Terreno Realty has quietly done a terrific job growing its dividend. Terreno Realty (TRNO -0.01%) flies under the radar of most investors. The industrial-focused real estate investment trust (REIT) is tiny compared to industry behemoth Prologis (PLD -1.54%). It owns 292 buildings in six U.S. markets compared to over 5,500 properties worldwide for the sector leader. Because of its smaller size, many investors might have missed that the industrial REIT just increased its dividend again. That raise pushed its ...

Terreno Realty Corporation (TRNO) recently provided an update on its operating, investment and capital market activity for the second quarter of 2024. The preliminary results highlight solid growth in cash rents, though occupancy levels declined because of acquired vacancy. Nevertheless, accretive acquisitions and developments are likely to support its growth in the upcoming period. However, TRNO was able to lock in higher rents on new and renewed leases during the quarter. The cash rents on new and renewed ...

Terreno Realty Corporation (TRNO) recently announced the completion of the development and stabilization of Countyline Corporate Park Phase IV Building 40 in Hialeah, FL, effective Jun 30, 2024. This building has been 100% leased to four tenants. Building 40, with a 36-foot clear height, is located in Terreno Realty's Countyline Corporate Park. This 186,000-square-foot industrial distribution building is placed on 9.1 acres of land. It includes 60 dock-high and two grade-level loading positions, as well as ...

Terreno Realty Corporation (TRNO) recently announced the execution of an early renewal and expansion lease in Fremont, CA, with an Advanced Air Mobility provider. This reflects the healthy demand for its properties. The 30,000-square-foot lease, which was originally set to expire in February 2025, has been extended until August 2029. Additionally, the 41,000-square-foot expansion lease will begin in June 2024 and expire in August 2029. The company has also executed a lease for 5.5 acres of improved land in ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR For the transition period from __________ to __________ Commission file number: 001-34603 _________________________ Terreno Realty Corporation (Exact Name of Registrant as Specified in Its Charter) _________________________ Washington, D.C. 20549 _________________________ Form 10-Q ☐ TRANSITION REPORT PUR ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 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 Terreno Realty Corporation (Exact Name of Registrant as Specified in Its ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Terreno Realty Corporation's unaudited consolidated financial statements for Q3 and nine months ended September 30, 2023 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets increased to $3.74 billion, liabilities grew moderately to $1.00 billion, and stockholders' equity expanded to $2.74 billion, driven by real estate investments and capital raising Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 (unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$3,739,465** | **$3,164,441** | | Net investments in real estate | $3,567,320 | $3,075,143 | | Cash and cash equivalents | $96,196 | $26,393 | | **Total Liabilities** | **$1,002,495** | **$934,590** | | Senior unsecured notes, net | $572,269 | $571,825 | | **Total Stockholders' Equity** | **$2,736,970** | **$2,229,851** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q3 2023, total revenues increased 17.1% to $82.9 million and net income rose 35.1% to $30.3 million, while nine-month net income decreased 32.5% to $93.9 million due to lower real estate sale gains Statement of Operations Summary (in thousands, except EPS) | Metric | Q3 2023 | Q3 2022 | YoY Change | Nine Months 2023 | Nine Months 2022 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $82,920 | $70,801 | +17.1% | $237,106 | $200,205 | +18.4% | | Net Income | $30,315 | $22,439 | +35.1% | $93,900 | $139,134 | -32.5% | | Gain on sales of real estate | $0 | $0 | N/A | $12,257 | $76,048 | -83.9% | | Diluted EPS | $0.36 | $0.30 | +20.0% | $1.13 | $1.84 | -38.6% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, operating cash flow increased to $140.6 million, investing activities used $479.6 million, and financing activities provided $411.2 million, resulting in a net cash increase of $72.1 million Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $140,626 | $109,019 | | Net cash used in investing activities | ($479,637) | ($313,803) | | Net cash provided by financing activities | $411,150 | $10,980 | | **Net increase (decrease) in cash** | **$72,139** | **($193,804)** | [Condensed Notes to Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed context for financial statements, covering organization, accounting policies, real estate, debt, and equity activities - The company acquires, owns, and operates industrial real estate in six major coastal U.S. markets. As of September 30, 2023, its portfolio consisted of **257 buildings (15.8 million sq. ft.)**, **46 improved land parcels (165.8 acres)**, and **eight properties under development**[21](index=21&type=chunk) - During the nine months ended September 30, 2023, the company acquired **five industrial properties** for a total investment of approximately **$437.0 million**[48](index=48&type=chunk) - In the same nine-month period, **one property was sold for $25.5 million**, generating a gain of approximately **$12.3 million**[57](index=57&type=chunk) - As of September 30, 2023, the company had **$775.0 million of unsecured debt** and no secured debt. Total debt, net of issuance costs, was **$771.4 million**[58](index=58&type=chunk)[61](index=61&type=chunk) - In February 2023, a public offering of **5,750,000 shares of common stock** generated net proceeds of approximately **$355.9 million**. The company also actively used its at-the-market (ATM) equity programs[67](index=67&type=chunk) - Subsequent to the quarter's end, the company sold **one property for $18.0 million**, acquired **two properties for a combined $73.2 million**, and declared a quarterly dividend of **$0.45 per share**[81](index=81&type=chunk)[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses business overview, strategic activities, and financial performance, highlighting portfolio occupancy, cash rent growth, and revenue and NOI trends [Overview](index=21&type=section&id=Overview) Terreno operates a portfolio of industrial real estate in six major U.S. coastal markets, with high occupancy rates of 98.3% for buildings and 96.3% for improved land parcels as of September 30, 2023 Portfolio Summary by Market (as of Sep 30, 2023) | Market | % of Total Annualized Base Rent | Building Occupancy | Gross Book Value (in thousands) | | :--- | :--- | :--- | :--- | | Los Angeles | 18.0% | 98.7% | $704,688 | | Northern New Jersey/New York City | 24.3% | 99.1% | $787,136 | | San Francisco Bay Area | 19.4% | 97.1% | $763,929 | | Seattle | 16.0% | 96.4% | $606,522 | | Miami | 12.3% | 100.0% | $737,349 | | Washington, D.C. | 10.0% | 99.1% | $339,309 | - Cash rents on new and renewed leases commencing in the nine months ended September 30, 2023, were approximately **57.1% higher** than the previous rental rates for the same space[98](index=98&type=chunk) - Leases representing approximately **12.1% of the total annualized base rent** are scheduled to expire through December 31, 2024[98](index=98&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) During Q3 2023, the company acquired one industrial property for $14.8 million, advanced its substantial development pipeline, and raised $94.4 million in net proceeds from ATM programs - Acquired **one industrial property in Santa Ana, CA for $14.8 million** during Q3 2023, with an estimated stabilized cap rate of **5.1%**[100](index=100&type=chunk) Development & Redevelopment Pipeline Summary | Metric | Value | | :--- | :--- | | Properties in Pipeline | 8 | | Total Expected Investment | $336.1 million | | Amount Spent to Date | $213.0 million | | Estimated Stabilized Cap Rate | 5.3% | | Total Post Development Sq. Ft. | 1,231,624 | | % Pre-leased | 68.1% | - In the first nine months of 2023, the company issued **2,542,279 shares** under its ATM programs for net proceeds of approximately **$154.4 million**[106](index=106&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) The company's financial results show strong growth in Q3 2023, with total revenues up 17.1% and same-store NOI up 8.6%, though nine-month net income declined due to lower real estate sale gains Q3 2023 vs. Q3 2022 Performance (in thousands) | Metric | Q3 2023 | Q3 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $82,920 | $70,801 | $12,119 | 17.1% | | Net Operating Income (NOI) | $62,451 | $53,661 | $8,790 | 16.4% | | Same Store NOI | $51,413 | $47,350 | $4,063 | 8.6% | | Net Income | $30,315 | $22,439 | $7,876 | 35.1% | Nine Months 2023 vs. Nine Months 2022 Performance (in thousands) | Metric | Nine Months 2023 | Nine Months 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $237,106 | $200,205 | $36,901 | 18.4% | | Net Operating Income (NOI) | $179,670 | $150,385 | $29,285 | 19.5% | | Same Store NOI | $150,279 | $136,270 | $14,009 | 10.3% | | Net Income | $93,900 | $139,134 | ($45,234) | (32.5)% | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a conservative financing strategy with a long-term goal of limiting debt to less than 35% of total enterprise value, supported by strong liquidity and active equity offerings - The company's financing strategy includes maintaining a debt-to-adjusted EBITDA ratio below **6.0x** and a fixed charge coverage ratio above **2.0x**[135](index=135&type=chunk) Key Financial Ratios (as of Sep 30, 2023) | Ratio | Value | | :--- | :--- | | Total Debt-to-Total Market Capitalization | 13.7% | | Total Debt-to-Adjusted EBITDA | 3.3x | | Interest Coverage | 8.7x | | Fixed Charge Coverage | 6.7x | | Weighted Average Maturity of Total Debt | 4.6 years | - As of September 30, 2023, the company had **no borrowings outstanding** on its **$400.0 million revolving credit facility**[142](index=142&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations for key non-GAAP metrics, with Q3 2023 FFO attributable to common stockholders increasing 23.2% to $48.3 million and cash-basis same-store NOI growing 13.1% year-over-year FFO Performance (in thousands, except per share) | Metric | Q3 2023 | Q3 2022 | % Change | | :--- | :--- | :--- | :--- | | FFO attributable to common stockholders | $48,282 | $39,202 | +23.2% | | Diluted FFO per common share | $0.57 | $0.52 | +9.6% | NOI Performance (in thousands) | Metric | Q3 2023 | Q3 2022 | % Change | | :--- | :--- | :--- | :--- | | Same store NOI | $51,413 | $47,350 | +8.6% | | Cash-basis same store NOI | $48,811 | $43,144 | +13.1% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its $200.0 million variable-rate debt, where a 25 basis point change in SOFR would impact annual interest expense by approximately $0.5 million - The company's primary market risk is interest rate risk on its variable-rate debt, which stood at **$200.0 million** as of September 30, 2023[169](index=169&type=chunk)[170](index=170&type=chunk) - A **25 basis point fluctuation** in the SOFR rate would impact annual interest expense by approximately **$0.5 million**[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were **effective** as of the end of the reporting period[171](index=171&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the third quarter of 2023[172](index=172&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not involved in any material litigation, nor is it aware of any material litigation being threatened against it - The company is **not involved in any material legal proceedings**[175](index=175&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to the risk factors disclosed in the **2022 Form 10-K** have occurred[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) During Q3 2023, the company repurchased 12,499 shares of common stock to satisfy employee tax withholding obligations on vested restricted stock, not as part of a publicly announced plan - In August 2023, **12,499 shares** were repurchased at an average price of **$58.85 per share** to satisfy employee tax withholding obligations on vested restricted stock[177](index=177&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) During the third quarter of 2023, no directors or officers of the company adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer trading plans (Rule 10b5-1 or other) were adopted, terminated, or modified during the quarter[180](index=180&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL financial data files - The exhibits filed with this report include certifications under Rule 13a-14(a)/15d-14(a) and Section 1350, as well as Inline XBRL documents[181](index=181&type=chunk)

Table of Contents 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 June 30, 2023 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 _________________________ Terreno Realty Corporation (Exact Name of ...

Table of Contents 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 March 31, 2023 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 _________________________ Terreno Realty Corporation (Exact Name o ...

[Part I](index=5&type=section&id=Part%20I) [Business](index=5&type=section&id=Item%201.%20Business) Terreno Realty Corporation is an internally managed REIT that acquires, owns, and operates industrial real estate in six major coastal U.S. markets - As of December 31, 2022, the company's portfolio consisted of **252 buildings** (approx. 15.3 million sq. ft.) and **46 improved land parcels** (approx. 161.4 acres), with building and land occupancy at **98.6%** and **92.5%** respectively[19](index=19&type=chunk) - The company's investment strategy targets six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C[21](index=21&type=chunk) - The company's financing strategy aims to limit total consolidated indebtedness and perpetual preferred stock to **less than 35% of total enterprise value** and maintain a fixed charge coverage ratio **above 2.0x**[37](index=37&type=chunk) - As of February 7, 2023, the company had **40 employees** and emphasizes a commitment to diversity, inclusion, and competitive employee benefits[48](index=48&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) Portfolio Breakdown by Annualized Base Rent (as of Dec 31, 2022) | Property Type | % of Total Annualized Base Rent | | :--- | :--- | | Warehouse/Distribution | 76.5% | | Improved Land | 12.6% | | Transshipment | 6.8% | | Flex (Light Industrial/R&D) | 4.1% | [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, financial, and industry-wide risks, including market concentration, debt obligations, and the need to maintain its REIT status [Risks Related to Our Business and Our Properties](index=10&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Properties) - The company's investments are concentrated in the industrial real estate sector, exposing it to economic downturns in that specific area[59](index=59&type=chunk) - A significant portion of the company's portfolio is geographically concentrated, with the Northern New Jersey/New York City market representing approximately **24.9% of total annualized base rent** as of December 31, 2022[61](index=61&type=chunk) - The company faces risks from tenant bankruptcies or defaults, which could delay enforcement of landlord rights and lead to substantial costs in re-leasing properties[65](index=65&type=chunk)[66](index=66&type=chunk) [Risks Related to Financing and Capital](index=13&type=section&id=Risks%20Related%20to%20Financing%20and%20Capital) - As of December 31, 2022, the company had approximately **$770.8 million in total debt**, and significant debt service obligations could adversely affect operating results[78](index=78&type=chunk) - Debt agreements contain financial covenants that could limit operational flexibility, including restrictions on distributions if the company is in default[81](index=81&type=chunk)[82](index=82&type=chunk) - The company's variable rate debt is transitioning from LIBOR to SOFR, which could result in higher interest costs[89](index=89&type=chunk) [Risks Related to the Real Estate Industry](index=16&type=section&id=Risks%20Related%20to%20the%20Real%20Estate%20Industry) - Real estate investments are not as liquid as other assets, which may limit the company's ability to adjust its portfolio in response to changing economic conditions[97](index=97&type=chunk) - The company faces potential liability for environmental hazards, such as hazardous substances or asbestos, on its properties, which could lead to significant remediation costs[101](index=101&type=chunk)[102](index=102&type=chunk) - Future climate change and related regulations may result in increased operating costs and expose properties to physical risks like severe storms or rising sea levels[109](index=109&type=chunk)[110](index=110&type=chunk) [Risks Related to Our Organizational Structure](index=20&type=section&id=Risks%20Related%20to%20Our%20Organizational%20Structure) - The Board of Directors can change significant corporate policies, including investment and financing strategies, without stockholder approval[115](index=115&type=chunk) - Certain provisions of Maryland law could inhibit a change of control, although the company has opted out of these provisions[117](index=117&type=chunk)[118](index=118&type=chunk) [Risks Related to Our Status as a REIT](index=21&type=section&id=Risks%20Related%20to%20Our%20Status%20as%20a%20REIT) - Failure to qualify as a REIT would subject the company to federal income tax at regular corporate rates, substantially reducing funds available for distributions[121](index=121&type=chunk)[122](index=122&type=chunk) - To maintain REIT status, the company must distribute **at least 90% of its net taxable income annually**, which could adversely affect liquidity[128](index=128&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the staff of the Securities and Exchange Commission - None[144](index=144&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The company's highly occupied portfolio is concentrated in six markets, with Amazon.com as its top customer and significant rent growth on new leases - The company's top 20 customers account for **25.2% of total annualized base rent**, with Amazon.com being the largest at **4.3%**[152](index=152&type=chunk) - Leases representing **9.2% of the total annualized base rent** are scheduled to expire during the year ending December 31, 2023[152](index=152&type=chunk)[153](index=153&type=chunk) - For leases commencing in 2022, cash rent changes were approximately **49.5% higher** compared to the previous rental rates for the same space[153](index=153&type=chunk) Portfolio Summary by Market (as of Dec 31, 2022) | Market | % of Total Annualized Base Rent | | :--- | :--- | | Northern New Jersey/New York City | 24.9% | | Los Angeles | 19.1% | | Seattle | 16.7% | | San Francisco Bay Area | 16.3% | | Miami | 12.4% | | Washington, D.C. | 10.6% | [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material litigation nor is it aware of any being threatened - The company is not involved in any material litigation[155](index=155&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's business operations - Not Applicable[156](index=156&type=chunk) [Part II](index=30&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock (NYSE: TRNO) policy is to pay regular quarterly distributions, driven by its strategy and REIT tax requirements - The company's common stock is listed on the NYSE under the trading symbol **"TRNO"**[159](index=159&type=chunk) - To maintain its REIT qualification, the company must distribute **at least 90% of its REIT taxable income** to stockholders annually[160](index=160&type=chunk) - A performance graph shows the cumulative total stockholder return on the company's common stock from December 31, 2017, to December 31, 2022[163](index=163&type=chunk) [Reserved](index=32&type=section&id=Item%206.%20Reserved) This item is not applicable [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, significant property transactions drove a 126.9% increase in net income, with strong revenue growth and a solid liquidity position [2022 Developments](index=34&type=section&id=2022%20Developments) - During 2022, the company acquired **20 industrial properties** for a total purchase price of approximately **$414.8 million**[180](index=180&type=chunk) - The company sold four properties in 2022 for a total sales price of approximately **$168.3 million**, resulting in a total gain of approximately **$112.2 million**[182](index=182&type=chunk)[183](index=183&type=chunk) - In 2022, the company increased its revolving credit facility capacity to **$400.0 million** and added a new **$100.0 million term loan** maturing in 2028[184](index=184&type=chunk)[185](index=185&type=chunk) - Under its at-the-market (ATM) program, the company issued approximately **1.3 million shares** of common stock in 2022, generating net proceeds of about **$77.7 million**[187](index=187&type=chunk) [Financial Condition and Results of Operations](index=39&type=section&id=Financial%20Condition%20and%20Results%20of%20Operations) - The increase in total revenues was primarily driven by property acquisitions and a **49.5% increase in cash rents** on new and renewed leases commencing during 2022[214](index=214&type=chunk) Comparison of Operations for Years Ended Dec 31 (in thousands) | Metric | 2022 | 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $276,212 | $221,930 | $54,282 | 24.5% | | Total Net Operating Income | $207,309 | $165,682 | $41,627 | 25.1% | | Same Store NOI | $159,157 | $148,203 | $10,954 | 7.4% | | Gain on sales of real estate | $112,166 | $16,627 | $95,539 | 574.6% | | Net Income | $198,014 | $87,254 | $110,760 | 126.9% | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2022, the company had **$26.4 million in cash** and cash equivalents and **no outstanding balance** on its **$400.0 million revolving credit facility**[233](index=233&type=chunk)[230](index=230&type=chunk) Capitalization and Debt Ratios (as of Dec 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Total Debt, net (in thousands) | $770,818 | $720,670 | | Total Market Capitalization (in thousands) | $5,143,049 | $7,146,786 | | Total Debt-to-Total Market Capitalization | 15.0% | 10.1% | | Total Debt-to-Adjusted EBITDA | 3.7x | 4.5x | | Fixed Charge Coverage | 7.1x | 8.0x | [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) - The increase in FFO was primarily due to property acquisitions in 2021 and 2022, as well as same-store NOI growth of **$11.0 million** for the year ended December 31, 2022[263](index=263&type=chunk) Funds from Operations (FFO) (in thousands, except per share) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | FFO attributable to common stockholders | $150,883 | $120,812 | 24.9% | | Diluted FFO per common share | $2.00 | $1.71 | 17.0% | Net Operating Income (NOI) (in thousands) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Net Operating Income | $207,309 | $165,682 | 25.1% | | Same Store NOI | $159,157 | $148,203 | 7.4% | | Cash-basis Same Store NOI | $151,755 | $137,197 | 10.6% | [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations from its variable-rate debt - The primary market risk is interest rate risk from variable-rate debt used to fund operations and acquisitions[272](index=272&type=chunk) - As of December 31, 2022, the company had **$200.0 million of variable-rate debt** outstanding; a **0.25% fluctuation** in the SOFR rate would change annual interest expense by approximately **$0.5 million**[273](index=273&type=chunk) [Financial Statements and Supplementary Data](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item directs readers to the consolidated financial statements and supplementary data included in the report - Refers to the detailed financial statements and schedules beginning on page F-1 of the report[275](index=275&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=54&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure - None[276](index=276&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal controls over financial reporting were effective as of year-end - Management concluded that disclosure controls and procedures were **effective** as of the end of the period covered by the report[277](index=277&type=chunk) - Based on the COSO framework, management assessed its internal control over financial reporting as **effective** as of December 31, 2022[280](index=280&type=chunk) - The independent registered public accounting firm provided an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting[282](index=282&type=chunk) [Other Information](index=57&type=section&id=Item%209B.%20Other%20Information) A director notified the company of his decision not to stand for re-election at the 2023 Annual Meeting - Director David M. Lee will not stand for re-election at the 2023 Annual Meeting of Stockholders[290](index=290&type=chunk) [Part III](index=57&type=section&id=Part%20III) This section incorporates information by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - The information required by Items 10 through 14 will be contained in the definitive proxy statement for the 2023 Annual Meeting of Stockholders and is incorporated herein by reference[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) [Directors, Executive Officers and Corporate Governance](index=57&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the company's 2023 Proxy Statement [Executive Compensation](index=57&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the company's 2023 Proxy Statement [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=57&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the company's 2023 Proxy Statement [Certain Relationships and Related Transactions, and Director Independence](index=57&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information is incorporated by reference from the company's 2023 Proxy Statement [Principal Accountant Fees and Services](index=57&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information is incorporated by reference from the company's 2023 Proxy Statement [Part IV](index=58&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=58&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section contains financial statements and the auditor's report, which identifies the valuation of acquired properties as a critical audit matter - The independent auditor, Ernst & Young LLP, issued an **unqualified opinion** on the consolidated financial statements[305](index=305&type=chunk) - The auditor identified the **"Valuation of acquired properties"** as a Critical Audit Matter due to the complexity and judgment required in 2022's real estate acquisitions[309](index=309&type=chunk)[311](index=311&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Investments in Properties | $3,398,774 | $2,946,826 | | Total Assets | $3,164,441 | $2,924,215 | | Total Liabilities | $934,590 | $866,252 | | Total Stockholders' Equity | $2,229,851 | $2,057,963 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Revenues | $276,212 | $221,930 | $186,884 | | Net Income | $198,014 | $87,254 | $79,795 | | Diluted EPS | $2.61 | $1.23 | $1.16 | [Form 10-K Summary](index=58&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for its Form 10-K - None[302](index=302&type=chunk)