What changed in this filing

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Item 1. Financial Statements

2020-08-05 compared with 2020-05-06 · 172 added, 137 removed, 493 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands – except share and per share data)

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

Investments in real estate

30 unchanged sentences

1,587,057 1,514,266

Retained (deficit) earnings ( 2,837 ) 2,621

Common stock held in deferred compensation plan, 135,494 and 0 shares at March 31, 2020 and December 31, 2019, respectively

Common stock held in deferred compensation plan, 139,224 and 0 shares at June 30, 2020 and December 31, 2019, respectively

Retained earnings 9,389 2,621

Accumulated other comprehensive loss ( 318 ) ( 437 )

5 unchanged sentences

(in thousands – except share and per share data)

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2020 2019 2020 2019

Rental revenues and tenant expense reimbursements $ 45,742 $ 41,730 $ 90,858 $ 82,610

21 unchanged sentences

Terreno Realty Corporation

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2020 2019 2020 2019

Net income $ 30,704 $ 10,379 $ 43,560 $ 25,911

Other comprehensive income:

Other comprehensive income (loss):

Cash flow hedge adjustment 46 92 119 155

4 unchanged sentences

(in thousands – except share data)

Three months ended March 31, 2020:

Six months ended June 30, 2020:

Common Stock Additional

15 unchanged sentences

Balance as of March 31, 2020 67,695,805 $ 677 $ 1,552,592 135,494 $ ( 7,346 ) $ ( 2,837 ) $ ( 364 ) $ 1,542,722

Three months ended March 31, 2019:

Net income — — — — — 30,704 — 30,704

Issuance of common stock, net of issuance costs of $ 630

630,490 7 32,068 — — — — 32,075

Forfeiture of common stock related to employee awards ( 352 ) — — — — — — —

Stock-based compensation — — 2,197 — — — — 2,197

Common stock dividends ($ 0.27 per share)

— — — — — ( 18,478 ) — ( 18,478 )

Deposits to deferred compensation plan ( 3,730 ) — 200 3,730 ( 200 ) — — —

Other comprehensive income — — — — — — 46 46

Balance as of June 30, 2020 68,322,213 $ 684 $ 1,587,057 139,224 $ ( 7,546 ) $ 9,389 $ ( 318 ) $ 1,589,266

Six months ended June 30, 2019:

Common Stock Additional

in Capital Deferred Compensation Plan Accumulated

in Capital Accumulated

Other Comprehensive

12 unchanged sentences

Balance as of March 31, 2019 63,128,894 $ 632 $ 1,318,634 $ 14,608 $ ( 698 ) $ 1,333,176

Net income — — — 10,379 — 10,379

Issuance of common stock, net of issuance costs of $ 1,718

2,386,470 24 106,958 — — 106,982

Forfeiture of common stock related to employee awards ( 19,651 ) — — — — —

Stock-based compensation — — 1,268 — — 1,268

Common stock dividends ($ 0.24 per share)

— — — ( 15,719 ) — ( 15,719 )

Other comprehensive income — — — — 92 92

Balance as of June 30, 2019 65,495,713 $ 656 $ 1,426,860 $ 9,268 $ ( 606 ) $ 1,436,178

The accompanying condensed notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

17 unchanged sentences

Additions to buildings, improvements and leasing costs ( 14,953 ) ( 18,017 )

Payments on senior secured loan 4,987 —

Net cash used in investing activities ( 36,194 ) ( 27,681 )

Repayments on senior secured loan 15,915 —

Net cash provided by (used in) investing activities 5,536 ( 93,057 )

CASH FLOWS FROM FINANCING ACTIVITIES

4 unchanged sentences

Payments on credit facility — ( 36,000 )

Payments on mortgage loans payable ( 32,732 ) ( 373 )

Payments on mortgage loan payable ( 32,846 ) ( 749 )

Dividends paid to common stockholders ( 36,465 ) ( 29,752 )

Net cash (used in) provided by financing activities ( 14,864 ) 134,797

Net (decrease) increase in cash and cash equivalents and restricted cash ( 42,709 ) 27,901

Net increase in cash and cash equivalents and restricted cash 36,045 85,685

Cash and cash equivalents and restricted cash at beginning of period 112,739 34,479

4 unchanged sentences

Accounts payable related to capital improvements 9,426 9,575

Non-cash repayment of senior secured loan — ( 39,085 )

Non-cash issuance of common stock to the deferred compensation plan ( 7,546 ) —

Lease liability arising from recognition of right-of-use asset 523 766

Non-cash repayment of senior secured loan — ( 39,085 )

Reconciliation of cash paid for property acquisitions

8 unchanged sentences

All square feet, acres, occupancy and number of properties disclosed in these condensed notes to the consolidated financial statements are unaudited.

As of March 31, 2020, the Company owned 219 buildings (including three buildings held for sale) aggregating approximately 13.4 million square feet, 21 improved land parcels consisting of approximately 82.2 acres and four properties under redevelopment expected to contain approximately 0.5 million square feet upon completion.

As of June 30, 2020, the Company owned 218 buildings (including one building held for sale) aggregating approximately 13.1 million square feet, 22 improved land parcels consisting of approximately 85.0 acres and two properties under redevelopment expected to contain approximately 0.5 million square feet upon completion.

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.

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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 2019 Annual Report on Form 10-K and the notes thereto, which was filed with the Securities and Exchange Commission on February 6, 2020.

