What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-09 compared with 2021-02-10 · 370 added, 360 removed, 792 unchanged (48% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Table of Content s

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer, President and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), and has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to give reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer, President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

8 unchanged sentences

Terreno Realty Corporation’s independent auditors have issued an audit report on the effectiveness of the company’s internal control over financial reporting, as stated in their report included in this Annual Report on Form 10-K (which expresses an unqualified opinion on the effectiveness of the company’s internal control over financial reporting as of December 31, 2021).

Table of Content s

Report of Independent Registered Public Accounting Firm

23 unchanged sentences

February 9, 2022

Table of Content s

Changes in Internal Control Over Financial Reporting

1 unchanged sentence

Other Information.

On February 8, 2022, Gabriela F.

Parcella informed us that she would not stand for re-election at our 2022 Annual Meeting of Stockholders (the “Annual Meeting”) in order to focus on other commitments.

Parcella will continue to serve on our board of directors and maintain her committee memberships, including her position as chair of the nominating and corporate governance committee through the Annual Meeting.

Parcella’s decision not to stand for re-election was not the result of any disagreement with us on any matter relating to our operations, policies or practices.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance.

8 unchanged sentences

The information required by Item 14 will be contained in a definitive proxy statement for our Annual Meeting of Stockholders, which we anticipate will be filed no later than 120 days after the end of our fiscal year ended December 31, 2021 and is incorporated herein by reference.

Table of Content s

Exhibits and Financial Statement Schedules.

1 unchanged sentence

The following consolidated financial information is included as a separate section of this Annual Report on Form 10-K beginning on page F-1 as follows:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020

8 unchanged sentences

Form 10-K Summary.

Table of Content s

Report of Independent Registered Public Accounting Firm

19 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

Table of Content s

Valuation of acquired properties

Description of matter In the year ended December 31, 2020, the Company completed 11 real estate acquisitions for a total purchase price of $100.4 million.

Description of matter During the year ended December 31, 2021, the Company completed 34 real estate acquisitions for a total purchase price of $682 million.

The properties were acquired from unrelated third parties.

8 unchanged sentences

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting for real estate acquisitions relative to purchase accounting, including controls over the review of the valuation models and related significant assumptions underlying the valuation of the acquired assets and liabilities.

To test the purchase price allocations to the assets and liabilities acquired, our audit procedures included, among others, review of the purchase agreements, assessing the methodologies and testing the significant assumptions discussed above used to value the components of the acquired properties, assessing the sensitivity of changes in significant assumptions on the purchase price allocation and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

We compared land comparative sales values, building replacement cost and depreciation estimates, market rental rates, discount rate and market rental growth rates with external market data, and the incorporation of these assumptions in the cash flow projections and overall valuation conclusions.

5 unchanged sentences

February 9, 2022

Table of Content s

Terreno Realty Corporation

12 unchanged sentences

Restricted cash 397 656

Senior secured loan, net — 15,858

Other assets, net 51,650 38,829

2 unchanged sentences

Credit facility $ — $ —

Term loan payable, net 99,791 99,583

Term loans payable, net 99,495 99,791

Senior unsecured notes, net 621,175 348,063

Mortgage loans payable, net 11,264 44,318

Mortgage loan payable, net — 11,264

Security deposits 23,914 13,870

7 unchanged sentences

Common stock:

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

$ 0.01 par value, 400,000,000 shares authorized, and 75,068,575 and 68,376,364 shares issued and outstanding at December 31, 2021 and 2020, respectively.

Additional paid-in capital

2,069,604 1,589,301

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

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

( 15,197 ) ( 7,546 )

Retained earnings 2,804 5,926

3 unchanged sentences

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

Table of Content s

Terreno Realty Corporation

19 unchanged sentences

Allocation to participating securities ( 311 ) ( 400 ) ( 351 )

Net income available to common stockholders, net of redemption of preferred stock and preferred stock dividends $ 79,395 $ 55,165 $ 62,888

Net income available to common stockholders $ 86,943 $ 79,395 $ 55,165

EARNINGS PER COMMON SHARE - BASIC AND DILUTED:

Net income available to common stockholders - basic, net of redemption of preferred stock and preferred stock dividends $ 1.17 $ 0.86 $ 1.09

Net income available to common stockholders - diluted, net of redemption of preferred stock and preferred stock dividends $ 1.16 $ 0.85 $ 1.09

Net income available to common stockholders - basic $ 1.23 $ 1.17 $ 0.86

Net income available to common stockholders - diluted $ 1.23 $ 1.16 $ 0.85

BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 70,534,202 67,762,927 64,428,406

1 unchanged sentence

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

Table of Content s

Terreno Realty Corporation

4 unchanged sentences

Net income $ 87,254 $ 79,795 $ 55,516

Other comprehensive income (loss):

Other comprehensive income:

Cash flow hedge adjustment 183 254 324

1 unchanged sentence

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

Table of Content s

Terreno Realty Corporation

2 unchanged sentences

Common Stock Additional

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

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

Earnings Accumulated

Comprehensive

(Loss) Income Total

Shares Amount

Other Comprehensive

Shares Amount Total

Balance as of December 31, 2018 61,013,711 $ 610 $ 1,233,763 — $ — $ 14,185 $ ( 761 ) $ 1,247,797

5 unchanged sentences

Stock-based compensation — — 4,026 — — — — 4,026

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

Other comprehensive loss — — — — — — 285 285

Common stock dividends ($ 1.02 per share)

— — — — — ( 67,080 ) — ( 67,080 )

Other comprehensive income — — — — — — 324 324

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

2 unchanged sentences

1,344,281 13 70,638 — — — — 70,651

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

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

1 unchanged sentence

Stock-based compensation — — 6,688 — — — — 6,688

Common stock dividends — — — — — ( 67,080 ) — ( 67,080 )

Common stock dividends ($ 1.12 per share)

— — — — — ( 76,490 ) — ( 76,490 )

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

Other comprehensive income — — — — — — 254 254

7 unchanged sentences

Stock-based compensation — — 9,554 — — — — 9,554

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

Common stock dividends ($ 1.26 per share)

— — — — — ( 90,376 ) — ( 90,376 )

Deposits to deferred compensation plan ( 136,503 ) — 7,651 136,503 ( 7,651 ) — — —

2 unchanged sentences

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

Table of Content s

Terreno Realty Corporation

23 unchanged sentences

Additions to buildings, improvements and leasing costs ( 51,290 ) ( 31,611 ) ( 32,070 )

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

Repayment on senior secured loan 15,915 — —

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

Repayments on senior secured loan — 15,915 —

Net cash used in investing activities ( 666,438 ) ( 52,088 ) ( 251,482 )

10 unchanged sentences

Dividends paid to common stockholders ( 84,628 ) ( 74,778 ) ( 63,565 )

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

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

Net cash provided by (used in) financing activities 631,195 ( 53,865 ) 235,054

Net increase (decrease) in cash and cash equivalents and restricted cash 96,965 ( 4,903 ) 78,260

Cash and cash equivalents and restricted cash at beginning of year 107,836 112,739 34,479

12 unchanged sentences

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

Table of Content s

Terreno Realty Corporation

2 unchanged sentences

Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

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

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

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

As of December 31, 2021, the Company owned 253 buildings aggregating approximately 15.1 million square feet, 36 improved land parcels consisting of approximately 127.1 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.2 million square feet and two improved land parcels aggregating approximately 12.1 acres.

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.

25 unchanged sentences

If an asset is intended to be sold, impairment is determined using the estimated fair value less costs to sell.

The estimation of expected future net cash flows is inherently uncertain and relies on assumptions, among other things, regarding current and future economic and market conditions and the availability of capital.

The estimation of expected future net cash flows is inherently uncertain and relies on assumptions, among other things, regarding current and future economic and market

Table of Content s

conditions and the availability of capital.

The Company determines the estimated fair values based on its assumptions regarding rental rates, lease-up and holding periods, as well as sales prices.

When available, current market information is used to

determine capitalization and rental growth rates.

When available, current market information is used to determine capitalization and rental growth rates.

If available, current comparative sales values may also be used to establish fair value.

3 unchanged sentences

There were no impairment charges recorded to the carrying values of the Company’s properties during the years ended December 31, 2021, 2020 or 2019.

Loans Held-for-Investment.

Loans that are held-for-investment are carried at cost, net of loan fees and origination costs, as applicable, unless the loans are deemed impaired.

Impairment occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of loans that are held-for-investment.

The Company evaluates its senior secured loan (the “Senior Secured Loan”), which is classified as held-for-investment, for impairment quarterly.

If the Senior Secured Loan is considered to be impaired, the Company records an allowance through the provision for Senior Secured Loan losses to reduce the carrying value of the Senior Secured Loan to the present value of expected future cash flows discounted at the Senior Secured Loan’s contractual effective rate or the fair value of the collateral, if repayment is expected solely from the collateral.

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

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

Property Acquisitions.

Effective January 1, 2017, the Company adopted Accounting Standards Codification (“ASC”) 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business, which requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not considered a business.

In accordance with Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not considered a business.

To be a business, the set of acquired activities and assets must include inputs and one or more substantive processes that together contribute to the ability to create outputs.

The Company has determined that its real estate property acquisitions will generally be accounted for as asset acquisitions under the clarified definition.

Prior to January 1, 2017, the Company generally accounted for property acquisitions as business combinations, in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations .

Upon acquisition of a property the Company estimates the fair value of acquired tangible assets (consisting generally of land, buildings and improvements) and intangible assets and liabilities (consisting generally of the above and below-market leases and the origination value of all in-place leases).

10 unchanged sentences

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 December 31, 2020 is 7.8 years.

The remaining weighted average lease term related to these intangible assets and liabilities as of December 31, 2021 was 7.0 years.

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

7 unchanged sentences

Total $ 35,373 $ ( 48,244 ) $ ( 12,871 ) $ 43,061 $ ( 47,175 ) $ ( 4,114 )

Table of Content s

Projected net amortization of the intangible assets and liabilities for the next five years and thereafter as of December 31, 2021 is as follows (dollars in thousands):

2025 ( 1,245 )

2026 ( 1,330 )

Thereafter ( 10,456 )

13 unchanged sentences

Held for Sale Assets.

The Company considers a property to be held for sale when it meets the criteria established under ASC 360, Property, Plant, and Equipment (See “Note 5 – Held for Sale/Disposed Assets”).

The Company considers a property to be held for sale when it meets the criteria established under Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment (See “Note 5 - Held for Sale/Disposed Assets”).

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.

14 unchanged sentences

Cash and cash equivalents and restricted cash 204,801 107,836 112,739

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

Net increase (decrease) in cash and cash equivalents and restricted cash $ 96,965 $ ( 4,903 ) $ 78,260

Table of Content s

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.

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

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

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

2014-09"), using the modified retrospective approach, which requires a cumulative effect adjustment as of the date of the Company's adoption.

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

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

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

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

Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business.

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

ASC 610-20 refers to the revenue recognition principles under ASU 2014-09 (see above).

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

As a result of adoption of the standard, there was no material impact to the Company’s consolidated financial statements.

As of December 31, 2021 and 2020, approximately $ 39.7 million and $ 32.5 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.5 million and $ 0.9 million as of December 31, 2021 and 2020, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

Deferred Financing Costs.

Costs incurred in connection with financings are capitalized and amortized to interest expense using the effective interest method over the term of the related loan.

Deferred financing costs associated with the Company's revolving credit facility are classified as an asset 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.

financing costs related to the revolving credit facility and debt liabilities are shown at cost, net of accumulated amortization in the aggregate of approximately $ 9.4 million and $ 8.3 million as of December 31, 2020 and 2019, respectively.

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 $ 10.6 million and $ 9.4 million as of December 31, 2021 and 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 December 31, 2020 and 2019, the Company did no t 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 beginning with the 2010 calendar year.

As of December 31, 2021 and 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 December 31, 2021, include years 2018 to 2020 for federal purposes.

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

4 unchanged sentences

The amount of the expense may be subject to adjustment in future periods depending on the specific characteristics of the stock-based award.

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

Table of Content s

restated on January 8, 2019, to its executives that may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period, which is generally three years .

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

16 unchanged sentences

Fair Value of Financial Instruments .

ASC 820, Fair Value Measurements and Disclosures (See “Note 10 – Fair Value Measurements”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) (See “Note 9 - Fair Value Measurements”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 also provides guidance for using fair value to measure financial assets and liabilities.

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).

New Accounting Standards.

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

1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;

and 2) a right-of-use asset (“ROU asset”), which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

2016-02 also requires lessees to classify leases as either a finance or operating lease based on whether or not the lease is effectively a financed purchase of the leased asset by the lessee.

This classification is used to evaluate whether the lease expense should be recognized based on an effective interest method as a finance lease or on a straight-line basis over the term of the lease as an operating lease.

The Company is the lessee of one office space, which was classified as an operating lease under Topic 840.

As the Company elected the package of practical expedients as described above, the classification of existing leases was not reassessed and as such, this lease continues to be accounted for as an operating lease.

In July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842), Targeted Improvements (“ASU No.

2018-11”), which provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue recognition standard (Topic 606) and if certain conditions are met.

Upon adoption of ASU No.

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

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

In addition, ASU No.

2018-11 provides an additional optional transition method to allow entities to apply the new lease accounting standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings.

An entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease accounting standard will continue to be reported under the current lease accounting standards of Topic 840.

The Company adopted this transition method upon adoption of ASU No.

2016-02 on January 1, 2019.

There was no cumulative-effect adjustment to the opening balance of retained earnings upon adoption.

In December 2018, the FASB issued ASU No.

2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors (“ASU No.

2018-20”), which permits lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs and instead to account for these costs as if they were lessee costs.

In addition, ASU No.

2018-20 requires lessors to 1) exclude lessor costs paid directly by lessees to third parties on the lessor’s behalf from variable payments and 2) include lessor costs that are reimbursed by the lessee in the measurement of variable lease revenue and the associated expense.

The amendments also clarify that lessors are required to allocate the variable payments to the lease and non-lease components and follow the recognition guidance in Topic 842 for the lease component and other applicable guidance, such as ASU No.

2014-09, for the non-lease component.

As a result of the adoption of ASU No.

2016-02, ASU No.

2018-11, and ASC No.

2018-20, there was no material impact to the Company’s consolidated financial statements as a lessor or lessee.

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

does not currently capitalize internal leasing costs.

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

As the rate implicit in the lease was not readily determinable, the discount rate applied to measure the lease liability and ROU asset was based on the Company’s incremental borrowing rate of 2.7 % as of the adoption date.

The lease liability is included as a component of accounts payable and other liabilities and the ROU asset is included as a component of other assets in the accompanying consolidated balance sheets.

All operating lease expense is recognized on a straight-line basis over the lease term.

As of December 31, 2020, the lease liability was approximately $ 0.4 million and the ROU asset was approximately $ 0.4 million.

Segment Disclosure.

7 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 December 31, 2020, the Company owned 62 buildings aggregating approximately 3.6 million square feet and nine improved land parcels consisting of approximately 48.6 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 29.5 % of its annualized base rent.

Table of Content s

As of December 31, 2021, the Company owned 62 buildings aggregating approximately 3.4 million square feet and 10 improved land parcels consisting of approximately 54.2 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 27.3 % of its annualized base rent.

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

2 unchanged sentences

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 tenants that accounted for greater than 10% of its rental revenues for the years ended December 31, 2020, 2019 and 2018.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent for the years ended December 31, 2021, 2020 and 2019.

Investments in Real Estate

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

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

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

During the year ended December 31, 2021, the Company acquired 34 industrial properties with a total initial investment, including acquisition costs, of approximately $ 682.0 million, of which $ 446.3 million was recorded to land, $ 206.8 million to buildings and improvements, and $ 28.9 million to intangible assets.

Additionally, the Company assumed $ 37.4 million in liabilities.

The following table sets forth the wholly-owned industrial properties the Company acquired during the year ended December 31, 2021:

Table of Content s

Property Name Location Acquisition Date Number of

Square Feet Purchase Price

Buildings Square

Feet Purchase Price

(in thousands) 1

Old Bayshore 2

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

256 Paterson Plank Carlstadt, NJ January 13, 2021 1 16,159 $ 10,625 —

117th Place NE Kirkland, WA February 25, 2021 1 126,721 33,750 —

Countyline #24 & #25 Hialeah, FL March 17, 2021 2 273,577 48,114 —

Edison San Leandro, CA March 31, 2021 3 112,392 17,600 —

73rd Street Miami, FL April 6, 2021 — — 5,800 5.8

68th Kent Kent, WA April 13, 2021 2 67,120 10,000 —

East Gish San Jose, CA April 22, 2021 — — 8,004 2.2

Gramercy Place Torrance, CA May 12, 2021 1 17,407 6,290 —

Occidental Avenue Seattle, WA May 12, 2021 3 51,853 16,450 —

SW 16th Street Renton, WA June 14, 2021 — — 7,615 2.9

Countyline #26 Hialeah, FL July 14, 2021 1 220,942 39,409 —

13020 & 13030 Cerise Hawthorne, CA July 14, 2021 2 21,846 8,075 —

1150 & 1250 W.

Trenton Ave Orange, CA July 30, 2021 2 34,224 9,335 —

MLK 9801 Seattle, WA August 11, 2021 — — 11,900 3.1

MLK 9845 Seattle, WA August 11, 2021 — — 15,750 3.4

MLK 9600 Seattle, WA August 11, 2021 — — 22,350 5.2

Foley Street Hayward, CA August 26, 2021 2 40,504 8,250 —

Paterson Plank III Carlstadt, NJ August 27, 2021 — — 17,850 4.9

97 Third Street Kearny, NJ September 27, 2021 — — 26,250 5.4

13025 Cerise Hawthorne, CA September 30, 2021 1 21,000 7,875 —

Woodinville Woodinville, WA October 1, 2021 1 84,238 23,600 —

190 Morgan Brooklyn, NY October 12, 2021 1 11,881 4,450 —

San Pedro Gardena, CA October 15, 2021 — — 8,800 2.0

228 North Avenue Elizabeth, NJ October 20, 2021 1 30,978 44,000 —

Pickett Alexandria, VA October 29, 2021 1 27,683 9,000 —

Berryessa San Jose, CA October 29, 2021 — — 23,000 7.2

768 772 Ceres Los Angeles, CA November 18, 2021 2 16,887 7,661 —

Tuxedo Hyattsville, MD November 23, 2021 — — 8,000 2.9

Maple II Rancho Dominguez, CA November 30, 2021 — — 13,800 2.3

Eisenhower Alexandria, VA December 10, 2021 3 199,396 60,750 —

4501 46th Street Bladensburg, MD December 13, 2021 — — 11,850 4.4

Countyline #27 & #28 Hialeah, FL December 15, 2021 2 401,906 74,142 —

Woodinville II Woodinville, WA December 23, 2021 2 118,310 33,500 —

Willows Redmond, WA December 27, 2021 — — 3,500 0.8

Total/Weighted Average 34 1,895,024 $ 657,345 52.5

1 Excludes intangible liabilities and mortgage premiums, if any.

The total aggregate initial investment was approximately $ 682.0 million, including $ 12.6 million in capitalized closing costs and acquisition costs and $ 34.2 million in assumed intangible liabilities and $ 22.1 million in other credits related to near term capital expenditures at the Countyline #24 & #25, Countyline #26 and Countyline #27 & #28 properties.

The Company recorded revenues and net income for the year ended December 31, 2021 of approximately $ 12.6 million and $ 4.0 million, respectively, related to the 2021 acquisitions.

During the year ended December 31, 2020, the Company acquired 11 industrial properties with a total initial investment, including acquisition costs, of approximately $ 100.4 million, of which $ 78.8 million was recorded to land, $ 17.0 million to

Table of Content s

buildings and improvements, and $ 4.6 million to intangible assets.

Additionally, the Company assumed $ 2.2 million in liabilities.

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

Property Name Location Acquisition Date Number of

Buildings Square

Feet Purchase Price

(in thousands) 1

Old Bayshore San Jose, CA March 12, 2020 — — $ 11,784 2.7

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

Kent, WA April 17, 2020 — — 4,500

84th Kent Kent, WA April 17, 2020 — — 4,500 2.8

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

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

Aviation Blvd 4

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

Aviation Blvd Inglewood, CA October 26, 2020 — — 10,000 1.9

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

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

Maple Street 5

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

East Marginal 6

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

Maple Street Rancho Dominguez, CA December 5, 2020 — — 9,750 2.5

Marginal Tukwila, WA December 30, 2020 — — 6,625 2.1

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

Total 6 163,794 $ 96,657

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

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

2 An improved land parcel containing approximately 2.7 acres.

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

4 An improved land parcel containing approximately 1.9 acres.

5 An improved land parcel containing approximately 2.5 acres.

6 An improved land parcel containing approximately 2.1 acres.

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

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

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

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

As of December 31, 2020, the Company owned one property under redevelopment expected to contain approximately 0.2 million square feet upon completion with a total expected investment of approximately $ 64.1 million, including redevelopment costs, capitalized interest and other costs of approximately $ 61.4 million.

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

The total investment was approximately $ 49.8 million.

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

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

Property Name Location Acquisition Date Number of

Square Feet Purchase Price

(in thousands) 1

49th Street Queens, NY Februrary 12, 2019 1 19,000 $ 24,017

81 N Hackensack 2

Kearny, NJ March 8, 2019 — — 25,000

48 3rd and 286 Central 3

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

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

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

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

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

Morgan Brooklyn, NY August 29, 2019 2 195,598 80,500

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

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

East Marginal 5

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

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

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

Total 17 699,104 $ 273,610

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

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

2 An improved land parcel containing approximately 16.8 acres.

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

4 An improved land parcel containing approximately 2.0 acres.

5 An improved land parcel containing approximately 0.9 acres.

Total/Weighted Average 6 163,794 $ 96,657 12.0

1 Excludes intangible liabilities and mortgage premiums, if any.

The total aggregate initial investment was approximately $ 100.4 million, including $ 1.6 million in capitalized closing costs and acquisition costs and $ 2.2 million in assumed intangible liabilities.

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

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, issuance of common stock and borrowings on the revolving credit facility.

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 December 31, 2021, the Company had four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.2 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $ 75.8 million, including redevelopment costs, capitalized interest and other costs.

During the fourth quarter of 2021, the Company completed redevelopment of its Sodo Row - North & South property in Seattle, Washington, an approximately 0.2 million square foot redevelopment property.

The total investment was approximately $ 62.8 million.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 0.7 million, $ 1.6 million and $ 3.2 million during the years ended December 31, 2021, 2020 and 2019, respectively.

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

As of December 31, 2021 and 2020, the Company did not have any properties held for sale.

During the year ended December 31, 2021, the Company sold one property located in the Seattle market for a sales price of approximately $ 10.3 million, resulting in a gain of approximately $ 3.2 million, and one property located in the New York/New Jersey market for a sales price of approximately $ 32.7 million, resulting in a gain of approximately $ 13.4 million.

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

market for a total aggregate sales price of approximately $ 51.3 million, resulting in a gain of approximately $ 17.8 million, and one property located in the Miami market for a sales price of approximately $ 22.2 million, resulting in a gain of approximately $ 9.0 million.

Table of Content s

During the year ended December 31, 2019, the Company sold one property in the Los Angeles market for a sales price of approximately $ 12.4 million, resulting in a gain of approximately $ 4.5 million, one redevelopment property in the Miami market for a sales price of approximately $ 14.0 million, resulting in a gain of approximately $ 1.8 million, and two properties located in the Washington, D.C.

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

Senior Secured Loan

The Company had a Senior Secured Loan outstanding to a borrower that bore interest at a fixed annual interest rate of 8.0 % and was fully repaid in May 2020.

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

As of December 31, 2020 and December 31, 2019, there was approximately $ 0 and $ 15.9 million, respectively, net of deferred loan fees of approximately $ 0 and $ 0.1 million, respectively, outstanding on the Senior Secured Loan and approximately $ 0 and $ 0.3 million, respectively, of interest receivable outstanding on the Senior Secured Loan.

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

As of December 31, 2020, the Company had $ 50.0 million of senior unsecured notes that mature in September 2022, $ 100.0 million of senior unsecured notes that mature in July 2024, $ 50.0 million of senior unsecured notes that mature in July 2026, $ 50.0 million of senior unsecured notes that mature in October 2027 and $ 100.0 million of senior unsecured notes that mature in December 2029 (collectively, the “Senior Unsecured Notes”), and a credit facility (the “Facility”), which consists of a $ 250.0 million unsecured revolving credit facility that matures in October 2022 and a $ 100.0 million term loan that matures in January 2022.

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

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

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

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

The aggregate amount of the Facility may be increased to a total of up to $ 600.0 million, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

Outstanding borrowings under the Facility are limited to the lesser of (i) the sum of the $ 250.0 million revolving credit facility and the $ 100.0 million term loan 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 December 31, 2020) for the revolving credit facility and 1.20 % to 1.70 % ( 1.20 % as of December 31, 2020) for the $ 100.0 million term loan that matures in January 2022, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

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

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

The Facility and the Senior Unsecured Notes are unsecured by the Company’s 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 the Company must comply.

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

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

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

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

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

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

2021 $ — $ — $ — $ 11,271 $ 11,271

The following table summarizes the components of the Company’s indebtedness as of December 31, 2021 and 2020 (dollars in thousands):

Margin Above LIBOR Interest Rate 1

Contractual Maturity Date

Unsecured and Secured Debt:

Unsecured Debt:

Credit Facility $ — $ — 1.0 % 2

n/a 8/20/2025

5-Year Term Loan B

100,000 100,000 1.2 % 2

$ 50 M 7 -Year Unsecured 5

50,000 50,000 n/a 4.2 % 9/1/2022

$ 100 M 7 -Year Unsecured 5

100,000 100,000 n/a 3.8 % 7/14/2024

$ 50 M 10 -Year Unsecured 5

50,000 50,000 n/a 4.0 % 7/7/2026

$ 50 M 12 -Year Unsecured 5

50,000 50,000 n/a 4.7 % 10/31/2027

$ 100 M 7 -Year Unsecured 5

100,000 100,000 n/a 2.4 % 7/15/2028

$ 100 M 10 -Year Unsecured 5

100,000 — n/a 3.1 % 12/3/2029

$ 125 M 9 -Year Unsecured 5

125,000 — n/a 2.4 % 8/8/2030

$ 50 M 10 -Year Unsecured 5

50,000 — n/a 2.8 % 7/15/2031

Total Unsecured Debt 725,000 450,000

Secured Debt:

— 11,271 n/a 5.5 % 4/1/2021

Total Secured Debt — 11,271

Total Unsecured and Secured Debt 725,000 461,271

Unamortized premium/discount and debt issuance costs ( 4,330 ) ( 2,153 )

Total $ 720,670 $ 459,118

1 Reflects the contractual interest rate under the terms of each loan as of December 31, 2021.

See footnote (3) below.

Excludes the effects of unamortized debt issuance costs and unamortized fair market value premiums, if any.

2 The interest rates on these loans are comprised of LIBOR plus a LIBOR margin.

The LIBOR margins will range from 1.00 % to 1.45 % ( 1.00 % as of December 31, 2021) for the revolving credit facility and 1.15 % to 1.65 % ( 1.15 % as of December 31, 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.

3 As of December 31, 2020, interest on $ 50.0 million of the $ 100.0 million term loan was effectively capped through the use of an interest rate cap that expired on May 4, 2021.

See “Note 8 - Derivative Financial Instruments” for more information regarding the Company’s prior interest rate cap.

4 Loan was collateralized by one property as of December 31, 2020.

5 Collectively, the “Senior Unsecured Notes”.

On August 20, 2021, a subsidiary of the Company entered into a Sixth Amended and Restated Senior Credit Agreement (the “Amended Facility”) which consists of a $ 250.0 million revolving credit facility that matures in August 2025 and a $ 100.0 million term loan that matures in January 2027.

