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Item 7. Management’s Discussion and Analysis

2021-02-10 compared with 2020-02-06 · 181 added, 275 removed, 507 unchanged (47% of the section changed)

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This discussion contains forward-looking statements reflecting current expectations that involve risks and uncertainties.

Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Actual results and the timing of events may differ materially

from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

We acquire, own and operate industrial real estate in six major coastal U.S.

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

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, our 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.

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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.

We selected our target markets by drawing 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.

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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.

will opportunistically make investments in debt secured by industrial real estate that would otherwise meet our investment criteria with the intention of ultimately acquiring the underlying real estate.

We will opportunistically make investments in debt secured by industrial real estate that would otherwise meet our investment criteria with the intention of ultimately acquiring the underlying real estate.

We currently do not intend to target specific percentages of holdings of particular types of industrial properties.

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The properties we acquire may be stabilized (fully leased) or unstabilized (have near term lease expirations, be partially or fully vacant and may require physical repositioning).

During the period from February 16, 2010 to December 31, 2019, we have stabilized 74 properties.

We sell properties from time to time when we believe the prospective total return from a property is particularly low relative to its market value and/or the market value of the property is significantly greater than its estimated replacement cost.

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2020 Developments

The COVID-19 pandemic, and mitigation measures put in place by governments to slow it, have caused significant economic disruption.

We are headquartered in San Francisco and our employees have been working remotely in accordance with recommendations by the City of San Francisco since March 2020.

We utilize local, third-party property managers, and they are generally working remotely, as recommended by their municipalities.

We have business continuity and communication plans that have allowed, and we believe, although there can be no assurance, will continue to allow us to operate and manage our portfolio effectively during such disruptions.

We expect that we will, for the intermediate term, employ lower density work arrangements consistent with social distancing and our business continuity plan.

While the impact of the COVID-19 pandemic on our business is not possible to predict accurately, we continue to work

with our customers who have been forced to close or otherwise limit operations or whose businesses have been adversely impacted during the COVID-19 pandemic to, on a case-by-case basis, provide rent deferments.

Through February 8, 2021, we have granted rent deferrals to 62 tenants aggregating approximately 2.8% of annualized base rent.

No rent abatements were granted.

For the 62 rent deferrals granted:

• 17 tenants aggregating 0.3% of annualized base rent (11.0% of total deferrals) have completed their rent deferral period and have fully repaid the deferral amounts;

• 31 tenants aggregating 2.1% of annualized base rent (73.6% of total deferrals) have not completed their rent deferral repayment period and are fulfilling the terms of their deferral agreements;

• 14 tenants aggregating 0.4% of annualized base rent (15.4% of total deferrals) have defaulted on their rent deferral repayments.

The acquisition and disposition markets slowed in the early months of the COVID-19 pandemic as market participants searched for price discovery.

While transaction markets have returned to more normal volumes, our acquisition volume will remain dependent on both the quality and pricing of the opportunity set and the price of our stock relative to net asset value per share.

We believe, although there can be no assurance, that our balance sheet is well positioned to make opportunistic acquisitions as we have only $11.3 million of debt maturities expiring in 2021 and no balance outstanding on our $250 million revolving credit facility.

In addition, we had a cash balance of approximately $107.2 million as of December 31, 2020.

See “Item 1A - Risk Factors” in this Annual Report on Form 10-K for additional discussion regarding the risks to which we are and may be subject as a result of the COVID-19 pandemic.

Acquisition Activity

During 2019, we acquired 17 industrial buildings containing approximately 0.7 million square feet and four improved land parcels containing approximately 22.6 acres for a total purchase price of approximately $273.6 million.

The properties and improved land parcels were acquired from unrelated third parties using existing cash on hand, net proceeds from dispositions and net proceeds from the issuance of common stock.

The following table sets forth the industrial properties and improved land parcels we acquired during 2019:

During 2020, we acquired six industrial buildings containing approximately 0.2 million square feet and five improved land parcels containing approximately 12.0 acres for a total purchase price of approximately $96.7 million.

The buildings and improved land parcels were acquired from unrelated third parties using existing cash on hand, net proceeds from dispositions and net proceeds from the issuance of common stock.

The following table sets forth the industrial buildings and improved land parcels we acquired during 2020:

Property Name Location Acquisition Date Number of

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(in thousands) 1

49th Street Queens, NY February 12, 2019 1 19,000 $ 24,017 5.3 %

81 N Hackensack 3

Kearny, NJ March 8, 2019 — — 25,000 5.3 %

48 3rd and 286 Central 4

Kearny, NJ March 29, 2019 1 28,124 14,085 5.4 %

Minnesota and Tennessee San Francisco, CA May 28, 2019 2 119,089 47,775 4.0 %

Carlstadt, NJ August 7, 2019 — — 4,025 5.0 %

Los Angeles, CA August 19, 2019 5 53,016 18,100 5.2 %

Auburn 400 Auburn, WA August 21, 2019 1 70,345 9,450 5.1 %

Brooklyn, NY August 29, 2019 2 195,598 80,500 4.0 %

20th Street Oakland, CA August 30, 2019 1 92,884 23,752 4.8 %

Slauson Santa Fe Springs, CA August 30, 2019 2 29,927 5,331 5.2 %

Old Bayshore 3

San Jose, CA March 12, 2020 — — $ 11,784 5.0 %

Gladwick Rancho Dominguez, CA March 12, 2020 1 65,670 17,950 3.6 %

Kent, WA April 17, 2020 — — 4,500 5.7 %

Hudson Seattle, WA May 31, 2020 1 13,000 5,611 4.0 %

Starlite Street South San Francisco, CA July 10, 2020 1 22,275 6,300 4.7 %

Aviation Blvd 5

Inglewood, CA October 26, 2020 — — 10,000 5.7 %

Porter Street Los Angeles, CA November 5, 2020 1 12,618 4,400 4.5 %

SE 32nd Street Bellevue, WA November 6, 2020 1 38,883 11,737 4.9 %

Maple Street 6

Rancho Dominguez, CA December 5, 2020 — — 9,750 5.7 %

East Marginal 7

Seattle, WA November 15, 2019 — — 2,850 5.6 %

East Rutherford, NJ December 13, 2019 1 50,305 12,000 5.0 %

917 Valley Puyallup, WA December 19, 2019 1 40,816 6,725 5.4 %

Tukwila, WA December 30, 2020 — — 6,625 4.6 %

McLaren Irvine, CA December 30, 2020 1 11,348 8,000 4.0 %

Total/Weighted Average 6 163,794 $ 96,657 4.7 %

1 The total aggregate initial investment was approximately $289.6 million, including $6.0 million in closing costs and acquisition costs and $10.0 million in assumed intangible liabilities.

1 The total aggregate initial investment was approximately $100.4 million, including $1.7 million in closing costs and acquisition costs.

Additionally, we assumed $2.1 million in intangible liabilities.

2 Stabilized capitalization rates, referred to herein as stabilized cap rates, are calculated, at the time of acquisition, as annualized cash basis net operating income for the property stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property.

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These stabilized cap rates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in this Annual Report on Form 10-K.

3 Represents an improved land parcel containing approximately 16.8 acres.

4 Also includes an improved land parcel containing approximately 2.9 acres.

5 Represents an improved land parcel containing approximately 2.0 acres.

6 Includes approximately 20,000 square feet expiring in 2020.

7 Includes approximately 106,000 square feet expiring in 2020.

8 Represents an improved land parcel containing approximately 0.9 acres.

9 Includes approximately 50,305 square feet expiring in 2020.

3 An improved land parcel containing approximately 2.7 acres.

4 An improved land parcel containing approximately 2.8 acres.

5 An improved land parcel containing approximately 1.9 acres.

6 An improved land parcel containing approximately 2.5 acres.

7 An improved land parcel containing approximately 2.1 acres.

Redevelopment Activity

As of December 31, 2019, we have four properties under redevelopment that will contain approximately 0.5 million square feet upon completion with a total expected investment of approximately $120.4 million, including redevelopment costs, capitalized interest and other costs of approximately $52.4 million as follows:

As of December 31, 2020, we owned one property under redevelopment that will contain approximately 0.2 million square feet upon completion with a total expected investment of approximately $64.1 million, including redevelopment costs, capitalized interest and other costs of approximately $61.4 million as follows:

Property Name Total Expected Investment (in thousands) 1

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Estimated Completion Quarter % Pre-leased December 31, 2020

Sodo Row - North $ 17,000 $ 10,067 $ 6,933 5.4 % Q2 2021 — %

Sodo Row - South 53,446 44,726 8,720 5.7 % Q2 2021 28.1 %

6th Avenue South 15,511 14,976 535 5.1 % Q2 2020 — %

Kent 192 34,410 31,484 2,926 5.5 % Q4 2020 — %

Total/Weighted Average $ 120,367 $ 101,253 $ 19,114 5.5 % 10.2 %

Sodo Row - North & South $ 64,109 $ 61,448 $ 2,661 4.3 % Q4 2021 14.0 %

1 Total expected investment for the property includes the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

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These estimated stabilized cap rates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in this Annual Report on Form 10-K.