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, 2019 and the notes thereto, which was filed with the Securities and Exchange Commission on February 6, 2020.

Use of Estimates.

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The discount rates used in the fair value estimates represent a rate commensurate with the indicated holding period with a premium layered on for risk.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three months ended March 31, 2020 or 2019.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three or six months ended June 30, 2020 or 2019.

Loans Held-for-Investment .

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Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of loans that are held-for-investment .

The Company evaluates its senior secured loan (the “Senior Secured Loan”), which is classified as held-for-investment, for impairment quarterly.

If the Senior Secured Loan is considered to be impaired, the Company records an allowance through the provision for Senior Secured Loan losses to reduce the carrying value of the Senior Secured Loan to the present value of expected future cash flows discounted at the Senior Secured Loan’s contractual effective rate or the fair value of the collateral, if repayment is expected solely from the collateral.

Prior to the adoption of ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”) , the Company evaluated its senior secured loan (the “Senior Secured Loan”), which was classified as held-for-investment, for impairment quarterly.

If the Senior Secured Loan was considered to be impaired, the Company would record an allowance through the provision for Senior Secured Loan losses to reduce the carrying value of the Senior Secured Loan to the present value of expected future cash flows discounted at the Senior Secured Loan’s contractual effective rate or the fair value of the collateral, if repayment was expected solely from the collateral.

Actual losses, if any, could differ significantly from the Company’s estimates.

There were no impairment charges recorded to the carrying value of the Senior Secured Loan during the three months ended March 31, 2020 or 2019.

The Senior Secured Loan was fully repaid during the three months ended June 30, 2020 and there were no impairment charges recorded to the carrying value of the Senior Secured Loan during the three or six months ended June 30, 2020 or 2019.

On January 1, 2020, the Company adopted ASC 326 on a prospective basis, which had no material impact to the Company's consolidated financial statements.

ASC 326 replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information used under the incurred losses model.

Under ASC 326, the Company is required to re-evaluate the expected loss of its loans portfolio at each balance sheet date.

For the three and six months ended June 30, 2020, the Company had no allowances for loan losses.

Property Acquisitions.

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The above and below-market lease values are amortized to rental revenues over the remaining initial term plus the term of any below-market fixed rate renewal options that are considered bargain renewal options of the respective leases.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 1.4 million and $ 0.9 million for the three months ended March 31, 2020 and 2019, respectively.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 1.3 million and $ 1.0 million for the three months ended June 30, 2020 and 2019, respectively, and approximately $ 2.7 million and $ 1.9 million, for the six months ended June 30, 2020

and 2019, respectively.

The origination value of in-place leases is based on costs to execute similar leases, including commissions and other related costs.

The origination value of in-place leases also includes real estate taxes, insurance and an estimate of lost rental revenue at market rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition.

The remaining weighted average lease term related to these intangible assets and liabilities as of March 31, 2020 is 8.3 years.

As of March 31, 2020 and December 31, 2019, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

March 31, 2020 December 31, 2019

The remaining weighted average lease term related to these intangible assets and liabilities as of June 30, 2020 is 8.1 years.

As of June 30, 2020 and December 31, 2019, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

June 30, 2020 December 31, 2019

Gross Accumulated

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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 Three Months Ended March 31,

For the Six Months Ended June 30,

Cash and cash equivalents at beginning of period $ 110,082 $ 31,004

4 unchanged sentences

Cash and cash equivalents and restricted cash 148,784 120,164

Net (decrease) increase in cash and cash equivalents and restricted cash $ ( 42,709 ) $ 27,901

Net increase in cash and cash equivalents and restricted cash $ 36,045 $ 85,685

Revenue Recognition.

The Company records rental revenue from operating leases on a straight-line basis over the term of the leases and maintains an allowance for estimated losses that may result from the inability of its tenants to make required payments.

If tenants fail to make contractual lease payments that are greater than the Company’s allowance for doubtful

accounts, security deposits and letters of credit, then the Company may have to recognize additional doubtful account charges in future periods.

If tenants fail to make contractual lease payments that are greater than the Company’s allowance for doubtful accounts, security deposits and letters of credit, then the Company may have to recognize additional doubtful account charges in future periods.

The Company monitors the liquidity and creditworthiness of its tenants on an on-going basis by reviewing their financial condition periodically as appropriate.

4 unchanged sentences

Consistent with the Financial Accounting Standards Board staff question-and-answer document released on April 10, 2020, the Company elected to account for lease concessions related to the effects of COVID-19 as though no lease modification was made in instances where total contractual lease payments over the term of the lease were unchanged.

Due to the effects of COVID-19, the future contractual lease payments of certain of the Company's tenants were not probable and as such, approximately $ 0.5 million in straight-line rent receivables was reversed during the three months ended March 31, 2020.

As of March 31, 2020 and December 31, 2019, approximately $ 27.3 million and $ 27.4 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.5 million and $ 0.2 million as of March 31, 2020 and December 31, 2019, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

Due to the effects of COVID-19, the future contractual lease payments of certain of the Company's tenants were not probable and as such, approximately $ 0.4 million and $ 0.9 million straight-line rent receivables was reversed during the three and six months ended June 30, 2020, respectively.

As of June 30, 2020 and December 31, 2019, approximately $ 29.0 million and $ 27.4 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 1.1 million and $ 0.2 million as of June 30, 2020 and December 31, 2019, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

Effective January 1, 2018, the Company adopted ASU No.

14 unchanged sentences

Costs incurred in connection with financings are capitalized and amortized to interest expense using the effective interest method over the term of the related loan.

Deferred financing costs associated with the Company’s revolving credit facility are classified as an asset and deferred financing costs associated with debt liabilities are reported as a direct deduction from the carrying amount of the debt liability in the accompanying consolidated balance sheets.

Deferred financing costs related to the revolving credit facility and debt liabilities are shown at cost, net of accumulated amortization in the aggregate of approximately $ 8.6 million and $ 8.3 million as of March 31, 2020 and December 31, 2019, respectively.

Deferred financing costs associated with the Company’s

revolving credit facility are classified as an asset and deferred financing costs associated with debt liabilities are reported as a direct deduction from the carrying amount of the debt liability in the accompanying consolidated balance sheets.

Deferred financing costs related to the revolving credit facility and debt liabilities are shown at cost, net of accumulated amortization in the aggregate of approximately $ 8.8 million and $ 8.3 million as of June 30, 2020 and December 31, 2019, respectively.

Income Taxes.

8 unchanged sentences

Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year.

As of March 31, 2020 and December 31, 2019, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

As of June 30, 2020 and December 31, 2019, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions beginning with the 2010 calendar year.

5 unchanged sentences

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 (as amended and restated the "Amended LTIP) which the Company amended and restated on January 8, 2019, 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 .

In addition, the Company has awarded long-term incentive target awards (the “Performance Share awards”) under its Amended and Restated Long-Term Incentive Plan (as amended and restated the “Amended LTIP”), which the Company amended and restated on January 8, 2019, to its executives that may be payable in shares of the Company’s common stock after the conclusion of each preestablished 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.

8 unchanged sentences

(a) how and why the Company uses derivative instruments, (b) how the Company accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows.

Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments.

Further, qualitative disclosures

are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments.

The Company records all derivatives on the accompanying consolidated balance sheets at fair value.

17 unchanged sentences

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 March 31, 2020, the Company owned 62 buildings aggregating approximately 3.6 million square feet and nine land parcels consisting of approximately 48.7 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 29.7 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of March 31, 2020, excluding any partial or full rent abatements.

As of June 30, 2020, the Company owned 62 buildings aggregating approximately 3.6 million square feet and nine land parcels consisting of approximately 48.8 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 26.9 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of June 30, 2020, excluding any partial or full rent abatements.

Other real estate companies compete with the Company in its real estate markets.

1 unchanged sentence

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 March 31, 2020.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of June 30, 2020.

Investments in Real Estate

During the three months ended March 31, 2020, the Company acquired one industrial building containing approximately 66,000 square feet and one improved land parcel with 2.7 acres.

During the three months ended June 30, 2020, the Company acquired one industrial building containing approximately 13,000 square feet and one improved land parcel containing approximately 2.8 acres.

The total aggregate initial investment, including acquisition costs, was approximately $ 10.5 million, of which $ 9.0 million was recorded to land, $ 1.2 million to buildings and improvements, and $ 0.3 million to intangible assets.

Additionally, the Company assumed $ 0.1 million in intangible liabilities.

The Company recorded revenues and net income for the three months ended March 31, 2020 of approximately $ 0.1 million and $ 0.1 million, respectively, related to the 2020 acquisitions.

During the three months ended March 31, 2019, the Company acquired two industrial buildings containing

approximately 46,000 square feet and two improved land parcels containing approximately 19.7 acres.

The total aggregate

initial investment, including acquisition costs, was approximately $ 68.2 million, of which $ 59.6 million was recorded to land,

$ 4.7 million to buildings and improvements, $ 3.9 million to intangible assets.

During the six months ended June 30, 2020, the Company acquired two industrial buildings containing approximately 79,000 square feet and two improved land parcels containing approximately 5.5 acres.

The total aggregate initial investment, including acquisition costs, was approximately $ 41.1 million, of which $ 30.9 million was recorded to land, $ 8.9 million to buildings and

improvements, and $ 1.3 million to intangible assets.

Additionally, the Company assumed $ 0.6 million in intangible liabilities.

The Company recorded revenues and net income for the three months ended March 31, 2019 of approximately $ 0.2 million and

$ 0.1 million, respectively, related to the 2019 acquisitions.

The Company recorded revenues and net income for the three months ended June 30, 2020 of approximately $ 0.5 million and $ 0.4 million, respectively, and recorded revenues and net income for the six months ended June 30, 2020 of approximately $ 0.6 million and $ 0.5 million, respectively, related to the 2020 acquisitions.

During the three months ended June 30, 2019, the Company acquired two industrial buildings containing approximately 119,000 square feet.

The total aggregate initial investment, including acquisition costs, was approximately $ 51.2 million, of which $ 34.8 million was recorded to land, $ 13.1 million to buildings and improvements, and $ 3.3 million to intangible assets.

Additionally, the Company assumed $ 3.1 million in intangible liabilities.

During the six months ended June 30, 2019, the Company acquired four industrial buildings containing approximately 165,000 square feet, and two improved land parcels containing approximately 19.7 acres.

The total aggregate initial investment, including acquisition costs, was approximately $ 119.4 million, of which $ 94.4 million was recorded to land, $ 17.8 million to buildings and improvements, and $ 7.2 million to intangible assets.

Additionally, the Company assumed $ 6.4 million in intangible liabilities.