Among other things, the Amended Facility extended the maturity date of the revolving credit facility and the $ 100.0 million term loan.

As of both December 31, 2021 and 2020, there were no

Table of Content s

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

As of December 31, 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 variable-rate term loan, which expired on May 4, 2021.

See “Note 8 - Derivative Financial Instruments” for more information regarding the Company’s prior interest rate cap.

The aggregate amount of the Amended Facility may be increased to a total of up to $ 650.0 million, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

Outstanding borrowings under the Amended 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 Amended 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 Amended Facility plus 1.25 %.

The applicable LIBOR margin will range from 1.00 % to 1.45 % ( 1.00 % as of December 31, 2021) for the revolving credit facility and 1.15 % to 1.65 % ( 1.15 % as of December 31, 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 Amended 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.

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

The Amended Facility and the Senior Unsecured Notes are not secured by the Company’s properties or by interests in the subsidiaries that hold such properties.

The Amended 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 Amended Facility and the Senior Unsecured Notes as of December 31, 2021 and 2020.

During the year ended December 31, 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 debt was approximately $ 32.7 million.

As of December 31, 2021, the Company did not have any encumbered properties.

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

Facility Term Loan Senior

Notes Total Debt

2022 $ — $ — $ 50,000 $ 50,000

7 unchanged sentences

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of December 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 schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property

Table of Content s

operating expense reimbursements (dollars in thousands):

2022 $ 177,822

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

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

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

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

The 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):

Derivative Instrument Effective

Fair Value Notional Amount

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

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

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

Total $ — $ — $ 50,000 $ 100,000

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 years ended December 31, 2020 and 2019 (dollars in thousands):

Table of Content s

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):

For the Year Ended December 31,

2021 2020 2019

Interest rate caps in cash flow hedging relationships:

1 unchanged sentence

Amount of gain reclassified from AOCI into interest expense (effective portion) $ 183 $ 254 $ 350

The Company estimates that approximately $ 0.2 million will be reclassified from AOCI as an increase to interest expense over the next twelve months.

Fair Value Measurements

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 December 31, 2020 and 2019, 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 December 31, 2020 and 2019 (dollars in thousands):

Fair Value Measurement Using

Total Fair Value Quoted Price in

Active Markets for

Identical Assets and

Significant Other

Interest rate caps at:

December 31, 2020 $ — $ — $ — $ —

December 31, 2019 $ — $ — $ — $ —

Financial Instruments Disclosed at Fair Value

As of December 31, 2021 and 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 derivative instruments were evaluated based on Level 2 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 fair value of the Company’s Senior Secured Loan approximated its carrying value because the interest rate approximates the market lending rate available to the borrower, which is a Level 2 input.

The following table sets forth the carrying value and the estimated fair value of the Company’s Senior Secured Loan and debt as of December 31, 2020 and 2019 (dollars in thousands):

The fair values of the Company’s mortgage loan 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 Amended 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 December 31, 2021 and 2020 (dollars in thousands):

Fair Value Measurement Using

2 unchanged sentences

for Identical

Carrying Value

Senior Secured Loan at:

December 31, 2020 $ — $ — $ — $ — $ —

December 31, 2019 $ 15,915 $ — $ 15,915 $ — $ 15,858

(Level 1) Significant

(Level 2) Significant

(Level 3) Carrying Value

December 31, 2021 $ 743,592 $ — $ 743,592 $ — $ 720,670

3 unchanged sentences

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 ($ 221.4 million remaining as of December 31, 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 $ 250.0 million ATM program (the “$ 250 Million ATM Program”), which was substantially utilized as of May 2019 and is no longer active.

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.

The Company intends to use the net proceeds from the offering of the shares under the $ 300 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions and repayment of indebtedness, including borrowings under the Facility.

During the year ended December 31, 2020, the Company issued an aggregate of 1,197,597 shares of common stock at a weighted average offering price of $ 54.08 per share under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 63.8 million and paying total compensation to the applicable sales agents of approximately $ 0.9 million.

During the year ended December 31, 2019, the Company issued an aggregate of 6,064,576 shares of common stock at a weighted average offering price of $ 45.85 per share under the $ 300 Million ATM Program and the $ 250 Million ATM Program, resulting in net proceeds of approximately $ 274.0 million and paying total compensation to the applicable sales agents of approximately $ 4.0 million.

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

During the year ended December 31, 2021, the Company issued an aggregate of 2,569,771 shares of common stock at a weighted average offering price of $ 63.23 per share under the Previous $300 Million ATM Program and the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 160.1 million and paying total compensation to the applicable sales agents of approximately $ 2.4 million.

During the year ended December 31, 2020, the Company issued an aggregate of 1,197,597 shares of common stock at a

Table of Content s

weighted average offering price of $ 54.08 per share under the Previous $300 Million ATM Program, resulting in net proceeds of approximately $ 63.8 million, and paying total compensation to the applicable sales agents of approximately $ 0.9 million.

On November 8, 2021, the Company completed a public offering of 3,500,000 shares of common stock at a price per share of $ 74.50 .

On November 10, 2021, the Company sold an additional 525,000 shares upon the exercise by the underwriters of their option to purchase additional shares.

The net proceeds of the offering were approximately $ 296.5 million after deducting the underwriting discount and offering costs of approximately $ 3.3 million.

The Company intends to use the net proceeds for general corporate purposes, which may include, without limitation, working capital, repayment of indebtedness, future acquisitions and redevelopments.

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.

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

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

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

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

The program may be suspended or discontinued at any time.

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

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

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

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

No further awards will be made under the 2010 Plan.

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

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

As of December 31, 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 the year ended December 31, 2021 related to this issuance.

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

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

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

1 unchanged sentence

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

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

During the years ended December 31, 2021 and 2020, 136,503 and 139,224 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

As of December 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 1,000,935 were remaining and available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to December 31, 2021 ranged from $ 14.20 to $ 75.28 .

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

The fair value of the restricted stock that was granted during the year ended December 31, 2021 was approximately $ 6.6 million and the vesting period for the restricted stock is typically between one and five years .

As of December 31, 2021, the Company had approximately $ 10.8 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 3.1 years.

The Company recognized compensation costs of approximately $ 2.6 million, $ 1.9 million and $ 1.9 million, respectively, for the years ended December 31, 2020, 2019 and 2018 related to the restricted stock issuances.

The Company recognized compensation costs of approximately $ 3.6 million, $ 2.6 million and $ 1.9 million for the years ended December 31, 2021, 2020 and 2019, respectively, related to the restricted stock issuances.

Table of Content s

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 years ended December 31, 2021, 2020 and 2019:

Restricted Stock Activity:

Shares Weighted

Average Grant

Shares Weighted Average Grant

Date Fair Value

20 unchanged sentences

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.

Table of Content s

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

Fair Value Accrual Expense

Maximum Potential Payout For the Year Ended December 31,

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

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

Fair Value Performance Share Period Maximum Potential Payout Fair Value December 31, 2021 Accrual December 31, 2021 Expense for the Year Ended December 31,

2021 2020 2019

January 1, 2018 - December 31, 2020 $ — $ — $ — $ — $ 3,138 $ 3,208

1 unchanged sentence

Total $ — $ — $ — $ — $ 3,138 $ 6,425

Under the Amended LTIP, which the Company amended and restated on January 8, 2019, each participant’s Performance Share target award for target awards granted on or after January 1, 2019 will be expressed as a number of shares of common stock and settled in shares of common stock.

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

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

1 unchanged sentence

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

For the Year Ended December 31,

Performance Share Period Fair Value on Date of Grant 2020 2019 2018

Performance Share Period Fair Value on Date of Grant Expense for the Year Ended December 31,

2021 2020 2019

January 1, 2019 - December 31, 2021 $ 4,829 $ 1,609 $ 1,610 $ 1,610

January 1, 2020 - December 31, 2022 5,572 1,858 1,857 —

January 1, 2021 - December 31, 2023 5,469 1,822 — —

Total $ 15,870 $ 5,289 $ 3,467 $ 1,610

The following table sets forth the cash dividends paid or payable per share during the years ended December 31, 2021 and 2020:

For the Three

Security Dividend

Declaration Date Record Date Date Paid

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

3 unchanged sentences

For the Three

Security Dividend

Declaration Date Record Date Date Paid

Months Ended Security Dividend

per Share Declaration Date Record Date Date Paid

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

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

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

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

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

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

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

Net Income (Loss) Per Share

2 unchanged sentences

Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period.

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 anti-dilutive securities or dilutive restricted stock awards outstanding for the years ended December 31, 2020, 2019 and 2018.

The Company’s non-vested shares of restricted stock are considered participating securities since these share-based

Table of Content s

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 the years ended December 31, 2021, 2020 and 2019.

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.

6 unchanged sentences

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

Environmental Matters.

The industrial properties that the Company owns and will acquire are subject to various federal, state and local environmental laws.

Under these laws, courts and government agencies have the authority to require the Company, as owner of a contaminated property, to clean up the property, even if it did not know of or was not responsible for the contamination.

These laws also apply to persons who owned a property at the time it became contaminated, and therefore it is possible the Company could incur these costs even after the Company sells some of the properties it acquires.

In addition to the costs of cleanup, environmental contamination can affect the value of a property and, therefore, an owner’s ability to borrow using the property as collateral or to sell the property.

Under applicable environmental laws, courts and government agencies also have the authority to require that a person who sent waste to a waste disposal facility, such as a landfill or an incinerator, pay for the clean-up of that facility if it becomes contaminated and threatens human health or the environment.

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

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

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

An example would be laws that require a business using chemicals to manage them carefully and to notify local officials that the chemicals are being used.

The Company could be responsible for any of the costs discussed above.

The costs to clean up a contaminated property, to defend against a claim, or to comply with environmental laws could be material and could adversely affect the funds available for distribution to its stockholders.

The Company generally obtains “Phase I environmental site assessments”, or ESAs, on each property prior to acquiring it.

However, these ESAs may not reveal all environmental costs that might have a material adverse effect on the Company’s business, assets, results of operations or liquidity and may not identify all potential environmental liabilities.

The Company utilizes local third-party property managers for day-to-day property management and will rely on these third parties to operate its industrial properties in compliance with applicable federal, state and local environmental laws in their daily operation of the respective properties and to promptly notify the Company of any environmental contaminations or similar issues.

As a result, the Company may become subject to material environmental liabilities of which it is unaware.

The Company can make no assurances that (1) future laws or regulations will not impose material environmental liabilities on it, or (2) the environmental condition of the Company’s industrial properties will not be affected by the condition of the properties in the vicinity of its industrial properties (such as the presence of leaking underground storage tanks) or by third parties unrelated to the Company.

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

General Uninsured Losses.

The Company carries property and rental loss, liability and terrorism insurance.

The Company believes that the policy terms, conditions, limits and deductibles are adequate and appropriate under the circumstances, given the relative risk of loss, the cost of such coverage and current industry practice.

In addition, the Company’s properties are located, or may in the future be located, in areas that are subject to earthquake and flood activity.

As a result, the Company has obtained, as applicable, limited earthquake and flood insurance on those properties.

There are, however, certain types of extraordinary losses, such as those due to acts of war that may be either uninsurable or not economically insurable.

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

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

and cash flows from, a property.

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

Contractual Commitments.

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

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

As of February 8, 2022, the Company has five outstanding contracts with third-party sellers to acquire five industrial properties for a total purchase price of approximately $ 125.8 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 February 8, 2022, the Company has four non-binding letters of intent with third-party sellers to acquire four industrial properties for a total anticipated purchase price of approximately $ 94.9 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

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

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

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

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

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

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

Through February 8, 2021, the Company has granted rent deferrals to 62 tenants aggregating approximately 2.8 % of annualized base rent.

No rent abatements were granted.

For the 62 rent deferrals granted:

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

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

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

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

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

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

On February 8, 2022, the Company’s board of directors declared a cash dividend in the amount of $ 0.34 per share of its common stock payable on April 8, 2022 to the stockholders of record as of the close of business on March 25, 2022.

Table of Content s

Terreno Realty Corporation

13 unchanged sentences

747 Glasgow 1 Inglewood, CA — 1,759 1,555 297 1,759 1,852 3,611 526 2014 1981

1150 & 1250 W.

Trenton Ave 2 Orange, CA — 7,491 2,488 — 7,491 2,488 9,979 31 2021 1980 & 1971

13020 & 13030 Cerise 2 Hawthorne, CA — 6,986 1,371 — 6,986 1,371 8,357 17 2021 1956 & 1958

13025 Cerise 1 Hawthorne, CA — 6,864 1,330 — 6,864 1,330 8,194 10 2021 1955

14611 Broadway 1 Gardena, CA — 4,757 1,243 1,551 4,757 2,794 7,551 1,087 2013 1962

4 unchanged sentences

Aviation — Inglewood, CA — 9,544 498 580 9,544 1,078 10,622 32 2020 2013

Ceres Ave 2 Los Angeles, CA — 4,825 2,833 — 4,825 2,833 7,657 9 2021 2015

Dominguez — Los Angeles, CA — 11,370 1,535 3,235 11,370 4,770 16,140 572 2017

1 unchanged sentence

Gladwick 1 Rancho Dominguez, CA — 11,636 5,998 — 11,636 5,998 17,634 279 2020 2009

Gramercy Place 1 Torrance, CA — 4,846 1,503 160 4,846 1,664 6,510 31 2021 2015

Hawthorne 8 Hawthorne, CA — 17,226 10,069 2,253 17,226 12,322 29,548 1,824 2017 1952/1986

4 unchanged sentences

Maple — Rancho Dominguez, CA — 9,371 607 592 9,371 1,199 10,570 82 2020 1978

Maple II — Rancho Dominguez, CA — 14,102 183 — 14,102 183 14,285 1 2021

Porter 1 Los Angeles, CA — 3,791 399 — 3,791 399 4,190 12 2020 1911 & 1968

San Pedro — Gardena, CA — 7,598 1,523 268 7,598 1,791 9,389 17 2021

Shoemaker — Santa Fe Springs, CA — 4,759 1,099 25 4,759 1,124 5,883 119 2018 1986/1997

Slauson — Santa Fe Springs, CA — 4,679 697 957 4,679 1,654 6,333 112 2019 1967/1973

Table of Content s

Gross Amount Carried

at December 31, 2021

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

South Main 2 Carson, CA — 16,371 7,045 17,421 16,371 24,466 40,837 7,448 2012/2014 2016

6 unchanged sentences

New York City

Gross Amount Carried

at December 31, 2020

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

1 Dodge Drive 1 West Caldwell, NJ — 3,819 2,982 2,307 3,819 5,289 9,108 1,903 2013 1985

9 unchanged sentences

85 Doremus — Newark, NJ — 5,918 513 26 5,918 539 6,457 63 2018

97 Third Street — Kearny, NJ — 25,580 1,566 535 25,580 2,101 27,681 22 2021 1970

190 Morgan 1 Brooklyn, NY — 4,363 249 115 4,363 364 4,727 1 2021 1969

341 Michele 1 Carlstadt, NJ — 2,372 4,798 1,175 2,372 5,973 8,345 1,419 2013 1973

6 unchanged sentences

901 North 1 Elizabeth, NJ — 8,035 913 829 8,035 1,742 9,777 558 2016 2016

228 North Ave 1 Elizabeth, NJ — 40,671 5,218 — 40,671 5,218 45,889 29 2021 1975

256 Patterson Plank 1 Carlstadt, NJ — 9,478 1,284 1,585 9,478 2,870 12,348 73 2021 1960

Avenue A 4 Carlstadt, NJ — 7,516 4,660 1,363 7,516 6,023 13,539 953 2017 1951/1957

5 unchanged sentences

JFK Airgate 4 Queens, NY — 18,282 32,933 5,536 18,282 38,469 56,751 10,807 2013 1986/1991

Table of Content s

Gross Amount Carried

at December 31, 2021

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

Manor 1 East Rutherford, NJ — 4,076 5,262 2,329 4,076 7,591 11,667 1,361 2015 1968

Melanie Lane 3 East Hanover, NJ — 5,931 13,178 3,098 5,931 16,276 22,207 3,944 2013 1980/1998

Middlebrook 18 Bound Brook, NJ — 16,442 10,241 14,058 16,442 24,299 40,741 9,999 2010 1958/1976

7 unchanged sentences

Wilson 1 Newark, NJ — 2,016 484 813 2,016 1,297 3,313 387 2016 1970

Gross Amount Carried

at December 31, 2020

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

Woodside 1 Queens, NY — 23,987 3,796 3,972 23,987 7,768 31,755 1,000 2018 2018

11 unchanged sentences

Clawiter 1 Hayward, CA — 5,964 1,159 167 5,964 1,326 7,290 318 2011 1967

East Gish — San Jose, CA — 6,759 726 — 6,759 726 7,485 17 2021 1959

Edison 3 San Leandro, CA — 14,797 2,806 603 14,797 3,409 18,205 80 2021 1975

Foley Street 2 Hayward, CA — 5,023 3,281 475 5,023 3,756 8,778 38 2021 1976 & 1972

Hotchkiss 1 Fremont, CA — 4,163 3,152 1,060 4,163 4,212 8,375 629 2017 1997

8 unchanged sentences

Whitney 3 San Leandro, CA — 13,821 9,016 2,091 13,821 11,107 24,928 1,387 2018 1974

Table of Content s

Gross Amount Carried

at December 31, 2021

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

Wicks 1 San Leandro, CA — 2,224 298 32 2,224 330 2,554 38 2018 1976

1 unchanged sentence

Central Pacific Business Park II 4 Union City, CA 13,642 23,658 5,718 13,642 29,376 43,018 7,354 2015 2015

1st Ave 1 Seattle, WA — 29,441 30,537 3,887 29,441 34,424 63,865 313 2018 1937 & 1967

6th Ave South 1 Seattle, WA — 7,215 8,670 91 7,215 8,761 15,976 443 2020 1960

1 unchanged sentence

68th Kent 2 Kent, WA — 7,465 2,263 19 7,465 2,282 9,746 44 2021 1976

84th Kent — Kent, WA — 4,552 136 313 4,552 449 5,001 49 2020 1963 & 2000

117th Place NE 1 Kirkland, WA — 23,846 9,842 598 23,846 10,440 34,286 237 2021 1978

917 Valley 1 Puyallup, WA — 2,203 4,551 351 2,203 4,902 7,105 268 2019 2006

3 unchanged sentences

12119 East Marginal — Tukwila, WA — 4,950 1,740 — 4,950 1,740 6,690 51 2020 1996

Gross Amount Carried

at December 31, 2020

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

17600 West Valley Highway 1 Tukwila, WA — 3,361 5,260 1,832 3,361 7,092 10,453 2,087 2012 1986

5 unchanged sentences

East Marginal — Renton, WA — 2,618 380 114 2,618 494 3,112 59 2019 1991

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

Hudson 1 Seattle, WA — 4,471 912 245 4,471 1,157 5,628 41 2020 2006

7 unchanged sentences

Lund 1 Auburn, WA — 2,573 4,399 350 2,573 4,749 7,322 738 2016 1999

Occidental Avenue 3 Seattle, WA — 12,550 3,300 592 12,550 3,892 16,442 61 2021 1988

Olympic 1 Tukwila, WA — 1,499 1,431 555 1,499 1,986 3,485 677 2015 1978

MLK 9801 — Seattle, WA — 14,388 1,360 — 14,208 1,360 15,568 20 2021

MLK 9845 — Seattle, WA — 14,436 531 — 15,389 531 15,920 ( 2 ) 2021

MLK 9600 — Seattle, WA — 20,849 1,395 666 20,077 2,061 22,138 44 2021 1957

Table of Content s

Gross Amount Carried

at December 31, 2021

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

SeaTac 8th Avenue 1 Burien, WA — 2,501 4,020 1,912 2,501 5,932 8,433 1,596 2013 1988

SE 32nd Street 1 Bellevue, WA — 9,059 2,081 364 9,059 2,445 11,504 77 2020 1982

SW 16th Street — Renton, WA — 6,251 2,001 — 6,251 2,001 8,252 30 2021 1962

SW 34th 1 Renton, WA — 2,912 3,289 540 2,912 3,829 6,741 918 2014 1996/2010

Valley Corporate 2 Kent, WA — 5,264 9,096 2,232 5,264 11,328 16,592 3,563 2011 1987

Woodinville 1 Woodinville, WA — 12,490 12,244 — 12,490 12,244 24,734 66 2021 1996

Woodinville II 2 Woodinville, WA — 20,941 12,949 — 20,941 12,949 33,890 14 2021 1999

Willows — Redmond, WA — 3,067 581 — 3,067 581 3,647 1 2021 1970

26th Street 1 Miami, FL — 3,444 4,558 1,187 3,444 5,745 9,189 1,398 2012 1973

12 unchanged sentences

131st Street 1 Medley, FL — 2,903 5,729 599 2,903 6,328 9,231 1,483 2014 1999

Gross Amount Carried

at December 31, 2020

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

12950 SW South River 1 Medley, FL — 1,971 4,029 804 1,971 4,833 6,804 750 2016 2000

Americas Gateway 5 Doral, FL — 9,088 9,552 4,039 9,088 13,591 22,679 4,140 2013 1978/1982

