Terreno Realty's Rent Rises in Q3, Occupancy Declines Y/Y

Core Insights - Terreno Realty Corporation (TRNO) reported a strong performance in Q3 2025, with higher rents on new and renewed leases and a focus on accretive acquisitions and developments to support future growth [1][12]. Operating Activity - In Q3 2025, TRNO experienced a 17.2% increase in cash rents on new and renewed leases, covering approximately 0.6 million square feet and 8 acres of improved land [3]. - The tenant retention ratio was 68.7% for the operating portfolio and 100% for the improved land portfolio [3]. - As of September 30, 2025, occupancy for the improved land portfolio was 98.6%, up from 97.1% a year earlier, while the operating portfolio occupancy was 96.2%, down 150 basis points sequentially and 80 basis points year over year [4]. Investment Activity - TRNO sold three properties, including six buildings and two improved land parcels, for a total of $102.8 million in Q3 2025 [6]. - The company acquired two industrial properties and a multi-market portfolio for a total of $472.6 million during the same period [7]. - As of September 30, 2025, TRNO had acquisitions worth approximately $20.8 million under contract and nearly $39 million under letters of intent, along with around $8.8 million of dispositions under contract [8]. Development and Redevelopment Activity - TRNO had six properties under development or redevelopment, which will consist of nine buildings totaling around 0.9 million square feet, with 54% pre-leased upon completion [9]. - The company also has around 10.7 acres of land dedicated to future developments, with an estimated investment value of approximately $391.2 million [10]. Capital Market Activity - In Q3 2025, TRNO did not issue any shares or repurchase any shares under its equity offering program [11]. - As of September 30, 2025, the outstanding balance for its $600 million revolving credit facility was approximately $280 million, with no debt maturities in 2025 and $50 million 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].