Terreno Realty Corp 10-K

Item 9A. Controls And Procedures. Evaluation of Disclosure Controls and Procedures 50 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. Management’s Annual Report on Internal Control Over Financial Reporting Terreno Realty Corporation’s management is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system was designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Terreno Realty Corporation’s management assessed the effectiveness of its internal control over financial reporting as of December 31, 2021. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). Based on its assessment, management of Terreno Realty Corporation believes that, as of December 31, 2021, the company’s internal control over financial reporting is effective based on those criteria. 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). 51 Table of Content s Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Terreno Realty Corporation Opinion on Internal Control Over Financial Reporting We have audited Terreno Realty Corporation’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Terreno Realty Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 of the Company and our report dated February 9, 2022 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP San Francisco, California February 9, 2022 52 Table of Content s Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. 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. Ms. 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. Ms. 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. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. Part III Item 10. Directors, Executive Officers and Corporate Governance. The information required by Item 10 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. Item 11. Executive Compensation. The information required by Item 11 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. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by Item 12 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. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by Item 13 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. Item 14. Principal Accounting Fees and Services. 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. 53 Table of Content s Part IV Item 15. Exhibits and Financial Statement Schedules. (a) 1. and 2. Financial Statements and Schedules 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: Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 57 Consolidated Balance Sheets as of December 31, 2021 and 2020 59 Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 60 Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 61 Consolidated Statements of Equity for the years ended December 31, 2021, 2020 and 2019 62 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 63 Notes to Consolidated Financial Statements 64 Schedule III – Real Estate Investments and Accumulated Depreciation 1 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted, or the required information is included in the consolidated financial statements and notes thereto. 3. Exhibits The exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index at the end of this Annual Report on Form 10-K immediately preceding the signature page, which is incorporated by reference herein. Item 16. Form 10-K Summary. None. 54 Table of Content s Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Terreno Realty Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Terreno Realty Corporation (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income , equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 9, 2022 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (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 it relates. 55 Table of Content s Valuation of acquired properties 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. As further discussed in Notes 2 and 4 of the consolidated financial statements, the transactions were accounted for as asset acquisitions. The purchase price for each acquisition was allocated to the individual acquired assets and liabilities based on their relative fair values. Auditing the Company’s real estate acquisitions is complex and required the involvement of a valuation specialist due to the judgments and estimates in determining the fair value of the components of each acquisition. The fair value of the tangible assets is determined by valuing the property as if it were vacant. Land values are derived from current comparative sales values, when available, or management’s estimates of the fair value based on market conditions and the experience of the Company’s management team. Building and improvement values are calculated as replacement cost less depreciation, or management’s estimates of the fair value of these assets using discounted cash flow analyses or similar methods. The fair value of the above and below-market leases is based on the present value of the difference between the contractual amounts to be received pursuant to the acquired leases (using a discount rate that reflects the risks associated with the acquired leases) and the Company’s estimate of the market lease rates measured over a period equal to the remaining term of the leases plus the term of any below-market fixed rate renewal options. All of these assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in the markets in which the Company’s acquisitions occur. 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. 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. We also tested the completeness and accuracy of the underlying data. We involved our valuation specialists to assist in the assessment of the methodology utilized by the Company and to test certain of the assumptions used in the valuation of land, building and above and below market intangibles. /s/ Ernst & Young LLP We have served as the Company‘s auditor since 2012. San Francisco, California February 9, 2022 56 Table of Content s Terreno Realty Corporation Consolidated Balance Sheets (in thousands – except share and per share data) December 31, 2021 December 31, 2020 ASSETS Investments in real estate Land $ 1,556,952 $ 1,138,233 Buildings and improvements 1,210,591 942,688 Construction in progress 65,157 61,448 Intangible assets 114,126 88,859 Total investments in properties 2,946,826 2,231,228 Accumulated depreciation and amortization ( 279,062 ) ( 238,073 ) Net investments in real estate 2,667,764 1,993,155 Cash and cash equivalents 204,404 107,180 Restricted cash 397 656 Other assets, net 51,650 38,829 Total assets $ 2,924,215 $ 2,139,820 LIABILITIES AND EQUITY Liabilities Credit facility $ — $ — Term loans payable, net 99,495 99,791 Senior unsecured notes, net 621,175 348,063 Mortgage loan payable, net — 11,264 Security deposits 23,914 13,870 Intangible liabilities, net 51,025 24,608 Dividends payable 25,618 19,870 Performance share awards payable — 7,482 Accounts payable and other liabilities 45,025 26,688 Total liabilities 866,252 551,636 Commitments and contingencies (Note 12) Equity Stockholders’ equity Common stock: $ 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. 