What changed in this filing

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Item 1. Business

2021-02-10 compared with 2020-02-06 · 35 added, 17 removed, 128 unchanged (29% of the section changed)

2 unchanged sentences

We invest in several types of industrial real estate, including warehouse/distribution (approximately 82.0% of our total annualized base rent as of December 31, 2020), flex (including light industrial and research and development, or R&D) (approximately 5.0%), transshipment (approximately 5.3%) and improved land (approximately 7.7%).

We target functional buildings in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate.

We target functional properties in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate.

Infill locations are geographic locations surrounded by high concentrations of already developed land and existing buildings.

As of December 31, 2019, we owned a total of 220 buildings aggregating approximately 13.3 million square feet, 19 improved land parcels consisting of approximately 77.6 acres and four properties under redevelopment expected to contain approximately 0.5 million square feet upon completion.

The buildings and improved land parcels were approximately 96.8% and 92.0% leased, respectively, to 493 customers, the largest of which accounted for approximately 3.6% of our total annualized base rent.

As of December 31, 2020, we owned a total of 222 buildings aggregating approximately 13.2 million square feet, 25 improved land parcels consisting of approximately 91.5 acres and one property under redevelopment expected to contain approximately 0.2 million square feet upon completion.

As of December 31, 2020, the buildings and improved land parcels were approximately 97.8% and 98.6% leased, respectively, to 488 customers, the largest of which accounted for approximately 5.4% of our total annualized base rent.

We are an internally managed Maryland corporation and elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2010.

3 unchanged sentences

As described in more detail below, we invest in several types of industrial real estate, including warehouse/distribution, flex (including light industrial and R&D), transshipment and improved land.

We target functional buildings in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate.

We target functional properties in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate.

Industrial Facility General Characteristics

21 unchanged sentences

Improved land (approximately 7.7% of our total annualized base rent as of December 31, 2020)

• Used for truck, trailer and container storage and/or car parking

• Used for industrial outdoor storage, including truck, trailer and car parking

• May be redeveloped in the future

10 unchanged sentences

In general, we prefer to utilize local third-party property managers for day-to-day property management.

We believe outsourcing property management is cost effective and provides us with operational flexibility and is a source of acquisition opportunities.

We may directly manage properties in the future if we determine such direct property management is in our best interest.

We believe outsourcing property management is cost effective, provides us with operational flexibility and is a source of acquisition opportunities.

We have directly managed certain of our properties in the past and may do so in the future if we determine such direct property management is in our best interest.

We have no current intention to acquire undeveloped or unimproved industrial land or to pursue greenfield ground-up development.

Nevertheless, we pursue redevelopment, renovation and expansion opportunities of properties that we own, acquire properties and improved land parcels with the intent to redevelop in the near-term, and acquire adjacent land to expand our existing facilities.

We expect that we will continue to acquire the significant majority of our investments as equity interests in individual properties, portfolios of properties or improved industrial land parcels which may be rented without a building in place.

We expect that we will continue to acquire the significant majority of our investments as equity interests in individual properties or portfolios of properties.

We may acquire industrial properties through the acquisition of other corporations or entities that own industrial real estate.

12 unchanged sentences

markets and focus on infill locations.

and in anticipation of trends in logistics patterns resulting from population changes, regulatory and physical constraints, changes in technology, e-commerce, the economic and environmental benefits of reducing vehicle miles traveled and other factors.

We selected our six target markets based upon the experience of our executive management investing and operating in over 50 global industrial markets located in North America, Europe and Asia, the fundamentals of supply and demand, and in anticipation of trends in logistics patterns resulting from population changes, regulatory and physical constraints, changes in technology, e-commerce, the economic and environmental benefits of reducing vehicle miles traveled and other factors.

We have no current intention to acquire undeveloped or unimproved land or pursue greenfield ground-up development, but we pursue redevelopment, renovation and expansion activities.

1 unchanged sentence

We believe that executive compensation should be closely aligned with long-term stockholder value creation.

As a result, the long-term equity incentive compensation of our executive officers is based primarily on our total shareholder return exceeding the total shareholder return of the MSCI U.S.

As a result, the long-term performance-based equity incentive compensation of our executive officers is based exclusively on our total shareholder return exceeding the total shareholder return of the MSCI U.S.

REIT Index (RMS) or the FTSE National Association of Real Estate Investment Trusts (“Nareit”) Equity Industrial Index.

25 unchanged sentences

We are a Maryland corporation formed on November 6, 2009 and have been publicly held and subject to U.S.

Securities and Exchange Commission, or SEC, reporting obligations since 2010.

Securities and Exchange Commission ("SEC") reporting obligations since 2010.

We are not structured as an Umbrella Partnership Real Estate Investment Trust, or UPREIT, although we could put in place a similar structure to facilitate an acquisition if needed.

8 unchanged sentences

We do not currently own any taxable REIT subsidiaries but may in the future.

We believe the current market for industrial real estate acquisitions to be competitive.

We believe the current market for industrial real estate acquisitions to be highly competitive.

We compete for real property investments with pension funds and their advisors, bank and insurance company investment accounts, other public and private real estate investment companies, including other REITs, real estate limited partnerships, owner-users, individuals and other entities engaged in real estate investment activities, some of which have greater financial resources than we do.

We believe the leasing of real estate to be highly competitive.

We believe the leasing of real estate to be competitive.

We experience competition for customers from owners and managers of competing properties.

As a result, we may have to provide free rental periods, incur charges for tenant improvements or offer other inducements, all of which may have an adverse impact on our results of operations.

Governmental Regulations

Compliance with various governmental regulations has an impact on our business, including our capital expenditures, earnings and competitive position, which can be material.

We incur costs to monitor and take actions to comply with governmental regulations that are applicable to our business, which include, among others, federal securities laws and regulations, applicable stock exchange requirements, REIT and other tax laws and regulations, environmental and health and safety laws and regulations, local zoning, usage and other regulations relating to real property and the Americans with Disabilities Act of 1990.

In addition to the discussion below, see “Item 1A – Risk Factors” for a discussion of material risks to us, including, to the extent material, to our competitive position, relating to governmental regulations, and see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation” together with our audited consolidated financial statements and the related notes thereto for a discussion of material information relevant to an assessment of our financial condition and results of operations, including, to the extent material, the effects that compliance with governmental regulations may have upon our capital expenditures and earnings.

Environmental Matters

5 unchanged sentences

Furthermore, various court decisions have established that third parties may recover damages for injury caused by property contamination.

For instance, a person exposed to asbestos at one of our properties may seek to recover damages if he or she suffers injury from the asbestos.

For instance, a person exposed to asbestos at one of our properties may seek to recover damages if he

or she suffers injury from the asbestos.

Lastly, some of these environmental laws restrict the use of a property or place conditions on various activities.

8 unchanged sentences

We were not aware of any significant or material exposures as of December 31, 2020 and 2019.

As of February 6, 2020, we have 24 employees.

None of our employees is a member of any union.

Employees and Human Capital

As of February 9, 2021, we had 26 employees.

None of our employees is a member of any union or is subject to a collective bargaining agreement.

We recognize that our success is linked to the talent and expertise of our people.

We invest in our employees and are committed to growing individual skills and leadership qualities across our business.

Our human capital objectives include, as applicable, identifying, recruiting, retaining, developing, incentivizing and integrating our existing and prospective employees.

We also emphasize external community engagement by encouraging volunteer work, providing paid time off to participate in charitable activities and matching a portion of employee donations to qualifying nonprofit organizations.

As an equal opportunity employer, we promote a consistent message of diversity and inclusion and reward our employees based on merit and their contributions.

We have also increased our board diversity in terms of gender, race and work experience.

We have designed an executive compensation program intended to (i) align the interest of our executives and stockholders, (ii) motivate our executives to manage our business to meet our near, medium and long-term objectives, (iii) assist in attracting and retaining talented and well-qualified executives, (iv) be competitive with other industrial real estate investment trusts and (v) encourage and provide the opportunity for our executives to obtain meaningful ownership levels of our stock.

The health and safety of our employees, third-party property managers, tenants and communities where our properties are located are of primary concern.

Our employees are encouraged to make healthy lifestyle decisions that can ultimately benefit the company by reducing insurance claims and boosting productivity.

We are headquartered in San Francisco and, in response to the COVID-19 pandemic, our employees have been working remotely in accordance with recommendations by the City of San Francisco since March 2020.

Our local, third-party property managers are also generally working remotely, as recommended by their municipalities.

Investors should refer to our COVID-19 disclosure in "Item 6 - Management's Discussion and Analysis of Financial Condition and Results of Operations".

Available Information

7 unchanged sentences

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-K

Item 1. Business