During 2019, we completed redevelopment of our 1775 NW 70th Avenue property in Miami, Florida.

We executed a full-building five-year lease stabilizing the approximately 65,000 square foot redevelopment property.

The total investment was approximately $10.0 million.

In addition, we completed redevelopment and sold our 10100 NW 25th Street property in Miami, Florida for a sales price of approximately $14.0 million, resulting in a gain of approximately $1.8 million, as discussed below.

During the year ended December 31, 2020, we completed redevelopment of our Kent 192 property in Kent, Washington and 6th Avenue South property in Seattle, Washington, with estimated stabilized cap rates of 5.0% and 5.1%, respectively.

The total aggregate investment was approximately $49.8 million consisting of approximately 0.3 million square feet.

Disposition Activity

During the year ended December 31, 2019, we sold four properties for an aggregate sales price of approximately $48.9 million, resulting in a total gain of approximately $9.4 million.

We 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, one redevelopment property located in the Miami market for a sales price of approximately $14.0 million, resulting in a gain of approximately $1.8 million, and two properties located in the Washington, D.C.

market for an aggregate sales price of approximately $22.5 million, resulting in an aggregate gain of approximately $3.1 million.

During the year ended December 31, 2020, we 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, and one property located in the Miami market for a sales price of approximately $22.2 million, resulting in a gain of approximately $9.0 million.

The following summarizes the condensed results of operations of the properties sold during the year ended December 31, 2020 for the years ended December 31, 2020, 2019 and 2018 (in thousands):

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We have an at-the-market equity offering program (the “$300 Million ATM Program”) pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $300.0 million ($84.1 million remaining as of December 31, 2020) in amounts and at times as we determine from time to time.

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

We intend to use the net proceeds from the offering of the shares under the $300 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions and repayment of indebtedness, including borrowings under our revolving credit facility.

During 2019, we issued an aggregate of 6,064,576 shares of common stock at a weighted average offering price of $45.85 per share under the $300 Million ATM Program and the $250 Million ATM Program, resulting in net proceeds of approximately $274.0 million and paying total compensation to the applicable sales agents of approximately $4.0 million.

Long Term Incentive Plan

During 2019, we amended and restated our Amended and Restated Long-Term Incentive Plan (as amended and restated, the “Amended LTIP”).

Under the Amended LTIP, each participant’s performance share target award for target awards granted on or after January 1, 2019 will be expressed as a number of shares of common stock and settled in shares of common stock.

Target awards were previously expressed as a dollar amount and settled in shares of common stock.

Commencing with performance share awards granted on or after January 1, 2019, the grant date fair value of the performance share awards will be determined under current accounting treatment using a Monte Carlo simulation model on the date of grant and recognized on a straight-line basis over the performance period.

The fair value of the performance share awards for the performance measurement period of January 1, 2019 to December 31, 2021 is $4.8 million, which will be recognized quarterly over a three-year period.

Stock-based compensation expense for the performance share awards for the performance measurement period of January 1, 2019 to December 31, 2021 was $1.6 million for the year ended December 31, 2019.

Equity Incentive Plan

During 2019, our stockholders approved the 2019 Equity Incentive Plan (the “2019 Plan”), which replaced the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”).

The 2019 Plan permits the grant of restricted stock awards, performance share awards and unrestricted stock awards.

The maximum number of shares of our common stock that may be issued under the 2019 Plan is 1,898,961, which consists of (i) 1,510,079 shares initially reserved and available for issuance under the 2019 Plan and (ii) 388,882 shares underlying outstanding awards under the 2010 Plan, which if forfeited, canceled or otherwise terminated under the 2010 Plan shall be added to the shares available for issuance under the 2019 Plan.

No further awards will be made under the 2010 Plan.

As of December 31, 2019, 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 1,460,991 were remaining available for issuance.

During 2020, we issued an aggregate of 1,197,597 shares of common stock at a weighted average offering price of $54.08 per share under the $300 Million ATM Program, resulting in net proceeds of approximately $63.8 million and paying total compensation to the applicable sales agents of approximately $0.9 million.

Senior Secured Loan

As of December 31, 2019, we had a senior secured loan, with an original principle amount of $55.0 million, outstanding with a two-year term that bears interest at a fixed annual interest rate of 8.0% and matures in May 2020 (the “Senior Secured Loan”).

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

One of the properties securing the Senior Secured Loan may be put to us as partial repayment of the Senior Secured Loan.

This property may be called by us 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 our approval.

During the year ended December 31, 2019, we acquired two properties that were securing the Senior Secured Loan for a previously agreed upon aggregate purchase price which approximated their fair value of approximately $39.1 million, which resulted in an approximately $39.1 million reduction in the amount outstanding under the Senior Secured Loan.

As of December 31, 2019, there was approximately $15.9 million, net of deferred loan fees of

approximately $0.1 million, outstanding on the Senior Secured Loan and approximately $0.3 million of interest receivable outstanding on the Senior Secured Loan.

Senior Unsecured Notes

During 2019, we entered into a note purchase agreement with certain institutional investors in a private placement transaction pursuant to which we issued $100.0 million of ten-year 3.14% senior unsecured notes on December 2, 2019.

The proceeds from the issuance were used to repay the previously outstanding $50.0 million term loan that was to mature in August 2021 and the related unamortized deferred financing costs of approximately $0.2 million were written off to loss on extinguishment of debt.

We had a senior secured loan (the “Senior Secured Loan”) outstanding to a borrower that bore interest at a fixed annual interest rate of 8.0% and was fully repaid in May 2020.

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

Share Repurchase Program

We have a share repurchase program authorizing us to repurchase up to 3,000,000 shares of our outstanding common stock from time to time through December 31, 2020.

We have a share repurchase program authorizing us to repurchase up to 3,000,000 shares of our outstanding common stock from time to time through December 31, 2022 (extended from December 31, 2020 by our board of directors on November 3, 2020).

Purchases made pursuant to the program, if any, will be made in either the open market or in privately negotiated transactions as permitted by federal securities laws and other legal requirements.

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The program may be suspended or discontinued at any time.

As of December 31, 2019, we have not repurchased any shares of our stock pursuant to the share repurchase authorization.

As of December 31, 2020, we have not repurchased any shares of our common stock pursuant to our share repurchase program.

Dividend and Distribution Activity

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For the Three

Security Dividend

Months Ended Security Dividend

Declaration Date Record Date Date Paid

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

June 30, 2019 Common stock $ 0.24 April 30, 2019 July 5, 2019 July 19, 2019

September 30, 2019 Common stock $ 0.27 July 26, 2019 October 4, 2019 October 18, 2019

December 31, 2019 Common stock $ 0.27 October 29, 2019 December 31, 2019 January 14, 2020

Recent Developments

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

September 30, 2020 Common stock $ 0.29 August 4, 2020 October 2, 2020 October 16, 2020

December 31, 2020 Common stock $ 0.29 November 3, 2020 December 15, 2020 January 5, 2021

Contractual Commitments

As of February 6, 2020, we have two outstanding contracts with third-party sellers to acquire one industrial property and one improved land parcel and one non-binding letter of intent with a third party buyer to sell three industrial properties as further described under the heading “Contractual Obligations” in this Annual Report on Form 10-K.

There is no assurance that we will acquire the property and improved land parcel under contract or sell the properties under non-binding letter of intent because the proposed acquisitions and disposition are subject to the completion of satisfactory due diligence and various closing conditions, and with respect to the properties under non-binding letter of intent, our entry into a purchase and sale agreement.

Current operating conditions in our six markets are excellent.

We believe that on average, the rental rates we are likely to achieve on new or renewed leases for our 2020 expirations will be above the rates currently being paid for the same space.