Countyline #24 & #25 2 Hialeah, FL — 15,552 27,898 6,636 15,552 34,534 50,086 851 2021 2021 & 2021

Countyline #26 1 Hialeah, FL — 11,826 24,407 4,963 11,826 29,370 41,196 410 2021 2021

Countyline #27 & #28 2 Hialeah, FL — 18,595 49,052 1,050 18,595 50,102 68,697 53 2021 2021 & 2021

Miami International Trade Center 4 Medley, FL — 5,063 10,958 2,468 5,063 13,426 18,489 2,491 2015 1996

5 unchanged sentences

4230 Forbes 1 Lanham, MD — 1,736 2,395 1,160 1,736 3,555 5,291 786 2013 2003

4501 46th Street — Bladensburg, MD — 9,576 1,984 — 9,576 1,984 11,560 2 2021 1955

Business Parkway 1 Lanham, MD — 3,038 3,007 210 3,038 3,217 6,255 436 2016 2002

Eisenhower 3 Alexandria, VA — 36,755 23,768 — 36,755 23,768 60,523 25 2021 1974

Table of Content s

Gross Amount Carried

at December 31, 2021

Property Name No.

Location Encumbrances Land Buildings &

Land Buildings &

Total Accumulated

Depreciation Year

Hampton Overlook 3 Capitol Heights, MD — 4,602 7,521 1,139 4,602 8,660 13,262 1,332 2016 1989/1990

New Ridge — Hanover, MD — 5,689 1,567 443 5,689 2,010 7,699 320 2016

Pickett 1 Alexandria, VA — 6,256 2,850 — 6,256 2,850 9,106 15 2021 1963

Tuxedo — Hyattsville, MD — 6,867 1,266 — 6,867 1,266 8,133 4 2021 1962

V Street 6 Washington, D.C.

4 unchanged sentences

Total 253 $ — $ 1,556,952 $ 952,818 $ 257,773 $ 1,556,952 $ 1,210,591 $ 2,881,669 $ 279,062

Table of Content s

Terreno Realty Corporation

16 unchanged sentences

Balance at end of year $ 279,062 $ 238,073

Table of Content s

Exhibit Index

28 unchanged sentences

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

Table of Content s

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

2 to the Registrant’s Registration Statement on Form S-11 on January 6, 2010 and incorporated by reference herein).

10.14 Fifth Amended and Restated Senior Credit Agreement, dated as of October 19, 2018, among Terreno Realty LLC, KeyBank National Association, both individually as a “Lender” and as “Administrative Agent”, KeyBanc Capital Markets, as joint lead arranger, MUFG Union Bank, N.A., as co-syndication agent and joint lead arranger, PNC Bank, National Association, as co-syndication agent, PNC Capital Markets LLC, as joint lead arranger, Regions Bank, as co-syndication agent, Regions Capital Markets, as joint lead arranger and the several banks, financial institutions and other entities which may from time to time become parties as additional “Lenders” (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on October 25, 2018 and incorporated herein by reference).

10.14 Sixth Amended and Restated Senior Credit Agreement, dated as of August 20, 2021, among Terreno Realty LLC, KeyBank National Association, both individually as a “Lender” and as “Administrative Agent”, MUFG Union Bank, N.A., as co-syndication agent and joint lead arranger, PNC Bank, National Association, as co-syndication agent, PNC Capital Markets LLC, as joint lead arranger, Regions Bank, as co-syndication agent, Regions Capital Markets, as joint lead arranger and the several banks, financial institutions and other entities which may from time to time become parties as additional “Lenders” (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on August 26, 2021 and incorporated herein by reference).

10.15 Note Purchase Agreement, dated as of June 7, 2017, among the Registrant, Terreno Realty LLC and the institutions named in Schedule B thereto as purchasers (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on June 12, 2017 and incorporated herein by reference).

7 unchanged sentences

10.21+ Deferred Compensation Plan of Registrant (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on November 8, 2019 and incorporated herein by reference).

10.22 Note Purchase Agreement, dated as of May 13, 2021, among the Registrant, Terreno Realty LLC and the institutions named in Schedule B thereto as purchasers (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on May 18, 2021 and incorporated herein by reference).

10.23 Note Purchase Agreement, dated as of August 17, 2021, among the Registrant, Terreno Realty LLC and the institutions named in Schedule B thereto as purchasers (previously filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K on August 23, 2021 and incorporated herein by reference).

21* Subsidiaries of Registrant.

1 unchanged sentence

24.1* Power of Attorney (included on the signature page to this Annual Report on Form 10-K).

31.1* Certification of Chief Executive Officer, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* Certification of Chief Financial Officer, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3* Certification of President, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1** Certification of Chief Executive Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2** Certification of Chief Financial Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.3** Certification of President, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

31.1* Rule 13a-14(a)/15d-14(a) Certification dated February 9, 2022 .

31.2* Rule 13a-14(a)/15d-14(a) Certification dated February 9, 2022 .

31.3* Rule 13a-14(a)/15d-14(a) Certification dated February 9, 2022 .

32.1** 18 U.S.C.

§ 1350 Certification dated February 9, 2022 .

32.2** 18 U.S.C.

§ 1350 Certification dated February 9, 2022 .

32.3** 18 U.S.C.

§ 1350 Certification dated February 9, 2022 .

101.SCH* Inline XBRL Taxonomy Extension Schema Document

2 unchanged sentences

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document

Table of Content s

101.DEF* Inline XBRL Taxonomy Definition Linkbase Document

104* Cover Page Interactive Data File (formatted as inline XBRL and with applicable taxonomy extension information contained in Exhibits 101.*)

________________

* Filed herewith.

1 unchanged sentence

+ Exhibit is a management contract or compensatory plan or arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on February 10, 2021.

Table of Content s

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Bellevue, State of Washington, on February 9, 2022.

Terreno Realty Corporation

5 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Table of Content s

Signature Title Date

Chairman, Chief Executive Officer

Blake Baird Chairman, Chief Executive Officer

(principal executive officer)

1 unchanged sentence

/s/ Michael A.

President and Director February 10, 2021

Executive Vice President and Chief

Coke President and Director February 9, 2022

Cannon Executive Vice President and Chief

Financial Officer

1 unchanged sentence

February 9, 2022

/s/ Linda Assante

Linda Assante Director February 10, 2021

Director February 10, 2021

/s/ Linda Assante Director February 9, 2022

Linda Assante

Carlson Director February 9, 2022

Lee Director February 9, 2022

/s/ Gabriela F.

Director February 10, 2021

Parcella Director February 9, 2022

/s/ Douglas M.

Director February 10, 2021

/s/ Dennis Polk

Director February 10, 2021

Pasquale Director February 9, 2022

/s/ Dennis Polk Director February 9, 2022

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

What changed 10-K

Item 9A. Controls and Procedures