Terreno Realty Corp 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We caution investors that forward-looking statements are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “project”, “result”, “should”, “will”, “seek”, “target”, “see”, “likely”, “position”, “opportunity”, “outlook” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements 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. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends. Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following: • the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 10, 2021, in this Quarterly Report on Form 10-Q, and in our other public filings, which you should interpret as being heightened as a result of the numerous and ongoing adverse impacts of COVID-19; • our ability to identify and acquire industrial properties on terms favorable to us; • general volatility of the capital markets and the market price of our common stock; • adverse economic or real estate conditions or developments in the industrial real estate sector and/or in the markets in which we acquire properties; • our dependence on key personnel and our reliance on third-party property managers; • our inability to comply with the laws, rules and regulations applicable to companies, and in particular, public companies; • our ability to manage our growth effectively; • tenant bankruptcies and defaults on or non-renewal of leases by tenants; • decreased rental rates or increased vacancy rates; • increased interest rates and operating costs; • the potential discontinuation of London Interbank Offered Rate (“LIBOR”); • declining real estate valuations and impairment charges; • our expected leverage, our failure to obtain necessary outside financing, and existing and future debt service obligations; • our ability to make distributions to our stockholders; • our failure to successfully hedge against interest rate increases; • our failure to successfully operate acquired properties; • risks relating to our real estate redevelopment, renovation and expansion strategies and activities; • the ongoing impact of COVID-19 on the U.S., regional and global economies and the business, financial condition and results of operations of our Company and our tenants; • our failure to qualify or maintain our status as a real estate investment trust (“REIT”), and possible adverse changes to tax laws; • uninsured or underinsured losses and costs relating to our properties or that otherwise result from future litigation; • environmental uncertainties and risks related to natural disasters; 18 Table of Contents • financial market fluctuations; and • changes in real estate and zoning laws and increases in real property tax rates. Overview Terreno Realty Corporation (“Terreno”, and together with its subsidiaries, “we”, “us”, “our”, “our Company”, or “the Company”) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. We invest in several types of industrial real estate, including warehouse/distribution (approximately 81.6% of our annualized base rent as of March 31, 2021), flex buildings (including light industrial and research and development, or R&D, approximately 5.0%), transshipment (approximately 5.6%), and improved land parcels (approximately 7.8%). 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. Infill locations are geographic locations surrounded by high concentrations of already developed land and existing buildings. As of March 31, 2021, we owned a total of 228 buildings aggregating approximately 13.7 million square feet, 25 improved land parcels consisting of approximately 92.5 acres and two properties under redevelopment expected to contain approximately 0.3 million square feet upon completion. As of March 31, 2021, the buildings and improved land parcels were approximately 96.1% and 97.9% leased, respectively, to 519 customers, the largest of which accounted for approximately 5.3% of our total annualized base rent. See “Item 1 – Our Investment Strategy – Industrial Facility General Characteristics” in our Annual Report on Form 10-K for the year ended December 31, 2020 for a general description of these types of industrial real estate. We are an internally managed Maryland corporation and elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2010. The following table summarizes by type our investments in real estate as of March 31, 2021: Type Number of Buildings or Improved Land Parcels Annualized Base Rent (000's) 1 % of Total Warehouse/distribution 201 $ 125,496 81.6 % Flex 10 7,686 5.0 % Transshipment 17 8,545 5.6 % Improved land 25 12,055 7.8 % Total/Weighted Average 253 $ 153,782 100.0 % 1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2021, multiplied by 12. 19 Table of Contents The following table summarizes by market our investments in real estate as of March 31, 2021: Los Angeles Northern New Jersey/New York City San Francisco Bay Area Seattle Miami Washington, D.C. Total/Weighted Average Investments in Real Estate Number of Buildings 43 63 44 32 28 18 228 Rentable Square Feet 2,584,648 3,571,409 2,155,510 2,223,143 1,587,649 1,534,625 13,656,984 % of Total 18.9 % 26.2 % 15.8 % 16.3 % 11.6 % 11.2 % 100.0 % Occupancy % as of March 31, 2021 98.4 % 94.1 % 99.9 % 98.7 % 86.8% 4 97.4 % 96.1 % Annualized Base Rent (000’s) 1 $ 24,223 $ 37,904 $ 28,132 $ 21,314 $ 13,017 $ 17,137 $ 141,727 % of Total 17.2 % 26.7 % 19.8 % 15.0 % 9.2 % 12.1 % 100.0 % Annualized Base Rent 1 Per Occupied Square Foot $ 9.52 $ 11.28 $ 13.07 $ 9.72 $ 9.45 $ 11.46 $ 10.80 Weighted Average Remaining Lease Term (Years) 2 6.5 4.8 3.0 3.8 3.9 3.6 4.5 Investments in Improved Land Number of Land Parcels 8 9 2 3 2 1 25 Acres 16.4 48.6 5.0 5.9 3.2 13.4 92.5 % of Total 17.7 % 52.6 % 5.4 % 6.3 % 3.5 % 14.5 % 100.0 % Occupancy % as of March 31, 2021 88.2 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 97.9 % Annualized Base Rent (000’s) 1 $ 3,279 $ 5,639 $ 985 $ 888 $ 396 $ 868 $ 12,055 % of Total 27.2 % 46.7 % 8.2 % 7.4 % 3.3 % 7.2 % 100.0 % Annualized Base Rent 1 Per Occupied Square Foot $ 5.22 $ 2.71 $ 4.57 $ 3.67 $ 2.87 $ 1.49 $ 3.09 Weighted Average Remaining Lease Term (Years) 2 4.3 4.5 2.2 4.9 2.5 8.8 4.9 Total Investments in Real Estate Annualized Base Rent (000’s) 1 $ 27,502 $ 43,543 $ 29,117 $ 22,202 $ 13,413 $ 18,005 $ 153,782 Gross Book Value (000’s) 3 $ 464,532 $ 663,172 $ 408,595 $ 392,768 $ 199,597 $ 217,531 $ 2,346,195 % of Total Gross Book Value 19.8 % 28.3 % 17.4 % 16.7 % 8.5 % 9.3 % 100.0 % 1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2021, multiplied by 12. 2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of March 31, 2021, weighted by the respective square footage. 3 Includes two properties under redevelopment expected to contain approximately 0.3 million square feet upon completion, as discussed below. 4 Includes our acquisition of the Countyline property totaling approximately 273,577 square feet that was 32.1% leased to one tenant as of March 31, 2021, with the remaining 67.9% pre-leased to four tenants with leases commencing between April and July 2021. As of March 31, 2021, we owned two properties under redevelopment expected to contain approximately 0.3 million square feet upon completion with a total expected investment of approximately $71.6 million including redevelopment costs, capitalized interest and other costs of approximately $65.9 million. 20 Table of Contents The following table summarizes our capital expenditures incurred during the three months ended March 31, 2021 and 2020 (dollars in thousands): For the Three Months Ended March 31, 2021 2020 Building improvements $ 1,754 $ 3,330 Tenant improvements 921 265 Leasing commissions 2,742 2,942 Redevelopment, renovation and expansion 572 1,214 Total capital expenditures 1 $ 5,989 $ 7,751 1 Includes approximately $1.2 million and $4.4 million for the three months ended March 31, 2021 and 2020, respectively, related to leasing acquired vacancy, redevelopment construction in progress and renovation, and expansion projects (stabilized capital) at five and ten properties for the three months ended March 31, 2021 and 2020, respectively. Our industrial properties are typically subject to leases on a “triple net basis,” in which tenants pay their proportionate share of real estate taxes, insurance and operating costs, or are subject to leases on a “modified gross basis,” in which tenants pay expenses over certain threshold levels. In addition, approximately 93.6% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years. We monitor the liquidity and creditworthiness of our tenants on an on-going basis by reviewing outstanding accounts receivable balances, and as provided under the respective lease agreements, review the tenant’s financial condition periodically as appropriate. As needed, we hold discussions with the tenant’s management about their business and we conduct site visits of the tenant’s operations. Our top 20 customers based on annualized base rent as of March 31, 2021 are as follows: Customer Leases Rentable Square Feet % of Total Rentable Square Feet Annualized Base Rent (000’s) 1 % of Total Annualized Base Rent 1 Amazon.com 2 5 471,880 3.5 % $ 8,198 5.3 % 2 FedEx Corporation 3 7 314,519 2.3 % 5,142 3.3 % 3 United States Government 8 300,732 2.2 % 3,748 2.4 % 4 Danaher 3 171,707 1.2 % 3,732 2.4 % 5 District of Columbia 7 234,071 1.7 % 3,342 2.2 % 6 DirectBuy Home Improvement 1 230,891 1.7 % 1,915 1.3 % 7 Costco-Innovel Solutions LLC 1 219,910 1.6 % 1,816 1.2 % 8 XPO Logistics 2 180,717 1.3 % 1,764 1.2 % 9 L3 Harris Technologies, Inc. 1 147,898 1.1 % 1,700 1.1 % 10 O'Neill Logistics 2 237,692 1.7 % 1,576 1.0 % 11 Topaz Lighting Corp. 1 190,000 1.4 % 1,463 1.0 % 12 Port Kearny Security, Inc. 1 — — % 1,458 1.0 % 13 United States Postal Service 2 81,950 0.6 % 1,438 0.9 % 14 YRC 2 61,252 0.4 % 1,432 0.9 % 15 Envogue International 1 192,000 1.4 % 1,411 0.9 % 16 Bar Logistics 1 203,263 1.5 % 1,393 0.9 % 17 Lilac Solutions Inc. 1 92,884 0.7 % 1,338 0.9 % 18 Saia Motor Freight Line LLC 1 52,086 0.4 % 1,315 0.9 % 19 Northrop Grumman Systems Corporation 1 103,200 0.8 % 1,300 0.8 % 20 JAM'N Logistics 1 110,336 0.8 % 1,266 0.8 % Total 49 3,596,988 26.3 % $ 46,747 30.4 % 1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2021, multiplied by 12. 2 Includes an improved land parcel consisting of approximately 2.8 acres. 21 Table of Contents 3 Includes two improved land parcels totaling approximately 7.7 acres. The following table summarizes the anticipated lease expirations for leases in place as of March 31, 2021, without giving effect to the exercise of unexercised renewal options or termination rights, if any, at or prior to the scheduled expirations: Year Rentable Square Feet % of Total Rentable Square Feet Annualized Base Rent (000’s) 2, 3 % of Total Annualized Base Rent 2021 1 1,363,461 10.0 % 15,004 8.7 % 2022 1,770,962 13.0 % 19,636 11.3 % 2023 1,908,363 14.0 % 24,282 14.0 % 2024 1,711,028 12.5 % 22,475 13.0 % 2025 1,578,239 11.6 % 24,142 13.9 % Thereafter 4,790,844 35.0 % 67,680 39.1 % Total 13,122,897 96.1 % 173,219 100.0 % 1 Includes leases that expire on or after March 31, 2021 and month-to-month leases totaling approximately 122,414 square feet. 2 Annualized base rent is calculated as contractual monthly base rent per the leases at expiration, excluding any partial or full rent abatements, as of March 31, 2021, multiplied by 12. 3 Includes annualized base rent related to 25 improved land parcels totaling approximately 92.5 acres. Our ability to re-lease or renew expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations. As of March 31, 2021, leases representing approximately 8.7% of the total annualized base rent of our portfolio are scheduled to expire through December 31, 2021. We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our 2021 expirations will be above the rates currently being paid for the same space. Rent changes on new and renewed leases totaling approximately 0.3 million square feet commencing during the three months ended March 31, 2021 were approximately 16.0% higher as compared to the previous rental rates for that same space. We had a tenant retention ratio of 82.3% for the three months ended March 31, 2021. We define tenant retention as the square footage of all leases commenced during the period that are rented by existing tenants divided by the square footage of all expiring leases during the reporting period. The square footage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year are not included in the calculation. Our past performance may not be indicative of future results, and we cannot assure you that leases will be renewed or that our properties will be re-leased at all or at rental rates equal to or above the current average rental rates. Further, re-leased/renewed rental rates in a particular market may not be consistent with rental rates across our portfolio as a whole and re-leased/renewed rental rates for particular properties within a market may not be consistent with rental rates across our portfolio within a particular market, in each case due to a number of factors, including local real estate conditions, local supply and demand for industrial space, the condition of the property, the impact of leasing incentives, including free rent and tenant improvements and whether the property, or space within the property, has been redeveloped. 22 Table of Contents Recent Developments Acquisition Activity During the three months ended March 31, 2021, we acquired four industrial properties containing approximately 529,000 square feet for a total purchase price of approximately $110.1 million. The properties were acquired from unrelated third parties using existing cash on hand and net proceeds from the issuance of common stock. The following table sets forth the industrial properties we acquired during the three months ended March 31, 2021: Property Name Location Acquisition Date Number of Buildings Square Feet Purchase Price (in thousands) 1 Stabilized Cap Rate 2 256 Patterson Plank Carlstadt, NJ January 13, 2021 1 16,159 $ 10,625 5.2 % 117th Place NE Kirkland, WA February 25, 2021 1 126,721 33,750 3.0 % Countyline 3 Hialeah, FL March 17, 2021 2 273,577 48,114 3.7 % Edison San Leandro, CA March 31, 2021 3 112,392 17,600 5.6 % Total/Weighted Average 7 528,849 $ 110,089 3.9 % 1 Excludes intangible liabilities and mortgage premiums, if any. The total initial investment was approximately $109.9 million, including $1.6 million in capitalized closing costs and acquisition costs, $4.7 million in assumed intangible liabilities and $6.1 million in other credits related to near term capital expenditures at the Countyline property. 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. Total acquisition cost basis for the property includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization. We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles. 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 our Annual Report on Form 10-K for the year ended December 31, 2020, in our Quarterly Report on this Form 10-Q and in our other public filings. 3 The property was 32.1% leased to one tenant as of March 31, 2021, with the remaining 67.9% pre-leased to four tenants with leases commencing between April and July 2021. Redevelopment Activity As of March 31, 2021, we had two properties under redevelopment expected to contain approximately 0.3 million square feet upon completion with a total expected investment of approximately $71.6 million, including redevelopment costs, capitalized interest and other costs of approximately $65.9 million as follows: Property Name Total Expected Investment (in thousands) 1 Amount Spent to Date (in thousands) Estimated Amount Remaining to Spend (in thousands) Estimated Stabilized Cap Rate 2 Estimated Post-Development Square Feet Estimated Stabilization Quarter % Pre-leased March 31, 2021 Sodo Row - North & South $ 64,133 $ 61,814 $ 2,319 4.3 % 234,308 Q4 2021 27.0 % Americas Gateway 5 7,429 4,069 3,360 5.5 % 51,800 Q4 2022 — % Total/Weighted Average $ 71,562 $ 65,883 $ 5,679 4.4 % 286,108 22.1 % 1 Total expected investment for the property includes the initial purchase price, due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization. 2 Estimated stabilized cap rates are calculated 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. We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles. These estimated stabilized cap rates are subject to risks, uncertainties, and assumptions and are not 23 Table of Contents 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 our Annual Report on Form 10-K for the year ended December 31, 2020, in this Quarterly Report on Form 10-Q and in our other public filings. Disposition Activity We had no disposition activity during the three months ended March 31, 2021 and 2020, respectively. ATM Program 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 ($43.0 million remaining as of March 31, 2021) in amounts and at times as we determine from time to time. 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, if any. During the three months ended March 31, 2021, we issued an aggregate of 706,524 shares of common stock at a weighted average offering price of $58.20 per share, under the $300 Million ATM Program, resulting in net proceeds of approximately $40.5 million, and paying total compensation to the applicable sales agents of approximately $0.6 million. 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, 2022. Purchases made pursuant to this 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 us in our 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 March 31, 2021, we had not repurchased any shares of stock pursuant to our share repurchase program. Dividend and Distribution Activity On May 4, 2021, our board of directors declared a cash dividend in the amount of $0.29 per share of our common stock payable on July 14, 2021 to the stockholders of record as of the close of business on June 30, 2021. Contractual Commitments As of May 4, 2021, we have outstanding contracts with third-party sellers to acquire six industrial properties for a total aggregate anticipated purchase price of $93.9 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. Financial Condition and Results of Operations We derive substantially all of our revenues from rents received from tenants under existing leases on each of our properties. These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants. Approximately 93.6% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years. Our primary cash expenses consist of our property operating expenses, which include: real estate taxes, repairs and maintenance, management expenses, insurance, utilities, general and administrative expenses, which include compensation costs, office expenses, professional fees and other administrative expenses, acquisition costs, which include third-party costs paid to brokers and consultants, and interest expense, primarily on our mortgage loans, revolving credit facility, term loans and senior unsecured notes. Our consolidated results of operations often are not comparable from period to period due to the impact of property acquisitions at various times during the course of such periods. The results of operations of any acquired property are included in our financial statements as of the date of its acquisition. 24 Table of Contents The analysis of our results below for the three months ended March 31, 2021 and 2020 includes the changes attributable to same store properties. The same store pool for the comparison of the three months ended March 31, 2021 and 2020 includes all properties that were owned and in operation as of March 31, 2021 and since January 1, 2020 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of March 31, 2021. As of March 31, 2021, the same store pool consisted of 213 buildings aggregating approximately 12.7 million square feet representing approximately 93.0% of our total square feet owned and 19 improved land parcels consisting of 79.6 acres. As of March 31, 2021, the non-same store properties, which we acquired, redeveloped, or sold during 2020 and 2021 or were held for sale (if any) or in redevelopment as of March 31, 2021, consisted of 15 buildings aggregating approximately 1.0 million square feet, six improved land parcels containing approximately 12.9 acres and two properties under redevelopment expected to contain approximately 0.3 million square feet upon completion. As of March 31, 2021 and 2020, our consolidated same store pool occupancy was approximately 97.4% and 97.0%, 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 Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020: For the Three Months Ended March 31, 2021 2020 $ Change % Change (Dollars in thousands) Rental revenues 1 Same store $ 37,203 $ 33,834 $ 3,369 10.0 % Non-same store operating properties 2 2,606 1,590 1,016 63.9 % Total rental revenues 39,809 35,424 4,385 12.4 % Tenant expense reimbursements 1 Same store 10,338 9,326 1,012 10.9 % Non-same store operating properties 2 544 366 178 48.6 % Total tenant expense reimbursements 10,882 9,692 1,190 12.3 % Total revenues 50,691 45,116 5,575 12.4 % Property operating expenses Same store 12,540 11,354 1,186 10.4 % Non-same store operating properties 2 972 554 418 75.5 % Total property operating expenses 13,512 11,908 1,604 13.5 % Net operating income 3 Same store 35,001 31,806 3,195 10.0 % Non-same store operating properties 2 2,178 1,402 776 55.4 % Total net operating income $ 37,179 $ 33,208 $ 3,971 12.0 % Other costs and expenses Depreciation and amortization 11,376 11,100 276 2.5 % General and administrative 5,582 5,758 (176) (3.1) % Acquisition costs 55 52 3 5.8 % Total other costs and expenses 17,013 16,910 103 0.6 % Other income (expense) Interest and other income 236 564 (328) (58.2) % Interest expense, including amortization (4,145) (4,006) (139) 3.5 % Total other income (expense) (3,909) (3,442) (467) 13.6 % Net income $ 16,257 $ 12,856 $ 3,401 26.5 % 25 Table of Contents 1 Accounting Standards Update (“ASU”) No. 2018-11, Leases (Topic 842), Targeted Improvements , allows us to elect not to separate lease and non-lease rental income. All rental income earned pursuant to tenant leases is reflected as one line, “Rental revenues and tenant expense reimbursements” on our accompanying consolidated statements of operations. We believe that the above presentation of rental revenues and tenant expense reimbursements is not, and is not intended to be, a presentation in accordance with GAAP, and a reconciliation to total revenue is provided above. We believe this information is frequently used by management, investors, and other interested parties to evaluate our performance. 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 2021 and 2020 acquisitions and dispositions, six improved land parcels and two properties under redevelopment as of March 31, 2021. 3 Includes straight-line rents and amortization of lease intangibles. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and 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. Revenues. Total revenues increased approximately $5.6 million for the three months ended March 31, 2021 compared to the same period from the prior year due primarily to property acquisitions during 2021 and 2020 and increased revenue on new and renewed leases. Cash rents on new and renewed leases totaling approximately 0.3 million square feet commencing during the three months ended March 31, 2021 increased approximately 16.0% as compared to the previous rental rates for that same space. For the three months ended March 31, 2021 and 2020 approximately $1.1 million and $0.6 million, respectively, was recorded in straight-line rental revenue related to contractual rent abatements given to certain tenants. Property operating expenses. Total property operating expenses increased approximately $1.6 million during the three months ended March 31, 2021 compared to the same period from the prior year. The increase in total property operating expenses was primarily in the same store pool (approximately $1.2 million) and due to increases in real estate taxes related to annual rate increases, as well as utilities expenses incurred at certain of our properties. Depreciation and amortization. Depreciation and amortization increased approximately $0.3 million during the three months ended March 31, 2021 compared to the same period from the prior year primarily due to property acquisitions and dispositions during 2021 and 2020. General and administrative expenses. General and administrative expenses decreased for the three months ended March 31, 2021 compared to the same period from the prior year primarily due to a $0.2 million decrease in performance share award expense. Interest and other income. Interest and other income decreased approximately $0.3 million for the three months ended March 31, 2021 compared to the same period from the prior year primarily due to the repayment of the outstanding Senior Secured Loan in May 2020. Interest expense, including amortization. Interest expense increased approximately $0.1 million for the three months ended March 31, 2021 compared to the same period from the prior year primarily due to a lower capitalized interest in 2021, offset by the lower interest rate on our variable rate term loan and the repayment of a $32.7 million mortgage loan in 2020 and a $11.3 million mortgage loan in 2021. Liquidity and Capital Resources The primary objective of our financing strategy is to maintain financial flexibility with a conservative capital structure using retained cash flows, proceeds from dispositions of properties, long-term debt and the issuance of common and perpetual preferred stock to finance our growth. Over the long-term, we intend to: • limit the sum of the outstanding principal amount of our consolidated indebtedness and the liquidation preference of any outstanding perpetual preferred stock to less than 35% of our total enterprise value; • maintain a fixed charge coverage ratio in excess of 2.0x; • maintain a debt-to-adjusted EBITDA ratio below 6.0x; • limit the principal amount of our outstanding floating rate debt to less than 20% of our total consolidated indebtedness; and 26 Table of Contents • 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 perpetual preferred stock. Fitch Ratings assigned us an issuer rating of BBB with a stable outlook. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. There can be no assurance that we will be able to maintain our current credit rating. 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. We may also assume debt in connection with property acquisitions which may have a higher loan-to-value. We expect to meet our short-term liquidity requirements generally through net cash provided by operations, existing cash balances and, if necessary, short-term borrowings under our revolving credit facility. We believe that our net cash provided by operations will be adequate to fund operating requirements, pay interest on any borrowings and fund distributions in accordance with the REIT requirements of the federal income tax laws. In the near-term, we intend to fund future investments in properties with cash on hand, term loans, senior unsecured notes, mortgages, borrowings under our revolving credit facility, perpetual preferred and common stock issuances and, from time to time, property dispositions. We expect to meet our long-term liquidity requirements, including with respect to other investments in industrial properties, property acquisitions, property redevelopments, renovations and expansions and scheduled debt maturities, through borrowings under our revolving credit facility, periodic issuances of common stock, perpetual preferred stock, and long-term secured and unsecured debt, and, from time to time, with proceeds from the disposition of properties. The success of our acquisition strategy may depend, in part, on our ability to obtain and borrow under our revolving credit facility and to access additional capital through issuances of equity and debt securities. The following sets forth certain information regarding our current at-the-market common stock offering program as of March 31, 2021: ATM Stock Offering Program Date Implemented Maximum Aggregate Offering Price (in thousands) Aggregate Common Stock Available as of three months ended (in thousands) $300 Million ATM Program May 17, 2019 $ 300,000 $ 42,968 The table below sets forth the activity under our at-the-market common stock offering programs during the three months ended March 31, 2021 and 2020, respectively (in thousands, except share and price per share data): For the Three Months Ended, Shares Sold Weighted Average Price Per Share Net Proceeds (in thousands) Sales Commissions (in thousands) March 31, 2021 706,524 $ 58.20 $ 40,526 $ 596 March 31, 2020 427,027 $ 53.37 $ 22,458 $ 330 As of March 31, 2021, 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 both March 31, 2021 and December 31, 2020, there were no borrowings outstanding on our revolving credit facility and $100.0 million of borrowings outstanding on our term loan. As of March 31, 2021, 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 had a notional value of $50.0 million and effectively capped 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. We were required to make certain monthly variable rate payments on the term loan, while the applicable counterparty was obligated to make certain monthly floating rate payments based on LIBOR to us in the event LIBOR was 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 $100.0 million term loan and the $250.0 million revolving credit 27 Table of Contents facility, or (ii) 60.0% of the value of the unencumbered properties. Interest on the Facility, including the term loan, is generally to be paid based upon, at 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 March 31, 2021) for the revolving credit facility and 1.20% to 1.70% (1.20% as of March 31, 2021) 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. 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. The Facility and the Senior Unsecured Notes are guaranteed by us and by substantially all of the current and to-be-formed subsidiaries of the borrower that own an unencumbered property. The Facility and the Senior Unsecured Notes are unsecured by our properties or by interests in the subsidiaries that hold such properties. The Facility and the Senior Unsecured Notes include a series of financial and other covenants with which we must comply. We were in compliance with the covenants under the Facility and the Senior Unsecured Notes as of March 31, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, we had an outstanding mortgage loan payable, net of deferred financing costs, of approximately $0 and $11.3 million, respectively, and held cash and cash equivalents totaling approximately $29.4 million and $107.2 million, respectively. The mortgage loan payable was paid off in full during the three months ended March 31, 2021. The following tables summarize our debt maturities and principal payments and market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the three months ended March 31, 2021 and 2020 (dollars in thousands, except per share data): Credit Facility Term Loan Senior Unsecured Notes Total Debt 2021 (9 months) $ — $ — $ — $ — 2022 — 100,000 50,000 150,000 2023 — — — — 2024 — — 100,000 100,000 2025 — — — — Thereafter — — 200,000 200,000 Total Debt — 100,000 350,000 450,000 Deferred financing costs, net — (156) (1,840) (1,996) Total Debt, net $ — $ 99,844 $ 348,160 $ 448,004 Weighted average interest rate n/a 1.3% 3.8% 3.3% 28 Table of Contents As of March 31, 2021 As of March 31, 2020 Total Debt, net $ 448,004 $ 459,008 Equity Common Stock Shares Outstanding 1 69,372,554 67,831,299 Market Price 2 $ 59.21 $ 51.75 Total Equity 4,107,549 3,510,270 Total Market Capitalization $ 4,555,553 $ 3,969,278 Total Debt-to-Total Investments in Properties 3 19.1 % 20.9 % Total Debt-to-Total Investments in Properties and Senior Secured Loan 4 19.1 % 20.8 % Total Debt-to-Total Market Capitalization 5 9.8 % 11.6 % Floating Rate Debt as a % of Total Debt 6 22.3 % 21.7 % Unhedged Floating Rate Debt as a % of Total Debt 7 11.2 % 10.9 % Mortgage Loans Payable as a % of Total Debt 8 — % 2.5 % Mortgage Loans Payable as a % of Total Investments in Properties 9 — % 0.5 % Adjusted EBITDA 10 $ 33,803 $ 30,193 Interest Coverage 11 8.2 x 7.5 x Fixed Charge Coverage 12 8.1 x 6.5 x Total Debt-to-Adjusted EBITDA 13 3.3 x 3.8 x Weighted Average Maturity of Total Debt (years) 4.3 5.2 1 Includes 216,047 and 438,835 shares of unvested restricted stock outstanding as of March 31, 2021 and 2020, respectively. Also includes 270,546 and 135,494 shares held in the Deferred Compensation Plan as of March 31, 2021 and 2020, respectively. 2 Closing price of our shares of common stock on the New York Stock Exchange on March 31, 2021 and 2020, respectively, in dollars per share. 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. 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, including the Senior Secured Loan, which was fully repaid in May 2020, net of deferred loan fees of approximately $0 as of both March 31, 2021 and 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 March 31, 2021 and 2020. 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 $100.0 million variable-rate term loan borrowings, of which $50.0 million was subject to an interest rate cap of 4.0% plus 1.20% to 1.70%, depending on leverage as of both March 31, 2021 and 2020. See “Note 9 - Derivative Financial Instruments” in our condensed 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, including premiums and net of deferred financing costs. Hedged debt includes our $100.0 million variable-rate term loan borrowings, of which $50.0 million was subject to an interest rate cap of 4.0% plus 1.20% to 1.70%, depending on leverage as of both March 31, 2021 and 2020. See “Note 9 - Derivative Financial Instruments” in our condensed notes to consolidated financial statements for more information regarding our interest rate caps. 8 Mortgage loans payable as a percentage of total debt is calculated as mortgage loans payable, including premiums and net of deferred financing costs, divided by total debt, including premiums and net of deferred financing costs. 9 Mortgage loans payable as a percentage of total investments in properties is calculated as mortgage loans payable, including premiums and net of deferred financing costs, divided by total investments in properties. 29 Table of Contents 10 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the three months ended March 31, 2021 and 2020, respectively. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q 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. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q 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. 12 Fixed charge coverage is calculated as Adjusted EBITDA divided by interest expense, including amortization plus capitalized interest. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q 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. 13 Total debt-to-Adjusted EBITDA is calculated as total debt, including premiums and net of deferred financing costs, divided by annualized Adjusted EBITDA. See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q 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. The following table sets forth the cash dividends paid or payable per share during the three months ended March 31, 2021: For the Three Months Ended Security Dividend per Share Declaration Date Record Date Date Paid March 31, 2021 Common stock $ 0.29 February 9, 2021 March 26, 2021 April 9, 2021 Sources and Uses of Cash Our principal sources of cash are cash from operations, borrowings under loans payable, draws on our Facility, common and preferred stock issuances, proceeds from property dispositions and issuances of unsecured notes. Our principal uses of cash are asset acquisitions, debt service, capital expenditures, operating costs, corporate overhead costs and common stock dividends. Cash From Operating Activities. Net cash provided by operating activities totaled approximately $26.2 million for the three months ended March 31, 2021 compared to approximately $22.2 million for the three months ended March 31, 2020. This increased in cash provided by operating activities is primarily attributable to additional cash flows generated from the properties we acquired during 2021 and 2020 and same store properties. Cash From Investing Activities. Net cash used in investing activities was approximately $112.4 million and $36.2 million, respectively, for the three months ended March 31, 2021 and 2020, which consisted primarily of cash paid for property acquisitions of approximately $104.4 million and $30.1 million, respectively, and additions to capital improvements of approximately $8.0 million and $11.1 million, respectively, offset by partial repayment of our Senior Secured Loan of approximately $5.0 million. Cash From Financing Activities. Net cash provided by financing activities was approximately $8.8 million for the three months ended March 31, 2021, which consisted primarily of approximately $40.5 million in net common stock issuance proceeds partially offset by approximately $19.9 million in equity dividend payments and approximately $11.3 million in payments on mortgage loans payable. Net cash used in financing activities was approximately $28.7 million for the three months ended March 31, 2020, which consisted primarily of approximately $22.5 million in net common stock issuance proceeds partially offset by approximately $18.2 million in equity dividend payments and $32.7 million in payments on mortgage loans payable. Critical Accounting Policies A summary of our critical accounting policies is set forth in our Annual Report on Form 10-K for the year ended December 31, 2020 and in the condensed notes to consolidated financial statements in this Quarterly Report on Form 10-Q. Off-Balance Sheet Arrangements 30 Table of Contents We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Contractual Obligations As of May 4, 2021, we have outstanding contracts with third-party sellers to acquire six properties for a total aggregate purchase price of approximately $93.9 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. The following table summarizes our contractual obligations due by period as of March 31, 2021 (dollars in thousands): Contractual Obligations Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Total Debt $ 100,000 $ 50,000 $ 100,000 $ 200,000 $ 450,000 Debt interest payments 13,325 23,478 16,795 18,208 71,806 Operating lease commitments 479 514 — — 993 Purchase obligations 93,905 — — — 93,905 Total $ 207,709 $ 73,992 $ 116,795 $ 218,208 $ 616,704 Non-GAAP Financial Measures We use the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: funds from operations, or FFO, Adjusted EBITDA, net operating income, or NOI, same store NOI and cash-basis same store NOI. FFO, Adjusted EBITDA, NOI, same store NOI and cash-basis same store NOI should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. Further, our computation of FFO, Adjusted EBITDA, NOI, same store NOI and cash-basis same store NOI may not be comparable to FFO, Adjusted EBITDA, NOI, same store NOI and cash-basis same store NOI reported by other companies. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), which defines FFO as net income (loss) (determined in accordance with GAAP), excluding gains (losses) from sales of property and impairment write-downs of depreciable real estate, plus depreciation and amortization on real estate assets and after adjustments for unconsolidated partnerships and joint ventures (which are calculated to reflect FFO on the same basis). We believe that presenting FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets. We believe that FFO is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting alone to be insufficient. As a result, we believe that the use of FFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance. 31 Table of Contents The following table reflects the calculation of FFO reconciled from net income for the three months ended March 31, 2021 and 2020 (dollars in thousands except per share data): For the Three Months Ended March 31, 2021 2020 $ Change % Change Net income $ 16,257 $ 12,856 $ 3,401 26.5 % Depreciation and amortization Depreciation and amortization 11,376 11,100 276 2.5 % Non-real estate depreciation (13) (26) 13 (50.0) % Allocation to participating securities 1 (86) (154) 68 (44.2) % Funds from operations attributable to common stockholders 2 $ 27,534 $ 23,776 $ 3,758 15.8 % Basic FFO per common share $ 0.40 $ 0.35 $ 0.05 14.3 % Diluted FFO per common share $ 0.40 $ 0.35 $ 0.05 14.3 % Weighted average basic common shares 68,603,068 67,062,582 Weighted average diluted common shares 68,862,922 67,469,721 1 To be consistent with our policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the FFO per common share is adjusted for FFO distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method. Under this method, allocations were made to 211,746 and 434,538 of weighted average unvested restricted shares outstanding for the three months ended March 31, 2021 and 2020, respectively. 2 Includes performance share award expense of approximately $1.3 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively. See “Note 11 – Stockholders’ Equity” in the condensed notes to consolidated financial statements for more information regarding our performance share awards. FFO increased by approximately $3.8 million for the three months ended March 31, 2021 compared to the same period from the prior year due primarily to property acquisitions during 2020 and 2021 and same store NOI growth of approximately $3.2 million for the three months ended March 31, 2021 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. We believe that presenting Adjusted EBITDA provides useful information to investors regarding our operating performance because it is a measure of our operations on an unleveraged basis before the effects of tax, gain (loss) on sales of real estate investments, non-cash depreciation and amortization expense, acquisition costs and stock-based compensation. By excluding interest expense, Adjusted EBITDA allows investors to measure our operating performance independent of our capital structure and indebtedness and, therefore, allows for more meaningful comparison of our operating performance between quarters and other interim periods as well as annual periods and for the comparison of our operating performance to that of other companies, both in the real estate industry and in other industries. As we are currently in a growth phase, acquisition costs are excluded from Adjusted EBITDA to allow for the comparison of our operating performance to that of stabilized companies. The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three months ended March 31, 2021 and 2020 (dollars in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Net income $ 16,257 $ 12,856 $ 3,401 26.5 % Depreciation and amortization 11,376 11,100 276 2.5 % Interest expense, including amortization 4,145 4,006 139 3.5 % Stock-based compensation 1,970 2,179 (209) (9.6) % Acquisition costs 55 52 3 5.8 % Adjusted EBITDA $ 33,803 $ 30,193 $ 3,610 12.0 % We compute NOI as rental revenues, including tenant expense reimbursements, less property operating expenses. We compute same store NOI as rental revenues, including tenant expense reimbursements, less property operating expenses on a 32 Table of Contents same store basis. NOI excludes depreciation, amortization, general and administrative expenses, acquisition costs and interest expense, including amortization. We compute cash-basis same store NOI as same store NOI excluding straight-line rents and amortization of lease intangibles. The same store pool includes all properties that were owned and in operation as of March 31, 2021 and since January 1, 2020 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of March 31, 2021. As of March 31, 2021, the same store pool consisted of 213 buildings aggregating approximately 12.7 million square feet representing approximately 93.0% of our total square feet owned and 19 improved land parcels containing approximately 79.6 acres. 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. By presenting same store NOI and cash-basis same store NOI, the operating results on a same store basis are directly comparable from period to period. The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three months ended March 31, 2021 and 2020 (dollars in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Net income 1 $ 16,257 $ 12,856 $ 3,401 26.5 % Depreciation and amortization 11,376 11,100 276 2.5 % General and administrative 5,582 5,758 (176) (3.1) % Acquisition costs 55 52 3 5.8 % Total other income and expenses 3,909 3,442 467 13.6 % Net operating income 37,179 33,208 3,971 12.0 % Less non-same store NOI 2 (2,178) (1,402) (776) 55.4 % Same store NOI 3 $ 35,001 $ 31,806 $ 3,195 10.0 % Less straight-line rents and amortization of lease intangibles 4 (2,434) (1,442) (992) 68.8 % Cash-basis same store NOI 3 $ 32,567 $ 30,364 $ 2,203 7.3 % Less termination fee income (118) (39) (79) 202.6 % Cash-basis same store NOI excluding termination fees $ 32,449 $ 30,325 $ 2,124 7.0 % 1 Includes approximately $0.1 million and $39,000 of lease termination income for the three months ended March 31, 2021 and 2020, respectively. 2 Includes 2020 and 2021 acquisitions and dispositions, six improved land parcels and two properties under redevelopment. 3 Includes approximately $0.1 million and $39,000 of lease termination income for the three months ended March 31, 2021 and 2020, respectively. 4 Includes straight-line rents and amortization of lease intangibles for the same store pool only. Cash-basis same store NOI increased by approximately $2.4 million for the three months ended March 31, 2021 compared to the same period from the prior year due to increased rental revenue on new and renewed leases. For the three months ended March 31, 2021 and 2020, total contractual rent abatements of approximately $0.9 million and $0.4 million, respectively, were given to certain tenants in the same-store pool and approximately $0.1 million and $39,000 in lease termination income was received from certain tenants in the same store pool. Approximately $0.8 million of the increase in cash-basis same store NOI for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 related to properties that were acquired vacant or with near term expirations in 2019.