements of approximately $1.7 million and $0.7 million, respectively, were given to certain tenants in the same store pool and approximately $0.1 million and $10,000, respectively, in lease termination income was received from certain tenants in the same store pool. In addition, approximately $0.3 million of the increase in cash-basis same store NOI for the three months ended September 30, 2025 related to properties that were acquired vacant or with near term expirations in 2024.
Cash-basis same store NOI increased by approximately $11.7 million for the nine months ended September 30, 2025 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases as well as an increase in same store occupancy for the nine months ended compared to the same period from the prior year. For the nine months ended September 30, 2025 and 2024, total contractual rent abatements of approximately $3.5 million and $2.5 million, respectively, were given to certain tenants in the same-store pool. For both the nine months ended September 30, 2025 and 2024, approximately $0.5 million in lease termination income was received from certain tenants in the same store pool. In addition, approximately $0.9 million of the increase in cash-basis same store NOI for the nine months ended September 30, 2025 related to properties that were acquired vacant or with near term expirations in 2024.
We compute net debt as total debt, less deferred financing costs and cash and cash equivalents. We believe that presenting net debt provides useful information to investors regarding our ability to repay our outstanding consolidated indebtedness. See “Debt Sources of Liquidity” in this Quarterly Report on Form 10-Q for a reconciliation of net debt from total debt.
42
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business strategies, the primary market risk which we are exposed to is interest rate risk. We are exposed to interest rate changes primarily as a result of debt used to maintain liquidity, fund capital expenditures and expand our investment portfolio and operations. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. As described below, some of our outstanding debt bears interest at variable rates, and we expect that some of our future outstanding debt will have variable interest rates. We may use interest rate caps and/or swap agreements to manage our interest rate risks relating to our variable rate debt. We expect to replace variable rate debt on a regular basis with fixed rate, long-term debt to finance our assets and operations.
As of September 30, 2025, we had $480.0 million of borrowings outstanding under our Amended Facility, none of which were subject to interest rate caps. Amounts borrowed under our Amended Facility bear interest at a variable rate based on SOFR plus an applicable SOFR margin. The weighted average interest rate on borrowings outstanding under our Amended Facility was 5.4% as of September 30, 2025. If the SOFR rate were to fluctuate by 0.25%, interest expense would increase or decrease, depending on rate movement, future earnings and cash flows by approximately $1.2 million annually on the total of the outstanding balances on our Amended Facility as of September 30, 2025.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer, President and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), and has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer, President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
43
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
We are not involved in any material litigation nor, to our knowledge, is any material litigation threatened against us.
Item 1A. Risk Factors.
The following risk factor supplements our risk factors described under “Item 1A. Risk Factors” in our Annual Report in Form 10-K for the year ended December 31, 2024 and should be read in conjunction with other risk factors presented in our Annual Report on Form 10-K.
Trade policies, tariffs and related government actions may cause a decline in economic activity and have a material adverse impact on our business.
The U.S. government has continued to evaluate and effectuate changes to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto. For example, the United States government has imposed, and may in the future further increase, tariffs on certain foreign goods, including from China, such as steel and aluminum. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods. Most recently, the United States has imposed or sought to impose significant increases to tariffs on goods imported into the United States, including from China, Canada and Mexico. Tariffs on imported goods imposed by the United States or by foreign countries could further increase costs, decrease margins, reduce the competitiveness of products and services offered by our current and future tenants and adversely affect the revenues and profitability of our tenants whose businesses rely on goods imported from such impacted jurisdictions or exported to foreign countries.
In addition, there is uncertainty as to further actions that may be taken by the United States and by foreign countries with respect to trade policy and tariffs. Further governmental actions related to the imposition of tariffs or other trade barriers or changes to international trade agreements or policies, could further increase costs, decrease margins, reduce the competitiveness of products and services offered by our current and future tenants and adversely affect the revenues and profitability of companies whose businesses rely on goods imported from outside of the United States or exported to foreign countries. Any of these impacts could depress economic activity, including consumption, and have a material adverse effect on the businesses of our current and future tenants as well as on our business, financial condition and results of operations.
Except to the extent updated above or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(a)Not Applicable.
(b)Not Applicable.
(c)
| Period | (a) Total Number of Shares of Common Stock Purchased | (b) Average Price Paid per Common Share | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plan or Program | ||||||||||||||||||||||
| July 1, 2025 - July 31, 2025 | — | $ | — | n/a | n/a | |||||||||||||||||||||
| August 1, 2025 - August 31, 2025 | 22,446 | 54.27 | n/a | n/a | ||||||||||||||||||||||
| September 1, 2025 - September 30, 2025 | — | — | n/a | n/a | ||||||||||||||||||||||
| Total | 22,446 | 1 | $ | 54.27 | n/a | n/a | ||||||||||||||||||||
44
(1) Represents shares of common stock surrendered by employees to the Company to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted stock.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
During the three months ended September 30, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
45
Item 6. Exhibits.
Exhibit Number | Exhibit Description | |||||||
| 31.1* | ||||||||
| 31.2* | Rule 13a-14(a)/15d-14(a) Certification dated November 5, 2025. | |||||||
| 31.3* | ||||||||
| 32.1** | ||||||||
| 32.2** | ||||||||
| 32.3** | ||||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Definition Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL and with applicable taxonomy extension information contained in Exhibits 101.*) | |||||||
________________
* Filed herewith.
** Furnished herewith.
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Terreno Realty Corporation | |||||||||||
| November 5, 2025 | By: | /s/ W. Blake Baird | |||||||||
| W. Blake Baird | |||||||||||
| Chairman and Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| November 5, 2025 | By: | /s/ Michael A. Coke | |||||||||
| Michael A. Coke | |||||||||||
| President | |||||||||||
| November 5, 2025 | By: | /s/ Jaime J. Cannon | |||||||||
| Jaime J. Cannon | |||||||||||
| Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||
47
Exhibit 31.1
Certification
I, W. Blake Baird, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Terreno Realty Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2025
| /s/ W. Blake Baird | |||||
| Chairman and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
Certification
I, Michael A. Coke, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Terreno Realty Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2025
| /s/ Michael A. Coke | |||||
| President | |||||
Exhibit 31.3
Certification
I, Jaime J. Cannon, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Terreno Realty Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2025
| /s/ Jaime J. Cannon | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
Exhibit 32.1
Certification
The undersigned officer, who is the Chief Executive Officer of Terreno Realty Corporation (the “Company”), hereby certifies to the best of his knowledge, that the Company’s Quarterly Report on Form 10-Q to which this certification is attached (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2025
| /s/ W. Blake Baird | |||||
| Chairman and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 32.2
Certification
The undersigned officer, who is the President of Terreno Realty Corporation (the “Company”), hereby certifies to the best of his knowledge, that the Company’s Quarterly Report on Form 10-Q to which this certification is attached (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2025
| /s/ Michael A. Coke | |||||
| President | |||||
Exhibit 32.3
Certification
The undersigned officer, who is the Chief Financial Officer of Terreno Realty Corporation (the “Company”), hereby certifies to the best of his knowledge, that the Company’s Quarterly Report on Form 10-Q to which this certification is attached (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2025
| /s/ Jaime J. Cannon | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||