Core Insights - Terreno Realty (TRNO) has executed a 52,000 square foot early lease renewal in Washington, D.C. with a wine and spirits distributor, effective from April 1, 2026, to March 2031 [1] - The company also renewed a 35,000 square foot lease and expanded by 30,000 square feet in Santa Clara, CA, with a designer and developer of eVTOL aircraft [2] - TRNO's operating portfolio was 97.7% leased to 662 tenants as of June 30, 2025, with a same-store portfolio leased at 98.5% [3] - Cash rents on new and renewed leases increased by 22.6% during Q2 2025, with a tenant retention ratio of 71.7% [4][8] - The company is well-positioned for long-term growth due to a solid operating platform and healthy balance sheet, despite macroeconomic uncertainties affecting customer decision-making [5] Leasing Performance - TRNO's Q2 2025 leasing activity shows strong performance, with a high leasing rate across its portfolios [3] - The company has successfully locked in higher rents on new and renewed leases, indicating robust demand for its properties [4] Market Position - TRNO's shares have decreased by 6.5% over the past month, compared to a 3.1% decline in the broader industry [6] - The company is ranked 2 (Buy) by Zacks, indicating a favorable outlook compared to other REITs [6][9]

Core Viewpoint - Terreno Realty Corporation (TRNO) has acquired an industrial property in Redondo Beach, CA for approximately $35.5 million, which is expected to support the company's future growth by enhancing its portfolio [1][8]. Acquisition Details - The acquired property is fully leased to two tenants and is located at 3700 and 3730 Redondo Beach Avenue, covering around 100,000 square feet over 5.1 acres [2][8]. - The property features two industrial distribution buildings with 16 dock-high and three grade-level loading positions, along with parking for 88 cars [2]. - The estimated stabilized cap rate for the property is 5.8% [2]. Capital Recycling Strategy - TRNO follows a disciplined capital-recycling strategy, having recently sold an industrial property in Santa Fe Springs, CA for approximately $11 million [3]. - The company also announced the purchase of an industrial property in Long Island City, Queens, NY for around $31.1 million last month [3][8]. Market Positioning - Terreno Realty is strategically expanding its portfolio 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. [4]. - These markets are characterized by solid demographic trends and strong demand for industrial real estate [4]. Stock Performance - TRNO shares have declined by 8.2% over the past month, compared to a 2.5% decline in the industry [5].

Core Insights - Terreno Realty Corporation (TRNO) has executed the sale of an industrial property in Santa Fe Springs, CA for approximately $11 million, emphasizing its strategy of divesting non-core assets to strengthen its portfolio for future growth [1][8] - The sold property, a 2.3-acre improved land parcel, was fully leased and had been acquired in 2018 for $6.4 million, yielding a 13.2% unleveraged internal rate of return [2][8] - The company has been actively optimizing its portfolio, as evidenced by a recent sale of a 2.1-acre industrial property in Tukwila, WA for $9.5 million, and a portfolio of six industrial properties in Doral, FL for approximately $23.7 million [2][3] Financial Performance - Terreno Realty declared a dividend of 52 cents per share for Q3 2025, reflecting a 6.1% increase from the previous dividend level, and has increased its dividend six times over the past five years, with a five-year annualized growth rate of 14.11% [4][8] - Despite the positive dividend growth, shares of Terreno Realty have decreased by 6.9% over the past month, contrasting with a 2.5% decline in the broader industry [5] Market Position - The company is currently ranked 2 (Buy) by Zacks, indicating a favorable outlook compared to other stocks in the REIT sector [5][6]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements%20of%20Terreno%20Realty%20Corporation) The company's total assets grew to **$4.98 billion**, with net income of **$141.4 million** and operating cash flow of **$122.1 million** for H1 2025 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) | Balance Sheet Highlights (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Net investments in real estate | $4,752,477 | $4,661,615 | | Cash and cash equivalents | $128,368 | $18,070 | | **Total Assets** | **$4,982,211** | **$4,770,156** | | **Liabilities & Equity** | | | | Total liabilities | $1,039,223 | $1,107,824 | | Total stockholders' equity | $3,942,988 | $3,662,332 | | **Total Liabilities and Equity** | **$4,982,211** | **$4,770,156** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) | Income Statement Highlights (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $112,234 | $94,247 | $222,654 | $179,277 | | Gain on sales of real estate | $54,643 | $— | $66,485 | $5,715 | | Net income | $93,273 | $35,696 | $141,399 | $71,755 | | Diluted EPS | $0.90 | $0.37 | $1.38 | $0.77 | [Consolidated Statements of Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Equity) - Total stockholders' equity increased from **$3.66 billion** at the end of 2024 to **$3.94 billion** as of June 30, 2025, primarily due to net income of **$141.4 million** and net proceeds from common stock issuance of **$233.4 million**, partially offset by dividends of **$101.3 million**[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $122,067 | $111,369 | | Net cash used in investing activities | ($62,075) | ($547,122) | | Net cash provided by financing activities | $50,491 | $451,967 | | **Net increase in cash** | **$110,483** | **$16,214** | [Condensed Notes to Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail **$152.8 million** in property acquisitions, **$66.5 million** gain on sales, and **$742.4 million** total debt as of June 30, 2025 - As of June 30, 2025, the Company owned **297 buildings** aggregating approximately **18.9 million square feet** and **47 improved land parcels** consisting of approximately **150.6 acres** in six major coastal U.S. markets[21](index=21&type=chunk) - During the six months ended June 30, 2025, the Company acquired **six industrial properties** with a total initial investment of approximately **$152.8 million**[53](index=53&type=chunk) | Property Sales (H1 2025) | Number of Properties | Total Sales Price | Total Gain | | :--- | :--- | :--- | :--- | | Los Angeles | 1 | $97,000 | $49,523 | | San Francisco Bay Area | 2 | $24,880 | $11,842 | | Seattle | 1 | $17,500 | $5,120 | | **Total** | **4** | **$139,380** | **$66,485** | - As of June 30, 2025, total debt was approximately **$742.4 million**, comprised of unsecured term loans, senior unsecured notes, and one secured mortgage loan, with a weighted average interest rate of **3.8%**[64](index=64&type=chunk)[68](index=68&type=chunk) - During the six months ended June 30, 2025, the Company issued **3,506,371 shares** of common stock under its ATM Program, resulting in net proceeds of approximately **$234.0 million**[74](index=74&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's business, recent activities, and financial performance, including a **19.1%** Q2 2025 revenue increase and **$472.5 million** in pending acquisitions [Overview](index=22&type=section&id=Overview) The company's portfolio includes **297 buildings** and **47 land parcels** in six coastal U.S. markets, with **97.7%** and **95.1%** occupancy rates respectively - As of June 30, 2025, the company's portfolio of buildings and improved land parcels were approximately **97.7%** and **95.1% leased**, respectively, to **662 customers**[95](index=95&type=chunk) - The New York City/Northern New Jersey market is the largest contributor to the portfolio, accounting for **29.1%** of total annualized base rent[99](index=99&type=chunk) - The **top 20 customers** account for **26.0%** of total annualized base rent, with Amazon.com being the largest single customer at **5.3%**[103](index=103&type=chunk) - Cash rent on new and renewed leases commencing in H1 2025 increased by approximately **26.8%** compared to previous rates for the same space[106](index=106&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments) Recent developments include **$123.5 million** in Q2 2025 property acquisitions, **$319.3 million** in ongoing developments, and **$472.5 million** in pending acquisitions - Acquired **six industrial properties** for a total purchase price of approximately **$123.5 million** during Q2 2025[109](index=109&type=chunk) - As of June 30, 2025, the company had **six properties** under development or redevelopment with a total expected investment of **$319.3 million**[110](index=110&type=chunk) - Sold **four properties** during H1 2025 for a total of **$139.4 million**, realizing a gain of **$66.5 million**[112](index=112&type=chunk) - As of August 5, 2025, the company had outstanding contracts to acquire properties for a total purchase price of **$472.5 million**[116](index=116&type=chunk) [Financial Condition and Results of Operations](index=31&type=section&id=Financial%20Condition%20and%20Results%20of%20Operations) Q2 2025 total revenues increased **19.1%** to **$112.2 million**, with net income rising to **$93.3 million**, driven by property acquisitions and strong leasing spreads | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $112,234 | $94,247 | 19.1% | | Net Operating Income | $84,326 | $70,475 | 19.7% | | Same Store NOI | $61,612 | $58,053 | 6.1% | | Net Income | $93,273 | $35,696 | 161.3% | | Metric (in thousands) | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $222,654 | $179,277 | 24.2% | | Net Operating Income | $165,979 | $134,615 | 23.3% | | Same Store NOI | $121,915 | $116,451 | 4.7% | | Net Income | $141,399 | $71,755 | 97.1% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a conservative capital structure with **$614.0 million** net debt and **$1.3 billion** in material cash commitments, including **$472.5 million** for pending acquisitions - The company's long-term financing strategy includes limiting total debt and preferred stock to less than **35%** of total enterprise value and maintaining a net debt-to-adjusted EBITDA ratio below **5.0x**[143](index=143&type=chunk) - As of June 30, 2025, there were **no borrowings outstanding** on the **$600.0 million** revolving credit facility[148](index=148&type=chunk) | Capitalization Metric | As of June 30, 2025 | | :--- | :--- | | Net Debt | $614.0 million | | Total Market Capitalization | $6.54 billion | | Total Debt-to-Total Market Capitalization | 11.4% | | Net Debt-to-Adjusted EBITDA | 1.9x | - As of August 5, 2025, the company had material cash commitments of approximately **$1.3 billion**, which includes **$472.5 million** for pending property acquisitions[161](index=161&type=chunk)[162](index=162&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP measures, reporting Q2 2025 FFO of **$66.3 million** and H1 2025 Adjusted EBITDA of **$154.2 million**, with strong cash-basis same-store NOI growth | FFO Highlights (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | FFO attributable to common stockholders | $66,335 | $58,408 | $129,238 | $109,424 | | Diluted FFO per common share | $0.64 | $0.61 | $1.27 | $1.18 | | Adjusted EBITDA (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $78,790 | $68,252 | $154,184 | $128,131 | | Same Store NOI Growth | Q2 2025 vs Q2 2024 | H1 2025 vs H1 2024 | | :--- | :--- | :--- | :--- | | Same Store NOI | 6.1% | 4.7% | | Cash-basis Same Store NOI | 7.3% | 7.2% | [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its **$200.0 million** variable-rate debt, where a **0.25%** SOFR change impacts annual interest by **$0.5 million** - The company's primary market risk exposure is to **interest rate changes** on its variable-rate debt[178](index=178&type=chunk) - As of June 30, 2025, the company had **$200.0 million** in variable-rate debt outstanding. A **0.25%** fluctuation in the SOFR rate would result in an approximate **$0.5 million** annual change in interest expense[179](index=179&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were **effective** as of June 30, 2025, with **no material changes** to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[180](index=180&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[181](index=181&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company reports **no involvement in any material litigation**, nor is any threatened against it - The company is **not involved in any material litigation**[183](index=183&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section highlights potential adverse impacts of U.S. and foreign trade policies, tariffs, and government actions on economic activity and tenant businesses - The company identifies that changes to international trade policies, tariffs, and related government actions could depress economic activity and have a **material adverse effect** on the business of its tenants and its own financial results[185](index=185&type=chunk)[186](index=186&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **1,347 shares** of common stock during the quarter, primarily for employee tax withholding obligations on vested restricted stock - During the quarter, **1,347 shares** were repurchased at an average price of **$55.99 per share**. These were shares surrendered by employees to satisfy tax withholding obligations on vested restricted stock[188](index=188&type=chunk)[190](index=190&type=chunk) [Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports **no defaults** upon its senior securities - **None reported**[190](index=190&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to the company - **Not Applicable**[191](index=191&type=chunk) [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during Q2 2025 - During Q2 2025, **no directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement**[192](index=192&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the **2025 Equity Incentive Plan** and required certifications - The report includes exhibits such as the **2025 Equity Incentive Plan**, officer certifications, and Inline XBRL documents[194](index=194&type=chunk)