As of February 9, 2021, we have outstanding contracts with third-party sellers to acquire six industrial properties for a total aggregate purchase price of approximately $123.8 million, as further described under the heading “Contractual Obligations” in this Annual Report on Form 10-K.

There is no assurance that we will acquire the properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and various closing conditions.

Current operating conditions in our six markets for our business are very good.

We believe that on average, the rental rates we are likely to achieve on new or renewed leases for our 2021 expirations will be above the rates currently paid for the same space.

However, new speculative development continues.

This new development will slow potential rent growth from what it would be without such new development.

Macroeconomic conditions, while uncertain and impossible to accurately predict, appear favorable to us.

We see attractive acquisition opportunities.

Nevertheless, our acquisition volume will be dependent on both the quality and pricing of the opportunity set and the price of our stock relative to our net asset value (NAV).

We see attractive acquisition opportunities and expect our 2021 acquisition volume to exceed that of 2020, perhaps significantly so.

Nevertheless, our acquisition volume will be dependent on both the quality and pricing of the opportunity set and the price of our stock relative to net asset value (“NAV”).

Those conditions, not knowable in advance, will determine our results.

We will continue to sell assets and redeploy the capital to enhance NAV or return the capital to shareholders.

We entered 2020 with our balance sheet very well positioned for growth.

We entered 2021 with our balance sheet exceedingly well positioned for growth, as we have no balance outstanding on our $250 million revolving credit facility and a cash balance of approximately $107.2 million.

Eleven years ago, we completed our $175 million blind-pool IPO with a plan to invest in infill industrial real estate in the six best coastal U.S.

Since then, we have grown to approximately $4.5 billion, with $4.0 billion of equity as of December 31, 2020.

Within our six markets we have increasingly focused on urban infill locations.

While our net growth will remain limited to a size where we can make directly informed operational decisions, we feel more strongly today than we did ten years ago about the long-term investment merits of our strategy and the growth opportunities ahead.

While our net growth will remain limited to a size where we can make directly informed operational decisions, we feel more strongly today than we did eleven years ago about the long-term investment merits of our strategy and the growth opportunities ahead.

We are mindful, always, that it is per share rather than aggregate results that matter.

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As a result, we are enthusiastic about the future and our ability to produce superior results for our shareholders over time.

We contribute positively to the environment by owning and operating facilities in infill locations close to population centers thereby minimizing vehicle miles traveled and the concomitant use of fuel and production of airborne particulate matter pollution.

Further, we do no ground up greenfield development of properties;

sustainability for us means never building on a site that has not previously been commercially developed.

During redevelopment of our facilities, we recycle the majority of the building materials from existing buildings and focus on modern design solutions to reduce our impact on the environment.

When releasing vacant space, we seek to reduce our carbon footprint by upgrading existing facilities with energy efficient lighting and heating.

Our outlook is subject to the risks set forth in this Annual Report on Form 10-K, including the risks set form in “Item 1A - Risk Factors”.

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Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.

In addition, approximately 65.0% of our total rentable square feet expire within five years which enables us to seek to replace existing leases with new leases at the then-existing market rate.

Supplemental Material U.S.

Federal Income Tax Considerations

The following discussion updates the disclosures under “Material U.S.

Federal Income Tax Considerations” in the prospectus dated February 9, 2018 contained in our Registration Statement on Form S-3 filed with the SEC on February 9, 2018 and contained in the prospectus supplement dated May 17, 2019.

Consolidated Appropriations Act

On March 23, 2018, President Donald J.

Trump signed into law the Consolidated Appropriations Act, 2018 (the “CAA”), which amended various provisions of the Code and implicate certain tax-related disclosures contained in the prospectus.

As a result, the discussion in the third and fourth paragraphs under “Material U.S.

Federal Income Tax Considerations-U.S.

Taxation of Non-U.S.

Stockholders-Sale of Stock” on pages 33 to 35 of the prospectus is replaced with the following paragraphs:

Additionally, to the extent our stock is held directly (or indirectly through one or more partnerships) by a “qualified shareholder,” it will not be treated as a U.S.

real property interest for such qualified shareholder.

Therefore, gain treated as gain from the sale or exchange of our stock will not be subject to tax under FIRPTA but would be subject to tax if such gain is treated as effectively connected with the qualified shareholder’s conduct of a U.S.

trade or business.

Further, to the extent such treatment applies, any distribution to such shareholder will not be treated as gain recognized from the sale or exchange of a U.S.

real property interest (and capital gain dividends and non-dividend distributions to such shareholder may be treated as ordinary dividends).

For these purposes, a qualified shareholder is generally a non-U.S.

stockholder that (i)(A) is eligible for treaty benefits under an income tax treaty with the United States that includes an exchange of information program, and the principal class of interests of which is listed and regularly traded on one or more stock exchanges as defined by the treaty, or (B) is a foreign limited partnership organized in a jurisdiction with an exchange of information agreement with the United States and that has a class of regularly traded limited partnership units (having a value greater than 50% of the value of all partnership units) on the New York Stock Exchange or Nasdaq, (ii) is a “qualified collective investment vehicle” (within the meaning of section 897(k)(3)(B) of the Code) and (iii) maintains records of persons holding 5% or more of the class of interests described in clauses (i)(A) or (i)(B) above.

However, in the case of a qualified shareholder having one or more “applicable investors,” the exception described in the first sentence of this paragraph will not apply to the applicable percentage of the qualified shareholder’s stock (where “applicable percentage” generally means the percentage of the value of the interests in the qualified shareholder held by applicable investors after applying certain constructive ownership rules).

The applicable percentage of the amount realized by a qualified shareholder on the disposition of our stock or with respect to a distribution from us attributable to gain from the sale or exchange of a U.S.

real property interest will be treated as amounts realized from the disposition of U.S.

real property interest.

Such treatment shall also apply to applicable investors in respect of distributions treated as a sale or exchange of stock with respect to a qualified shareholder.

For these purposes, an “applicable investor” is a person (other than a qualified shareholder) who holds an interest in the qualified shareholder and holds more than 10% of our stock applying certain constructive ownership rules.

For periods on or after December 18, 2015, for FIRPTA purposes neither a “qualified foreign pension fund” nor a "qualified controller entity" (each as defined below) shall be treated as a non-U.S.

Accordingly, the U.S.

federal income tax treatment of ordinary dividends received by qualified foreign pension funds and qualified controlled entities will be determined without regard to the FIRPTA rules, and their gain from the sale or exchange of our stock, as well as our capital gain dividends and distributions treated as gain from the sale or exchange, will not be subject to U.S.

federal income tax unless such gain is treated as effectively connected with such qualified foreign pension fund’s (or such qualified controlled entity’s) conduct of a U.S.

trade or business.

A “qualified foreign pension fund” is an organization or arrangement (i) created or organized in a foreign country, (ii) established to provide retirement or pension benefits to current or former employees (including self-employed individuals) or their designees by either (A) a foreign country as a result of services rendered by such employees to their employers, or (B) one or more employers in consideration for services rendered by such employees to such employers, (iii) which does not have a single participant or beneficiary that has a right to more than 5% of its assets or income, (iv) which is subject to government regulation and with respect to which annual information about its beneficiaries is provided, or is otherwise made available, to relevant local tax authorities and (v) with respect to which, under its local laws, (A) contributions that would otherwise be subject to tax are deductible or excluded from its gross income or taxed at a reduced rate, or (B) taxation of its investment income is deferred, or such income is excluded from its gross income or taxed at a reduced rate .

A “qualified controlled entity” for purposes of the above summary means an entity all the interests of which are held by a qualified foreign pension fund.

Alternatively, under proposed Treasury Regulations that taxpayers generally may rely on, but which are subject to change, a “qualified controlled entity” is a trust of corporation organized under the laws of a foreign country all of the interests of which are held by one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled entities or partnerships.

Finally, the Consolidated Appropriations Act, 2018 clarified that for purposes of determining whether a REIT is a “domestically controlled qualified investment entity” under FIRPTA, the presumption that generally a person holding less than 5% of a REIT’s class of stock that is regularly traded on an established securities market in the United States for five years has been, and will be, treated as a U.S.

person applies for testing periods ending on or after December 18, 2015 (e.g., if a testing period ends on June 1, 2018, then the presumption applies for the entire five-year period starting on June 1, 2013).

Recent FATCA Proposed Regulations

On December 13, 2018, the Department of the Treasury and the Internal Revenue Service issued proposed regulations under Sections 1471-1474 of the Code (commonly referred to as FATCA), which proposed regulations eliminate FATCA withholding on gross proceeds and thus implicate certain tax-related disclosures contained in the prospectus.

