What changed in this filing

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Item 1. Financial Statements

2021-08-04 compared with 2021-05-05 · 153 added, 127 removed, 410 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands – except share and per share data)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Investments in real estate

5 unchanged sentences

Accumulated depreciation and amortization ( 260,128 ) ( 238,073 )

Net investments in properties 2,097,782 1,993,155

Net investments in real estate 2,166,323 1,993,155

Cash and cash equivalents 39,955 107,180

16 unchanged sentences

Common stock:

$ 0.01 par value, 400,000,000 shares authorized, and 69,102,008 and 68,376,364 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively.

$ 0.01 par value, 400,000,000 shares authorized, and 70,191,398 and 68,376,364 shares issued and outstanding, at June 30, 2021 and December 31, 2020, respectively.

Additional paid-in capital

1,717,265 1,589,301

Common stock held in deferred compensation plan, 270,546 and 139,224 shares at March 31, 2021 and December 31, 2020, respectively

Common stock held in deferred compensation plan, 275,727 and 139,224 shares at June 30, 2021 and December 31, 2020, respectively.

( 15,197 ) ( 7,546 )

Retained earnings 2,092 5,926

Retained (deficit) earnings ( 958 ) 5,926

Accumulated other comprehensive loss — ( 183 )

5 unchanged sentences

(in thousands – except share and per share data)

For the Three Months Ended March 31,

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

2021 2020 2021 2020

Rental revenues and tenant expense reimbursements $ 53,295 $ 45,742 $ 103,986 $ 90,858

9 unchanged sentences

Interest expense, including amortization ( 4,016 ) ( 3,909 ) ( 8,161 ) ( 7,915 )

Gain on sales of real estate investments — 17,750 — 17,750

Total other income (expense) ( 3,795 ) 14,031 ( 7,704 ) 10,589

11 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

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

2021 2020 2021 2020

Net income $ 17,378 $ 30,704 $ 33,635 $ 43,560

6 unchanged sentences

(in thousands – except share data)

Three months ended March 31, 2021:

Six months ended June 30, 2021:

Common Stock Additional

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

in Capital Common Shares Held in Deferred Compensation Plan Deferred Compensation Plan Retained (Deficit)

Earnings Accumulated

Other Comprehensive

Shares Amount Retained

Earnings Total

Shares Amount Total

Balance as of December 31, 2020 68,376,364 $ 686 $ 1,589,301 139,224 $ ( 7,546 ) $ 5,926 $ ( 183 ) $ 1,588,184

10 unchanged sentences

Balance as of March 31, 2021 69,102,008 $ 693 $ 1,645,876 270,546 $ ( 14,867 ) $ 2,092 $ ( 77 ) $ 1,633,717

Three months ended March 31, 2020:

Net income — — — — — 17,378 — 17,378

Issuance of common stock, net of issuance costs of $ 1,228

1,094,656 11 68,382 — — — — 68,393

Forfeiture of common stock related to employee awards ( 85 ) — — — — — — —

Stock-based compensation — — 2,677 — — — — 2,677

Common stock dividends ($ 0.29 per share)

— — — — — ( 20,428 ) — ( 20,428 )

Deposits to deferred compensation plan ( 5,181 ) — 330 5,181 ( 330 ) — — —

Other comprehensive income — — — — — — 77 77

Balance as of June 30, 2021 70,191,398 $ 704 $ 1,717,265 275,727 $ ( 15,197 ) $ ( 958 ) $ — $ 1,701,814

Six months ended June 30, 2020:

Common Stock Additional

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

in Capital Common Shares Held in Deferred Compensation Plan Deferred Compensation Plan Retained (Deficit)

Earnings Accumulated

Other Comprehensive

Shares Amount Retained

Earnings Total

Shares Amount Total

Balance as of December 31, 2019 67,252,787 $ 673 $ 1,514,266 — $ — $ 2,621 $ ( 437 ) $ 1,517,123

10 unchanged sentences

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

Net income — — — — — 30,704 — 30,704

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

630,490 7 32,068 — — — — 32,075

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

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

Common stock dividends ($ 0.27 per share)

— — — — — ( 18,478 ) — ( 18,478 )

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

Other comprehensive income — — — — — — 46 46

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

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

2 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Depreciation and amortization 23,344 22,559

Gain on sales of real estate investments — ( 17,750 )

Deferred financing cost amortization 747 692

7 unchanged sentences

Cash paid for property acquisitions ( 160,031 ) ( 40,374 )

Proceeds from sales of real estate investments, net — 49,690

Additions to construction in progress ( 3,021 ) ( 4,742 )

1 unchanged sentence

Repayments on senior secured loan — 15,915

Net cash used in investing activities ( 112,379 ) ( 36,194 )

Net cash (used in) provided by investing activities ( 183,414 ) 5,536

CASH FLOWS FROM FINANCING ACTIVITIES

2 unchanged sentences

Repurchase of common stock related to employee awards ( 582 ) ( 240 )

Borrowings on credit facility 25,000 —

Payments on credit facility ( 25,000 ) —

Payments on mortgage loan payable ( 11,271 ) ( 32,846 )

2 unchanged sentences

Net cash provided by (used in) financing activities 59,062 ( 14,864 )

Net decrease in cash and cash equivalents and restricted cash ( 77,431 ) ( 42,709 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 65,128 ) 36,045

Cash and cash equivalents and restricted cash at beginning of period 107,836 112,739

8 unchanged sentences

Acquisition of properties 167,660 41,057

Acquisition and assumption of other assets and liabilities ( 5,510 ) ( 536 )

Assumption of other assets and liabilities ( 7,629 ) ( 683 )

Net cash paid for property acquisitions $ 160,031 $ 40,374

5 unchanged sentences

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

As of March 31, 2021, the Company owned 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 June 30, 2021, the Company owned 234 buildings aggregating approximately 13.8 million square feet, 27 improved land parcels consisting of approximately 97.6 acres and three properties under redevelopment expected to contain approximately 0.4 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.

36 unchanged sentences

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

There were no impairment charges recorded to the carrying values of the Company’s properties during the three months ended March 31, 2021 or 2020.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three or six months ended June 30, 2021 or 2020.

Property Acquisitions.

12 unchanged sentences

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

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 1.4 million for both the three months ended March 31, 2021 and 2020.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 1.6 million and $ 1.3 million for the three months ended June 30, 2021 and 2020, respectively, and approximately $ 3.1 million and $ 2.7 million for the six months ended June 30, 2021 and 2020, respectively.

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

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

The remaining weighted average lease term related to these intangible assets and liabilities as of March 31, 2021 is 7.5 years.

As of March 31, 2021 and December 31, 2020, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

March 31, 2021 December 31, 2020

The remaining weighted average lease term related to these intangible assets and liabilities as of June 30, 2021 was 7.6 years.

As of June 30, 2021 and December 31, 2020, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

June 30, 2021 December 31, 2020

Gross Accumulated

8 unchanged sentences

The following table reflects the standard depreciable lives typically used to compute depreciation and amortization.

However, such depreciable lives may be different based on the estimated useful life of such assets or liabilities.

However, such depreciable lives may be different

based on the estimated useful life of such assets or liabilities.

Description Standard Depreciable Life

16 unchanged sentences

The following summarizes the reconciliation of cash and cash equivalents and restricted cash as presented in the accompanying consolidated statements of cash flows (dollars in thousands):

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash and cash equivalents at beginning of period $ 107,180 $ 110,082

4 unchanged sentences

Cash and cash equivalents and restricted cash 42,708 148,784

Net decrease in cash and cash equivalents and restricted cash $ ( 77,431 ) $ ( 42,709 )

Net (decrease) increase in cash and cash equivalents and restricted cash $ ( 65,128 ) $ 36,045

Revenue Recognition.

6 unchanged sentences

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.

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

Due to the effects of COVID-19, the future contractual lease payments of certain of the Company's tenants were not probable and as such, approximately

$ 0.1 million and $ 0.5 million of straight-line rent receivables were reversed during the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021 and December 31, 2020, approximately $ 34.3 million and $ 32.5 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 1.3 million and $ 0.9 million as of March 31, 2021 and December 31, 2020, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

As of June 30, 2021 and December 31, 2020, approximately $ 34.9 million and $ 32.5 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 1.3 million and $ 0.9 million as of June 30, 2021 and

December 31, 2020, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

Deferred Financing Costs.