The Company recorded revenues and net income for the three months ended June 30, 2019 of approximately $ 1.2 million and $ 0.6 million, respectively, and recorded revenues and net income for the six months ended June 30, 2019 of approximately $ 1.4 million and $ 0.7 million, respectively, related to the 2019 acquisitions.

The above assets and liabilities were recorded at fair value, which uses Level 3 inputs.

The properties were acquired from unrelated third parties using existing cash on hand, proceeds from property sales, issuance of common stock and borrowings on the revolving credit facility.

As of March 31, 2020, the Company had four properties under redevelopment expected to contain approximately 0.5 million square feet upon completion with a total expected investment of approximately $ 111.9 million, including redevelopment costs, capitalized interest, and other costs of approximately $ 102.5 million.

The Company capitalized interest associated with

redevelopment and expansion activities of approximately $ 0.7 million and $ 0.8 million, respectively, during the three months ended March 31, 2020 and 2019.

As of June 30, 2020, the Company had two properties under redevelopment expected to contain approximately 0.5 million square feet upon completion with a total expected investment of approximately $ 97.0 million, including redevelopment costs, capitalized interest and other costs of approximately $ 89.8 million.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 0.4 million and $ 0.8 million, respectively, during the three months ended June 30, 2020 and 2019 and approximately $ 1.0 million and $ 1.6 million, respectively, during the six months ended June 30, 2020 and 2019.

Held for Sale/Disposed Assets

1 unchanged sentence

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 March 31, 2020, the Company had entered into an agreement with a third-party purchaser to sell three properties located in the Washington, D.C.

market for a sales price of approximately $ 54.0 million (net book value of approximately $ 31.8 million).

The sale of the properties is subject to various closing conditions.

The following summarizes the condensed results of operations of the properties held for sale as of March 31, 2020 for the three months ended 2020 and 2019 (dollars in thousands):

For the Three Months Ended March 31,

As of June 30, 2020, the Company had entered into an agreement with a third-party purchaser to sell one property located in the Miami, Florida market for a sales price of approximately $ 22.2 million (net book value of approximately $ 11.8 million).

The sale of the property is subject to various closing conditions.

The following summarizes the condensed results of operations of the property held for sale as of June 30, 2020 for the three and six months ended June 30, 2020 and 2019 (dollars in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

2020 2019 2020 2019

Revenues $ 370 $ 243 $ 740 $ 554

2 unchanged sentences

Income from operations $ 151 $ 39 $ 326 $ 145

During the three months ended March 31, 2019, the Company sold one property located in the Los Angeles market for a sales price of approximately $ 12.4 million, resulting in a gain of approximately $ 4.5 million.

The Company did not sell any property during the three months ended March 31, 2020.

During the six months ended June 30, 2020, the Company sold three properties located in the Washington, D.C.

market for a total aggregate sales price of approximately $ 51.3 million, resulting in a gain of approximately $ 17.8 million.

During the six months ended June 30, 2019, the Company sold one property located in the Los Angeles market for a sales price of approximately $ 12.4 million, resulting in a gain of approximately $ 4.5 million.

Senior Secured Loan

As of March 31, 2020, the Company had a Senior Secured Loan outstanding to a borrower that bears interest at a fixed annual interest rate of 8.0 % and matures in May 2020.

The Senior Secured Loan is secured by a portfolio of six improved land parcels located primarily in Newark, New Jersey.

One of the properties securing the Senior Secured Loan may be put to the Company as partial repayment of the Senior Secured Loan at a previously agreed upon value.

This property may be called by the Company as partial repayment of the Senior Secured Loan at a previously agreed upon value.

In addition, per the terms of the Senior Secured Loan, the borrower may repay the loan at any time with either cash or deed in lieu, with the deed subject to the Company’s approval.

During the three months ended March 31, 2020, the borrower sold one of the improved land parcels that was securing the Senior Secured Loan and repaid a portion of the outstanding balance on the Senior Secured Loan.

As of March 31, 2020 and December 31, 2019, there was approximately $ 10.9 million and $ 15.9 million, respectively, net of deferred loan fees of approximately $ 0 and $ 0.1 million, respectively, outstanding on the Senior Secured Loan and approximately $ 0 and $ 0.3 million, respectively, of interest receivable outstanding on the Senior Secured Loan.

The Company had a Senior Secured Loan outstanding to a borrower that bore interest at an annual interest rate of 8.0 % and was fully repaid during the three months ended June 30, 2020.

The Senior Secured Loan was secured by a portfolio of six improved land parcels located primarily in Newark, New Jersey.

As of June 30, 2020 and December 31, 2019, there was approximately $ 0 and $ 15.9 million, respectively, net of deferred loan fees of approximately $ 0 and $ 0.1 million, respectively, outstanding on the Senior Secured Loan and approximately $ 0 and $ 0.3 million, respectively, of interest receivable outstanding on the Senior Secured Loan.

Interest receivable is included as a component of other assets in the accompanying consolidated balance sheets.

As of March 31, 2020, the Company had $ 50.0 million of senior unsecured notes that mature in September 2022, $ 100.0 million of senior unsecured notes that mature in July 2024, $ 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 December 2029 (collectively, the “Senior Unsecured Notes”), and a credit facility (the “Facility”), which consists of a $ 250.0 million unsecured revolving credit facility that matures in October 2022 and a $ 100.0 million term loan that matures in January 2022.

As of both March 31, 2020 and December 31, 2019, there were no borrowings outstanding on the revolving credit facility and $ 100.0 million of borrowings outstanding on the term loan.

As of March 31, 2020, the Company had one interest rate cap to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan.