Financial Performance - Net income available to common stockholders for the three months ended June 30, 2025, was $92877 thousand, or $0.90 per share[58, 60] - Funds from Operations (FFO) for the three months ended June 30, 2025, was $66335 thousand, or $0.64 per share[60] - Adjusted Funds from Operations (AFFO) for the three months ended June 30, 2025, was $51888 thousand[60] - Cash Same Store NOI growth for Q2 2025 was 7.3%[16, 18] - Rental revenues and tenant expense reimbursements for the three months ended June 30, 2025, were $112234 thousand[58, 60] Investment and Capital Activities - Q2 2025 acquisitions totaled $123.5 million[21] - Acquisitions under contract as of August 5, 2025, totaled $472.5 million[21] - Q2 2025 dispositions totaled $114.5 million[21] - Year-to-date through June 30, 2025, the company issued 3506371 shares of common stock, receiving gross proceeds of $237.4 million[25] Portfolio Overview - Portfolio occupancy as of June 30, 2025, was 97.7%[29] - The portfolio consists of approximately 18.9 million square feet and 47 improved land parcels consisting of approximately 150.6 acres as of June 30, 2025[29]

Core Insights - Terreno Realty Corporation (TRNO) reported a strong performance in Q2 2025, with significant increases in cash rents and occupancy rates, indicating robust demand in the industrial real estate sector [1][10]. Operating Activity - In Q2 2025, TRNO experienced a 22.6% increase in cash rents on new and renewed leases, with a total of approximately 0.8 million square feet and 9.2 acres of improved land leased [2]. - The occupancy rate for the operating portfolio reached 97.7%, reflecting a 110 basis points increase sequentially and 170 basis points year over year [3]. - The same-store portfolio, comprising around 14.1 million square feet, had a quarter-end occupancy of 98.5%, up 110 basis points sequentially and 240 basis points year over year [3]. Investment Activity - TRNO actively restructured its portfolio by selling non-core assets and acquiring value-accretive investments, which are expected to support long-term revenue growth [5]. - In Q2 2025, the company sold two properties, including six buildings totaling around 584,000 square feet, for an aggregate sale value of $114.5 million, while acquiring six industrial properties for $123.5 million [6]. Development and Redevelopment Activity - As of June 30, 2025, TRNO had six properties under development or redevelopment, which will consist of nine buildings totaling around 0.9 million square feet, currently 47% leased [8]. - The company also has approximately 22.4 acres of land earmarked for future developments, with an estimated investment value of around $436.4 million [8]. Capital Market Activity - In Q2 2025, TRNO did not issue any shares under its at-the-market equity offering program and did not repurchase any shares under its share repurchase authorization [9]. Financial Position - As of June 30, 2025, TRNO had no outstanding borrowings under its $600 million revolving credit facility and no debt maturities in 2025, with $50 million of debt maturing in 2026 [11]. Industry Context - The industrial real estate sector is benefiting from the rising e-commerce market, which is driving demand for logistics infrastructure and efficient distribution networks [12]. - TRNO is well-positioned to capitalize on these trends due to its modern logistics facilities and strategic expansion efforts [13].

Core Insights - Terreno Realty (TRNO) has executed a 35,000 square foot renewal lease and a 30,000 square foot expansion lease in Santa Clara, CA, with a lessee involved in eVTOL aircraft development [1][7] - The renewal lease will start upon the expiration of the existing lease in September 2025, while the expansion lease will commence in August 2025, both set to expire in August 2028 [1][7] - TRNO has reported strong leasing activity, with its operating portfolio being 96.6% leased to 663 tenants as of March 31, 2025, and a same-store portfolio leased at 97.4% [3] Leasing Activity - In addition to the Santa Clara leases, TRNO announced an 81,000 square foot lease in Avenel, NJ, with a third-party logistics provider [2] - The cash rents on new and renewed leases during Q1 2025 increased by 34.2%, indicating a positive trend in rental income [4] - The tenant retention ratio for the operating portfolio was 71.7% during the same period [4] Financial Position - TRNO is positioned well for long-term growth opportunities due to its solid operating platform and healthy balance sheet [5] - Despite macroeconomic uncertainties and geopolitical issues affecting customer decision-making, TRNO's strategic expansion moves are noteworthy [5] Market Performance - Over the past three months, TRNO's shares have gained 2.7%, while the industry has seen an 8.9% increase [6]

Core Viewpoint - Terreno Realty Corporation (TRNO) is actively expanding its industrial property portfolio through recent acquisitions, including a $31.1 million purchase in Long Island City, NY, and a $49.5 million acquisition in Santa Ana, CA, aiming to enhance its presence in major industrial markets [1][4]. Group 1: Recent Acquisitions - TRNO acquired an industrial property in Long Island City, Queens, NY, for $31.1 million, which is situated on 2.2 acres and includes a distribution building of approximately 48,000 square feet [1][2]. - The Santa Ana property, purchased for $49.5 million, consists of a 134,000 square foot industrial distribution building on 12.1 acres, fully leased to a major home improvement retailer [4][9]. - Prior to these acquisitions, TRNO also purchased another industrial property in Long Island City for $16 million [4]. Group 2: Redevelopment Plans - The Long Island City property is set for redevelopment with a total investment of around $40.2 million, including upgrades such as a redesigned truck loading area and new office and warehouse space, expected to be completed by 2026 [3]. - The estimated stabilized cap rate for the Long Island City redevelopment is projected at 5.5% [3]. Group 3: Capital Recycling Strategy - TRNO follows a disciplined capital-recycling strategy, having sold two properties for a total of approximately $114.5 million in May 2025, which allows the company to reinvest in active deals and pending acquisitions [5][9]. - In early June 2025, TRNO acquired another industrial property in Los Angeles for around $10 million [5]. Group 4: Market Position and Trends - TRNO is well-positioned to enhance its portfolio across six major coastal U.S. markets, including New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C., which exhibit strong demographic trends and demand for industrial real estate [6]. - Despite the expansion efforts, macroeconomic uncertainties and tariff issues are noted as significant concerns for the company [6]. Group 5: Stock Performance - TRNO's shares have declined by 2.3% over the past three months, contrasting with a 1.3% increase in the industry [8].

Core Insights - Terreno Realty (TRNO) has executed an 81,000 square foot lease in Avenel, NJ, starting June 30, 2025, with a third-party logistics provider, expiring in November 2030, indicating strong tenant confidence [1][8] - The company has also secured a 103,000 square foot lease in Redondo Beach, CA, with an in-space mobility provider, showcasing ongoing demand for its properties [2] - As of March 31, 2025, TRNO's operating portfolio was 96.6% leased to 663 tenants, with a same-store portfolio of 15.6 million square feet at 97.4% leased, and an improved land portfolio of 47 parcels at 95.1% leased [3] - Cash rents on new and renewed leases during Q1 2025 increased by 34.2%, and the tenant retention ratio for the operating portfolio was 71.7% [4] Company Positioning - TRNO is well-positioned for long-term growth with a solid operating platform, a healthy balance sheet, and strategic expansion moves, despite macroeconomic uncertainties and geopolitical issues affecting customer decision-making [5] - Over the past three months, TRNO's shares have declined by 10.4%, compared to a 0.7% decline in the industry [6]

Core Insights - Terreno Realty (TRNO) has executed a significant lease of 103,000 square feet in Redondo Beach, CA, set to commence in stages from July to October 2025 and expiring in October 2035, with the lessee being a provider of in-space mobility [1][8] - The company has shown strong leasing activity, with its operating portfolio being 96.6% leased to 663 tenants as of March 31, 2025, and a same-store portfolio leased at 97.4% [3] - TRNO has successfully increased cash rents on new and renewed leases by 34.2% during Q1 2025, with a tenant retention ratio of 71.7% [4][8] Leasing Activity - In addition to the Redondo Beach lease, TRNO executed a new lease for a 3.0-acre land parcel in Rancho Dominguez, CA, with an environmental and regulated waste management services provider [2] - The company also renewed a lease for 53,000 square feet with the United States Postal Service in Washington, D.C. [2] Financial Performance - TRNO's improved land portfolio, consisting of 47 parcels over 150.6 acres, had a leased rate of 95.1% as of March 31, 2025 [3] - The company maintains a solid operating platform and a healthy balance sheet, positioning it well for long-term growth opportunities despite macroeconomic uncertainties [5] Market Position - TRNO's shares have seen a slight decline of 0.2% over the past month, contrasting with the industry's growth of 0.4% [6] - Analysts have revised the 2025 funds from operations (FFO) per share estimate marginally downward to $2.61 over the past two months [6]