While these regulations have not yet been finalized, taxpayers are generally entitled to rely on the proposed regulations (subject to certain limited exceptions).

Accordingly, the discussion under “Material U.S.

Federal Income Tax Considerations-Additional U.S.

Federal Income Tax Withholding Rules” on pages 36 and 37 of the prospectus is replaced with the following paragraph:

The Foreign Account Tax Compliance Act, or FATCA, imposes withholding taxes on dividends made to “foreign financial institutions” and certain other non-U.S.

entities unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner.

If the payee is a foreign financial institution, it must enter into an agreement with the United States Treasury requiring, among other things, that it undertakes to identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent them from complying with these reporting and other requirements.

Investors in jurisdictions that have entered into “intergovernmental agreements” may, in lieu of the foregoing requirements, be required to report such information to their home jurisdictions.

Prospective investors should consult their tax advisors regarding this legislation.

In addition, leases with respect to approximately 63.9% of our total rentable square feet expire within five years which enables us to seek to replace existing leases with new leases at the then-existing market rate.

Financial Condition and Results of Operations

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The same store pool for the comparison of the 2020 and 2019 fiscal years includes all properties that were owned and in operation as of December 31, 2020 and since January 1, 2019 and excludes properties that were either disposed of prior to, held for sale to a third-party or in redevelopment as of December 31, 2020.

As of December 31, 2019, the same store pool consisted of 187 buildings aggregating approximately 11.8 million square feet representing approximately 88.6% of our total square feet owned and ten improved land parcels consisting of approximately 47.2 acres.

As of December 31, 2019, the non-same store properties, which we acquired, redeveloped or sold during 2018 and 2019, or were held for sale (if any) or in redevelopment as of December 31, 2019, consisted of 33 buildings aggregating approximately 1.5 million square feet, nine improved land parcels consisting of approximately 30.4 acres and four properties under redevelopment expected to contain approximately 0.5 million square feet upon completion.

As of December 31, 2020, the same store pool consisted of 198 buildings aggregating approximately 12.0 million square feet representing approximately 91.1% of our total square feet owned and 14 improved land parcels consisting of approximately 54.2 acres.

As of December 31, 2020, the non-same store properties, which we acquired, redeveloped or sold during 2019 and 2020, or were held for sale (if any) or in redevelopment as of December 31, 2020, consisted of 24 buildings aggregating approximately 1.2 million square feet, 11 improved land parcels consisting of approximately 37.3 acres and one property under redevelopment expected to contain approximately 0.2 million square feet upon completion.

As of December 31, 2020 and 2019, our consolidated same store pool occupancy was approximately 98.0% and 97.8%, respectively.

Our future financial condition and results of operations, including rental revenues, straight-line rents and amortization of lease intangibles, may be impacted by the acquisitions of additional properties, and expenses may vary materially from historical results.

Comparison of the Year Ended December 31, 2019 to the Year Ended December 31, 2018:

Comparison of the Year Ended December 31, 2020 to the Year Ended Year Ended December 31, 2019:

For the Year Ended December 31,

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Interest expense, including amortization (15,997) (16,338) 341 (2.1) %

Loss on extinguishment of debt (189) — (189) n/a

Loss on extinguishment of debt — (189) 189 (100.0) %

Gain on sales of real estate investments 26,766 9,391 17,375 185.0 %

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See “Note 2 - Significant Accounting Policies” in our condensed notes to consolidated financial statements for more information regarding our adoption of this standard.

2 Includes 2018 and 2019 acquisitions and dispositions, nine improved land parcels and four properties under redevelopment as of December 31, 2019.

2 Includes 2019 and 2020 acquisitions and dispositions, eleven improved land parcels and one property under redevelopment as of December 31, 2020.

3 Includes straight-line rents and amortization of lease intangibles.

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Cash rents on new and renewed leases totaling approximately 2.6 million square feet commencing during the year ended December 31, 2020 increased approximately 22.1% compared to the same period from the prior year.

For the quarter and year ended December 31, 2019, approximately $0.3 million and $2.0 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants.

For the three months and year ended December 31, 2020, approximately $1.3 million and $4.3 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants.

During the year ended December 31, 2020, primarily due to the effects of COVID-19 on our tenants, approximately $1.3 million in straight-line rent receivables was reversed.

Additionally, during the year ended December 31, 2020, we terminated a lease with the existing tenant at our 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 non-cash deferred rent receivable write-off was approximately $3.2 million.

Property operating expenses.

Total property operating expenses increased approximately $4.9 million during the year ended December 31, 2020 compared to the prior year.

The increase in total property operating expenses was due primarily to an increase of approximately $3.5 million attributable to property acquisitions during 2018 and 2019.

The increase in total property operating expenses was due primarily to an increase of approximately $1.1 million in utilities and maintenance expenses and $1.5 million attributable to increases in real estate taxes for properties included in our same store pool.

Depreciation and amortization.

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General and administrative expenses.

General and administrative expenses increased approximately $2.4 million for the year ended December 31, 2019 compared to the prior year due primarily to increased compensation expense, bonus expense, accounting service fees and performance share award expense.

The increase in performance share award expense primarily related to the expense for performance share awards granted prior to January 1, 2019, which varies quarter to quarter based on our relative share price performance.

General and administrative expenses decreased approximately $0.4 million for the year ended December 31, 2020 compared to the prior year due primarily to decreased performance share award expense offset by increased compensation expense.

The decrease in performance share award expense primarily related to the expense for performance share awards granted prior to January 1, 2019, which varies quarter to quarter based on our relative share price performance.

Performance share award expense for the year ended December 31, 2020 was approximately $6.6 million as compared to approximately $8.0 million for the prior year.

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Acquisition costs.

Acquisition costs decreased by approximately $0.1 million for the year ended December 31, 2019 compared to the year ended December 31, 2018.

Acquisition costs increased $0.2 million for the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily due to dead deal costs incurred during 2020 with respect to potential acquisitions that did not close.

Interest and other income.

Interest and other income increased approximately $0.2 million for the year ended December 31, 2019 compared to the prior year primarily due to approximately $3.3 million in interest and fees earned on our Senior Secured Loan, which we made in May 2018 and higher cash balances and interest rates during 2019 compared to the prior year.

Interest and other income decreased approximately $2.9 million for the year ended December 31, 2020 compared to the prior year primarily due to lower interest and fees earned on our Senior Secured Loan, offset by interest earned on higher cash balances held during the year ended December 31, 2020.

Interest expense, including amortization.

Interest expense decreased approximately $1.9 million for the year ended December 31, 2019 compared to the prior year due primarily to lower average outstanding borrowings on our revolving credit facility and mortgage loans payable and an increase of $0.7 million in capitalized interest compared to the prior year.

Interest expense decreased approximately $0.3 million for the year ended December 31, 2020 compared to the prior year due primarily to lower average interest rate on our term loan and lower average outstanding borrowings on our mortgage loans payable, offset by a decrease of $0.1 million in capitalized interest compared to the prior year.

Gain on sales of real estate investments .

Gain on sales of real estate investments decreased approximately $19.2 million for the year ended December 31, 2019 compared to the prior year period due to property sales.

Gain on sales of real estate investments increased approximately $17.4 million for the year ended December 31, 2020 compared to the prior year.

The aggregate sales price for property sales for the year ended December 31, 2020 was approximately $73.5 million as compared to approximately $48.9 million for the prior year.

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The same store pool for the comparison of the 2019 and 2018 fiscal years includes all properties that were owned and in operation as of December 31, 2019 and since January 1, 2018 and excludes properties that were either disposed of prior to, held for sale to a third-party or in redevelopment as of December 31, 2019.

As of December 31, 2018, the same store pool consisted of 156 buildings aggregating approximately 10.4 million square feet representing approximately 81.3% of our total square feet owned and six improved land parcels consisting of approximately 23.0 acres.

As of December 31, 2018, the non-same store properties, which we acquired or sold during 2017 and 2018, were held for sale or in redevelopment as of December 31, 2018, consisted of 49 buildings aggregating approximately 2.4 million square feet, ten improved land parcels consisting of approximately 32.2 acres and five properties under redevelopment expected to contain approximately 0.7 million square feet upon completion.