As of June 30, 2020, the Company had $ 50.0 million of senior unsecured notes that mature in September 2022, $ 100.0 million of senior unsecured notes that mature in July 2024, $ 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 December 2029 (collectively, the “Senior Unsecured Notes”), and a credit facility (the “Facility”), which consists of a $ 250.0 million unsecured revolving credit facility that matures in October 2022, and a $ 100.0 million term loan that matures in January 2022.

As of both June 30, 2020 and December 31, 2019, there were no borrowings outstanding on the revolving credit facility and $ 100.0 million of borrowings outstanding on the term loan.

As of June 30, 2020, the Company had one interest rate cap to hedge the variable cash flows associated with its $ 100.0 million term loan.

As of December 31, 2019, the Company had two interest rate caps to hedge the variable cash flows associated with its existing $ 100.0 million variable-rate term loan.

See “Note 9 - Derivative Financial Instruments” for more information regarding the Company’s interest rate caps.

The aggregate amount of the Facility may be increased to a total of up to $ 600.0 million, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

Outstanding borrowings under the Facility are limited to the lesser of (i) the sum of the $ 100.0 million term loan and the $ 250.0 million revolving credit facility, or (ii) 60.0 % of the value of the unencumbered properties.

Interest on the Facility, including the term loan, is generally

to be paid based upon, at the Company’s option, either (i) LIBOR plus the applicable LIBOR 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, or thirty-day LIBOR plus the applicable LIBOR margin for LIBOR rate loans under the Facility plus 1.25 %.

The applicable LIBOR margin will range from 1.05 % to 1.50 % ( 1.05 % as of March 31, 2020) for the revolving credit facility and 1.20 % to 1.70 % ( 1.20 % as of March 31, 2020 ) for the $ 100.0 million term loan that matures in January 2022, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

Interest on the Facility, including the term loan, is generally to be paid based upon, at the Company’s option, either (i) LIBOR plus the applicable LIBOR 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, or thirty-day LIBOR plus the applicable LIBOR margin for LIBOR rate loans under the Facility plus 1.25 %.

The applicable LIBOR margin will range from 1.05 % to 1.50 % ( 1.05 % as of June 30, 2020) for the revolving credit facility and 1.20 % to 1.70 % ( 1.20 % as of June 30, 2020) for the $ 100.0 million term loan that matures in January 2022, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

The 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.

2 unchanged sentences

The 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 Facility and the Senior Unsecured Notes as of March 31, 2020 and December 31, 2019.

As of March 31, 2020, the Company had one mortgage loan payable, net of deferred financing costs, totaling approximately $ 11.6 million, which bears interest at a fixed annual rate of 5.5 %.

The Company was in compliance with the covenants under the Facility and the Senior Unsecured Notes as of June 30, 2020 and December 31, 2019.

As of June 30, 2020, the Company had one mortgage loan payable, net of deferred financing costs, totaling approximately $ 11.5 million, which bore interest at a weighted average fixed annual rate of 5.5 %.

The mortgage loan payable is collateralized by one property, is non-recourse and requires monthly interest and principal payments until it matures in April 2021.

As of December 31, 2019, the Company had two mortgage loans payable, net of deferred financing costs, totaling approximately $44.3 million, which bore interest at a weighted average fixed annual interest rate of 4.1 %.

As of March 31, 2020 and December 31, 2019, the total gross book value of the properties securing the debt was approximately $ 33.9 million and $ 114.9 million, respectively.

The scheduled principal payments of the Company’s debt as of March 31, 2020 were as follows (dollars in thousands):

As of June 30, 2020 and December 31, 2019, the total gross book value of the properties securing the debt was approximately $ 33.9 million and $ 114.9 million, respectively.

The scheduled principal payments of the Company’s debt as of June 30, 2020 were as follows (dollars in thousands):

Facility Term Loan Senior

Notes Mortgage Loan Payable Total Debt

Notes Mortgage

Payable Total Debt

2020 (6 months) $ — $ — $ — $ 231 $ 231

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Weighted average interest rate n/a 1.7 % 3.8 % 5.5 % 3.4 %

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of March 31, 2020.

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of June 30, 2020.

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):

2020 (9 months) $ 96,918

2020 $ 67,785

Thereafter 152,328

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The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities.

The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and through the use of derivative financial instruments.

The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments.

Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

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The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings.

As of March 31, 2020, the Company had one interest rate cap to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan.

As of June 30, 2020, the Company had one interest rate cap to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan.

The cap has a notional value of $ 50.0 million and will effectively cap the annual interest rate payable at 4.0 % plus 1.20 % to 1.70 %, depending on leverage, with respect to $ 50.0 million for the period from December 1, 2014 (effective date) to May 4, 2021.

The Company previously had an interest rate cap with a notional value of $ 50.0 million (which expired on February 3, 2020) to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan.

The Company previously had an additional interest rate cap with a notional value of $ 50.0 million (which expired on February 3, 2020) to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan.

The Company is required to make certain monthly variable rate payments on the term loan, while the applicable counterparty is obligated to make certain monthly floating rate payments based on LIBOR to the Company in the event LIBOR is greater than 4.0 %, referencing the same notional amount.

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Strike Fair Value Notional Amount

March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019

Interest rate cap 12/1/2014 5/4/2021 4.0 % $ — $ — $ 50,000 $ 50,000

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The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings into interest expense.

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the three months ended March 31, 2020 and 2019 (dollars in thousands):

For the Three Months Ended March 31,

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the three and six months ended June 30, 2020 and 2019 (dollars in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

2020 2019 2020 2019

Interest rate caps in cash flow hedging relationships:

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This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves.

As of March 31, 2020, the Company applied the provisions of this standard to the valuation of its interest rate caps.

The following sets forth the Company’s financial instruments that are accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (dollars in thousands):

As of June 30, 2020, the Company applied the provisions of this standard to the valuation of its interest rate caps.

The following sets forth the Company’s financial instruments that are accounted for at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 (dollars in thousands):

Fair Value Measurement Using

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Interest rate caps at:

March 31, 2020 $ — $ — $ — $ —

June 30, 2020 $ — $ — $ — $ —

December 31, 2019 $ — $ — $ — $ —

Financial Instruments Disclosed at Fair Value

As of March 31, 2020 and December 31, 2019, 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.

As of June 30, 2020 and December 31, 2019, 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 derivative instruments were evaluated based on Level 2 inputs.

The fair values of the Company’s mortgage loans payable 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 Facility approximated its carrying value because the variable interest rates approximate market borrowing rates available to the Company, which are Level 2 inputs.

The fair value of the Senior Secured Loan approximated its carrying value because the interest rate approximates the market lending rate available to the borrower, which is a Level 2 input.

The following table sets forth the carrying value and the estimated fair value of the Senior Secured Loan and debt as of March 31, 2020 and December 31, 2019 (dollars in thousands):

The fair value of the Company’s Facility approximated its carrying value because the variable interest rates approximate market borrowing rates available to the Company, which are Level 2 inputs.

The fair value of the Company’s Senior Secured Loan approximated its carrying value because the interest rate approximates the market lending rate available to the borrower, which is a Level 2 input.

The following table sets forth the carrying value and the estimated fair value of the Company’s Senior Secured Loan and debt as of June 30, 2020 and December 31, 2019 (dollars in thousands):

Fair Value Measurement Using

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Senior secured loan at:

March 31, 2020 $ 10,928 $ — $ 10,928 $ — $ 10,914

June 30, 2020 $ — $ — $ — $ — $ —

December 31, 2019 $ 15,915 $ — $ 15,915 $ — $ 15,858

March 31, 2020 $ 494,429 $ — $ 494,429 $ — $ 459,008

June 30, 2020 $ 495,763 $ — $ 495,763 $ — $ 459,044

December 31, 2019 $ 503,028 $ — $ 503,028 $ — $ 491,575

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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 “$ 300 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 $ 300.0 million ($ 126.1 million remaining as of March 31, 2020) in amounts and at times to be determined by the Company from time to time.

The Company has an at-the-market equity offering program (the “$ 300 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 $ 300.0 million ($ 93.3 million remaining as of June 30, 2020) in amounts and at times to be determined by the Company from time to time.

Prior to the implementation of the $ 300 Million ATM Program, the Company had a $ 250.0 million ATM program (the “$ 250 Million ATM Program”), which was substantially utilized as of May 31, 2019 and which is no longer active.

Actual sales under the $ 300 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 March 31, 2020, the Company issued an aggregate of 427,027 shares of common stock at a weighted average offering price of $ 53.37 per share under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 22.5 million and paying total compensation to the applicable sales agents of approximately $ 0.3 million.

During the three months ended March 31, 2019, the Company issued an aggregate of 1,988,801 shares of common stock at a weighted average offering price of 41.39 per share under the $ 250 Million ATM Program, resulting in net proceeds of approximately $ 81.1 million and paying total compensation to the

applicable sales agents of approximately $ 1.2 million.

During the three and six months ended June 30, 2020, the Company issued an aggregate of 619,300 and 1,046,327 shares, respectively, of common stock at a weighted average offering price of $ 52.81 and $ 53.04 per share, respectively, under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 32.2 million and $ 54.7 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 0.5 million and $ 0.8 million, respectively.

During the three and six months ended June 30, 2019, the Company issued an aggregate of 2,375,270 and 4,364,071 shares, respectively, of common stock at a weighted average offering price of $ 45.76 and $ 43.77 per share, respectively, under the $ 300 Million ATM Program and the $ 250 Million ATM Program, resulting in net proceeds of approximately $ 107.1 million and $ 188.2 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 1.6 million and $ 2.8 million, respectively.

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, 2020.

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The program may be suspended or discontinued at any time.

As of March 31, 2020, the Company had no t repurchased any shares of stock pursuant to its share repurchase program.

As of June 30, 2020, the Company had not repurchased any shares of stock pursuant to its share repurchase program.

In connection with the Annual Meeting of Stockholders on May 5, 2020, the Company granted a total of 11,190 shares of the Company's common unrestricted stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 53.62 .

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 $ 0.6 million in compensation costs for both the three and six months ended June 30, 2020 related to this issuance.

In 2019, the Company established a Non-Qualified Deferred Compensation Plan (“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.

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 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 the three months ended March 31, 2020, 135,494 shares of common stock were deposited into the Deferred Compensation Plan.

As of March 31, 2020, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 1,440,490 were remaining 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 March 31, 2020 ranged from $ 14.20 to $ 58.08 .

The fair value of the restricted stock that was granted during the three months ended March 31, 2020 was approximately $ 1.2 million and the vesting period for the restricted stock is three years .

As of March 31, 2020, the Company had approximately $ 6.5 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 3.6 years.