752 686 Additional paid-in capital 2,069,604 1,589,301 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 Accumulated other comprehensive loss — ( 183 ) Total stockholders’ equity 2,057,963 1,588,184 Total liabilities and equity $ 2,924,215 $ 2,139,820 The accompanying notes are an integral part of these consolidated financial statements. 57 Table of Content s Terreno Realty Corporation Consolidated Statements of Operations (in thousands – except share and per share data) For the Year Ended December 31, 2021 2020 2019 REVENUES Rental revenues and tenant expense reimbursements $ 221,930 $ 186,884 $ 171,022 Total revenues 221,930 186,884 171,022 COSTS AND EXPENSES Property operating expenses 56,248 49,096 44,201 Depreciation and amortization 50,687 45,875 44,015 General and administrative 26,964 23,489 23,924 Acquisition costs 172 271 45 Total costs and expenses 134,071 118,731 112,185 OTHER INCOME (EXPENSE) Interest and other income 822 873 3,815 Interest expense, including amortization ( 18,054 ) ( 15,997 ) ( 16,338 ) Loss on extinguishment of debt — — ( 189 ) Gain on sales of real estate investments 16,627 26,766 9,391 Total other income (expense) ( 605 ) 11,642 ( 3,321 ) Net income 87,254 79,795 55,516 Allocation to participating securities ( 311 ) ( 400 ) ( 351 ) 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 $ 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 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 70,793,670 68,170,066 64,722,976 The accompanying notes are an integral part of these consolidated financial statements. 58 Table of Content s Terreno Realty Corporation Consolidated Statements of Comprehensive Income (in thousands) For the Year Ended December 31, 2021 2020 2019 Net income $ 87,254 $ 79,795 $ 55,516 Other comprehensive income: Cash flow hedge adjustment 183 254 324 Comprehensive income $ 87,437 $ 80,049 $ 55,840 The accompanying notes are an integral part of these consolidated financial statements. 59 Table of Content s Terreno Realty Corporation Consolidated Statements of Equity (in thousands – except share data) Common Stock Additional Paid- in Capital Common Shares Held in Deferred Compensation Plan Deferred Compensation Plan Retained Earnings Accumulated Other Comprehensive Loss Number of Shares Amount Total Balance as of December 31, 2018 61,013,711 $ 610 $ 1,233,763 — $ — $ 14,185 $ ( 761 ) $ 1,247,797 Net income — — — — — 55,516 — 55,516 Issuance of common stock, net of issuance costs of $ 4,593 6,271,863 63 280,436 — — — — 280,499 Repurchase of common stock related to employee awards ( 143,886 ) — ( 3,959 ) — — — — ( 3,959 ) Issuance of restricted stock 111,099 — — — — — — — Stock-based compensation — — 4,026 — — — — 4,026 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 Net income — — — — — 79,795 — 79,795 Issuance of common stock, net of issuance costs of $ 1,406 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 ) Issuance of restricted stock 78,041 — — — — — — — Stock-based compensation — — 6,688 — — — — 6,688 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 Balance as of December 31, 2020 68,376,364 686 1,589,301 139,224 ( 7,546 ) 5,926 ( 183 ) 1,588,184 Net income — — — — — 87,254 — 87,254 Issuance of common stock, net of issuance costs of $ 6,123 6,736,455 66 463,680 — — — — 463,746 Forfeiture of common stock related to employee awards ( 776 ) — — — — — — — Repurchase of common stock related to employee awards ( 6,534 ) — ( 582 ) — — — — ( 582 ) Issuance of restricted stock 99,569 — — — — — — — Stock-based compensation — — 9,554 — — — — 9,554 Common stock dividends ($ 1.26 per share) — — — — — ( 90,376 ) — ( 90,376 ) Deposits to deferred compensation plan ( 136,503 ) — 7,651 136,503 ( 7,651 ) — — — Other comprehensive income — — — — — — 183 183 Balance as of December 31, 2021 75,068,575 $ 752 $ 2,069,604 275,727 $ ( 15,197 ) $ 2,804 $ — $ 2,057,963 The accompanying notes are an integral part of these consolidated financial statements. 60 Table of Content s Terreno Realty Corporation Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 87,254 $ 79,795 $ 55,516 Adjustments to reconcile net income to net cash provided by operating activities Straight-line rents ( 8,683 ) ( 361 ) ( 2,597 ) Amortization of lease intangibles ( 7,686 ) ( 5,420 ) ( 4,682 ) Depreciation and amortization 50,687 45,875 44,015 Loss on extinguishment of debt — — 189 Gain on sales of real estate investments ( 16,627 ) ( 26,766 ) ( 9,391 ) Deferred financing cost amortization 1,335 1,391 1,562 Deferred senior secured loan fee amortization — ( 57 ) ( 531 ) Stock-based compensation 9,554 9,826 10,644 Changes in assets and liabilities Other assets ( 3,669 ) ( 3,911 ) ( 1,579 ) Accounts payable and other liabilities 20,043 678 1,542 Net cash provided by operating activities 132,208 101,050 94,688 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for property acquisitions ( 644,956 ) ( 98,088 ) ( 238,661 ) Proceeds from sales of real estate investments, net 41,082 70,685 47,133 Additions to construction in progress ( 11,274 ) ( 8,989 ) ( 27,884 ) Additions to buildings, improvements and leasing costs ( 51,290 ) ( 31,611 ) ( 32,070 ) Repayments on senior secured loan — 15,915 — Net cash used in investing activities ( 666,438 ) ( 52,088 ) ( 251,482 ) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 462,386 64,767 278,058 Issuance costs on issuance of common stock ( 5,683 ) ( 940 ) ( 4,023 ) Repurchase of common stock related to employee awards ( 582 ) ( 9,837 ) ( 3,959 ) Borrowings on credit facility 75,000 — 17,000 Payments on credit facility ( 75,000 ) — ( 36,000 ) Payments on term loans payable — — ( 50,000 ) Borrowings on senior unsecured notes 275,000 — 100,000 Payments on mortgage loans payable ( 11,271 ) ( 33,077 ) ( 1,514 ) Payment of deferred financing costs ( 4,027 ) — ( 943 ) Dividends paid to common stockholders ( 84,628 ) ( 74,778 ) ( 63,565 ) 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 Cash and cash equivalents and restricted cash at end of year $ 204,801 $ 107,836 $ 112,739 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest, net of capitalized interest 15,144 16,315 18,351 Supplemental disclosures of non-cash transactions Accounts payable related to capital improvements 16,873 10,552 12,498 Non-cash issuance of common stock to the deferred compensation plan ( 7,651 ) ( 7,546 ) — Non-cash repayment of senior secured loan — — ( 39,085 ) Lease liability arising from recognition of right-of-use asset 3,287 — 647 Reconciliation of cash paid for property acquisitions Acquisition of properties 681,970 100,391 250,506 Assumption of other assets and liabilities ( 37,014 ) ( 2,303 ) ( 11,845 ) Net cash paid for property acquisitions $ 644,956 $ 98,088 $ 238,661 The accompanying notes are an integral part of these consolidated financial statements. 61 Table of Content s Terreno Realty Corporation Notes to Consolidated Financial Statements Note 1. Organization Terreno Realty Corporation (“Terreno”, and together with its subsidiaries, the “Company”) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. 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. Note 2. Significant Accounting Policies Basis of Presentation. The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include all of the Company’s accounts and its subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Capitalization of Costs. The Company capitalizes costs directly related to the redevelopment, renovation and expansion of its investment in real estate. Costs associated with such projects are capitalized as incurred. If the project is abandoned, these costs are expensed during the period in which the redevelopment, renovation or expansion project is abandoned. Costs considered for capitalization include, but are not limited to, construction costs, interest, real estate taxes and insurance, if appropriate. These costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. Costs incurred for maintaining and repairing properties, which do not extend their useful lives, are expensed as incurred. Interest is capitalized based on actual capital expenditures from the period when redevelopment, renovation or expansion commences until the asset is ready for its intended use, at the weighted average borrowing rate during the period. Investments in Real Estate. Investments in real estate, including tenant improvements, leasehold improvements and leasing costs, are stated at cost, less accumulated depreciation, unless circumstances indicate that the cost cannot be recovered, in which case, an adjustment to the carrying value of the property is made to reduce it to its estimated fair value. The Company also reviews the impact of above and below-market leases, in-place leases and lease origination costs for acquisitions and records an intangible asset or liability accordingly. Impairment. Carrying values for financial reporting purposes are reviewed for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. Examples of such events or changes in circumstances may include classifying an asset to be held for sale, changing the intended hold period or when an asset remains vacant significantly longer than expected. The intended use of an asset either held for sale or held for use can significantly impact how impairment is measured. If an asset is intended to be held for the long-term, the recoverability is based on the undiscounted future cash flows. If the asset carrying value is not supported on an undiscounted future cash flow basis, then the asset carrying value is measured against the lower of cost or the present value of expected cash flows over the expected hold period. An impairment charge to earnings is recognized for the excess of the asset’s carrying value over the lower of cost or the present values of expected cash flows over the expected hold period. 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 62 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. If available, current comparative sales values may also be used to establish fair value. When market information is not readily available, the inputs are based on the Company’s understanding of market conditions and the experience of the Company’s management team. Actual results could differ significantly from the Company’s estimates. The discount rates used in the fair value estimates represent a rate commensurate with the indicated holding period with a premium layered on for risk. There were no impairment charges recorded to the carrying values of the Company’s properties during the years ended December 31, 2021, 2020 or 2019. Property Acquisitions. 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. 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). The Company determines fair values using Level 3 inputs such as replacement cost, estimated cash flow projections and other valuation techniques and applying appropriate discount and capitalization rates based on available market information. Mortgage loans assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the date of acquisition. Acquisition-related costs associated with asset acquisitions are capitalized to individual tangible and intangible assets and liabilities assumed on a relative fair value basis and acquisition-related costs associated with business combinations are expensed as incurred. The fair value of the tangible assets is determined by valuing the property as if it were vacant. Land values are derived from current comparative sales values, when available, or management’s estimates of the fair value based on market conditions and the experience of the Company’s management team. Building and improvement values are calculated as replacement cost less depreciation, or management’s estimates of the fair value of these assets using discounted cash flow analyses or similar methods. The fair value of the above and below-market leases is based on the present value of the difference between the contractual amounts to be received pursuant to the acquired leases (using a discount rate that reflects the risks associated with the acquired leases) and the Company’s estimate of the market lease rates measured over a period equal to the remaining term of the leases plus the term of any below-market fixed rate renewal options. The above and below-market lease values are amortized to rental revenues over the remaining initial term plus the term of any below-market fixed rate renewal options that are considered bargain renewal options of the respective leases. The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 7.7 million, $ 5.4 million and $ 4.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. The origination value of in-place leases is based on costs to execute similar leases, including commissions and other related costs. The origination value of in-place leases also includes real estate taxes, insurance and an estimate of lost rental revenue at market rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition. The remaining weighted average lease term related to these intangible assets and liabilities as of 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): December 31, 2021 December 31, 2020 Gross Accumulated Amortization Net Gross Accumulated Amortization Net In-place leases $ 110,351 $ ( 72,266 ) $ 38,085 $ 85,026 $ ( 64,668 ) $ 20,358 Above-market leases 3,775 ( 3,706 ) 69 3,833 ( 3,697 ) 136 Below-market leases ( 78,753 ) 27,728 ( 51,025 ) ( 45,798 ) 21,190 ( 24,608 ) Total $ 35,373 $ ( 48,244 ) $ ( 12,871 ) $ 43,061 $ ( 47,175 ) $ ( 4,114 ) 63 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): 2022 $ 615 2023 279 2024 ( 734 ) 2025 ( 1,245 ) 2026 ( 1,330 ) Thereafter ( 10,456 ) Total $ ( 12,871 ) Depreciation and Useful Lives of Real Estate and Intangible Assets. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets or liabilities. The following table reflects the standard depreciable lives typically used to compute depreciation and amortization. However, such depreciable lives may be different based on the estimated useful life of such assets or liabilities. Description Standard Depreciable Life Land Not depreciated Building 40 years Building Improvements 5 - 40 years Tenant Improvements Shorter of lease term or useful life Leasing Costs Lease term In-place Leases Lease term Above/Below-Market Leases Lease term Held for Sale 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. Cash and Cash Equivalents. Cash and cash equivalents consists of cash held in a major banking institution and other highly liquid short-term investments with original maturities of three months or less. Cash equivalents are generally invested in U.S. government securities, government agency securities or money market accounts. Restricted Cash. Restricted cash includes cash held in escrow in connection with property acquisitions and reserves for certain capital improvements, leasing, interest and real estate tax and insurance payments as required by certain mortgage loan obligations. The following summarizes the reconciliation of cash and cash equivalents and restricted cash as presented in the accompanying consolidated statements of cash flows (dollars in thousands): For the Year Ended December 31, 2021 2020 2019 Beginning Cash and cash equivalents at beginning of year $ 107,180 $ 110,082 $ 31,004 Restricted cash 656 2,657 3,475 Cash and cash equivalents and restricted cash 107,836 112,739 34,479 Ending Cash and cash equivalents at end of year 204,404 107,180 110,082 Restricted cash 397 656 2,657 Cash and cash equivalents and restricted cash 204,801 107,836 112,739 Net increase (decrease) in cash and cash equivalents and restricted cash $ 96,965 $ ( 4,903 ) $ 78,260 64 Table of Content s Revenue Recognition. The Company records rental revenue from operating leases on a straight-line basis over the term of the leases and maintains an allowance for estimated losses that may result from the inability of its tenants to make required payments. If tenants fail to make contractual lease payments that are greater than the Company’s allowance for doubtful accounts, security deposits and letters of credit, then the Company may have to recognize additional doubtful account charges in future periods. The Company monitors the liquidity and creditworthiness of its tenants on an on-going basis by reviewing their financial condition periodically as appropriate. Each period the Company reviews its outstanding accounts receivable, including straight-line rents, for doubtful accounts and provides allowances as needed. The Company also records lease termination fees when a tenant has executed a definitive termination agreement with the Company and the payment of the termination fee is not subject to any conditions that must be met or waived before the fee is due to the Company. If a tenant remains in the leased space following the execution of a definitive termination agreement, the applicable termination will be deferred and recognized over the term of such tenant’s occupancy. 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, 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, 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. The Company elected to be taxed as a REIT under the Code and operates as such beginning with its taxable year ended December 31, 2010. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. If it fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the IRS grants it relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes it is organized and operates in such a manner as to qualify for treatment as a REIT. ASC 740-10, Income Taxes (“ASC 740-10”) , provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740-10 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. 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, 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. The Company follows the provisions of ASC 718, Compensation-Stock Compensation, to account for its stock-based compensation plan, which requires that the compensation cost relating to stock-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The Company’s 2019 Equity Incentive Plan (the “2019 Plan”) provides for the grant of restricted stock awards, performance share awards, unrestricted shares or any combination of the foregoing. Stock-based compensation is recognized as a general and administrative expense in the accompanying consolidated statements of operations and measured at the fair value of the award on the date of grant. The Company estimates the forfeiture rate based on historical experience as well as expected behavior. 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 65 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. REIT Index (RMS) and the FTSE Nareit Equity Industrial Index over the pre-established performance measurement period. Under the Amended LTIP, each participant’s Performance Share award granted on or after January 1, 2019 will be expressed as a number of shares of common stock and settled in shares of common stock. Target awards were previously expressed as a dollar amount and settled in shares of common stock. Commencing with Performance Share awards granted on or after January 1, 2019, the grant date fair value of the Performance Share awards will be determined under current accounting treatment using a Monte Carlo simulation model on the date of grant and recognized on a straight-line basis over the performance period. For Performance Share awards granted prior to January 1, 2019, the Company estimates the fair value of the Performance Share awards using a Monte Carlo simulation model on the date of grant and at each reporting period. The Performance Share awards granted prior to January 1, 2019 are recognized as compensation expense over the requisite performance period based on the fair value of the Performance Share awards at the balance sheet date, which varies quarter to quarter based on the Company’s relative share price performance, and are included as a component of performance share awards payable in the accompanying consolidated balance sheets. Use of Derivative Financial Instruments. ASC 815, Derivatives and Hedging (See “Note 8 – Derivative Financial Instruments”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why the Company uses derivative instruments, (b) how the Company accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments. The Company records all derivatives on the accompanying consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. Fair Value of Financial Instruments . 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). Segment Disclosure. ASC 280, Segment Reporting , establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate are geographically diversified and the chief operating decision makers evaluate operating performance on an individual asset level. As each of the Company’s assets has similar economic characteristics, the assets have been aggregated into one reportable segment. Note 3. Concentration of Credit Risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company may maintain deposits in federally insured financial institutions in excess of federally insured limits. 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. 66 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. Other real estate companies compete with the Company in its real estate markets. This results in competition for tenants to occupy space. The existence of competing properties could have a material impact on the Company’s ability to lease space and on the level of rent that can be achieved. The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent for the years ended December 31, 2021, 2020 and 2019. Note 4. Investments in Real Estate 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: 67 Table of Content s Property Name Location Acquisition Date Number of Buildings Square Feet Purchase Price (in thousands) 1 Acreage 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 68 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 Acreage Old Bayshore San Jose, CA March 12, 2020 — — $ 11,784 2.7 Gladwick Rancho Dominguez, CA March 12, 2020 1 65,670 17,950 — 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 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 Rancho Dominguez, CA December 5, 2020 — — 9,750 2.5 E. Marginal Tukwila, WA December 30, 2020 — — 6,625 2.1 McLaren Irvine, CA December 30, 2020 1 11,348 8,000 — 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 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. Note 5. Held for Sale/Disposed Assets The Company considers a property to be held for sale when it meets the criteria established under ASC 360, Property, Plant, and Equipment . 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, 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. 69 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. Note 6. Debt The following table summarizes the components of the Company’s indebtedness as of December 31, 2021 and 2020 (dollars in thousands): 2021 2020 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 1.2 % 3 1/1/2027 $ 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: Belleville 4 — 11,271 n/a 5.5 % 4/1/2021 Total Secured Debt — 11,271 Total Unsecured and Secured Debt 725,000 461,271 Less: 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 70 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): Credit Facility Term Loan Senior Unsecured Notes Total Debt 2022 $ — $ — $ 50,000 $ 50,000 2023 — — — — 2024 — — 100,000 100,000 2025 — — — — 2026 — — 50,000 50,000 Thereafter — 100,000 425,000 525,000 Total debt — 100,000 625,000 725,000 Deferred financing costs, net — ( 505 ) ( 3,825 ) ( 4,330 ) Total debt, net $ — $ 99,495 $ 621,175 $ 720,670 Weighted average interest rate n/a 1.2 % 3.2 % 2.9 % Note 7. Leasing 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 71 Table of Content s operating expense reimbursements (dollars in thousands): 2022 $ 177,822 2023 161,239 2024 139,955 2025 115,919 2026 90,491 Thereafter 188,173 Total $ 873,599 Note 8. Derivative Financial Instruments Risk Management Objective of Using Derivatives The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. 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 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 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. The Company does not use derivatives for trading or speculative purposes. The Company requires that hedging derivative instruments be highly effective in reducing the risk exposure that they are designated to hedge. As a result, there is no significant ineffectiveness from any of its derivative activities. The accounting for changes in fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative that is designated and that qualifies as a cash flow hedge, the effective portion of the change in fair value of the derivative is initially recorded in accumulated other comprehensive income (loss) (“AOCI”). Amounts recorded in AOCI are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. 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, 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. 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. 72 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: Amount of gain recognized in AOCI on derivatives (effective portion) $ — $ — $ ( 26 ) Amount of gain reclassified from AOCI into interest expense (effective portion) $ 183 $ 254 $ 350 Note 9. Fair Value Measurements ASC 820 requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). 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 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 Total Fair Value Quoted Price in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Carrying Value Liabilities Debt at: December 31, 2021 $ 743,592 $ — $ 743,592 $ — $ 720,670 December 31, 2020 $ 481,809 $ — $ 481,809 $ — $ 459,118 Note 10. Stockholders’ Equity The Company’s authorized capital stock consists of 400,000,000 shares of common stock, $ 0.01 par value per share, and 100,000,000 shares of preferred stock, $ 0.01 par value per share. The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 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 previous at-the-market equity offering program (the “Previous $300 Million ATM Program”), which was substantially utilized as of June 10, 2021 and is no longer active. Actual sales under the $ 300 Million ATM Program, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock, determinations by the Company of the appropriate sources of funding for the Company and potential uses of funding available to the Company. During the 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 73 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 program may be suspended or discontinued at any time. 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. 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. The shares held in the Deferred Compensation Plan are classified within stockholders’ equity in a manner similar to the manner in which treasury stock is classified. Subsequent changes in the fair value of the shares are not recognized. During the 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, 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 $ 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. 74 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 Date Fair Value Non-vested shares outstanding as of December 31, 2018 383,930 $ 22.98 Granted 111,099 46.99 Forfeited ( 52,892 ) 31.02 Vested ( 15,367 ) 23.90 Non-vested shares outstanding as of December 31, 2019 426,770 28.20 Granted 78,041 60.11 Forfeited ( 5,146 ) 51.58 Vested ( 295,936 ) 21.07 Non-vested shares outstanding as of December 31, 2020 203,729 50.19 Granted 99,569 65.90 Forfeited ( 776 ) 59.29 Vested ( 13,336 ) 43.04 Non-vested shares outstanding as of December 31, 2021 289,186 $ 55.90 The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of December 31, 2021: Non-vested Shares Vesting Schedule Number of Shares 2022 42,295 2023 45,973 2024 92,056 2025 57,540 2026 51,322 Thereafter — Total Non-vested Shares 289,186 Long-Term Incentive Plan: As of December 31, 2021, there are three open performance measurement periods for the Performance Share awards: January 1, 2019 to December 31, 2021, January 1, 2020 to December 31, 2022, and January 1, 2021 to December 31, 2023. During the year ended December 31, 2021, the Company issued 131,322 shares of common stock at a price of $ 55.75 per share related to the Performance Share awards for the performance period from January 1, 2018 to December 31, 2020. The expense related to the open Performance Share awards granted prior to January 1, 2019 varies quarter to quarter based on the Company’s relative share price performance. 75 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 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 January 1, 2017 - December 31, 2019 — — — — — 3,217 Total $ — $ — $ — $ — $ 3,138 $ 6,425 Under the Amended LTIP, each participant’s Performance Share target award for target awards granted on or after January 1, 2019 will be expressed as a number of shares of common stock and settled in shares of common stock. Target awards were previously expressed as a dollar amount and settled in shares of common stock. Commencing with Performance Share awards granted on or after January 1, 2019, the grant date fair value of the Performance Share awards will be determined under current accounting treatment using a Monte Carlo simulation model on the date of grant and recognized on a straight-line basis over the performance period. The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2019 (dollars in thousands): Performance Share Period Fair Value on Date of Grant Expense for the 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 Dividends: 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 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 June 30, 2021 Common stock $ 0.29 May 4, 2021 June 30, 2021 July 14, 2021 September 30, 2021 Common stock $ 0.34 August 3, 2021 October 1, 2021 October 15, 2021 December 31, 2021 Common stock $ 0.34 November 2, 2021 December 15, 2021 January 5, 2022 For the Three 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, 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 Note 11. Net Income (Loss) Per Share Pursuant to ASC 260-10-45, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities , unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing earnings per share allocates earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. 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 76 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. Under this method, allocations were made to 245,075 , 341,673 and 402,380 of weighted average unvested restricted shares outstanding for the years ended December 31, 2021, 2020 and 2019, respectively. Performance Share awards which may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period are included as contingently issuable shares in the calculation of diluted weighted average common shares of stock outstanding assuming the reporting period is the end of the measurement period, and the effect is dilutive. Diluted shares related to the Performance Share awards were 259,468 , 407,139 and 294,570 for the years ended December 31, 2021, 2020 and 2019, respectively. Note 12. Commitments and Contingencies Litigation . The Company is not involved in any material litigation nor, to its knowledge, is any material litigation threatened against it. In the normal course of business, from time to time, the Company may be involved in legal actions relating to the ownership and operations of its properties. Management does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material effect on the consolidated financial position, results of operations or cash flows of the Company. Contractual Commitments. 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. Note 13. Subsequent Events 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. 77 Table of Content s Terreno Realty Corporation Schedule III Real Estate Investments and Accumulated Depreciation As of December 31, 2021 (in thousands) Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2021 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed Los Angeles 104th Street 1 Los Angeles, CA $ — $ 3,701 $ 976 $ 206 $ 3,701 $ $ 1,182 $ $ 4,883 $ 129 2017 1951 139th Street 2 Carson, CA — 21,236 15,783 2 21,236 15,785 37,021 1,677 2017 1965/2003 630 Glasgow 1 Inglewood, CA — 2,245 1,855 474 2,245 2,329 4,574 810 2011 1988 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 19601 Hamilton 1 Torrance, CA — 7,409 4,072 1,338 7,409 5,410 12,819 1,562 2011 1985 709 Hindry 1 Inglewood, CA — 2,105 2,972 214 2,105 3,186 5,291 531 2016 1984 Acacia 1 Compton, CA — 5,143 1,985 203 5,143 2,188 7,331 325 2017 1972 Anderson 5 Los Angeles, CA — 17,095 1,271 3,037 17,095 4,308 21,403 193 2019 1912-1987 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 Garfield 5 Commerce, CA — 27,539 22,694 4,924 27,539 27,618 55,157 9,293 2012 2002 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 Las Hermanas 1 Compton, CA — 3,330 751 805 3,330 1,556 4,886 455 2014 1970 Lynwood 3 Lynwood, CA — 43,885 — — 43,885 — 43,885 — 2017 1988 McLaren 1 Irvine, CA — 7,459 668 — 7,459 668 8,127 25 2020 1982 Manhattan Beach 1 Redondo Beach, CA — 7,874 5,641 1,182 7,874 6,823 14,697 1,799 2012 1963/1970 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 1 Table of Content s Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2021 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed South Main 2 Carson, CA — 16,371 7,045 17,421 16,371 24,466 40,837 7,448 2012/2014 2016 South Main III 1 Gardena, CA — 11,521 12,467 787 11,521 13,254 24,775 1,517 2017 2016 Telegraph Springs 2 Santa Fe Springs, CA — 7,063 7,236 571 7,063 7,807 14,870 1,051 2017 2007 Vermont 1 Torrance, CA — 10,173 7,105 238 10,173 7,343 17,516 822 2018 1978 1215 Walnut 1 Compton, CA — 6,130 2,522 10 6,130 2,532 8,662 315 2017 1969/1990 Walnut II 1 Compton, CA — 6,097 5,069 955 6,097 6,024 12,121 648 2018 1969 Northern New Jersey/ New York City 1 Dodge Drive 1 West Caldwell, NJ — 3,819 2,982 2,307 3,819 5,289 9,108 1,903 2013 1985 17 Madison 1 Fairfield, NJ — 974 1,647 543 974 2,190 3,164 758 2013 1979 20 Pulaski 1 Bayonne, NJ — 4,003 4,946 1,864 4,003 6,810 10,813 1,726 2014 1965 22 Madison 1 Fairfield, NJ — 1,365 1,607 1,140 1,365 2,747 4,112 419 2015 1979 48th 3rd and 286 Central 1 Kearny, NJ — 12,061 1,664 452 12,061 2,116 14,177 169 2019 1978/1983 49th Street 1 Queens, NY — 21,674 2,999 1,435 21,674 4,434 26,108 604 2019 1966 50 Kero 2 Carlstadt, NJ — 10,343 3,876 3,515 10,343 7,391 17,734 1,068 2017 1970 51 Kero — Carlstadt, NJ — 3,236 589 301 3,236 890 4,126 46 2019 1956-1966 74th North Bergen 1 North Bergen, NJ — 2,933 1,817 1,204 2,933 3,021 5,954 520 2016 1973 81 N. Hackensack — Kearny, NJ — 25,901 — 1,263 25,901 1,263 27,164 66 2019 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 422 Frelinghuysen — Newark, NJ — 16,728 — 6,781 16,728 6,781 23,509 1,036 2017 465 Meadow 1 Carlstadt, NJ — 713 1,618 256 713 1,874 2,587 371 2013 1972 550 Delancy 1 Newark, NJ — 9,230 4,855 1,993 9,230 6,848 16,078 1,859 2013 1987 620 Division 1 Elizabeth, NJ — 6,491 3,568 5,478 6,491 9,046 15,537 3,338 2011 1980 7777 West Side 1 North Bergen, NJ — 4,525 8,856 — 4,525 8,856 13,381 1,071 2017 1967 900 Hart 1 Piscataway, NJ — 3,202 3,866 1,356 3,202 5,222 8,424 1,345 2014 1983 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 Belleville 1 Kearny, NJ — 12,845 18,041 1,808 12,845 19,849 32,694 5,103 2011 2006 Commerce 1 Carlstadt, NJ — 1,656 1,544 128 1,656 1,672 3,328 155 2018 1969 Dell 1 Carlstadt, NJ — 6,641 771 548 6,641 1,319 7,960 383 2011 1972 Ethel 2 Piscataway, NJ — 2,748 3,801 1,684 2,748 5,485 8,233 1,582 2013 1981/1984 Interstate 2 South Brunswick, NJ — 13,686 12,135 14,721 13,686 26,856 40,542 7,720 2010/2013 1999/2014 JFK Airgate 4 Queens, NY — 18,282 32,933 5,536 18,282 38,469 56,751 10,807 2013 1986/1991 2 Table of Content s Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2021 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed Manor 1 East Rutherford, NJ — 4,076 5,262 2,329 4,076 7,591 11,667 1,361 2015 1968 Middlebrook 18 Bound Brook, NJ — 16,442 10,241 14,058 16,442 24,299 40,741 9,999 2010 1958/1976 Morgan 2 Brooklyn, NY — 71,051 10,888 3,490 71,051 14,378 85,429 897 2019 1960/1980 & 1967 New Dutch 1 Fairfield, NJ — 4,773 2,004 — 4,773 2,004 6,777 316 2017 1976 Paterson Plank 1 Carlstadt, NJ — 4,127 455 761 4,127 1,216 5,343 172 2016 1998 Schoolhouse 1 Somerset, NJ — 2,375 5,705 425 2,375 6,130 8,505 1,021 2016 2009 Stockton — Newark, NJ — 12,327 1,282 222 12,327 1,504 13,831 464 2017 Terminal Way 2 Avenel, NJ — 3,537 3,598 1,329 3,537 4,927 8,464 843 2014 1950/1968 Whelan 1 East Rutherford, NJ — 6,366 5,704 598 6,366 6,302 12,668 397 2019 2005 Wilson 1 Newark, NJ — 2,016 484 813 2,016 1,297 3,313 387 2016 1970 Woodside 1 Queens, NY — 23,987 3,796 3,972 23,987 7,768 31,755 1,000 2018 2018 San Francisco Bay Area 20th Street 1 Oakland, CA — 18,092 6,730 1,467 18,092 8,197 26,289 651 2019 1970 & 2003 238/242 Lawrence 2 South San Francisco, CA — 6,674 2,655 1,616 6,674 4,271 10,945 1,842 2010 1986 240 Littlefield 1 South San Francisco, CA — 5,107 3,293 2,806 5,107 6,099 11,206 1,412 2013 2013 299 Lawrence 1 South San Francisco, CA — 1,352 1,198 471 1,352 1,669 3,021 673 2010 1968 631 Brennan 1 San Jose, CA — 1,932 2,245 948 1,932 3,193 5,125 926 2012 1975 Ahern 2 Union City, CA — 3,246 2,749 1,366 3,246 4,115 7,361 1,514 2010 1986 Ahern II 1 Union City, CA — 2,467 4,527 753 2,467 5,280 7,747 1,048 2015 1997 Burroughs 3 San Leandro, CA — 5,400 7,092 1,408 5,400 8,500 13,900 1,954 2014 1966 Caribbean 3 Sunnyvale, CA — 17,483 14,493 2,874 17,483 17,367 34,850 4,902 2012 1980/1981 Carlton Court 1 South San Francisco, CA — 2,036 1,475 492 2,036 1,967 4,003 540 2012 1981 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 Hotchkiss II 1 Fremont, CA — 3,042 3,081 355 3,042 3,436 6,478 325 2018 1997 Merced 4 San Leandro, CA — 25,621 9,318 3,132 25,621 12,450 38,071 1,346 2018 1958 Michele 1 South San Francisco, CA — 2,710 2,540 616 2,710 3,156 5,866 488 2016 1979 Minnesota and Tennessee 2 San Francisco, CA — 34,738 13,141 1,403 34,738 14,544 49,282 935 2019 1963 Old Bayshore — San Jose, CA — 10,244 1,609 57 10,244 1,666 11,910 100 2020 1955 San Clemente 1 Hayward, CA — 5,126 3,938 152 5,126 4,090 9,216 425 2018 1982 Starlite 1 South San Francisco, CA — 3,738 144 1,691 3,738 1,835 5,573 30 2020 1966 & 1972 West 140th 2 San Leandro, CA — 9,578 6,297 3,745 9,578 10,042 19,620 1,729 2016 1959 Whitney 3 San Leandro, CA — 13,821 9,016 2,091 13,821 11,107 24,928 1,387 2018 1974 3 Table of Content s Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2021 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed Wicks 1 San Leandro, CA — 2,224 298 32 2,224 330 2,554 38 2018 1976 Central Pacific Business Park I 3 Union City, CA — 8,468 14,165 1,542 8,468 15,707 24,175 3,490 2014 1989 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 Seattle 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 79 Ave South 1 Kent, WA — 1,267 1,503 796 1,267 2,299 3,566 625 2014 2000 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 3401 Lind 1 Renton, WA — 2,999 6,707 1,451 2,999 8,158 11,157 1,453 2014 1984/2012 4225 2nd Avenue 1 Seattle, WA — 4,236 4,049 2,258 4,236 6,307 10,543 1,218 2015 1957 4930 3rd Avenue South 1 Seattle, WA — 3,984 2,424 831 3,984 3,255 7,239 654 2016 1964 12119 East Marginal — Tukwila, WA — 4,950 1,740 — 4,950 1,740 6,690 51 2020 1996 17600 West Valley Highway 1 Tukwila, WA — 3,361 5,260 1,832 3,361 7,092 10,453 2,087 2012 1986 Auburn 400 1 Auburn, WA — 4,415 5,234 316 4,415 5,550 9,965 397 2019 2000 Auburn 1307 1 Auburn, WA — 4,253 5,034 496 4,253 5,530 9,783 1,191 2014 2002 Dawson 1 Seattle, WA — 3,902 278 331 3,902 609 4,511 166 2017 1964 Denver 1 Seattle, WA — 3,203 1,345 489 3,203 1,834 5,037 487 2016 1953 East Valley 1 Renton, WA — 2,693 2,959 123 2,693 3,082 5,775 285 2018 1991 East Marginal — Renton, WA — 2,618 380 114 2,618 494 3,112 59 2019 1991 Hudson 1 Seattle, WA — 4,471 912 245 4,471 1,157 5,628 41 2020 2006 Kent 188 1 Kent, WA — 3,251 4,719 1,299 3,251 6,018 9,269 2,140 2010 1979 Kent 190 1 Kent, WA — 4,560 5,561 452 4,560 6,013 10,573 1,299 2015 1992/1999 Kent 192 1 Kent, WA — 12,752 20,642 530 12,752 21,172 33,924 953 2020 Kent 202 1 Kent, WA — 5,761 9,114 2,810 5,761 11,924 17,685 2,765 2015 1981 Kent 216 1 Kent, WA — 3,672 5,408 967 3,672 6,375 10,047 1,531 2014 1996 Kent Corporate Park 4 Kent, WA — 5,032 6,916 2,257 5,032 9,173 14,205 2,139 2015 1980/1981 Lucile 1 Seattle, WA — 4,498 3,504 1,342 4,498 4,846 9,344 1,046 2017 1976 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 4 Table of Content s Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2021 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed 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 Miami 26th Street 1 Miami, FL — 3,444 4,558 1,187 3,444 5,745 9,189 1,398 2012 1973 48th Avenue 2 Miami Gardens, FL — 4,322 2,187 586 4,322 2,773 7,095 726 2011 1987 70th Avenue 1 Miami, FL — 1,434 2,333 402 1,434 2,735 4,169 755 2011 1999 70th Avenue II 1 Miami, FL — 2,152 3,418 858 2,152 4,276 6,428 717 2016 1969 70th Avenue III 1 Miami, FL — 2,543 3,167 690 2,543 3,857 6,400 590 2016 1974 70th Avenue IV 1 Miami, FL — 1,119 1,456 329 1,119 1,785 2,904 257 2017 1969 70th Avenue V 1 Miami, FL — 5,036 3,419 2,230 5,036 5,649 10,685 501 2017 1974 74th Avenue 1 Miami, FL — 2,327 3,538 646 2,327 4,184 6,511 701 2016 1986 78th Avenue 1 Doral, FL — 2,445 1,755 2,911 2,445 4,666 7,111 1,473 2012 1977 81st Street 2 Medley, FL — 2,938 5,242 1,315 2,938 6,557 9,495 1,560 2015 1996/2003 94th Avenue 1 Doral, FL — 3,000 3,580 352 3,000 3,932 6,932 483 2017 1989 107th Avenue 1 Medley, FL — 2,787 2,036 884 2,787 2,920 5,707 826 2013 2001 101st Road 1 Medley, FL — 2,647 3,258 553 2,647 3,811 6,458 1,128 2013 2012 131st Street 1 Medley, FL — 2,903 5,729 599 2,903 6,328 9,231 1,483 2014 1999 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 Washington, D.C. 75th Ave 5 Landover, MD — 10,658 18,615 5,280 10,658 23,895 34,553 5,119 2014 1987/1990 2920 V Street 1 Washington, D.C. — 2,248 1,670 1,499 2,248 3,169 5,417 449 2017 1958 3601 Pennsy 1 Landover, MD — 2,331 4,375 1,272 2,331 5,647 7,978 1,419 2013 1996 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 5 Table of Content s Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2021 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed 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. — 67,132 41,299 14,594 67,132 55,893 123,025 12,563 2015 1955/1963 Subtotal 253 — 1,556,952 952,818 257,773 1,556,952 1,210,591 2,767,543 203,090 Unamortized net deferred financing costs Intangible assets 114,126 75,972 Total 253 $ — $ 1,556,952 $ 952,818 $ 257,773 $ 1,556,952 $ 1,210,591 $ 2,881,669 $ 279,062 6 Table of Content s Terreno Realty Corporation Schedule III Real Estate Investments and Accumulated Depreciation – (Continued) As of December 31, 2021 (in thousands) A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2021 and 2020 is as follows: 2021 2020 Investment in Properties Balance at beginning of year $ 2,231,228 $ 2,154,194 Acquisition of properties 681,970 100,391 Disposition of properties ( 30,934 ) ( 53,978 ) Construction in progress 14,711 7,029 Improvements, net of write-offs 49,851 23,592 Balance at end of year $ 2,946,826 $ 2,231,228 2021 2020 Accumulated Depreciation Balance at beginning of year $ 238,073 208,279 Amortization of lease intangible assets 9,581 6,702 Depreciation expense 39,498 37,020 Disposition of properties and write-offs ( 8,090 ) ( 13,928 ) Balance at end of year $ 279,062 $ 238,073 7 Table of Content s Exhibit Index Exhibit Number Exhibit Description 3.1 Articles of Amendment and Restatement of Registrant, as amended (previously filed as Exhibit 3.1 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-11 on January 6, 2010 and incorporated herein by reference). 3.2 Articles Supplementary for Registrant’s 7.75% Series A Cumulative Redeemable Preferred Stock (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on July 19, 2012 and incorporated herein by reference). 3.3 Articles Supplementary (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on February 9, 2017 and incorporated herein by reference). 3.4 Amended and Restated Bylaws of Registrant (previously filed as Exhibit 3.2 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-11 on January 6, 2010 and incorporated herein by reference). 3.5 First Amendment to Amended and Restated Bylaws of Registrant (previously filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K on February 9, 2017 and incorporated herein by reference). 4.1 Specimen Common Stock Certificate of Registrant (previously filed as Exhibit 4.1 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-11 on January 15, 2010 and incorporated herein by reference). 4.2 Description of Securities of Registrant (previously filed as Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K on February 6, 2020 and incorporated herein by reference). 10.1+ Amended and Restated Severance Agreement between Registrant and W. Blake Baird, dated as of February 18, 2014 (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on February 19, 2014 and incorporated herein by reference). 10.2+ Amended and Restated Severance Agreement between Registrant and Michael A. Coke dated as of February 18, 2014 (previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K on February 19, 2014 and incorporated herein by reference). 10.3+ Severance Agreement between Registrant and Jaime J. Cannon dated as of February 18, 2014 (previously filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K on February 19, 2014 and incorporated herein by reference). 10.4+ Amended and Restated 2010 Equity Incentive Plan of Registrant (previously filed as Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A on March 19, 2014 and incorporated herein by reference). 10.5+ Form of Restricted Stock Award Agreement for Executive Officers and Employees (previously filed as Exhibit 10.4 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-11 on January 6, 2010 and incorporated herein by reference). 10.6+ Form of Restricted Stock Award Agreement for Non-Employee Directors (previously filed as Exhibit 10.5 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-11 on January 6, 2010 and incorporated herein by reference). 10.7+ 2019 Equity Incentive Plan of Registrant (previously filed as Exhibit 4.7 to the Registrant’s Registration Statement on Form S-8 on April 30, 2019 and incorporated herein by reference). 10.8+ Form of Restricted Stock Award Agreement for Executive Officers and Employees (previously filed as Exhibit 4.8 to the Registrant’s Registration Statement on Form S-8 on April 30, 2019 and incorporated herein by reference). 10.9+ Form of Indemnification Agreement between Registrant and its Directors and Executive Officers (previously filed as Exhibit 10.6 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-11 on January 6, 2010 and incorporated herein by reference). 10.10+ Amended and Restated Long-Term Incentive Plan of Registrant effective as of January 1, 2019 (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on January 14, 2019 and incorporated by reference herein). 10.11+ Form of Award Notice under the Amended and Restated Long-Term Incentive Plan of Registrant (previously filed as Exhibit 10.9 to the Registrant's Annual Report on Form 10-K on February 6, 2019 and incorporated by reference herein). 10.12+ Amended and Restated Long-Term Incentive Plan of Registrant, effective as of 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). 8 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 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). 10.16 Note Purchase Agreement, dated as of June 2, 2016, 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 7, 2016 and incorporated herein by reference). 10.17 Note Purchase Agreement, dated as of September 1, 2015, 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 September 8, 2015 and incorporated herein by reference). 10.18 Note Purchase Agreement, dated as of September 12, 2019, 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 September 18, 2019 and incorporated herein by reference). 10.19+ Severance Agreement between the Registrant and Andrew T. Burke, dated as of February 18, 2014 (previously filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K on February 8, 2017 and incorporated herein by reference). 10.20+ Severance Agreement between the Registrant and John T. Meyer, dated as of February 18, 2014 (previously filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K on February 8, 2017 and incorporated herein by reference). 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. 23* Consent of Independent Registered Public Accounting Firm. 24.1* Power of Attorney (included on the signature page to this Annual Report on Form 10-K). 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 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 9 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. ** Furnished herewith. + Exhibit is a management contract or compensatory plan or arrangement. 10 Table of Content s SIGNATURES 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 By: /s/ W. Blake Baird W. Blake Baird Chairman and Chief Executive Officer Power of Attorney We, the undersigned directors of Terreno Realty Corporation hereby severally constitute and appoint W. Blake Baird and Michael A. Coke, and each of them singly, our true and lawful attorneys, with full power to them and each of them singly, to sign for us in our names in the capacities indicated below, all amendments to this report, and generally to do all things in our names and on our behalf in such capacities to enable Terreno Realty Corporation to comply with the provisions of the Securities Exchange Act of 1934, as amended, and all requirements of the Securities and Exchange Commission. 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. 1 Table of Content s Signature Title Date /s/ W. Blake Baird Chairman, Chief Executive Officer and Director (principal executive officer) February 9, 2022 W. Blake Baird /s/ Michael A. Coke President and Director February 9, 2022 Michael A. Coke /s/ Jaime J. Cannon Executive Vice President and Chief Financial Officer (principal financial and accounting officer) February 9, 2022 Jaime J. Cannon /s/ Linda Assante Director February 9, 2022 Linda Assante /s/ LeRoy E. Carlson Director February 9, 2022 LeRoy E. Carlson /s/ David M. Lee Director February 9, 2022 David M. Lee /s/ Gabriela F. Parcella Director February 9, 2022 Gabriela F. Parcella /s/ Douglas M. Pasquale Director February 9, 2022 Douglas M. Pasquale /s/ Dennis Polk Director February 9, 2022 Dennis Polk 2