1 unchanged sentence

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

Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of accumulated amortization in the aggregate of approximately $ 9.7 million and $ 9.4 million as of March 31, 2021 and December 31, 2020, respectively.

Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of accumulated amortization in the aggregate of approximately $ 10.0 million and $ 9.4 million as of June 30, 2021 and December 31, 2020, respectively.

Income Taxes.

8 unchanged sentences

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

As of March 31, 2021 and December 31, 2020, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of March 31, 2021 include years 2017 to 2020 for Federal purposes.

As of June 30, 2021 and December 31, 2020, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of June 30, 2021 include years 2017 to 2020 for federal purposes.

Stock-Based Compensation and Other Long-Term Incentive Compensation.

10 unchanged sentences

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

For Performance Share awards granted prior to January 1, 2019, the Company estimates the

fair value of the Performance Share awards using a Monte Carlo simulation model on the date of grant and at each reporting period.

For Performance Share awards granted prior to January 1, 2019, the Company estimates the fair value of the Performance Share awards using a Monte Carlo simulation model on the date of grant and at each reporting period.

The Performance Share awards granted prior to January 1, 2019 are recognized as compensation expense over the requisite performance period based on the fair value of the Performance Share awards at the balance sheet date, which varies quarter to quarter based on the Company’s relative share price performance, and are included as a component of performance share awards payable in the accompanying consolidated balance sheets.

22 unchanged sentences

However, the Company’s management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

As of March 31, 2021, the Company owned 63 buildings aggregating approximately 3.6 million square feet and nine land parcels consisting of approximately 48.6 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 28.3 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of March 31, 2021, excluding any partial or full rent abatements.

As of June 30, 2021, the Company owned 63 buildings aggregating approximately 3.6 million square feet and nine land parcels consisting of approximately 48.8 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 28.8 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of June 30, 2021, excluding any partial or full rent abatements.

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

1 unchanged sentence

The existence of competing properties could have a material impact on the Company’s ability to lease space and on the level of rent that can be achieved.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of March 31, 2021.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of June 30, 2021.

Investments in Real Estate

During the three months ended March 31, 2021, the Company acquired four industrial properties with a total initial investment, including acquisition costs, of approximately $ 109.9 million, of which $ 63.7 million was recorded to land, $ 41.8 million to buildings and improvements, and $ 4.4 million to intangible assets.

During the three months ended June 30, 2021, the Company acquired six industrial properties with a total initial investment, including acquisition costs, of approximately $ 57.8 million, of which $ 44.0 million was recorded to land, $ 9.8 million to buildings and improvements, and $ 4.0 million to intangible assets.

Additionally, the Company assumed $ 2.2 million in liabilities.

The Company recorded revenues and net income for the three months ended March 31, 2021 of approximately $ 0.5 million and $ 0.3 million, respectively, related to the 2021 acquisitions.

During the three months ended March 31, 2020, the Company acquired two industrial properties with a total aggregate initial investment, including acquisition costs, of approximately $ 30.6 million, of which $ 21.9 million was recorded to land, $ 7.6 million to buildings and improvements, and $ 1.1 million to intangible assets.

During the six months ended June 30, 2021, the Company acquired ten industrial properties with a total initial investment, including acquisition costs, of approximately $ 167.7 million, of which $ 107.7 million was recorded to land, $ 51.6 million to buildings and improvements, and $ 8.4 million to intangible assets.

Additionally, the Company assumed $ 7.8 million in liabilities.

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

The Company recorded revenues and net income for the three months ended June 30, 2021 of approximately $ 2.0 million and $ 0.7 million, respectively, and recorded revenues and net income for the six months ended June 30, 2021 of approximately $ 2.5 million and $ 1.0 million, respectively, related to the 2021 acquisitions.

During the three months ended June 30, 2020, the Company acquired two industrial properties with a total initial investment, including acquisition costs, of approximately $ 10.5 million, of which $ 9.0 million was recorded to land, $ 1.2 million to buildings and improvements, and $ 0.3 million to intangible assets.

Additionally, the Company assumed $ 0.1 million in liabilities.

During the six months ended June 30, 2020, the Company acquired four industrial properties with a total initial investment, including acquisition costs, of approximately $ 41.1 million, of which $ 30.9 million was recorded to land, $ 8.9 million to buildings and improvements, and $ 1.3 million to intangible assets.

Additionally, the Company assumed $ 0.7 million in liabilities.

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

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

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

As of March 31, 2021, the Company 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.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 0 and $ 0.7 million, respectively, during the three months ended March 31, 2021 and 2020 .

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

As of June 30, 2021, the Company had three properties under redevelopment expected to contain approximately 0.4 million square feet upon completion with a total expected investment of approximately $ 91.6 million, including redevelopment costs, capitalized interest and other costs.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 0.1 million and $ 0.4 million, respectively, during the three months ended June 30, 2021 and 2020 and approximately $ 0.1 million and $ 1.0 million, respectively, during the six months ended June 30, 2021 and 2020.

Held for Sale/Disposed Assets

1 unchanged sentence

Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale.

As of March 31, 2021, the Company had no properties held for sale.

There were no properties sold during the three months ended March 31, 2021 or 2020.

As of June 30, 2021, the Company had no properties held for sale.

During the three and six months ended June 30, 2021, the Company had no property sales and no properties considered held for sale.

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

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

Senior Secured Loan

1 unchanged sentence

The senior secured loan was secured by a portfolio of six improved land parcels located primarily in Newark, New Jersey.

As of March 31, 2021, 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 both March 31, 2021 and December 31, 2020, there were no borrowings outstanding on the revolving credit facility and $ 100.0 million of borrowings outstanding on the term loan.

As of March 31, 2021 and December 31, 2020, the Company had one interest rate cap to hedge the variable cash flows associated with $ 50.0 million of its $ 100.0 million variable-rate term loan.

As of June 30, 2021, 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 both June 30, 2021 and December 31, 2020, there were no borrowings outstanding on the revolving credit facility

and $ 100.0 million of borrowings outstanding on the term loan.

As of June 30, 2021, the Company had no interest rate caps.

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 $ 100.0 million variable-rate term loan, which expired on May 4, 2021.

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

1 unchanged sentence

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

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

LIBOR plus the applicable LIBOR margin for LIBOR rate loans under the Facility plus 1.25 %.

The applicable LIBOR margin will range from 1.05 % to 1.50 % ( 1.05 % as of March 31, 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 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 June 30, 2021) for the revolving credit facility and 1.20 % to 1.70 % ( 1.20 % as of June 30, 2021) for the $ 100.0 million term loan, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

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

2 unchanged sentences

The Facility and the Senior Unsecured Notes include a series of financial and other covenants with which the Company must comply.

The Company was in compliance with the covenants under the Facility and the Senior Unsecured Notes as of March 31, 2021 and December 31, 2020.

During the three months ended March 31, 2021, the Company fully repaid its $ 11.3 million mortgage loan payable.

The Company was in compliance with the covenants under the Facility and the Senior Unsecured Notes as of June 30, 2021 and December 31, 2020.

During the six months ended June 30, 2021, the Company fully repaid its $ 11.3 million mortgage loan payable.

As of December 31, 2020, this mortgage loan payable, net of deferred financing costs, totaled approximately $ 11.3 million, and bore interest at a weighted average fixed annual rate of 5.5 %.

The mortgage loan payable was collateralized by one property.

As of December 31, 2020, the total gross book value of the property securing the mortgage loan payable was approximately $ 32.7 million.

The scheduled principal payments of the Company’s debt as of March 31, 2021 were as follows (dollars in thousands):

As of December 31, 2020, the total gross book value of the property securing the debt was approximately $ 32.7 million.

As of June 30, 2021, the Company did not have any encumbered properties.

The scheduled principal payments of the Company’s debt as of June 30, 2021 were as follows (dollars in thousands):

Facility Term Loan Senior

8 unchanged sentences

Weighted average interest rate n/a 1.3 % 3.8 % 3.3 %

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of March 31, 2021.

The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements (dollars in thousands):

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of June 30, 2021.

The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property

operating expense reimbursements (dollars in thousands):

2021 (6 months) $ 79,659

6 unchanged sentences

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

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

The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of its known or expected cash payments principally related to its borrowings.

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

The Company’s derivative financial instruments may be used to manage differences in the amount, timing, and duration of its known or expected cash payments principally related to its borrowings.

Derivative Instruments

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movements.

To accomplish this objective, the Company primarily uses interest rate caps as part of its interest rate risk management strategy.

To accomplish this objective, the Company has historically used interest rate caps as part of its interest rate risk management strategy.

Interest rate caps involve the receipt of variable amounts from a counterparty at the end of each period in which the interest rate exceeds the agreed fixed price.

7 unchanged sentences

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

As of March 31, 2021 and 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, 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, that expired on May 4, 2021.

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.

The Company was 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 the Company in the event LIBOR was greater than 4.0 %, referencing the same notional amount.

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.

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

Instrument Effective

Date Maturity

Date Interest

Strike Fair Value Notional Amount

March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

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

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.

Under each interest rate cap, the Company was 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 the Company in the event LIBOR was greater than 4.0 %, referencing the same notional amount.

The effective portion of changes in the fair value of derivatives designated and qualified as cash flow hedges is recorded in AOCI and will be reclassified to interest expense in the period that the hedged forecasted transaction affects earnings on the Company’s variable rate debt.

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

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the three and six months ended June 30, 2021 and 2020 (dollars in thousands):

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

2021 2020 2021 2020

Interest rate caps in cash flow hedging relationships:

1 unchanged sentence

Amount of gain reclassified from AOCI into interest expense (effective portion) $ 77 $ 46 $ 183 $ 119

The Company estimates that approximately $ 0.1 million will be reclassified from AOCI as an increase to interest expense over the next twelve months.

Fair Value Measurements

ASC 820 requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3).

Recurring Measurements – Interest Rate Contracts

Fair Value of Interest Rate Caps

Currently, the Company uses interest rate cap agreements to manage its interest rate risk.

The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives.

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

As of March 31, 2021, the Company applied the provisions of this standard to the valuation of its interest rate caps.

The following sets forth the Company’s financial instruments that are accounted for at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (dollars in thousands):

Fair Value Measurement Using

Total Fair Value Quoted Price in

Active Markets for

Identical Assets

and Liabilities

(Level 1) Significant

(Level 2) Significant

Interest rate caps at:

March 31, 2021 $ — $ — $ — $ —

December 31, 2020 $ — $ — $ — $ —

Financial Instruments Disclosed at Fair Value

As of March 31, 2021 and December 31, 2020, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs.

As of June 30, 2021 and December 31, 2020, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs.

The fair values of the Company’s mortgage loans payable and Senior Unsecured Notes were estimated by calculating the present value of principal and interest payments, based on borrowing rates available to the Company, which are Level 2 inputs, adjusted with a credit spread, as applicable, and assuming the loans are outstanding through maturity.

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

The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of March 31, 2021 and December 31, 2020 (dollars in thousands):

The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of June 30, 2021 and December 31, 2020 (dollars in thousands):

Fair Value Measurement Using

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(Level 3) Carrying Value

March 31, 2021 $ 458,647 $ — $ 458,647 $ — $ 448,004

June 30, 2021 $ 474,874 $ — $ 474,874 $ — $ 448,154

December 31, 2020 $ 481,809 $ — $ 481,809 $ — $ 459,118

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The Company’s authorized capital stock consists of 400,000,000 shares of common stock, $ 0.01 par value per share, and 100,000,000 shares of preferred stock, $ 0.01 par value per share.

The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 43.0 million remaining as of March 31, 2021) in amounts and at times to be determined by the Company from time to time.

The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 273.2 million remaining as of June 30, 2021) 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 previous at-the-market equity offering program (the "Previous $ 300 Million ATM Program"), which was substantially utilized as of June 10, 2021 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.

During the three months ended March 31, 2021, the Company 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.

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

During the three and six months ended June 30, 2021, the Company issued an aggregate of 1,084,294 and 1,790,818 shares, respectively, of common stock at a weighted average offering price of $ 64.21 and $ 61.84 per share, respectively, under the Previous $300 Million ATM Program and the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 68.6 million and $ 109.1 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 1.0 million and $ 1.6 million, respectively.

During the three and

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

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.

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The program may be suspended or discontinued at any time.

As of March 31, 2021, the Company had not repurchased any shares of stock pursuant to its share repurchase program.

As of June 30, 2021, the Company had not repurchased any shares of stock pursuant to its share repurchase program.

In connection with the Annual Meeting of Stockholders on May 4, 2021, the Company granted a total of 10,362 shares of the Company's common unrestricted stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 63.70 .

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

The Company recognized approximately $ 0.7 million in compensation costs for both the three and six months ended June 30, 2021 related to this issuance.

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

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

During the three months ended March 31, 2021 and 2020 , 131,322 and 135,494 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

As of March 31, 2021, 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 1,084,436 were remaining available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to March 31, 2021 ranged from $ 14.20 to $ 60.83 .

The fair value of the restricted stock that was granted during the three months ended March 31, 2021 was approximately $ 1.5 million.

The vesting period for restricted stock is generally three to five years .

As of March 31, 2021, the Company had approximately $ 8.7 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 3.4 years.

The Company recognized compensation costs of approximately $ 0.6 million and $ 0.7 million for the three months ended March 31, 2021 and 2020, respectively, related to the restricted stock issuances.

The following is a summary of the total restricted shares granted to the Company’s executive officers and employees with the related weighted average grant date fair value share prices for the three months ended March 31, 2021:

During the three months ended June 30, 2021 and 2020 , 5,181 and 3,730 shares of common stock, respectively, and during the six months ended June 30, 2021 and 2020, 136,503 and 139,224 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

As of June 30, 2021, 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 1,074,159 were remaining available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to June 30, 2021 ranged from $ 14.20 to $ 60.83 .

The fair value of the restricted stock that was granted during the six months ended June 30, 2021 was approximately $ 1.5 million and the vesting period for the restricted stock is typically between three and five years .

As of June 30, 2021, the Company had approximately $ 8.0 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 3.2 years.

The Company recognized compensation costs of approximately $ 0.7 million for both the three months ended June 30, 2021 and 2020, and approximately $ 1.3 million and $ 1.4 million for the six months ended June 30, 2021 and 2020, respectively, related to the restricted stock issuances.

Restricted Stock Activity:

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Non-vested shares outstanding as of December 31, 2020

203,729 $ 50.19

Granted 25,654 59.29

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Vested ( 13,336 ) 43.04

Non-vested shares outstanding as of March 31, 2021 216,047 $ 51.71

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of March 31, 2021:

Non-vested shares outstanding as of June 30, 2021

215,962 $ 51.71

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of June 30, 2021:

Non-vested Shares Vesting Schedule Number of Shares

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Long-Term Incentive Plan:

As of March 31, 2021, there are three open performance measurement periods for the Performance Share awards:

As of June 30, 2021, there are three open performance measurement periods for the Performance Share awards:

January 1, 2019 to December 31, 2021, January 1, 2020 to December 31, 2022, and January 1, 2021 to December 31, 2023.

During the three months ended March 31, 2021, the Company issued 131,322 shares of common stock at a price of $ 55.75 per share related to the Performance Share awards for the performance period from January 1, 2018 to December 31, 2020.

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

During the six months ended June 30, 2021, the Company issued 131,322 shares of common stock at a price of $ 55.75 per share related to the Performance Share awards for the performance period from January 1, 2018 to December 31, 2020.

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

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

Fair Value Performance Share Period Maximum Potential Payout Fair Value March 31, 2021 Accrual March 31, 2021 Expense for the Three Months Ended March 31,

Fair Value Performance Share Period Fair Value June 30, 2021 Accrual June 30, 2021 Expense for the Three Months Ended June 30, Expense for the Six Months Ended June 30,

2021 2020 2021 2020

January 1, 2018 - December 31, 2020 $ — $ — $ — $ 119 $ — $ 725

Total $ — $ — $ — $ — $ 606

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

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

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

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

2021 2020 2021 2020

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

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Total $ 15,870 $ 1,323 $ 867 $ 2,645 $ 1,734

The following table sets forth the cash dividends paid or payable per share during the three months ended March 31, 2021:

The following table sets forth the cash dividends paid or payable per share during the six months ended June 30, 2021:

For the Three Months Ended Security Dividend per

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March 31, 2021 Common stock $ 0.29 February 9, 2021 March 26, 2021 April 9, 2021

June 30, 2021 Common stock $ 0.29 May 4, 2021 June 30, 2021 July 14, 2021

Net Income (Loss) Per Share

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The Company’s non-vested shares of restricted stock are considered participating securities since these share-based awards contain non-forfeitable rights to dividends irrespective of whether the awards ultimately vest or expire.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for both the three months ended March 31, 2021 and 2020.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for both the three and six months ended June 30, 2021 and 2020.

In accordance with the Company’s policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the net income (loss) per common share is adjusted for earnings distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method.

Under this method, allocations were made to 211,746 and 434,538 of weighted average unvested restricted shares outstanding for the three months ended March 31, 2021 and 2020, respectively.

Under this method, allocations were made to 216,025 and 438,595 of weighted average unvested restricted shares outstanding for the three months ended June 30, 2021 and 2020, respectively, and 213,897 and 436,567 of weighted average unvested restricted shares outstanding for the six months ended June 30, 2021 and 2020, respectively.

Performance Share awards which may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period are included as contingently issuable shares in the calculation of diluted weighted average common shares of stock outstanding assuming the reporting period is the end of the measurement period, and the effect is dilutive.

Diluted shares related to the Performance Share awards were 259,854 and 407,139 for the three months ended March 31, 2021 and 2020, respectively.

Diluted shares related to the Performance Share awards were 228,177 and 223,047 for the three and six months ended June 30, 2021, respectively, and 407,139 for both the three and six months ended June 30, 2020.

Commitments and Contingencies

Contractual Commitments.

As of May 4, 2021, the Company had outstanding contracts with third-party sellers to acquire six industrial properties for a total aggregate anticipated purchase price of approximately $ 93.9 million.

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

As of August 3, 2021, the Company has outstanding contracts with third-party sellers to acquire seven industrial properties for a total purchase price of $ 107.1 million There is no assurance that the Company will acquire the properties under contract because the proposed acquisitions are subject to due diligence and various closing conditions.

As of August 3, 2021, the Company has executed five non-binding letters of intent with third-party sellers to acquire five industrial properties for a total anticipated purchase price of approximately $ 59.9 million.

In the normal course of its business,

the Company enters into non-binding letters of intent to purchase properties from third parties that may obligate the Company to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters.

There can be no assurance that the Company will enter into purchase and sale agreements with respect to these properties or otherwise complete any such prospective purchases on the terms described or at all.

Subsequent Events

On April 6, 2021, the Company acquired one property in Miami, Florida for a total purchase price of approximately $ 5.8 million.

On July 14, 2021, the Company acquired one industrial property in Hawthorne, CA, for a total purchase price of approximately $ 8.1 million.

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

On April 13, 2021, the Company acquired one property in Kent, Washington for a total purchase price of approximately $ 10.0 million.

On July 14, 2021, the Company acquired one industrial property in Hialeah, FL, for a total purchase price of approximately $ 39.4 million.

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

On April 22, 2021, the Company acquired one property in San Jose, CA for a total purchase price of approximately $ 8.0 million.

On July 15, 2021, the Company issued in a private placement (i) $ 100.0 million of senior guaranteed green notes (the “Series A Notes”) and (ii) $ 50.0 million of senior guaranteed notes (the “Series B Notes” and, together with the Series A Notes, the “Notes”).

The Series A Notes bear interest at a fixed annual interest rate of 2.41 % and mature in July 2028, and the Series B Notes bear interest at a fixed annual interest rate of 2.84 % and mature in July 2031.

The Notes are guaranteed by the Company and by substantially all of the current and to-be-formed subsidiaries of the borrower that own an unencumbered property.

The Notes are unsecured by the Company’s properties or by interests in the subsidiaries that hold such properties.

The Notes include a series of financial and other covenants with which the Company must comply.

On July 30, 2021, the Company acquired one industrial property in Orange, CA, for a total purchase price of approximately $ 9.3 million.

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

On May 4, 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 July 14, 2021 to the stockholders of record as of the close of business on June 30, 2021.

On August 3, 2021, the Company’s board of directors declared a cash dividend in the amount of $ 0.34 per share of its common stock payable on October 15, 2021 to the stockholders of record as of the close of business on October 1, 2021.

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

What changed 10-Q

Item 1. Financial Statements