As of December 31, 2019, the non-same store properties, which we acquired or sold during 2018 and 2019, were held for sale (if any) or in redevelopment as of December 31, 2019, consisted of 33 buildings aggregating approximately $1.5 million square feet, nine improved land parcels consisting of approximately 30.4 acres and four properties under redevelopment expected to contain approximately 0.5 million square feet upon completion.

As of December 31, 2019 and 2018, our consolidated same store pool occupancy was approximately 98.4% and 99.1%, respectively.

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Gain on sales of real estate investments 9,391 28,610 (19,219) (67.2) %

Total other income and expenses 14,063 14,046 17 0.1 %

Total other income and expenses (3,321) 14,063 (17,384) n/a

Net income $ 55,516 $ 63,289 $ (7,773) (12.3) %

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See “Note 2 - Significant Accounting Policies” in our condensed notes to consolidated financial statements for more information regarding our adoption of this standard.

2 Includes 2017 and 2018 acquisitions and dispositions, ten improved land parcels, five properties under redevelopment and one completed redevelopment property with a gross book value of $29.3 million as of December 31, 2018.

2 Includes 2018 and 2019 acquisitions and dispositions, nine improved land parcels and four properties under redevelopment as of December 31, 2019.

3 Includes straight-line rents and amortization of lease intangibles.

See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for a reconciliation of net operating income and same store net operating income from net income and a discussion of why we believe net operating income and same store net operating income are useful supplemental measures of our operating performance.

Total revenues increased approximately $19.2 million for the year ended December 31, 2018 compared to the prior year due primarily to property acquisitions during 2017 and 2018 and increased revenue on new and renewed leases and

lease termination income of approximately $0.7 million.

Same store rental revenues and tenant expense reimbursement revenues increased primarily due to new lease agreements at our West 140th, Airgate, Denver Avenue and S.

River Drive properties.

For the quarter and year ended December 31, 2018, approximately $0.4 million and $2.9 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants.

Total revenues increased approximately $19.4 million for the year ended December 31, 2019 compared to the prior year due primarily to property acquisitions during 2019 and 2018 and increased revenue on new and renewed leases.

Cash rents on new and renewed leases totaling 0.2 million square feet commencing during the year ended December 31, 2019 increased approximately 17.3% compared to the same period from the prior year.

For the three months and year ended December 31, 2019, approximately $0.3 million and $2.0 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants.

Property operating expenses.

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General and administrative expenses.

General and administrative expenses increased approximately $1.8 million for the year ended December 31, 2018 compared to the prior year due primarily to increased compensation expense, bonus expense, accounting service fees, and performance share award expense, which varies quarter to quarter based on our relative share price performance.

Performance share award expense for the year ended December 31, 2019 was approximately $8.0 million as compared to approximately $7.1 million for the prior year.

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Acquisition costs.

Acquisition costs increased by approximately $0.1 million for the year ended December 31, 2018 compared to the year ended December 31, 2017.

Acquisition costs decreased by approximately $0.1 million for the year ended December 31, 2019 compared to the year ended 2018.

Interest and other income.

Interest and other income increased approximately $3.5 million for the year ended December 31, 2018 compared to the prior year primarily due to approximately $3.3 million in interest and fees earned on our Senior Secured Loan, which we made in May 2018.

Interest and other income increased approximately $0.2 million for the year ended December 31, 2019 compared to the prior year primarily due to approximately $3.3 million in interest and fees earned on our Senior Secured Loan, which we made in May 2018, and higher cash balances and interest rates during 2019 compared to the prior year.

Interest expense, including amortization.

Interest expense increased approximately $1.4 million for the year ended December 31, 2018 compared to the prior year due primarily to an increase in our average outstanding borrowings on our revolving credit facility and senior unsecured debt and higher interest rates, partially offset by an increase of $2.5 million in capitalized interest compared to the prior year.

Gain on sales of real estate investments .

Gain on sales of real estate investments decreased approximately $2.0 million for the year ended December 31, 2018 compared to the prior year due to property sales.

Gain on sales of real estate investments decreased approximately $19.2 million for the year ended December 31, 2019 compared to the prior year.

The aggregate sales price for property sales for the year ended December 31, 2019 was approximately $48.9 million as compared to approximately $82.1 million for the prior year.

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• have staggered debt maturities that are aligned to our expected average lease term (5-7 years), positioning us to re-price parts of our capital structure as our rental rates change with market conditions.

We intend to preserve a flexible capital structure with a long-term goal to maintain our investment grade rating and be in a position to issue additional unsecured debt and additional perpetual preferred stock.

We intend to preserve a flexible capital structure with a long-term goal to maintain our investment grade rating and be in a position to issue additional unsecured debt and perpetual preferred stock.

Fitch Ratings assigned us an issuer rating of BBB with a stable outlook.

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Our credit rating can affect the amount and type of capital we can access, as well as the terms of any financings we may obtain.

In the event our current credit rating is downgraded, it may become difficult or expensive to obtain additional financing or refinance existing obligations and commitments.

We intend to primarily utilize senior unsecured notes,

term loans, credit facilities, dispositions of properties, common stock and perpetual preferred stock.

In the event our current credit rating is downgraded, it may become difficult or expensive to obtain additional

financing or refinance existing obligations and commitments.

We intend to primarily utilize senior unsecured notes, term loans, credit facilities, dispositions of properties, common stock and perpetual preferred stock.

We may also assume debt in connection with property acquisitions which may have a higher loan-to-value ratio.

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December 31, 2019 6,064,576 $ 45.85 $ 275,026 $ 4,032

As of December 31, 2019, we had a Senior Secured Loan outstanding with a two-year term 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 seven improved land parcels primarily located in Newark, New Jersey.

One of the properties securing the Senior Secured Loan may be put to us as partial repayment of the Senior Secured Loan.

This property may be called by us 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 our approval.

As of December 31, 2019 and 2018, there was approximately $15.9 million and $54.5 million, respectively, net of deferred loan fees of approximately $0.1 million and $0.5 million, respectively, outstanding on the Senior Secured Loan and approximately $0.3 million and $0.4 million, respectively, of interest receivable outstanding on the Senior Secured Loan.

On September 12, 2019, we entered into a note purchase agreement with certain institutional investors in a private placement transaction pursuant to which we issued $100.0 million of ten-year 3.14% senior unsecured notes on December 2, 2019.

Our Senior Secured Loan bore interest at a fixed annual interest rate of 8.0% and was fully repaid in May 2020.

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

As of December 31, 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.

As of December 31, 2020, we 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 and $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 December 31, 2019 and 2018, there was $0 and $19.0 million, respectively, of borrowings outstanding on our revolving credit facility and $100.0 million and $150.0 million, respectively, of borrowings outstanding on our term loans.

We have two interest rate caps to hedge the variable cash flows associated with our existing $100.0 million variable-rate

See “Note 9-Derivative Financial Instruments” in our notes to consolidated financial statements for more information regarding our interest rate caps.

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

As of December 31, 2020, we had one interest rate cap to hedge the variable cash flows associated with $50.0 million of our 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.

As of December 31, 2019, we 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 our existing $100.0 million variable-rate term loan.

We are 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 us in the event LIBOR is greater than 4.0%, referencing the same notional amount.

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 $250.0 million revolving credit facility and the $100.0 million term loan maturing in January 2022 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 our 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 December 31, 2019) for the revolving credit facility and 1.20% to 1.70% (1.20% as of December 31, 2019) for the $100.0 million term loan that matures in January 2022, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value.

Outstanding borrowings under the Facility are limited to the lesser of (i) the sum of the $250.0 million revolving credit facility and the $100.0 million term loan 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 our 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 December 31, 2020) for the revolving credit facility and 1.20% to 1.70% (1.20% as of December 31, 2020) for the $100.0 million term loan, depending on the ratio of our outstanding consolidated indebtedness to the value of our 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 our outstanding consolidated indebtedness to the value of our consolidated gross asset value.

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As of December 31, 2020 and 2019, we had outstanding mortgage loans payable, net of deferred financing costs, of approximately $11.3 million and $44.3 million, respectively, and held cash and cash equivalents totaling approximately $107.2 million and $110.1 million, respectively.

Subsequent to December 31, 2019, we used a portion of the proceeds from our $100.0 million ten-year 3.14% senior unsecured note to repay a mortgage loan payable of $32.7 million.

Subsequent to December 31, 2020, we used cash on hand to repay the mortgage loan payable of $11.3 million.

The following tables summarize our debt maturities and principal payments as of and for the year ended December 31, 2020, and market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the years ended December 31, 2020 and 2019 (dollars in thousands – except per share data):

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2024 — — 100,000 — 100,000

2025 — — — — —

Thereafter — — 200,000 — 200,000

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3 Total debt-to-total investments in properties is calculated as total debt, including premiums and net of deferred financing costs, divided by total investments in properties as of December 31, 2020 and 2019, respectively.

4 Total debt-to-total investments in properties and Senior Secured Loan is calculated as total debt, including premiums and net of deferred financing costs, divided by total investments in properties and total Senior Secured Loan, net of deferred loan fees of approximately $0.1 million and $0.5 million, as of December 31, 2019 and 2018, respectively.

4 Total debt-to-total investments in properties and Senior Secured Loan is calculated as total debt, including premiums and net of deferred financing costs, divided by total investments in properties and total Senior Secured Loan, net of deferred loan fees of approximately $0 and $0.1 million, as of December 31, 2020 and 2019, respectively.

The Senior Secured Loan was fully repaid in May 2020.

5 Total debt-to-total market capitalization is calculated as total debt, including premiums and net of deferred financing costs, divided by total market capitalization as of December 31, 2020 and 2019, respectively.

6 Floating rate debt as a percentage of total debt is calculated as floating rate debt, including premiums and net of deferred financing costs, divided by total debt, including premiums and net of deferred financing costs.

Floating rate debt includes our existing $100.0 million and $150.0 million of variable-rate term loan borrowings with interest rate caps of 4.0% plus 1.20% to 1.70%, depending on leverage as of December 31, 2019 and 2018, respectively.

Floating rate debt includes $100.0 million variable-rate term loan borrowings, of which $50.0 million is subject to an interest rate cap of 4.0% plus 1.20% to 1.70%, depending on leverage as of December 31, 2020, and $150.0 million variable-rate term loan borrowings, of which $100.0 million was subject to interest rate caps of 4.0% plus 1.20% to 1.70% as of December 31, 2019.

See “Note 9 – Derivative Financial Instruments” in our notes to consolidated financial statements for more information regarding our interest rate caps.

7 Unhedged floating rate debt as a percentage of total debt is calculated as unhedged floating rate debt, including premiums and net of deferred financing costs, divided by total debt, net of deferred financing costs.

Hedged debt includes our existing $100.0 million and $150.0 million of variable-rate term loan borrowings with interest rate caps of 4.0% plus 1.20% to 1.70%, depending on leverage as of December 31, 2019 and 2018, respectively.

Hedged debt includes our $100.0 million variable-rate term loan borrowings, of which $50.0 million is subject to an interest rate cap of 4.0% plus 1.20% to 1.70%, depending on leverage as of December 31, 2020, and our $100.0 million variable rate term loan borrowings of which $100.0 million was subject to interest rate caps of 4.0% plus 1.20% to 1.70% as of December 31, 2019.

See “Note 9 – Derivative Financial Instruments” in our notes to consolidated financial statements for more information regarding our interest rate caps.

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10 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the years ended December 31, 2020 and 2019, respectively.

See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for a definition and reconciliation of

Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.

See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for a definition and reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.

11 Interest coverage is calculated as Adjusted EBITDA divided by interest expense, including amortization.

12 Fixed charge coverage is calculated as Adjusted EBITDA divided by interest expense, including amortization, capitalized interest plus preferred stock dividends, if any.

12 Fixed charge coverage is calculated as Adjusted EBITDA divided by interest expense, including amortization plus capitalized interest.

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March 31, 2020 Common stock $ 0.27 February 05, 2020 March 27, 2020 April 10, 2020

June 30, 2019 Common stock $ 0.24 April 30, 2019 July 5, 2019 July 19, 2019

September 30, 2019 Common stock $ 0.27 July 26, 2019 October 4, 2019 October 18, 2019

December 31, 2019 Common stock $ 0.27 October 29, 2019 December 31, 2019 January 14, 2020

June 30, 2020 Common stock $ 0.27 May 05, 2020 June 30, 2020 July 14, 2020

September 30, 2020 Common stock $ 0.29 August 04, 2020 October 02, 2020 October 16, 2020

December 31, 2020 Common stock $ 0.29 November 03, 2020 December 15, 2020 January 05, 2021

For the Three

Security Dividend

Declaration Date Record Date Date Paid

Months Ended Security Dividend

per Share Declaration Date Record Date Date Paid

March 31, 2019 Common stock $ 0.24 February 05, 2019 March 29, 2019 April 12, 2019

June 30, 2018 Common stock $ 0.22 May 1, 2018 July 6, 2018 July 20, 2018

September 30, 2018 Common stock $ 0.24 August 1, 2018 October 5, 2018 October 19, 2018

June 30, 2019 Common stock $ 0.24 April 30, 2019 July 05, 2019 July 19, 2019

September 30, 2019 Common stock $ 0.27 July 26, 2019 October 04, 2019 October 18, 2019

December 31, 2019 Common stock $ 0.27 October 29, 2019 December 31, 2019 January 14, 2020

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Cash From Operating Activities.

Net cash provided by operating activities totaled approximately $94.7 million for the year ended December 31, 2019 compared to approximately $77.6 million for the year ended December 31, 2018.

Net cash provided by operating activities totaled approximately $101.1 million for the year ended December 31, 2020 compared to approximately $94.7 million for the year ended 2019.

This increase in cash provided by operating activities is primarily attributable to additional cash flows generated from the properties acquired during 2020 and 2019 and increased rents on new and renewed leases at our same store properties.

Additionally, during the year ended December 31, 2020, we received cash of approximately $3.3 million related to the termination of a lease held with the existing tenant at our Belleville property.

Cash From Investing Activities.

Net cash used in investing activities was approximately $251.5 million and $235.0 million, respectively, for the years ended December 31, 2019 and 2018, which consists primarily of cash paid for property acquisitions of $238.7 million and $221.8 million, respectively, net cash paid for our Senior Secured Loan of approximately $0 and $54.1 million, respectively, and additions to capital improvements of approximately $60.0 million and $38.6 million, respectively, offset by net proceeds from sales of real estate investments of approximately $47.1 million and $79.6 million, respectively, for the years ended December 31, 2019 and 2018.

Net cash used in investing activities was approximately $52.1 million and $251.5 million, respectively, for the years ended December 31, 2020 and 2019, which consists primarily of cash paid for property acquisitions of $98.1 million and $238.7 million, respectively, and additions to capital improvements of approximately $40.6 million and $60.0 million, respectively, offset by net proceeds from sales of real estate investments of approximately $70.7 million and $47.1 million, respectively, and net cash received for repayment of the Senior Secured Loan of $15.9 million and $0, respectively, for the years ended December 31, 2020 and 2019.

Cash From Financing Activities.

Net cash provided by financing activities was approximately $235.1 million for the year ended December 31, 2019, which consists primarily of approximately $274.0 million in net common stock issuance proceeds and borrowings of $100.0 million in connection with our issuance of senior unsecured notes, offset by approximately $63.6 million in equity dividend payments, $50.0 million in payments on our term loan that was to mature in August 2021 and approximately $19.0 million in net payments on our revolving credit facility.

Net cash provided by financing activities was

approximately $149.0 million for the year ended December 31, 2018, which consists primarily of approximately $205.9 million in net common stock issuance proceeds and $19.0 million in borrowings on our revolving credit facility, offset by approximately $51.4 million in equity dividend payments and approximately $19.2 million in mortgage loan payments.

Net cash used by financing activities was approximately $53.9 million for the year ended December 31, 2020, which consists primarily of approximately $63.8 million in net common stock issuance proceeds, offset by approximately $74.8 million in equity dividend payments and $33.0 million in mortgage loan payments.

Net cash provided by financing activities was approximately $235.1 million for the year ended December 31, 2019, which consists primarily of approximately $274.0 million in net common stock issuance proceeds and borrowings of $100.0 million in connection with our issuance of senior unsecured notes, offset by approximately $63.6 million in equity dividend payments, $50.0 million in payments on our term loan that was to mature in August 2021 and and approximately $19.0 million in net payments on our revolving credit facility.

Critical Accounting Policies

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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 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.

Carrying values for financial reporting purposes are reviewed for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable.

Examples of such events or changes in circumstances may include classifying an asset to be held for sale, changing the intended

hold period or when an asset remains vacant significantly longer than expected.

Examples of such events or changes in circumstances may include classifying an asset to be held for sale, changing the intended hold period or when an asset remains vacant significantly longer than expected.

The intended use of an asset either held for sale or held for use can significantly impact how impairment is measured.

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Tenant expense reimbursement income includes payments and amounts due from tenants pursuant to their leases for real estate taxes, insurance and other recoverable property operating expenses and is recognized as revenues during the same period the related expenses are incurred.

Effective January 1, 2018, we adopted ASU No.

2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No.

2014-09”), using the modified retrospective approach, which requires a cumulative effect adjustment as of the date of our adoption.

Under the modified retrospective approach, an entity may also elect to apply this standard to either (i) all contracts as of January 1, 2018 or (ii) only to contracts that were not completed as of January 1, 2018.

A completed contract is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP that was in effect before the date of initial application.

We elected to apply this standard only to contracts that were not completed as of January 1, 2018.

Based on our evaluation of contracts within the scope of ASU No.

2014-09, the guidance impacts revenue generated by sales of real estate, which is evaluated in conjunction with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (see below).

Effective January 1, 2018, we adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets , which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business.

Generally, our sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610-20.

ASC 610-20 refers to the revenue recognition principles under ASU 2014-09, Revenue from Contracts with Customers (see above).

Under ASC 610-20, if we determine that we do not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, we will derecognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer.

Income Taxes.

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If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions.

Such an event could materially adversely affect our net

income and net cash available for distribution to stockholders.

Such an event could materially adversely affect our net income and net cash available for distribution to stockholders.

However, we believe we are organized and operate in such a manner as to qualify for treatment as a REIT.

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We follow the provisions of ASC 718, Compensation-Stock Compensation, to account for our stock-based compensation plan, which requires that the compensation cost relating to stock-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued.

Our 2019 Plan provides for the grant of restricted stock awards, performance share awards, unrestricted shares or any combination of the foregoing.

Our 2019 Equity Incentive Plan (the "2019 Plan") provides for the grant of restricted stock awards, performance share awards, unrestricted shares or any combination of the foregoing.

Stock-based compensation is recognized as a general and administrative expense in the financial statements and measured at the fair value of the award on the date of grant.

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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, we have awarded long-term incentive target awards (the "Performance Share awards") under the Amended LTIP, which we amended and restated on January 8, 2019, to our executives that are payable in shares of our common stock after the conclusion of each pre-established performance measurement period, which is generally three years.

In addition, we have awarded long-term incentive target awards (the "Performance Share awards") under the Amended and Restated Long-Term Incentive Plan (as amended and restated, the "Amended LTIP"), which we amended and restated on January 8, 2019, to our executives that are payable in shares of our common stock after the conclusion of each pre-established performance measurement period, which is generally three years.

The amount that may be earned is variable depending on the relative total shareholder return of our stock as compared to the total shareholder return of the MSCI U.S.

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Contractual Obligations

As of February 6, 2020, we have two outstanding contracts with third-party sellers to acquire one industrial property and one improved land parcel.

There is no assurance that we will acquire the property and improved land parcel under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and various closing conditions.

The following table summarizes certain information with respect to the property and improved land parcel we have under contract:

Market Number of

Buildings Square Feet Purchase Price

(in thousands) Assumed Debt

(in thousands)

Los Angeles 1 65,670 $ 18,000 $ —

Northern New Jersey/New York City — — — —

San Francisco Bay Area 1

Seattle — — — —

Miami — — — —

Washington, D.C.

Total 1 65,670 $ 30,000 $ —

1 Represents one improved land parcel containing approximately 2.78 acres.

As of February 6, 2020, we have one non-binding letter of intent 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 we will sell the properties under letter of intent because the proposed disposition is subject to the completion of a contract and satisfactory due diligence and closing conditions.

The following table summarizes our contractual obligations due by period as of December 31, 2019 (dollars in thousands):

Contractual Obligations Less than

1-3 Years 3-5 Years More than

Debt $ 33,077 $ 161,271 $ 100,000 $ 200,000 $ 494,348

Debt interest payments 14,254 26,855 22,420 26,665 90,194

Operating lease commitments 270 416 — — 686

Redevelopment obligations 1,100 — — — 1,100

Purchase obligations 30,000 — — — 30,000

Total $ 78,701 $ 188,542 $ 122,420 $ 226,665 $ 616,328

As of February 9, 2021, we have outstanding contracts with third-party sellers to acquire six industrial properties for a total aggregate purchase price of approximately $123.8 million.

There is no assurance that we will acquire the properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and various closing conditions.

Non-GAAP Financial Measures

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Net income, net of redemption of preferred stock and preferred stock dividends $ 13,513 $ 14,821 $ (1,308) (8.8) % $ 14,821 $ 22,972 $ (8,151) (35.5) %

Gain on sales of real estate investments (3,144) (13,624) 10,480 (76.9) % (13,624) (5,105) (8,519) 166.9 %

Gain on sales of real estate investments — (3,144) 3,144 n/a (3,144) (13,624) 10,480 (76.9) %

Depreciation and amortization 11,192 11,847 (655) (5.5) % 11,847 10,250 1,597 15.6 %

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for the three months ended December 31, 2020, 2019 and 2018, respectively, and 341,673, 402,380, and 368,912 for the years ended December 31, 2020, 2019 and 2018, respectively.

2 Includes performance share award expense of approximately $1.8 million, $2.7 million and $1.1 million for the three months ended December 31, 2019, 2018 and 2017, respectively, and approximately $8.0 million, $7.1 million and $6.7 million for the years ended December 31, 2019, 2018 and 2017, respectively, which varies quarter to quarter based our total shareholder return outperforming the MSCI U.S.

2 Includes performance share award expense of approximately $2.9 million, $1.8 million and $2.7 million for the three months ended December 31, 2020, 2019 and 2018, respectively, and approximately $6.6 million, $8.0 million and $7.1 million for the years ended December 31, 2020, 2019 and 2018, respectively, which varies quarter to quarter based on our total shareholder return outperforming the MSCI U.S.

REIT Index (RMS) and the FTSE Nareit Equity Industrial Index over the prior three year period.

See “Note 11 – Stockholders’ Equity” in our notes to consolidated financial statements for more information regarding our performance share awards.

3 Includes redemption charges of approximately $0, $0, and $1.8 million during the years ended December 31, 2019, 2018, and 2017, respectively, representing the write-off of original issuance costs related to the redemption of our Series A Preferred Stock.

See “Note 11 – Stockholders’ Equity” in our notes to consolidated financial statements for more information regarding our Series A Preferred Stock redemption.

FFO increased by approximately $1.3 million for the three months ended December 31, 2020 compared to the same period from the prior year due primarily to property acquisitions during 2019 and 2020 and same store NOI growth of approximately $1.7 million for the three months ended December 31, 2020 compared to the same period from the prior year.

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FFO increased by approximately $8.9 million for the year ended December 31, 2020 compared to the same period from the prior year due primarily to property acquisitions during 2019 and 2020 and same store NOI growth of approximately $8.5 million for the year ended December 31, 2020 compared to the same period from the prior year.

The FFO increase was offset by an increase of approximately $1.2 million in performance share award expense for the year ended December 31, 2019, compared to the same period from the prior year, and increased weighted average common shares outstanding for the year ended December 31, 2019 compared to the same period from the prior year.

FFO also increased due to a decrease of approximately $1.4 million in performance share award expense for the year ended December 31, 2020, compared to the same period from the prior year.

The FFO increase was also offset by approximately $3.0 million in bad debt expense, primarily due to the effects of COVID-19 on our tenants, including approximately $1.3 million in straight-line rent reversals, during the year ended December 31, 2020 as compared to approximately $0.6 million in bad debt expense, including approximately $0.3 million in straight-line rent reversals, during the year-ended December 31, 2019.

Weighted average common shares outstanding for the year ended December 31, 2020 increased compared to the same period from the prior year.

We compute Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, gain on sales of real estate investments, acquisition costs and stock-based compensation.

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Net income $ 13,513 $ 14,821 $ (1,308) (8.8) % $ 14,821 $ 22,972 $ (8,151) (35.5) %

Gain on sales of real estate investments (3,144) (13,624) 10,480 (76.9) % (13,624) (5,105) (8,519) 166.9 %

Gain on sales of real estate investments — (3,144) 3,144 n/a (3,144) (13,624) 10,480 (76.9) %

Depreciation and amortization from continuing operations 11,192 11,847 (655) (5.5) % 11,847 10,250 1,597 15.6 %

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Stock-based compensation 3,472 2,492 980 39.3 % 2,492 3,248 (756) (23.3) %

Acquisition costs (3) (5) 2 (40.0) % (5) (1) (4) 400.0 %

Acquisition costs 85 (3) 88 n/a (3) (5) 2 (40.0) %

Adjusted EBITDA $ 32,457 $ 30,271 $ 2,186 7.2 % $ 30,271 $ 27,335 $ 2,936 10.7 %

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The same store pool for the comparison of the three months and years ended December 31, 2020 and 2019 includes all properties that were owned as of December 31, 2020 and since January 1, 2019 and excludes properties that were either disposed of prior to, held for sale to a third-party or in redevelopment as of December 31, 2020.

The same store pool for the comparison of the three months and years ended December 31, 2019 and 2018 includes all properties that were owned as of December 31, 2019 and since January 1, 2018 and excludes properties that were either disposed of prior to, held for sale to a third-party or in redevelopment as of December 31, 2019.

We believe that presenting NOI, same store NOI and cash-basis same store NOI provides useful information to investors regarding the operating performance of our properties because NOI excludes certain items that are not considered to be controllable in connection with the management of the properties, such as depreciation, amortization, general and administrative expenses, acquisition costs and interest expense.

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General and administrative 6,936 6,072 864 14.2 % 6,072 6,371 (299) (4.7) %

Acquisition costs (3) (5) 2 (40.0) % (5) (1) (4) 400.0 %

Acquisition costs 85 (3) 88 n/a (3) (5) 2 (40.0) %

Total other income and expenses 4,127 470 3,657 778.1 % 470 (10,471) 10,941 n/a

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Cash-basis same store NOI $ 29,505 $ 28,161 $ 1,344 4.8 % $ 27,037 $ 25,626 $ 1,411 5.5 %

1 Includes $0.1 million, $0 and $0 of lease termination income for the three months ended December 31, 2019, 2018 and 2017.

2 Includes 2018 and 2019 acquisitions and dispositions, four properties under redevelopment and one completed redevelopment property with a gross book value of approximately $10.0 as of December 31, 2019.

3 Includes 2017 and 2018 acquisitions and dispositions, five properties under redevelopment and one completed redevelopment property with a gross book value of approximately $29.3 as of December 31, 2018.

4 Includes $0.1 million, $0 and $0 of lease termination income for the three months ended December 31, 2019, 2018 and 2017.

Less same store termination fee income (75) (143) 68 (47.6) % (143) (5) (138) 2760.0 %

Cash-basis same store NOI excluding termination fees $ 29,430 $ 28,018 $ 1,412 5.0 % $ 26,894 $ 25,621 $ 1,273 5.0 %

1 Includes $0.1 million, $0.1 million and $0 of lease termination income for the three months ended December 31, 2020, 2019 and 2018, respectively.

2 Includes 2019 and 2020 acquisitions and dispositions, one property under redevelopment and two completed redevelopment properties with an aggregate gross book value of approximately $49.3 million as of December 31, 2020.

3 Includes 2018 and 2019 acquisitions and dispositions, four properties under redevelopment and one completed

redevelopment property with a gross book value of approximately $10.0 million as of December 31, 2019.

4 Includes $0.1 million, $0.1 million and $0 of lease termination income for the three months ended December 31, 2020, 2019 and 2018, respectively.

5 Includes straight-line rents and amortization of lease intangibles for the same store pool only.

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Acquisition costs 271 45 226 502.2 % 45 124 (79) (63.7) %

Total other income and expenses 3,321 (14,063) 17,384 n/a (14,063) (14,046) (17) 0.1 %

Total other income and expenses (11,642) 3,321 (14,963) n/a 3,321 (14,063) 17,384 n/a

Net operating income 137,788 126,821 10,967 8.6 % 126,821 111,669 15,152 13.6 %

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Cash-basis same store NOI $ 118,271 $ 109,768 $ 8,503 7.7 % $ 106,639 $ 97,682 $ 8,957 9.2 %

Less same store termination fee income (3,696) (346) (3,350) 968.2 % (346) (699) 353 (50.5) %

Cash-basis same store NOI excluding termination fees $ 114,575 $ 109,422 $ 5,153 4.7 % $ 106,293 $ 96,983 $ 9,310 9.6 %

1 Includes approximately $3.8 million, $0.3 million and $0.7 million of lease termination income for the years ended December 31, 2020, 2019 and 2018, respectively.

2 Includes 2018 and 2019 acquisitions and dispositions, four properties under redevelopment and one completed redevelopment property with a gross book value of $10.0 million as of December 31, 2019.

3 Includes 2017 and 2018 acquisitions acquisitions and dispositions, five properties under redevelopment and one completed redevelopment property with a gross book value of approximately $29.3 as of December 31, 2018.

4 Includes approximately $0.3 million, $0.7 million and $0.1 million million of lease termination income for the years ended December 31, 2019, 2018 and 2017, respectively.

2 Includes 2019 and 2020 acquisitions and dispositions, one property under redevelopment and two completed redevelopment properties with an aggregate gross book value of $49.3 million as of December 31, 2020.

3 Includes 2018 and 2019 acquisitions and dispositions, four properties under redevelopment and one completed redevelopment property with a gross book value of approximately $10.0 million as of December 31, 2019.

4 Includes approximately $3.7 million, $0.3 million and $0.7 million of lease termination income for the years ended December 31, 2020, 2019 and 2018, respectively.

5 Includes straight-line rents and amortization of lease intangibles for the same store pool only.

Cash-basis same store NOI increased by approximately $1.4 million for the three months ended December 31, 2019 compared to the same period from the prior year primarily due to increased rental revenue and tenant reimbursement revenue on new and renewed leases.

For the three months ended December 31, 2019 and 2018, approximately $0.3 million and $0.2 million, respectively, of contractual rent abatements were given to certain tenants in the same-store pool.

In addition, approximately $0.4 million of the increase in cash-basis same store NOI for the three months ended December 31, 2019 compared to the three months ended December 31, 2019 related to properties that were acquired vacant or with near term expirations in 2018.

Cash-basis same store NOI increased by approximately $9.0 million for the year ended December 31, 2019 compared to the prior year primarily due to increased rental revenue and tenant reimbursement revenue on new and renewed leases and approximately $0.3 million in lease termination income, offset by approximately $0.6 million in rent abatements provided to the tenant at our Belleville property.

For the years ended December 31, 2019 and 2018, approximately $1.5 million and $2.7 million, respectively, of contractual rent abatements were given to certain tenants in the same-store pool.

Cash-basis same store NOI increased by approximately $1.3 million for the three months ended December 31, 2020 compared to the same period from the prior year.

For the three months ended December 31, 2020 and 2019, approximately $0.7 million and $0.2 million, respectively, of contractual rent abatements were given to certain tenants in the same-store pool and approximately $0.1 million for both periods in lease termination income was received from certain tenants in the same store pool.

In addition, approximately $0.3 million of the increase in cash-basis same store NOI for both the three months ended December 31, 2020 and 2019, related to properties that were acquired vacant or with near term expirations in 2018.

The increase in cash-basis same store NOI was also offset by an increase of approximately $0.1 million in cash bad debt expense during the three months ended December 31, 2020 compared to the same period in the prior year.

Cash-basis same store NOI increased by approximately $8.5 million for the year ended December 31, 2020 compared to the prior year primarily due to increased rental revenue and tenant reimbursement revenue on new and renewed leases and approximately $3.7 million in lease termination income, of which approximately $3.3 million related to the termination of a lease held with the existing tenant at our Belleville property.

We have since executed a new lease for our Belleville property with a leading e-commerce firm.

In connection with the termination we incurred a non-cash deferred rent receivable write-off of approximately $3.4 million.

For the years ended December 31, 2020 and 2019, approximately $2.5 million and $1.8 million, respectively, of contractual rent abatements were given to certain tenants in the same-store pool and approximately $3.7 million and $0.3 million, respectively, in lease termination income was received from certain tenants in the same store pool.

Approximately $1.0 million of the increase in cash-basis same store NOI for the year ended December 31, 2020 compared to the year ended December 31, 2019 related to properties that were acquired vacant or with near term expirations in 2018.

The increase in cash-basis same store NOI was also offset by an increase of approximately $1.1 million in cash bad debt expense, primarily due to the effects of COVID-19 on our tenants, during the year ended December 31, 2020 compared to the prior year.

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 7. Management’s Discussion and Analysis