The Company recognized compensation costs of approximately $ 0.7 million and $ 0.5 million for the three months ended March 31, 2020 and 2019, 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 three months ended March 31, 2020:

During the three and six months ended June 30, 2020 , 3,730 and 139,224 shares, respectively, of common stock were deposited into the Deferred Compensation Plan.

As of June 30, 2020, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 1,429,652 were remaining 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 June 30, 2020 ranged from $ 14.20 to $ 58.08 .

The fair value of the restricted stock that was granted during the six months ended June 30, 2020 was approximately $ 1.2 million and the vesting period for the restricted stock is three years .

As of June 30, 2020, the Company had approximately $ 5.8 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 3.5 years.

The Company recognized compensation costs of approximately $ 0.7 million and $ 0.4 million for the three months ended June 30, 2020 and 2019, respectively, and approximately $ 1.4 million and $ 0.9 million for the six months ended June 30, 2020 and 2019, respectively, related to the restricted stock issuances.

Restricted Stock Activity:

5 unchanged sentences

Vested ( 8,436 ) 31.89

Non-vested shares outstanding as of March 31, 2020 438,835 $ 29.52

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of March 31, 2020:

Non-vested shares outstanding as of June 30, 2020 438,483 $ 29.52

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of June 30, 2020:

Non-vested Shares Vesting Schedule Number of Shares

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Long-Term Incentive Plan:

As of March 31, 2020, there are three open performance measurement periods for the Performance Share awards:

As of June 30, 2020, there are three open performance measurement periods for the Performance Share awards:

January 1, 2018 to December 31, 2020, January 1, 2019 to December 31, 2021, and January 1, 2020 to December 31, 2022.

During the three months ended March 31, 2020, the Company issued 135,494 shares of common stock at a price of $ 54.22 per share related to the Performance Share awards for the performance period from January 1, 2017 to December 31, 2019.

During the six months ended June 30, 2020, the Company issued 135,494 shares of common stock at a price of $ 54.22 per share related to the Performance Share awards for the performance period from January 1, 2017 to December 31, 2019.

The expense related to the open Performance Share awards granted prior to January 1, 2019 varies quarter to quarter based on the Company’s relative share price performance.

The following table summarizes certain information with respect to the Performance Share awards granted prior to January 1, 2019 (dollars in thousands):

Fair Value Performance Share Period Fair Value March 31, 2020 Accrual March 31, 2020 Expense for the Three Months Ended March 31,

Fair Value Performance Share Period Fair Value June 30, 2020 Accrual June 30, 2020 Expense for the Three Months Ended June 30, Expense for the Six Months Ended June 30,

2020 2019 2020 2019

January 1, 2018 - December 31, 2020 $ 6,091 $ 5,069 $ 119 $ 1,295 $ 725 $ 1,886

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The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2019 (dollars in thousands):

Performance Share Period Fair Value on Date of LTIP Grant Expense for the Three Months Ended March 31,

Performance Share Period Fair Value on Date of Grant Expense for the Three Months Ended June 30, Expense for the Six Months Ended June 30,

2020 2019 2020 2019

January 1, 2019 - December 31, 2021 $ 4,829 $ 402 $ 403 $ 804 $ 805

1 unchanged sentence

Total $ 10,401 $ 867 $ 403 $ 1,734 $ 805

The following table sets forth the cash dividends paid or payable per share during the three months ended March 31, 2020:

The following table sets forth the cash dividends paid or payable per share during the six months ended June 30, 2020:

For the Three Months Ended Security Dividend per

1 unchanged sentence

March 31, 2020 Common stock $ 0.27 February 5, 2020 March 27, 2020 April 10, 2020

June 30, 2020 Common stock $ 0.27 May 5, 2020 June 30, 2020 July 14, 2020

Net Income (Loss) Per Share

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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 antidilutive securities or dilutive restricted stock awards outstanding for both the three months ended March 31, 2020 and 2019.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for both the three and six months ended June 30, 2020 and 2019.

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 434,538 and 389,518 of weighted average unvested restricted shares outstanding for the three months ended March 31, 2020 and 2019, respectively.

Under this method, allocations were made to 438,595 and 385,587 of weighted average unvested restricted shares outstanding for the three months ended June 30, 2020 and 2019, respectively, and 436,567 and 387,542 of weighted average unvested restricted shares outstanding for the six months ended June 30, 2020 and 2019, 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 407,139 and 147,285 for the three months ended March 31, 2020 and 2019, respectively.

Diluted shares related to the Performance Share awards were 407,139 and 294,570 for both the three and six months ended June 30, 2020 and 2019, respectively.

Commitments and Contingencies

Contractual Commitments.

As of May 5, 2020, the Company has one outstanding contract with a third-party seller to acquire one industrial property consisting of approximately 13,000 square feet.

There is no assurance that the Company will acquire or dispose of the properties under contract because the proposed acquisition and disposition are subject to the completion of satisfactory due diligence and various closing conditions.

As of August 4, 2020, the Company has one outstanding contract with a third-party seller to acquire one improved land parcel for a total of approximately 7.0 acres.

There is no assurance that the Company will acquire the property under contract because the proposed acquisition is subject to due diligence and various closing conditions.

The following table summarizes certain information with respect to the property the Company has under contract:

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San Francisco Bay Area — — — —

Seattle 1 13,000 5,700 —

Miami — — — —

1 unchanged sentence

Total — — $ 7,275 $ —

As of May 5, 2020, the Company has one contract with a third party buyer to sell three industrial properties in the Washington, D.C.

market totaling approximately 340,000 square feet for a sale price of approximately $ 54.0 million.

There is no assurance that the Company will sell the properties under contract because the proposed disposition is subject to the completion of satisfactory due diligence and various closing conditions.

1 Includes one improved land parcel containing approximately 7.0 acres.

As of August 4, 2020, the Company has executed two non-binding letters of intent with third-party sellers to acquire one industrial building consisting of approximately 13,000 square feet and one improved land parcel consisting of approximately 4.7 acres for a total anticipated purchase price of approximately $ 22.7 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 purchase and sale agreements with respect to these properties or otherwise complete any such prospective purchases on the terms described or at all.

Subsequent Events

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The Company expects that even after shelter-in-place orders have been lifted, it will, for the intermediate term, employ lower density work arrangements consistent with social distancing and the Company’s business continuity plan.

While the impact of the COVID-19 pandemic on the Company’s business is not possible to predict accurately, the Company is working with its customers who have been forced to close or otherwise limit operations or whose businesses have been adversely impacted during the pandemic to, on a case-by-case basis, provide rent deferments while those customers seek emergency funding from the U.S.

Small Business Administration and other federal, state and local funding programs.

Terreno Realty Corporation continues to work with its customers who have been forced to close or otherwise limit operations or whose businesses have been adversely impacted during the pandemic to, on a case-by-case basis, provide rent deferments.

For vacant space and upcoming lease expirations, the current leasing environment has slowed due to shelter-in-place orders, which will reduce revenue from what it would be in a normal leasing environment.

With regard to rent billed for April 2020, the Company received, as of May 1, 2020, approximately 84 % of such rent in cash and 11 % by applying security deposits.

As of May 1, 2020:

• 170 tenants, representing 34 % of the Company’s 498 total tenants’ leases had requested rent deferral or abatement.

Such requests aggregated 6.5 % of the Company’s annualized base rent as of April 1, 2020;

• Of the 170 requests, the Company granted rent deferrals to 49 tenants aggregating 2.0 % of annualized base rent ( 29 % of total requests by number and 31 % by dollar amount).

Deferrals granted represent 76 % of the total dollar requests from those 49 tenants.

With regard to rent billed for July 2020, the Company received, as of August 4, 2020, approximately 95 % of such rent in cash and an additional 1 % by applying security deposits.

As of August 4, 2020:

• 174 tenants, representing approximately 36.0 % of the Company’s total tenants had requested rent deferral or abatement.

Such requests aggregated 7.0 % of the Company’s annualized base rent;

• Of the 174 requests, the Company granted rent deferrals to 61 tenants aggregating 2.7 % of annualized base rent ( 35.1 % of total requests by number and 38.7 % by dollar amount) which represents 76.7 % of the total dollar deferral requests ( 3.6 % of annualized base rent) from those tenants.

The Company did not grant any rent abatement;

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59 tenants aggregating 1.6 % of annualized base rent requesting rent deferral or abatement rescinded their requests ( 33.3 % of requests by number and 22.5 % by dollar amount);

• The Company is still in discussions with eight tenants who are requesting 0.2 % of our annualized base rent in rent deferral or abatement ( 5 % of requests by number and 3 % by dollar amount);

• The Company is still in discussions with four tenants who are requesting 0.05 % of the Company's annualized base rent in rent deferral or abatement ( 2.3 % of requests by number and 0.7 % by dollar amount);

• The Company may in the future amend or enter into additional rent deferral agreements.

The acquisition and disposition markets have similarly slowed as market participants search for price discovery.

The acquisition and disposition markets have slowed as market participants search for price discovery.

The Company’s acquisition volume will remain dependent on both the quality and pricing of the opportunity set and the price of its stock relative to net asset value per share.

The Company has no remaining debt maturities in 2020, an $ 11.5 million mortgage loan maturing in April 2021, and no balance outstanding on its $ 250.0 million revolving credit facility.

In addition, the Company had a cash and cash equivalents balance of approximately $ 69.7 million as of March 31, 2020, in the accompanying consolidated balance sheets.

On April 17, 2020, the Company acquired one improved land parcel totaling 2.8 acres located in Kent, WA for a total purchase price of approximately $ 4.5 million.

In addition, the Company had a cash and cash equivalents balance of approximately $ 148.3 million as of June 30, 2020, in the accompanying consolidated balance sheets.

On July 9, 2020, the Company terminated a lease with the existing tenant at its Belleville property and executed a new lease with a leading e-commerce firm.

The lease termination fee received was approximately $ 3.3 million and the deferred rent receivable write-off was approximately $ 3.4 million.

On July 10, 2020, the Company acquired one industrial building totaling 22,000 square feet located in South San Francisco, CA for a total purchase price of approximately $ 6.3 million.

The property was acquired from an unrelated third party using existing cash on hand.

On May 5, 2020, the Company’s board of directors declared a cash dividend in the amount of $ 0.27 per share of its common stock payable on July 14, 2020 to the stockholders of record as of the close of business on June 30, 2020.

On July 23, 2020, the Company sold one industrial building totaling 192,500 square feet located in Miami Lakes, Florida for a sales price of approximately $ 22.2 million.

The property was sold to an unrelated third party.

On August 4, 2020, the Company’s board of directors declared a cash dividend in the amount of $ 0.29 per share of its common stock payable on October 16, 2020 to the stockholders of record as of the close of business on October 2, 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements