Terreno(TRNO) - 2023 Q1 - Quarterly Report

Real Estate Portfolio - As of March 31, 2023, Terreno Realty Corporation owned a total of 257 buildings, aggregating approximately 15.9 million square feet, with an occupancy rate of approximately 98.1%[83] - The company operates in six major coastal U.S. markets, with the highest annualized base rent contributions from Northern New Jersey/New York City at 24.6%[87] - The consolidated same store pool occupancy was approximately 98.5% as of March 31, 2023, compared to 97.3% in the same period of 2022[106] - The same store pool consisted of 225 buildings totaling approximately 13.2 million square feet, representing about 83.1% of total square feet owned[143] Financial Performance - Total revenues increased by approximately $10.6 million to $74.651 million for the three months ended March 31, 2023, compared to $64.035 million in the same period of 2022, representing a 16.6% increase[110] - Net income for the three months ended March 31, 2023, was $23.3 million, an 18.7% increase compared to $19.7 million for the same period in 2022[140] - Adjusted EBITDA for the three months ended March 31, 2023, was $51.9 million, up from $42.6 million in the same period of 2022, reflecting a 21.8% increase[127] - Total net operating income increased by 19.3% to $56.270 million, compared to $47.159 million in the same period last year[109] Rental Income - The annualized base rent as of March 31, 2023, was $235.2 million, with warehouse/distribution properties contributing 75.9% of this total[85] - The annualized base rent per occupied square foot was $13.02, with a weighted average remaining lease term of 4.3 years[87] - Approximately 10.5% of total annualized base rent is scheduled to expire during the year ending December 31, 2023, with expected rental rates for new leases projected to be above current rates[92] - Cash rent changes on new and renewed leases during the three months ended March 31, 2023, were approximately 69.3% higher compared to previous rental rates for the same space[92] Development and Acquisitions - The company has four properties under development or redevelopment, expected to consist of 12 buildings totaling approximately 2.3 million square feet, with a total expected investment of approximately $571.2 million[87] - The company acquired three industrial properties for a total purchase price of approximately $382.6 million during the three months ended March 31, 2023[94] - The company has two outstanding contracts to acquire industrial properties for a total purchase price of $62.9 million, subject to satisfactory due diligence[101] Capital Structure and Financing - The company completed a public offering of 5,750,000 shares at $62.50 per share, raising approximately $355.9 million in net proceeds for acquisitions[97] - The company maintains a flexible capital structure with a goal to preserve an investment-grade rating and limit consolidated indebtedness to less than 35% of total enterprise value[116] - As of March 31, 2023, total net debt increased to $770.9 million from $720.9 million as of March 31, 2022, representing a 6.5% increase[127] - The company expects to meet short-term liquidity needs through net cash from operations and existing cash balances, while long-term needs will be funded through various financing methods including equity and debt securities[117] Expenses and Costs - General and administrative expenses rose by approximately $1.8 million, primarily due to increased compensation expenses and a higher number of employees[113] - Interest expense increased by approximately $2.3 million to $7.375 million, attributed to the full borrowing of a $100 million unsecured term loan and higher average interest rates[115] - Inflation has increased construction costs and operating expenses, but approximately 65.0% of leases expire within five years, allowing the company to seek new leases at current market rates[102] Dividends - A cash dividend of $0.40 per share was declared on May 2, 2023, payable on July 14, 2023[100] - The company declared a cash dividend of $0.40 per share on February 7, 2023, payable on April 6, 2023[128]