What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-10 compared with 2020-02-06 · 162 added, 217 removed, 990 unchanged (28% of the section changed)

34 unchanged sentences

/s/ Ernst & Young LLP

San Francisco, CA

San Francisco, California

February 10, 2021

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Credit facility $ — $ —

Term loans payable, net 99,583 149,067

Term loan payable, net 99,791 99,583

Senior unsecured notes, net 348,063 347,674

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Common stock:

$ 0.01 par value, 400,000,000 shares authorized, and 67,252,787 and 61,013,711 shares issued and outstanding, respectively

$ 0.01 par value, 400,000,000 shares authorized, and 68,376,364 and 67,252,787 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

Additional paid-in capital

1,589,301 1,514,266

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

Retained earnings 5,926 2,621

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Net income 79,795 55,516 63,289

Redemption of preferred stock — — ( 1,767 )

Preferred stock dividends — — ( 1,961 )

Net income, net of redemption of preferred stock and preferred stock dividends 55,516 63,289 49,367

Allocation to participating securities ( 400 ) ( 351 ) ( 401 )

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Common Stock Additional

Capital Common Shares Held in Deferred Compensation Plan Deferred Compensation Plan Retained

Earnings Accumulated

Comprehensive

(Loss) Income

(Loss) Income Total

Shares Amount

Balance as of December 31, 2017 55,368,737 $ 553 $ 1,023,184 — $ — $ 4,803 $ ( 1,046 ) $ 1,027,494

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5,698,326 57 212,164 — — — — 212,221

Repurchase of common stock — ( 144,025 ) — ( 3,436 ) — — ( 3,436 )

Redemption of preferred stock ( 46,000 ) — — 1,729 ( 1,767 ) — ( 46,038 )

Repurchase of common stock related to employee awards ( 107,267 ) — ( 3,870 ) — — — — ( 3,870 )

Issuance of restricted stock 53,915 — — — — — — —

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Common stock dividends — — — — — ( 53,907 ) — ( 53,907 )

Preferred stock dividends — — — — ( 1,961 ) — ( 1,961 )

Other comprehensive loss — — — — — — 285 285

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6,271,863 63 280,436 — — — — 280,499

Repurchase of common stock — ( 107,267 ) — ( 3,870 ) — — ( 3,870 )

Repurchase of common stock related to employee awards ( 143,886 ) — ( 3,959 ) — — — — ( 3,959 )

Issuance of restricted stock 111,099 — — — — — — —

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1,344,281 13 70,638 — — — — 70,651

Repurchase of common stock — ( 143,886 ) — ( 3,959 ) — — ( 3,959 )

Forfeiture of common stock related to employee awards ( 5,146 ) — ( 265 ) — — — — ( 265 )

Repurchase of common stock related to employee awards ( 154,375 ) — ( 9,572 ) — — — — ( 9,572 )

Issuance of restricted stock 78,041 — — — — — — —

1 unchanged sentence

Common stock dividends — — — — ( 76,490 ) — ( 76,490 )

Deposits to deferred compensation plan ( 139,224 ) — 7,546 139,224 ( 7,546 ) — — —

Other comprehensive income — — — — — — 254 254

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Cash paid for senior secured loan — — ( 55,000 )

Repayment on senior secured loan 15,915 — —

Origination and other fees received on senior secured loan — — 900

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Issuance costs on issuance of common stock ( 940 ) ( 4,023 ) ( 3,030 )

Repurchase of common stock ( 3,959 ) ( 3,870 ) ( 3,436 )

Repurchase of preferred stock — — ( 46,000 )

Repurchase of common stock related to employee awards ( 9,837 ) ( 3,959 ) ( 3,870 )

Borrowings on credit facility — 17,000 204,000

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Dividends paid to common stockholders ( 74,778 ) ( 63,565 ) ( 51,445 )

Dividends paid to preferred stockholders — — ( 1,999 )

Net cash provided by financing activities 235,054 149,037 203,942

Net increase (decrease) in cash and cash equivalents and restricted cash 78,260 ( 8,321 ) 24,322

Net cash (used in) provided by financing activities ( 53,865 ) 235,054 149,037

Net (decrease) increase in cash and cash equivalents and restricted cash ( 4,903 ) 78,260 ( 8,321 )

Cash and cash equivalents and restricted cash at beginning of year 112,739 34,479 42,800

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Accounts payable related to capital improvements 10,552 12,498 10,712

Redemption of preferred stock — — 1,729

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

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

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All square feet, acres, occupancy, expected investment and related expected redevelopment costs and number of properties and improved land parcels disclosed in these notes to the consolidated financial statements are unaudited.

As of December 31, 2019, the Company owned 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, the Company owned 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.

The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2010.

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

There were no impairment charges recorded to the carrying value of the Senior Secured Loan during the year ended December 31, 2019 and 2018.

There were no impairment charges recorded to the carrying value of the Senior Secured Loan during the years ended December 31, 2020 and 2019.

Property Acquisitions.

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Cash and cash equivalents and restricted cash 107,836 112,739 34,479

Net increase (decrease) in cash and cash equivalents and restricted cash $ 78,260 $ ( 8,321 ) $ 24,322

Net (decrease) increase in cash and cash equivalents and restricted cash $ ( 4,903 ) $ 78,260 $ ( 8,321 )

Revenue Recognition.

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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.

As of December 31, 2019 and 2018, approximately $ 27.4 million and $ 25.7 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.2 million for both years ended December 31, 2019 and 2018, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

As of December 31, 2020 and 2019, approximately $ 32.5 million and $ 27.4 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.9 million and $ 0.2 million for the years ended December 31, 2020 and 2019, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

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

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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.

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

Based on the Company’s evaluation of contracts within the scope of ASU No.

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The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

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

The caps have a notional value of $ 100.0 million and will effectively cap the annual interest rate 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 and $ 50.0 million for the period from September 1, 2015 (effective date) to February 3, 2020.

The Company records all derivative instruments on a gross basis in other assets on the accompanying consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities.

As of December 31, 2019 and 2018, the fair value of the interest rate caps was approximately $ 0 and $ 25,000 , respectively.

Fair Value of Financial Instruments .

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New Accounting Standards.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No.

2016-02, Leases (Topic 842) (“ASU No.

The amendments in ASU No.

2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting.

2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years.

Early adoption of ASU No.

2016-02 was permitted.

2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.

Upon adoption of ASU No.

2016-02 on January 1, 2019, the Company adopted the package of practical expedients for all leases that commenced before the effective date of January 1, 2019.

Accordingly, the Company did not 1) reassess whether any expired or existing contracts are or contain leases, 2) reassess the lease classification for any expired or existing lease, and 3) reassess initial direct costs for any existing leases.

The Company did not elect the practical expedient related to using hindsight to reevaluate the lease term.

2016-02 requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

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2016-02, the Company adopted this practical expedient, specifically related to its tenant reimbursements which would otherwise be accounted for under the new revenue recognition standard.

The Company believes the two conditions have been met for tenant reimbursements as 1) the timing and pattern of transfer of the nonlease components

and associated lease components are the same and 2) the non-lease component is not the predominant component in the arrangement.

The Company believes the two conditions have been met for tenant reimbursements as 1) the timing and pattern of transfer of the nonlease components and associated lease components are the same and 2) the non-lease component is not the predominant component in the arrangement.

In addition, ASU No.

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In accordance with the guidance, the Company has combined rental revenues and tenant expense reimbursements on the Company’s consolidated statements of operations.

The Company does not currently capitalize internal leasing costs.

does not currently capitalize internal leasing costs.

In addition, on January 1, 2019, the Company recognized a lease liability of approximately $ 0.9 million and a related ROU asset of approximately $ 0.8 million on its consolidated balance sheets, based on the present value of lease payments for the remaining term of the Company’s corporate office lease, which was approximately 3.5 years as of the adoption date.

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Investments in Real Estate

During the year ended December 31, 2020, the Company acquired six industrial buildings containing approximately 0.2 million square feet and five improved land parcels containing approximately 12.0 acres.

The total aggregate initial investment, including acquisition costs, was approximately $ 100.4 million, of which $ 78.8 million was recorded to land, $ 17.0 million to buildings and improvements and $ 4.6 million to intangible assets.

Additionally, the Company assumed $ 2.1 million in intangible liabilities.

The following table sets forth the wholly-owned industrial properties the Company acquired during the year ended December 31, 2020:

Property Name Location Acquisition Date Number of

Square Feet Purchase Price

(in thousands) 1

Old Bayshore 2

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

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

Kent, WA April 17, 2020 — — 4,500

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

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

Aviation Blvd 4

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

Porter Street Los Angeles, CA November 5, 2020 1 13,000 4,400

SE 32nd Street Bellevue, WA November 6, 2020 1 39,000 11,737

Maple Street 5

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

East Marginal 6

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

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

Total 6 163,794 $ 96,657

1 The total aggregate investment was approximately $ 100.4 million, including $ 1.6 million in closing costs and acquisition costs.

Additionally, the Company assumed $ 2.1 million in intangible liabilities.

2 An improved land parcel containing approximately 2.7 acres.

3 Also includes an improved land parcel containing approximately 2.8 acres.

4 An improved land parcel containing approximately 1.9 acres.

5 An improved land parcel containing approximately 2.5 acres.

6 An improved land parcel containing approximately 2.1 acres.

The Company recorded revenues and net income for the year ended December 31, 2020 of approximately $ 2.4 million and $ 1.1 million, respectively, related to the 2020 acquisitions.

During the year ended December 31, 2019, the Company acquired 17 industrial buildings containing approximately 0.7 million square feet and four improved land parcels containing approximately 22.6 acres.

The total aggregate initial investment, including acquisition costs, was approximately $ 289.6 million, of which $ 224.1 million was recorded to land, $ 53.9 million to

buildings and improvements, $ 11.6 million to intangible assets.

The total aggregate initial investment, including acquisition costs, was approximately $ 289.6 million, of which $ 224.1 million was recorded to land, $ 53.9 million to buildings and improvements and $ 11.6 million to intangible assets.

Additionally, the Company assumed $ 10.0 million in intangible liabilities.

As of December 31, 2020, the Company owned one property under redevelopment expected to 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.

During the year ended December 31, 2020, the Company completed redevelopment of its Kent 192 property in Kent, Washington and 6th Avenue South property in Seattle, Washington, totaling approximately 0.3 million square feet.

The total investment was approximately $ 49.8 million.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 1.6 million, $ 3.2 million and $ 2.5 million, respectively, during the years ended December 31, 2020, 2019 and 2018.

The following table sets forth the wholly-owned industrial properties the Company acquired during the year ended December 31, 2019:

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1 The total aggregate investment was approximately $ 289.6 million, including $ 6.0 million in closing costs and acquisition costs.

2 Represents an improved land parcel containing approximately 16.8 acres.

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

4 Represents an improved land parcel containing approximately 2.0 acres.

5 Represents an improved land parcel containing approximately 0.9 acres.

The Company recorded revenues and net income for the year ended December 31, 2019 of approximately $ 7.6 million and $ 3.0 million, respectively, related to the 2019 acquisitions.

During the year ended December 31, 2018, the Company acquired 17 industrial buildings containing approximately 1.0 million square feet and five improved land parcels containing approximately 19.9 acres, including two buildings and one improved land parcel under redevelopment that upon completion will contain approximately 0.5 million square feet with a total expected investment of approximately $ 112.9 million (unaudited), including redevelopment costs of approximately $ 36.8 million.

The total aggregate initial investment, including acquisition costs, was approximately $ 227.1 million, of which $ 154.5 million was recorded to land, $ 64.0 million to buildings and improvements, $ 8.6 million to intangible assets.

Additionally, the Company assumed $ 10.0 million in intangible liabilities.

The following table sets forth the wholly-owned industrial properties the Company acquired during the year ended December 31, 2018:

Property Name Location Acquisition Date Number of

Square Feet Purchase Price

(in thousands) 1

Vermont Torrance, CA January 31, 2018 1 99,629 $ 17,500

Woodside Queens, NY March 6, 2018 1 83,294 25,170

1st Avenue South Seattle, WA March 6, 2018 1 234,720 42,000

Wicks Blvd San Leandro, CA April 27, 2018 1 11,300 2,600

Newark, NJ May 7, 2018 — — 6,300

East Valley Renton, WA May 7, 2018 1 39,005 5,950

San Leandro, CA August 2, 2018 4 225,344 36,000

San Clemente Hayward, CA September 7, 2018 1 54,000 9,000

San Leandro, CA September 17, 2018 3 128,073 22,790

Commerce Carlstadt, NJ October 17, 2018 1 24,000 3,480

Seattle, WA October 24, 2018 — — 12,434

6th Ave Seattle, WA October 31, 2018 1 50,270 12,558

Walnut II Compton, CA November 7, 2018 1 60,040 11,108

Santa Fe Springs, CA November 14, 2018 — — 6,400

Hotchkiss II Fremont, CA December 20, 2018 1 29,214 6,200

Total 17 1,038,889 $ 219,490

1 The total aggregate investment was approximately $ 227.1 million, including $ 2.9 million in closing costs and acquisition costs.

2 Represents an improved land parcel containing approximately 3.5 acres.

2 An improved land parcel containing approximately 16.8 acres.

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

4 Also includes improved land parcel containing approximately 0.2 acres.

5 Represents an improved land parcel containing approximately 12.7 acres.

6 Represents an improved land parcel containing approximately 2.3 acres.

4 An improved land parcel containing approximately 2.0 acres.

5 An improved land parcel containing approximately 0.9 acres.

The Company recorded revenues and net income for the year ended December 31, 2019 of approximately $ 7.6 million and $ 3.0 million, respectively, related to the 2019 acquisitions.

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

As of December 31, 2019, the Company has four properties under redevelopment that upon completion will contain approximately 0.5 million square feet with a total expected investment of approximately $ 120.4 million, including redevelopment costs of approximately $ 52.4 million.

During 2019, the Company completed redevelopment of its 1775 NW 70th Avenue property in Miami, Florida.

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

The total investment was approximately $ 10.0 million.

During 2019, the Company also completed redevelopment and sold its 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 (See "Note 5 - Held for Sale/Disposed Assets").

The property was vacant.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 3.2 million, $ 2.5 million and $ 0 , respectively, during the years ended December 31, 2019, 2018 and 2017.

Held for Sale/Disposed Assets

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As of December 31, 2020, the Company did no t have any properties held for sale.

During the year ended December 31, 2020, the Company sold three properties located in the Washington, D.C.

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

During the year ended December 31, 2019, the Company sold one property 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 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, 2018, the Company sold one property located in the

Los Angeles market for a sales price of approximately $ 33.2 million, resulting in a gain of approximately $ 12.2 million, two properties in the Miami market for an aggregate sales price of approximately $ 28.6 million, resulting in an aggregate gain of approximately $ 13.1 million and one property in the Washington, D.C.

market for a sales price of approximately $ 20.3 million, resulting in a gain of approximately $ 3.3 million.

Senior Secured Loan

As of December 31, 2019, the Company 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 the Company as partial repayment of the Senior Secured Loan.

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

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

During the year ended December 31, 2019, the Company 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 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.

The Company had a 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.

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.

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

On September 12, 2019, the Company entered into a note purchase agreement with certain institutional investors in a private placement transaction pursuant to which it 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.

As of December 31, 2020, the Company had $ 50.0 million of senior unsecured notes that mature in September 2022, $ 100.0 million of senior unsecured notes that mature in July 2024, $ 50.0 million of senior unsecured notes that mature in July 2026, $ 50.0 million of senior unsecured notes that mature in October 2027 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 the revolving credit facility and $ 100.0 million and $ 150.0 million, respectively, of borrowings outstanding on the term loans.

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

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

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

As of December 31, 2018, the Company had three interest rate caps to hedge the variable cash flows associated with its existing $ 150.0 million variable-rate term loan.

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

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Interest on the Facility, including the term loan, is generally to be paid based upon, at the Company’s option, either (i) LIBOR plus the applicable LIBOR margin or (ii) the applicable base rate which is the greatest of the administrative agent’s prime rate, 0.50 % above the federal funds effective rate, or thirty-day LIBOR plus the applicable LIBOR margin for LIBOR rate loans under the Facility plus 1.25 %.

The applicable LIBOR margin will range from 1.05 % to 1.50 % ( 1.05 % as of December 31, 2019) for the revolving credit facility and 1.20 % to 1.70 % ( 1.20 % as December 31, 2019) for the $ 100.0 million term loan that matures in January 2022, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

The 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 that matures in January 2022, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

The Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15 % to 0.30 % depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

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

The Company has mortgage loans payable which are collateralized by certain of the properties and require monthly interest and principal payments until maturity and are generally non-recourse.

The mortgage loans mature between 2020 and 2021.

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

As of December 31, 2018, the Company had three mortgage loans payable, net of deferred financing costs, totaling approximately $ 45.8 million, which bore interest at a weighted average fixed annual interest rate of 4.1 %.

As of December 31, 2019 and 2018, the total gross book value of the properties securing the debt was approximately $ 114.9 million and $ 153.7 million, respectively.

As of December 31, 2020, the Company had one mortgage loan payable, net of deferred financing costs, totaling approximately $ 11.3 million, which bore interest at a weighted average fixed annual rate of 5.5 %.

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

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

As of December 31, 2020 and December 31, 2019, the total gross book value of the properties securing the debt was approximately $ 32.7 million and $ 114.9 million, respectively.

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

3 unchanged sentences

2024 — — 100,000 — 100,000

2025 — — — — —

Thereafter — — 200,000 — 200,000

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

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

The caps have a notional value of $ 100.0 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 and $ 50.0 million for the period from September 1, 2015 (effective date) to February 3, 2020.

As of December 31, 2018, the Company had three interest rate caps to hedge the variable cash flows associated with its existing $ 150.0 million variable-rate term loans.

The caps have a notional value of $ 150.0 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, $ 50.0 million for the period from September 1, 2015 (effective date) to April 1, 2019 and $ 50.0 million for the period from September 1, 2015 (effective date) to February 3, 2020.

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

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

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

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

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

The following table presents a summary of the Company’s derivative instruments designated as hedging instruments (dollars in thousands):

Derivative Instrument Effective

Fair Value Notional Amount

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

Derivative Instrument

Interest Rate Cap 12/1/2014 5/4/2021 4.0 % $ — $ — $ 50,000 $ 50,000

Interest Rate Cap 9/1/2015 2/3/2020 4.0 % — — — 50,000

Interest Rate Cap 9/1/2015 2/3/2020 4.0 % — 1 50,000 50,000

Total $ — $ — $ 50,000 $ 100,000

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The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 84.1 million remaining as of December 31, 2020) in amounts and at times to be determined by the Company from time to time.

Prior to the implementation of the $ 300 Million ATM Program, the Company had a $ 250.0 million ATM program (the “$ 250 Million ATM Program”), which was substantially utilized as of May 2019 and is no longer active, and a $ 200.0 million ATM program (the “$ 200 Million ATM Program”), which was fully utilized as of June 30, 2018 and is no longer active.

Actual sales under the $ 300 Million ATM Program, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock, determinations by the Company of the appropriate sources of funding for the Company and potential uses of funding available to the Company.

The Company intends 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 the Facility.

During the year ended December 31, 2019, the Company 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.

During the year ended December 31, 2020, the Company 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.

As of December 31, 2019 and 2018, the Company had shares of common stock having an aggregate offering price of up to $ 148.9 million available for issuance under the $ 300 Million ATM Program and $ 129.9 million available for issuance under the $ 250 Million ATM Program, respectively.

The Company’s has a share repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its outstanding common stock from time to time through December 31, 2020.

The Company has a share repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its outstanding common stock from time to time through December 31, 2022 (extended from December 31, 2020 by the Company's Board of Directors on November 3, 2020).

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

The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors.

The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market

conditions, stock price, applicable legal requirements and other factors.

The program may be suspended or discontinued at any time.

As of December 31, 2019, the Company has no t repurchased any shares of stock pursuant to its share repurchase authorization.

As of December 31, 2020, the Company has not repurchased any shares of its common stock pursuant to the share repurchase program.

On April 30, 2019, the Company’s stockholders approved the 2019 Plan, which replaces the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”).

2 unchanged sentences

No further awards will be made under the 2010 Plan.

In connection with the annual meeting of stockholders on April 30, 2019, the Company granted a total of 11,200 shares of unrestricted common stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 44.65 .

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

The grant date fair value of the unrestricted common stock was determined using the closing price of the Company’s common stock on the date of the grant.

The Company recognized approximately $ 0.6 million in compensation costs for the year ended December 31, 2020 related to this issuance.

On July 19, 2017, the Company redeemed all 1,840,000 outstanding shares of the 7.75 % Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) for cash at a redemption price of $ 25.00 per share, plus an amount per share of $ 0.096875 representing all accrued and unpaid dividends per share from July 1, 2017 to, but excluding, July 19, 2017.

The Company recognized a charge of approximately $ 1.8 million during the year ended December 31, 2017 representing the write-off of original issuance costs related to the redemption of the Series A Preferred Stock.

In 2019, the Company established a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) maintained for the benefit of select employees and members of the Company’s Board of Directors, in which certain of their cash and equity-based compensation may be deposited.

Deferred Compensation Plan assets are held in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of bankruptcy or insolvency.

The shares held in the Deferred Compensation Plan are classified within stockholders’ equity in a manner similar to the manner in which treasury stock is classified.

Subsequent changes in the fair value of the shares are not recognized.

During the year ended December 31, 2020, 139,224 shares of common stock were deposited into the Deferred Compensation Plan.

As of December 31, 2020, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 1,376,906 were remaining and available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to December 31, 2020 ranged from $ 14.20 to $ 60.83 .

The fair value of the restricted stock that was granted during the year ended December 31, 2019 was approximately $ 5.2 million and the vesting period for the restricted stock is five years.

The fair value of the restricted stock that was granted during the year ended December 31, 2020 was approximately $ 4.7 million and the vesting period for the restricted stock is three to five years .

As of December 31, 2020, the Company had approximately $ 7.9 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 3.7 years.

28 unchanged sentences

Fair Value Accrual Expense

For the Year Ended December 31,

Performance Share Period December 31, 2019 December 31, 2019 2019 2018 2017

January 1, 2018 - December 31, 2020 $ 6,521 $ 4,343 $ 3,208 $ 1,135 $ —

Maximum Potential Payout For the Year Ended December 31,

Fair Value Performance Share Period December 31, 2020 December 31, 2020 2020 2019 2018

January 1, 2018 - December 31, 2020 $ 7,482 $ 7,482 $ 7,482 $ 3,138 $ 3,208 $ 1,135

7,290 7,290 3,217 2,540 1,532

January 1, 2017 - December 31, 2019 — — — — 3,217 2,540

1 unchanged sentence

Total $ 7,482 $ 7,482 $ 7,482 $ 3,138 $ 6,425 $ 7,063

1 Subsequent to December 31, 2019, the compensation committee determined that approximately $ 7.3 million was earned under the Long-Term Incentive Plan with respect to the performance period that ended on December 31, 2019 and a total of 135,494 shares of common stock were issued to the executives.

Under the Amended LTIP, which the Company amended and restated on January 8, 2019, 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.

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January 1, 2019 - December 31, 2021 $ 4,829 $ 1,610 $ 1,610 $ —

January 1, 2020 - December 31, 2022 5,572 1,857 — —

Total $ 10,401 $ 3,467 $ 1,610 $ —

The following table sets forth the cash dividends paid or payable per share during the years ended December 31, 2020 and 2019:

3 unchanged sentences

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

2 unchanged sentences

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

On July 19, 2017, the Company redeemed all 1,840,000 outstanding shares of the Series A Preferred Stock for cash at a redemption price of $ 25.00 per share, plus an amount per share of $ 0.096875 representing all accrued and unpaid dividends per share from July 1, 2017 to, but excluding, July 19, 2017.

Net Income (Loss) Per Share

8 unchanged sentences

Diluted shares related to the Performance Share awards were 407,139 and 294,570 for the years ended December 31, 2020 and 2019, respectively.

Quarterly Results of Operations – Unaudited

The following tables summarize the Company’s quarterly financial information.

2019 Quarter Ended

March 31 June 30 September 30 December 31

(in thousands, except share and per share data)

Total revenues $ 40,880 $ 41,730 $ 43,397 $ 45,015

Total costs and expenses ( 27,071 ) ( 28,115 ) ( 27,275 ) ( 29,724 )

Total other income and (expenses) 1,723 ( 3,236 ) ( 1,338 ) ( 470 )

Net income 15,532 10,379 14,784 14,821

Net income available to common stockholders $ 15,434 $ 10,315 $ 14,689 $ 14,727

Earnings per Common Share – Basic and Diluted:

Net income available to common stockholders, basic 1

$ 0.25 $ 0.16 $ 0.22 $ 0.22

Net income available to common stockholders, diluted 1

$ 0.25 $ 0.16 $ 0.22 $ 0.22

Basic Weighted Average Common Shares Outstanding 61,456,965 63,780,645 65,724,426 66,706,245

Diluted Weighted Average Common Shares Outstanding 61,604,250 64,075,215 66,018,996 67,000,815

2018 Quarter Ended

March 31 June 30 September 30 December 31

(in thousands, except share and per share data)

Total revenues $ 37,107 $ 37,238 $ 37,899 $ 39,413

Total costs and expenses ( 25,708 ) ( 25,099 ) ( 24,712 ) ( 26,912 )

Total other income and (expenses) ( 1,342 ) 7,998 ( 3,065 ) 10,471

Net income 10,057 20,137 10,122 22,972

Net income available to common stockholders $ 9,992 $ 20,012 $ 10,056 $ 22,827

Earnings per Common Share – Basic and Diluted:

Net income available to common stockholders, basic 1

$ 0.18 $ 0.35 $ 0.17 $ 0.38

Net income available to common stockholders, diluted 1

$ 0.18 $ 0.35 $ 0.17 $ 0.38

Basic Weighted Average Common Shares Outstanding 55,127,580 56,698,959 58,369,252 59,689,965

Diluted Weighted Average Common Shares Outstanding 55,127,580 56,698,959 58,369,252 59,689,965

1 The above quarterly income per share calculations are based on the weighted average number of common shares outstanding during each quarter.

The income per share calculation for the years ended December 31, 2019 and 2018 in the consolidated statements of operations is based on the weighted average number of common shares outstanding for the years ended December 31, 2019 and 2018.

The sum of the quarterly financial data may vary from the years ended December 31, 2019 and 2018 data due to rounding.

Commitments and Contingencies

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In the normal course of business, from time to time, the Company may be involved in legal actions relating to the ownership and operations of its properties.

Management does not expect that the liabilities, if any, that may

ultimately result from such legal actions will have a material effect on the consolidated financial position, results of operations or cash flows of the Company.

Management does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material effect on the consolidated financial position, results of operations or cash flows of the Company.

Environmental Matters.

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Although the Company has obtained coverage for certain acts of terrorism, with policy specifications and insured limits that it believes are commercially reasonable, there can be no assurance that the Company will be able to collect under such policies.

Should an uninsured loss occur, the Company could lose its investment in, and anticipated profits and cash flows from, a property.

Should an uninsured loss occur, the Company could lose its investment in, and anticipated profits

and cash flows from, a property.

The Company was not aware of any significant or material exposures as of December 31, 2020 or 2019.

Contractual Commitments.

As of February 6, 2020, the Company had two outstanding contracts with third-party sellers to acquire one industrial property consisting of approximately 66,000 square feet and one improved land parcel containing approximately 2.78 acres.

There is no assurance that the Company 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 the Company has 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, the Company has 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 the Company 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.

As of February 9, 2021, the Company had 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 the Company will acquire the properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and various closing conditions.

Subsequent Events

On January 6, 2020, the Company repaid a $ 32.7 million mortgage loan payable that was to mature in March 2020 and bore interest at 3.65 %.

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

The Company is headquartered in San Francisco, California and its employees have been working remotely in compliance with shelter-in-place orders mandated across the San Francisco Bay Area on March 16, 2020.

The Company utilizes local, third-party property managers, and they are generally under similar shelter-in-place orders and are working remotely.

The Company has business continuity and communication plans that the Company believes, although there can be no assurance, allow the Company to operate and manage its portfolio effectively during such disruptions.

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

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

Through February 8, 2021, the Company has 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.

On January 4, 2021, the Company repaid the $ 11.3 million mortgage loan payable that was to mature in April 2021 and bore interest at 5.5 %.

On January 19, 2021, the Company acquired one building totaling approximately 16,000 square feet, located in Carlstadt, New Jersey, for a total purchase price of approximately $ 10.6 million.

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

On February 9, 2021, the Company’s Board of Directors declared a cash dividend in the amount of $ 0.29 per share of its common stock payable on April 9, 2021 to the stockholders of record as of the close of business on March 26, 2021.

19 unchanged sentences

Anderson 5 Los Angeles, CA — 17,095 1,271 1,268 17,095 2,539 19,634 76 2019 1912-1987

Aviation — Inglewood, CA — 9,544 498 — 9,544 498 10,042 5 2020

Dominguez — Los Angeles, CA — 11,370 1,535 3,082 11,370 4,617 15,987 339 2017

Garfield 5 Commerce, CA — 27,539 22,694 4,427 27,539 27,121 54,660 8,369 2012 2002

Gladwick 1 Rancho Dominguez, CA — 11,636 5,998 — 11,636 5,998 17,634 123 2020 2009

Hawthorne 8 Hawthorne, CA — 17,226 10,069 1,742 17,226 11,811 29,037 1,287 2017 1952/1986

1 unchanged sentence

Lynwood 3 Lynwood, CA — 43,885 — — 43,885 — 43,885 — 2017 1988

McLaren 1 Irvine, CA — 7,459 668 — 7,459 668 8,127 1 2020 1982

Manhattan Beach 1 Redondo Beach, CA — 7,874 5,641 787 7,874 6,428 14,302 1,576 2012 1963/1970

Maple — Rancho Dominguez, CA — 9,371 607 285 9,371 892 10,263 1 2020 1965

Porter 1 Los Angeles, CA — 3,791 399 — 3,791 399 4,190 1 2020 1911/1968

Shoemaker — Santa Fe Springs, CA — 4,759 1,099 25 4,759 1,124 5,883 81 2018 1986/1997

8 unchanged sentences

New York City

1 Dodge Drive 1 West Caldwell, NJ — 3,819 2,982 1,628 3,819 4,610 8,429 1,459 2013 1985

17 Madison 1 Fairfield, NJ — 974 1,647 543 974 2,190 3,164 590 2013 1979

20 Pulaski 1 Bayonne, NJ — 4,003 4,946 1,201 4,003 6,147 10,150 1,235 2014 1965

22 Madison 1 Fairfield, NJ — 1,365 1,607 885 1,365 2,492 3,857 203 2015 1979

48th 3rd and 286 Central 1 Kearny, NJ — 12,061 1,664 — 12,061 1,664 13,725 41 2019 1978/1983

49th Street 1 Queens, NY — 21,674 2,999 1,125 21,674 4,124 25,798 104 2019 1966

Gross Amount Carried

5 unchanged sentences

Depreciation Year

1 Dodge Drive 1 West Caldwell, NJ — 3,819 2,982 2,029 3,819 5,011 8,830 1,672 2013 1985

17 Madison 1 Fairfield, NJ — 974 1,647 543 974 2,190 3,164 685 2013 1979

20 Pulaski 1 Bayonne, NJ — 4,003 4,946 1,641 4,003 6,587 10,590 1,478 2014 1965

22 Madison 1 Fairfield, NJ — 1,365 1,607 1,039 1,365 2,646 4,011 296 2015 1979

48th 3rd and 286 Central 1 Kearny, NJ — 12,061 1,664 6 12,061 1,670 13,731 93 2019 1978/1983

49th Street 1 Queens, NY — 21,674 2,999 1,169 21,674 4,168 25,842 349 2019 1966

50 Kero 2 Carlstadt, NJ — 10,343 3,876 3,082 10,343 6,958 17,301 744 2017 1970

29 unchanged sentences

Wilson 1 Newark, NJ — 2,016 484 813 2,016 1,297 3,313 311 2016 1970

Woodside 1 Queens, NY — 23,987 3,796 3,944 23,987 7,740 31,727 305 2018 2018

San Francisco Bay Area

20th Street 1 Oakland, CA — 18,092 6,730 1,017 18,092 7,747 25,839 70 2019 1970 & 2003

238/242 Lawrence 2 South San Francisco, CA — 6,674 2,655 1,546 6,674 4,201 10,875 1,412 2010 1986

240 Littlefield 1 South San Francisco, CA — 5,107 3,293 2,852 5,107 6,145 11,252 1,038 2013 2013

Gross Amount Carried

5 unchanged sentences

Depreciation Year

Woodside 1 Queens, NY — 23,987 3,796 3,972 23,987 7,768 31,755 652 2018 2018

San Francisco Bay Area

20th Street 1 Oakland, CA — 18,092 6,730 1,420 18,092 8,150 26,242 347 2019 1970 & 2003

238/242 Lawrence 2 South San Francisco, CA — 6,674 2,655 1,616 6,674 4,271 10,945 1,626 2010 1986

240 Littlefield 1 South San Francisco, CA — 5,107 3,293 2,806 5,107 6,099 11,206 1,225 2013 2013

299 Lawrence 1 South San Francisco, CA — 1,352 1,198 548 1,352 1,746 3,098 600 2010 1968

631 Brennan 1 San Jose, CA — 1,932 2,245 559 1,932 2,804 4,736 804 2012 1975

10 unchanged sentences

Minnesota and Tennessee 2 San Francisco, CA — 34,738 13,141 739 34,738 13,880 48,618 561 2019 1963

Old Bayshore — San Jose, CA — 10,244 1,609 — 10,244 1,609 11,853 44 2020 1987

San Clemente 1 Hayward, CA — 5,126 3,938 152 5,126 4,090 9,216 284 2018 1982

Starlite 1 South San Francisco, CA — 3,736 144 418 3,736 562 4,298 2 2020 1967

West 140th 2 San Leandro, CA — 9,578 6,297 3,745 9,578 10,042 19,620 1,363 2016 1959

3 unchanged sentences

Central Pacific Business Park II 4 Union City, CA — 13,642 23,658 4,937 13,642 28,595 42,237 6,100 2015 2015

6th Ave South 1 Seattle, WA — 7,215 8,670 0 7,215 8,670 15,885 142 2020 1960

79 Ave South 1 Kent, WA — 1,267 1,503 767 1,267 2,270 3,537 531 2014 2000

84th Kent — Kent, WA — 4,552 136 256 4,552 392 4,944 12 2020 1963/2000

917 Valley 1 Puyallup, WA — 2,203 4,551 — 2,203 4,551 6,754 128 2019 2006

2 unchanged sentences

4930 3rd Avenue South 1 Seattle, WA — 3,984 2,424 817 3,984 3,241 7,225 507 2016 1964

17600 West Valley Highway 1 Tukwila, WA — 3,361 5,260 1,193 3,361 6,453 9,814 1,630 2012 1986

Auburn 400 1 Auburn, WA — 4,415 5,234 — 4,415 5,234 9,649 52 2019 2000

Auburn 1307 1 Auburn, WA — 4,253 5,034 249 4,253 5,283 9,536 867 2014 2002

Dawson 1 Seattle, WA — 3,902 278 396 3,902 674 4,576 41 2017 1964

12119 East Marginal — Tukwila, WA — 4,950 1,740 — 4,950 1,740 6,690 2 2020 1996

Gross Amount Carried

5 unchanged sentences

Depreciation Year

17600 West Valley Highway 1 Tukwila, WA — 3,361 5,260 1,425 3,361 6,685 10,046 1,791 2012 1986

Auburn 400 1 Auburn, WA — 4,415 5,234 202 4,415 5,436 9,851 208 2019 2000

Auburn 1307 1 Auburn, WA — 4,253 5,034 337 4,253 5,371 9,624 1,000 2014 2002

Dawson 1 Seattle, WA — 3,902 278 331 3,902 609 4,511 103 2017 1964

Denver 1 Seattle, WA — 3,203 1,345 489 3,203 1,834 5,037 383 2016 1953

2 unchanged sentences

Hanford 1 Seattle, WA — 3,821 2,250 542 3,821 2,792 6,613 300 2017 1952

Hudson 1 Seattle, WA — 4,471 912 — 4,471 912 5,383 16 2020 2006

Kent 188 1 Kent, WA — 3,251 4,719 1,248 3,251 5,967 9,218 1,937 2010 1979

2 unchanged sentences

Kent 202 1 Kent, WA — 5,761 9,114 2,810 5,761 11,924 17,685 2,241 2015 1981

Kent 216 1 Kent, WA — 3,672 5,408 967 3,672 6,375 10,047 1,317 2014 1996

Kent Corporate Park 4 Kent, WA — 5,032 6,916 2,125 5,032 9,041 14,073 1,695 2015 1980/1981

3 unchanged sentences

SeaTac 8th Avenue 1 Burien, WA — 2,501 4,020 1,915 2,501 5,935 8,436 1,355 2013 1988

SE 32nd Street 1 Bellevue, WA — 9,059 2,081 — 9,059 2,081 11,140 7 2020 1982

SW 34th 1 Renton, WA — 2,912 3,289 498 2,912 3,787 6,699 775 2014 1996/2010

2 unchanged sentences

48th Avenue 2 Miami Gardens, FL — 4,322 2,187 586 4,322 2,773 7,095 634 2011 1987

60th Avenue 1 Miami Lakes, FL — 6,203 1,567 7,346 6,203 8,913 15,116 3,091 2010 1971/2011

70th Avenue 1 Miami, FL — 1,434 2,333 198 1,434 2,531 3,965 674 2011 1999

10 unchanged sentences

131st Street 1 Medley, FL — 2,903 5,729 599 2,903 6,328 9,231 1,257 2014 1999

Gross Amount Carried

at December 31, 2020

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

12950 SW South River 1 Medley, FL — 1,971 4,029 739 1,971 4,768 6,739 581 2016 2000

6 unchanged sentences

3601 Pennsy 1 Landover, MD — 2,331 4,375 1,219 2,331 5,594 7,925 1,192 2013 1996

Gross Amount Carried

at December 31, 2019

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

4230 Forbes 1 Lanham, MD — 1,736 2,395 1,130 1,736 3,525 5,261 643 2013 2003

9070 Junction 1 Annapolis Junction, MD — 3,538 6,670 2,838 3,538 9,508 13,046 2,099 2015 1997

Business Parkway 1 Lanham, MD — 3,038 3,007 1 3,038 3,008 6,046 347 2016 2002

1 unchanged sentence

New Ridge — Hanover, MD — 5,689 1,567 443 5,689 2,010 7,699 247 2016

Parkway 1 Hanover, MD — 4,543 12,094 372 4,543 12,466 17,009 2,062 2014 1968/2012

Troy Hill 1 Elkridge, MD — 1,409 5,033 495 1,409 5,528 6,937 1,140 2012 2003

V Street 6 Washington, D.C.

1 unchanged sentence

Subtotal 222 11,271 1,138,235 735,826 206,859 1,138,233 942,688 2,080,921 169,708

Unamortized net premiums — — — — — — — — —

Unamortized net deferred financing costs ( 7 )

30 unchanged sentences

3 to the Registrant’s Registration Statement on Form S-11 on January 15, 2010 and incorporated herein by reference).

4.2* Description of Securities of Registrant

4.2 Description of Securities of Registrant (previously filed as Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K on February 6, 2020 and incorporated herein by reference).

10.1+ Amended and Restated Severance Agreement between Registrant and W.

15 unchanged sentences

10.11+ Form of Award Notice under the Amended and Restated Long-Term Incentive Plan of Registrant (previously filed as Exhibit 10.9 to the Registrant's Annual Report on Form 10-K on February 6, 2019 and incorporated by reference herein).

10.12+ Amended and Restated Long-Term Incentive Plan of Registrant, effective as of February 18, 2014 (previously filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K on February 19, 2014 and incorporated by reference herein).

10.12+ Amended and Restated Long-Term Incentive Plan of Registrant, effective as of January 1, 2014 (previously filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K on February 19, 2014 and incorporated by reference herein).

10.13+ Form of Award Notice under the Long-Term Incentive Plan of Registrant (previously filed as Exhibit 10.8 to Amendment No.

49 unchanged sentences

February 10, 2021

/s/ Linda Assante

Linda Assante Director February 10, 2021

Director February 10, 2021

7 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures