What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-03 compared with 2022-05-04 · 268 added, 145 removed, 368 unchanged (53% of the section changed)

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Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

• the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 9, 2022, in this Quarterly Report on Form 10-Q, and in our other public filings;

• the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 9, 2022, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which was filed with the Securities and Exchange Commission on May 4, 2022, in this Quarterly Report on Form 10-Q, and in our other public filings;

• our ability to identify and acquire industrial properties on terms favorable to us;

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• increased interest rates and operating costs;

• the discontinuation of London Interbank Offered Rate (“LIBOR”) and the replacement of LIBOR with an alternative reference rate;

• declining real estate valuations and impairment charges;

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• our failure to successfully operate acquired properties;

• risks relating to our real estate redevelopment, renovation and expansion strategies and activities;

• risks relating to our real estate redevelopment, renovation and expansion strategies and activities (including rising inflation, supply chain disruptions and construction delays);

• the ongoing impact of the novel coronavirus (“COVID-19”), or the impact of any future pandemic, epidemic or outbreak of any other highly infectious disease, on the U.S., regional and global economies and on our business, financial condition and results of operations and that of our tenants;

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

We invest in several types of industrial real estate, including warehouse/distribution (approximately 79.5% of our total annualized base rent as of March 31, 2022), flex (including light industrial and research and development, or R&D) (approximately 4.7%), transshipment (approximately 6.5%) and improved land (approximately 9.3%).

We invest in several types of industrial real estate, including warehouse/distribution (approximately 77.7% of our total annualized base rent as of June 30, 2022), flex (including light industrial and research and development, or R&D) (approximately 4.5%), transshipment (approximately 6.2%) and improved land (approximately 11.6%).

We target functional properties in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate.

Infill locations are geographic locations surrounded by high concentrations of already developed land and existing buildings.

As of March 31, 2022, we owned a total of 256 buildings (including one property consisting of 18 buildings held for sale) aggregating approximately 15.1 million square feet, 37 improved land parcels consisting of approximately 128.3 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres.

As of March 31, 2022, our buildings and improved land parcels were approximately 96.9% and 94.9% leased (including 0.1 million square feet of vacancy acquired during the fourth quarter of 2021), respectively, to 565 customers, the largest of which accounted for approximately 4.7% of our total annualized base rent.

As of June 30, 2022, we owned a total of 249 buildings aggregating approximately 15.1 million square feet, 42 improved land parcels consisting of approximately 147.7 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres.

As of June 30, 2022, our buildings and improved land parcels were approximately 97.9% and 97.0% leased, respectively, to 576 customers, the largest of which accounted for approximately 4.5% of our total annualized base rent.

See “Item 1 – Our Investment Strategy – Industrial Facility General Characteristics” in our Annual Report on Form 10-K for the year ended December 31, 2021 for a general description of these types of industrial real estate.

We are an internally managed Maryland corporation and elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2010.

The following table summarizes by type our investments in real estate as of March 31, 2022:

The following table summarizes by type our investments in real estate as of June 30, 2022:

Type Number of Buildings or Improved Land Parcels Annualized Base Rent (in thousands) 1

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Total 291 $ 202,902 100.0 %

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2022, multiplied by 12.

The following table summarizes by market our investments in real estate as of March 31, 2022:

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of June 30, 2022, multiplied by 12.

The following table summarizes by market our investments in real estate as of June 30, 2022:

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

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% of Total 18.2 % 19.0 % 16.1 % 18.6 % 16.4 % 11.7 % 100.0 %

Occupancy % as of March 31, 2022 4

Occupancy % as of June 30, 2022

99.3 % 96.1 % 99.9 % 97.5 % 99.6 % 94.1 % 97.9 %

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% of Total 15.5 % 46.1 % 4.8 % 17.5 % 2.1 % 14.0 % 100.0 %

Occupancy % as of March 31, 2022

Occupancy % as of June 30, 2022

90.7 % 100.0 % 100.0 % 91.3 % 100.0 % 100.0 % 97.0 %

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% of Total Gross Book Value 18.0 % 23.5 % 17.0 % 18.6 % 13.1 % 9.8 % 100.0 %

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2022, multiplied by 12.

2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of March 31, 2022, weighted by the respective square footage.

3 Includes four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres, and one property consisting of 18 buildings held for sale with a gross book value of approximately $42.3 million.

4 Includes 0.1 million square feet of vacancy acquired in Miami that was pre-leased and expected to commence prior to June 30, 2022.

As of March 31, 2022, we owned four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $144.4 million, including redevelopment costs, capitalized interest and

The following table summarizes our capital expenditures incurred during the three months ended March 31, 2022 and 2021 (dollars in thousands):

For the Three Months Ended March 31,

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of June 30, 2022, multiplied by 12.

2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of June 30, 2022, weighted by the respective square footage.

3 Includes four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres.

As of June 30, 2022, we owned four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $108.3 million, including redevelopment costs, capitalized interest and other costs.

The following table summarizes our capital expenditures incurred during the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

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

2022 2021 2022 2021

Building improvements $ 11,356 $ 9,940 $ 20,872 $ 11,694

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$ 30,410 $ 22,735 $ 61,115 $ 28,724

1 Includes approximately $23.5 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively, related to leasing acquired vacancy, redevelopment construction in progress and renovation and expansion projects (stabilization capital) at twenty-one and five properties for the three months ended March 31, 2022 and 2021, respectively.

1 Includes approximately $19.2 million and $13.8 million for the three months ended June 30, 2022 and 2021, respectively, and approximately $42.7 million and $15.0 million for the six months ended June 30, 2022 and 2021, respectively, related to leasing acquired vacancy, redevelopment construction in progress and renovation and expansion projects (stabilization capital) at 29 and 14 properties for the three months ended June 30, 2022 and 2021, respectively, and at 34 and 14 properties for the six months ended June 30, 2022 and 2021, respectively.

Also includes approximately $3.4 million and $3.6 million for the three and six months ended June 30, 2022, respectively, related to roof replacements in advance of rooftop solar installations as part of our ESG initiatives.

Our industrial properties are typically subject to leases on a “triple net basis,” in which tenants pay their proportionate share of real estate taxes, insurance and operating costs, or are subject to leases on a “modified gross basis,” in which tenants pay expenses over certain threshold levels.

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As needed, we hold discussions with the tenant’s management about their business and we conduct site visits of the tenant’s operations.

Our top 20 customers based on annualized base rent as of March 31, 2022 are as follows:

Our top 20 customers based on annualized base rent as of June 30, 2022 are as follows:

Customer Leases Rentable

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6 246,779 1.6 % 4,880 2.4 %

3 Danaher 3 171,707 1.1 % 3,844 2.0 %

3 171,707 1.1 % 3,960 2.0 %

4 United States Government

8 300,732 2.0 % 3,794 1.9 %

5 District of Columbia

7 234,071 1.5 % 3,343 1.6 %

6 O'Neill Logistics

2 237,692 1.6 % 2,069 1.0 %

7 Port Kearny Security, Inc.

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8 DirectBuy Home Improvement

2 230,891 1.5 % 2,011 1.0 %

9 B&B Granite Block Sales, LLC 5

1 — — % 1,944 1.0 %

10 Costco-Innovel Solutions LLC

1 219,910 1.5 % 1,870 0.9 %

11 Hanjin International America, Inc.

and Hanjin Transportation Co., LTD

1 114,061 0.8 % 1,848 0.9 %

12 XPO Logistics

2 180,717 1.2 % 1,843 0.9 %

13 Team Alliance Logistics Inc.

DBA A&V Transportation 6

2 — — % 1,777 0.9 %

14 L3 Harris Technologies, Inc.

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16 Bar Logistics

15 YRC 2 61,252 0.4 % 1,540 0.8 %

1 203,263 1.3 % 1,593 0.8 %

17 Topaz Lighting Corp.

1 190,000 1.2 % 1,552 0.8 %

17 Envogue International 2 192,000 1.3 % 1,454 0.8 %

18 United States Postal Service 2 53,000 0.3 % 1,438 0.7 %

19 Lilac Solutions Inc.

2 61,252 0.4 % 1,540 0.8 %

20 Sarcona Management Corporation 6

19 PODS Enterprises.

1 201,977 1.3 % 1,515 0.7 %

20 Envogue International

1 192,000 1.3 % 1,454 0.7 %

Total 51 3,477,638 23.0 % $ 51,466 25.4 %

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2022, multiplied by 12.

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of June 30, 2022, multiplied by 12.

2 Includes two improved land parcels consisting of approximately 6.2 acres.

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5 Includes an improved land parcel consisting of approximately 7.2 acres.

6 Includes two improved land parcels consisting of approximately 4.4 acres.

7 Includes an improved land parcel consisting of approximately 1.4 acres.

The following table summarizes the anticipated lease expirations for leases in place as of March 31, 2022, without giving effect to the exercise of unexercised renewal options or termination rights, if any, at or prior to the scheduled expirations:

The following table summarizes the anticipated lease expirations for leases in place as of June 30, 2022, without giving effect to the exercise of unexercised renewal options or termination rights, if any, at or prior to the scheduled expirations:

Year Rentable Square Feet % of Total Rentable

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% of Total Annualized

2022 (6 months) 1

988,633 6.5 % $ 8,027 3.4 %

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Total 14,785,084 97.9 % $ 234,313 100.0 %

1 Includes leases that expire on or after March 31, 2022 and month-to-month leases totaling approximately 92,415 square feet.

2 Annualized base rent is calculated as contractual monthly base rent per the leases at expiration, excluding any partial or full rent abatements, as of March 31, 2022, multiplied by 12.

1 Includes leases that expire on or after June 30, 2022 and month-to-month leases totaling approximately 30,348 square feet.

2 Annualized base rent is calculated as contractual monthly base rent per the leases at expiration, excluding any partial or full rent abatements, as of June 30, 2022, multiplied by 12.

3 Includes annualized base rent related to 42 improved land parcels totaling approximately 147.7 acres.

Our ability to re-lease or renew expiring space at rental rates equal to or in excess of current rental rates will impact our results of operations.

As of March 31, 2022, leases representing approximately 6.1% of the total annualized base rent of our portfolio are scheduled to expire during the year ending December 31, 2022.

As of June 30, 2022, leases representing approximately 3.4% of the total annualized base rent of our portfolio are scheduled to expire during the year ending December 31, 2022.

We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our 2022 expirations will be above the rates currently being paid for the same space.

Cash rent changes on new and renewed leases totaling approximately 0.7 million square feet commencing during the three months ended March 31, 2022 were approximately 34.8% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio of 47.7% for the three months ended March 31, 2022.

We define tenant retention ratio as the square footage of all leases commenced during the period that are rented by existing tenants divided by the square footage of all expiring leases during the reporting period.

The square footage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year are not included in the calculation.

Cash rent changes on new and renewed leases totaling approximately 0.5 million square feet and 7.2 acres of improved land commencing during the three months ended June 30, 2022 were approximately 55.4% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 1.2 million square feet and 11.3 acres commencing during the six months ended June 30, 2022 were approximately 42.8% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio for the operating portfolio of 27.5% and 38.6%, respectively, for the three and six months ended June 30, 2022.

We had a tenant retention ratio for the improved land portfolio of 100.0% and 87.4%, respectively, for the three and six months ended June 30, 2022.

We define tenant retention ratio as the square footage or acreage of all leases commenced during the period that are rented by existing tenants divided by the square footage or acreage of all expiring leases during the reporting period.

The square footage or acreage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year are not included in the calculation.

Our past performance may not be indicative of future results, and we cannot assure you that leases will be renewed or that our properties will be re-leased at all or at rental rates equal to or above the current average rental rates.

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Acquisition Activity

During the three months ended March 31, 2022, we acquired two industrial properties for a total purchase price of approximately $86.2 million.

During the three months ended June 30, 2022, we acquired ten industrial properties for a total purchase price of approximately $203.3 million.

The properties were acquired from unrelated third parties using existing cash on hand, net proceeds from dispositions, net proceeds from the issuance of common stock and debt.

The following table sets forth the industrial properties we acquired during the three months ended March 31, 2022:

The following table sets forth the industrial properties we acquired during the three months ended June 30, 2022:

Property Name Location Acquisition Date Number of

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(in thousands) 1

Countyline #29 & #30 4

Hialeah, FL February 9, 2022 2 407,000 $ 73,200 3.8 % —

33rd Place Bellevue, WA February 23, 2022 2 29,000 13,040 3.4 % 1.2

NE 91st Redmond, WA April 8, 2022 2 32,000 $ 9,780 4.1 % —

87 Doremus Newark, NJ April 18, 2022 — — 17,300 5.3 % 9.7

3660 Thomas Road Santa Clara, CA May 4, 2022 1 135,000 54,600 2.5 % —

127 Doremus Avenue Newark, NJ May 19, 2022 — — 11,900 6.9 % 2.4

3660 Fee Ana Anaheim, CA May 24, 2022 — — 15,000 4.7 % 2.1

332 Hindry Avenue Inglewood, CA May 25, 2022 1 19,000 9,280 2.4 % —

8320-8400 Isis Avenue Los Angeles, CA May 25, 2022 1 40,000 17,902 3.2 % —

Teagarden San Leandro, CA June 1, 2022 5 104,000 34,600 3.5 % —

293 Roanoke Avenue Newark, NJ June 7, 2022 — — 13,000 5.4 % 1.8

8660 Willows Road Redmond, WA June 17, 2022 — — 19,900 4.3 % 3.5

Total/Weighted Average 10 330,000 $ 203,262 3.8 % 19.5

1 Excludes intangible liabilities and mortgage premiums, if any.

The total aggregate initial investment was approximately $70.3 million, including $1.4 million in capitalized closing costs and acquisition costs and $2.3 million in assumed intangible liabilities and $19.6 million in other credits related to near term capital expenditures at the Countyline #29 & #30 properties.

2 Stabilized capitalization rates, referred to herein as stabilized cap rates, are calculated, at the time of acquisition, as annualized cash basis net operating income for the property stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property.

The total aggregate initial investment was approximately $221.6 million, including $8.4 million in capitalized closing costs and acquisition costs and $9.9 million in assumed intangible liabilities.

the total acquisition cost for the property.

Total acquisition cost basis for the property includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization.

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3 Represents acreage of improved land parcels.

4 The property is included in the redevelopment pool and is expected to be completed by the third quarter of 2022.

Redevelopment Activity

As of March 31, 2022, we had four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $144.4 million, including redevelopment costs, capitalized interest and other costs as follows:

As of June 30, 2022, we had four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $108.3 million, including redevelopment costs, capitalized interest and other costs as follows:

Property Name Total Expected

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Estimated Post-Development Square Feet Estimated

Quarter % Pre-leased March 31, 2022

73rd Street $ 20,616 $ 18,063 $ 2,553 5.5 % 128,844 Q3 2022 33.5 %

Countyline #29 & #30 75,538 64,124 11,414 3.8 % 407,084 Q3 2022 100.0 %

Paterson Plank III 3

Quarter % Pre-leased June 30, 2022

$ 20,616 $ 18,313 $ 2,303 6.5 % 128,844 Q3 2022 66.1 %

Countyline #30

37,867 37,102 765 3.8 % 205,107 Q3 2022 100.0 %

24,563 24,182 381 5.1 % N/A Q1 2023 — %

Paterson Plank III 4

25,303 19,545 5,758 4.4 % N/A Q2 2023 — %

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4 Improved land parcel of approximately 4.9 acres.

We have an at-the-market equity offering program (the “$300 Million ATM Program”) pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $300.0 million ($221.4 million remaining as of March 31, 2022) in amounts and at times as we determine from time to time.

Prior to the implementation of the $300 Million ATM Program, we had a previous at-the-market equity program (the “Previous $300.0 million ATM Program”), which was substantially utilized as of June 10, 2021 and which is no longer active.

During the second quarter of 2022, we completed redevelopment of our Countyline 29 property in Hialeah, FL consisting of approximately 0.2 million square feet.

The property has an estimated stabilized cap rate of 3.8% and the total aggregate investment was approximately $37.7 million.

Disposition Activity

During the six months ended June 30, 2022, we sold one property (consisting of 18 buildings) located in the Northern New Jersey/New York City market for a sales price of approximately $110.4 million, resulting in a gain of approximately $76.0 million.

The following summarizes the condensed results of operations of the property sold during the three and six months ended June 30, 2022 (dollars in thousands):

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

2022 2021 2022 2021

Rental revenues $ 458 $ 1,005 $ 1,554 $ 1,985

Tenant expense reimbursements 122 422 647 1,001

Property operating expenses (186) (478) (745) (1,152)

Depreciation and amortization — (273) (243) (554)

Income from operations $ 394 $ 676 $ 1,213 $ 1,280

Credit Facility

On June 29, 2022, we entered into the First Amendment to the Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) which (i) increased the borrowing capacity of the revolving credit facility by $150.0 million to $400.0 million, (ii) decreased the accordion feature by $150.0 million to $500.0 million, and (iii) provided for the calculation of interest, pricing and fees based on SOFR instead of LIBOR.

Senior Unsecured Notes

On August 1, 2022, we prepaid a $50.0 million tranche of the Senior Unsecured Notes using borrowings from our revolving credit facility.

The notes bore interest at 4.23% and had an original maturity date of September 1, 2022.

We have an at-the-market equity offering program (the “$300 Million ATM Program”) pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $300.0 million ($219.4 million remaining as of June 30, 2022) in amounts and at times as we determine from time to time.

Prior to the implementation of the $300 Million ATM Program, we had a previous at-the-market equity program, which was substantially utilized as of June 10, 2021 and which is no longer active.

We intend to use the net proceeds from the offering of the shares under the $300 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions, redevelopments and repayment of indebtedness, including borrowings under our revolving credit facility.

During the three months ended March 31, 2022, we did not issue any common stock under the $300 Million ATM Program.

During both the three and six months ended June 30, 2022, we issued an aggregate of 27,087 shares of common stock at a weighted average offering price of $76.03 per share under the $300 Million ATM Program, resulting in net proceeds of approximately $2.0 million and paying total compensation to the applicable sales agents of approximately $29,000.

Share Repurchase Program

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The program may be suspended or discontinued at any time.

As of March 31, 2022, we had not repurchased any shares of our common stock pursuant to our share repurchase program.

As of June 30, 2022, we had not repurchased any shares of our common stock pursuant to our share repurchase program.

Dividend and Distribution Activity

On May 3, 2022, our board of directors declared a cash dividend in the amount of $0.34 per share of our common stock payable on July 14, 2022 to the stockholders of record as of the close of business on June 30, 2022.

On August 2, 2022, our board of directors declared a cash dividend in the amount of $0.40 per share of our common stock payable on October 14, 2022 to the stockholders of record as of the close of business on September 30, 2022.

Contractual Commitments

As of May 3, 2022, we had outstanding contracts with third-party sellers to acquire ten industrial properties for a total aggregate purchase price of $177.7 million, as described under the heading “Material Cash Commitments” in this Quarterly Report on Form 10-Q.

As of August 2, 2022, we had outstanding contracts with third-party sellers to acquire three industrial properties for a total aggregate purchase price of $51.3 million, as described under the heading “Material Cash Commitments” in this Quarterly Report on Form 10-Q.

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

economy has experienced an increase in inflation rates recently.

A wide variety of industries and sectors are affected by increasing commodity prices.

economy has experienced an increase in inflation rates recently affecting consumers and a wide variety of industries and sectors.

Inflation has increased construction costs, including tenant improvements and capital projects, and operating costs.

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The results of operations of any acquired property are included in our financial statements as of the date of its acquisition.

The analysis of our results below for the three months ended March 31, 2022 and 2021 includes the changes attributable to same store properties.

The same store pool for the comparison of the three months ended March 31, 2022 and 2021 includes all properties that were owned and in operation as of March 31, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of March 31, 2022.

As of March 31, 2022, the same store pool consisted of 200 buildings aggregating approximately 12.3 million square feet representing approximately 81.6% of our total square feet owned and 24 improved land parcels consisting of approximately 91.5 acres.

As of March 31, 2022, the non-same store properties, which we acquired, redeveloped, or sold during 2021 and 2022 or were held for sale or in redevelopment as of March 31, 2022, consisted of 56 buildings (including one property consisting of 18 buildings held for sale) aggregating approximately 2.8 million square feet, 13 improved land parcels consisting of approximately 36.8 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres.

As of March 31, 2022 and 2021, our consolidated same store pool occupancy was approximately 98.4% and 97.4%, respectively.

The analysis of our results below for the three and six months ended June 30, 2022 and 2021 includes the changes attributable to same store properties.

The same store pool for the comparison of the three and six months ended June 30, 2022 and 2021 includes all properties that were owned and in operation as of June 30, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of June 30, 2022.

As of June 30, 2022, the same store pool consisted of 200 buildings aggregating approximately 12.4 million square feet representing approximately 81.8% of our total square feet owned and 24 improved land parcels consisting of approximately 91.5 acres.

As of June 30, 2022, the non-same store properties, which we acquired, redeveloped, or sold during 2021 and 2022 or were held for sale or in redevelopment as of June 30, 2022, consisted of 49 buildings aggregating approximately 2.7 million square feet, 18 improved land parcels consisting of approximately 56.2 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres.

As of June 30, 2022 and 2021, our consolidated same store pool occupancy was approximately 98.0% and 97.9%, respectively.

Our future financial condition and results of operations, including rental revenues, straight-line rents and amortization of lease intangibles, may be impacted by the acquisitions of additional properties, and expenses may vary materially from historical results.

Comparison of the Three Months Ended March 31, 2022 to the Three Months Ended March 31, 2021:

For the Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2022 to the Three Months Ended June 30, 2021:

For the Three Months Ended June 30,

2022 2021 $ Change % Change

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General and administrative 7,333 6,866 467 6.8 %

Acquisition costs 28 55 (27) (49.1) %

Acquisition costs and other 1,027 117 910 777.8 %

Total other costs and expenses 23,648 18,951 4,697 24.8 %

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Interest expense, including amortization (5,047) (4,016) (1,031) 25.7 %

Total other expense (4,960) (3,909) (1,051) 26.9 %

Gain on sales of real estate investments 76,048 — 76,048 n/a

Total other income (expense) 71,116 (3,795) 74,911 n/a

Net income $ 97,033 $ 17,378 $ 79,655 458.4 %

1 Accounting Standards Update (“ASU”) No.

2018-11, Leases (Topic 842), allows us to elect not to separate lease and non-lease rental income.

All rental income earned pursuant to tenant leases is reflected as one line, “Rental revenues and tenant expense reimbursements” on our accompanying consolidated statements of operations.

We believe that the above presentation of rental revenues and tenant expense reimbursements is not, and is not intended to be, a presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and a reconciliation to total revenue is provided above.

We believe this information is frequently used by management, investors, and other interested parties to evaluate our performance.

See “Note 2 - Significant Accounting Policies” in our condensed notes to consolidated financial statements for more information regarding our adoption of this standard.

2 Includes 2022 and 2021 acquisitions and dispositions, eighteen improved land parcels and four properties under redevelopment as of June 30, 2022.

3 Includes straight-line rents and amortization of lease intangibles.

See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of net operating income and same store net operating income from net income and a discussion of why we believe net operating income and same store net operating income are useful supplemental measures of our operating performance.

Total revenues increased approximately $12.1 million for the three months ended June 30, 2022 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases, property acquisitions during 2022 and 2021 and an increase in occupancy rate.

Cash rents on new and renewed leases totaling approximately 0.5 million square feet commencing during the three months ended June 30, 2022 increased approximately 55.4% compared to the previous rental rates for that same space.

For the three months ended June 30, 2022 and 2021, approximately $1.4 million and $1.1 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants.

Property operating expenses.

Total property operating expenses increased approximately $2.6 million during the three months ended June 30, 2022 compared to the same period from the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $1.7 million attributable to property acquisitions during 2022 and 2021 as well as increases in insurance premiums, real estate taxes related to annual rate increases and utilities expenses incurred at certain of our properties.

Depreciation and amortization.

Depreciation and amortization increased approximately $3.3 million during the three months ended June 30, 2022 compared to the same period from the prior year primarily due to property acquisitions during 2022 and 2021.

General and administrative expenses.

General and administrative expenses increased approximately $0.5 million primarily due to increased restricted stock amortization and other compensation expenses due to an increase in the number of employees and salaries for the three months ended June 30, 2022 compared to the same period from the prior year.

Acquisition costs and other.

Acquisition costs and other increased approximately $0.9 million during the three months ended June 30, 2022 compared to the same period from the prior year primarily due to environmental remediation at our Avenue A property of approximately $1.0 million.

Interest and other income.

Interest and other income for the three months ended June 30, 2022 remained consistent with the same period in the prior year.

Interest expense, including amortization.

Interest expense increased approximately $1.0 million for the three months ended June 30, 2022 compared to the same period from the prior year primarily due to the issuance of approximately $150.0 million of senior unsecured notes on July 15, 2021 and $125.0 million of senior unsecured notes on October 28, 2021.

Gain on sales of real estate investments.

Gain on sales of real estate investments increased approximately $76.0 million for the three months ended June 30, 2022 compared to the same period from the prior year.

We sold one property during the three months ended June 30, 2022 and we did not sell any properties during the three months ended June 30, 2021.

Comparison of the Six Months Ended June 30, 2022 to the Six Months Ended June 30, 2021:

For the Six Months Ended June 30,

2022 2021 $ Change % Change

(Dollars in thousands)

Rental revenues 1

Same store $ 82,297 $ 76,558 $ 5,739 7.5 %

Non-same store operating properties 2

20,505 5,686 14,819 260.6 %

Total rental revenues 102,802 82,244 20,558 25.0 %

Tenant expense reimbursements 1

Same store 22,385 19,948 2,437 12.2 %

Non-same store operating properties 2

4,217 1,794 2,423 135.1 %

Total tenant expense reimbursements 26,602 21,742 4,860 22.4 %

Total revenues 129,404 103,986 25,418 24.4 %

Property operating expenses

Same store 26,375 24,005 2,370 9.9 %

Non-same store operating properties 2

6,305 2,678 3,627 135.4 %

Total property operating expenses 32,680 26,683 5,997 22.5 %

Net operating income 3

Same store 78,307 72,501 5,806 8.0 %

Non-same store operating properties 2

18,417 4,802 13,615 283.5 %

Total net operating income $ 96,724 $ 77,303 $ 19,421 25.1 %

Other costs and expenses

Depreciation and amortization 30,270 23,344 6,926 29.7 %

General and administrative 14,860 12,448 2,412 19.4 %

Acquisition costs and other 1,055 172 883 513.4 %

Total other costs and expenses 46,185 35,964 10,221 28.4 %

Other income (expense)

Interest and other income 236 457 (221) (48.4) %

Interest expense, including amortization (10,128) (8,161) (1,967) 24.1 %

Gain on sales of real estate investments 76,048 — 76,048 n/a

Total other income (expense) 66,156 (7,704) 73,860 n/a

Net income $ 116,695 $ 33,635 $ 83,060 246.9 %

2018-11, Leases (Topic 842), Targeted Improvements , allows us to elect not to separate lease and non-lease rental income.

All rental income earned pursuant to tenant leases is reflected as one line, “Rental revenues and tenant expense reimbursements” on our accompanying consolidated statements of operations.

We believe that the above presentation of rental revenues and tenant expense reimbursements is not, and is not intended to be, a presentation in accordance with GAAP, and a reconciliation to total revenue is provided above.

We believe that the above presentation of rental revenues and tenant expense reimbursements is not, and is not intended to be, a presentation in accordance with GAAP.

We believe this information is frequently used by management, investors, and other interested parties to evaluate our performance.

See “Note 2 - Significant Accounting Policies” in our condensed notes to consolidated financial statements for more information regarding our adoption of this standard.

2 Includes 2022 and 2021 acquisitions and dispositions, thirteen improved land parcels, four properties under redevelopment and one property held for sale with a gross book value of approximately $42.3 million as of March 31, 2022.

2 Includes 2021 and 2022 acquisitions and dispositions, eighteen improved land parcels and four properties under redevelopment as of June 30, 2022.

3 Includes straight-line rents and amortization of lease intangibles.

Total revenues increased approximately $13.3 million for the three months ended March 31, 2022 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases, property acquisitions during 2022 and 2021 and an increase in occupancy rate.

Cash rents on new and renewed leases totaling approximately 0.7 million square feet commencing during the three months ended March 31, 2022 increased approximately 34.8% compared to the previous rental rates for that same space.

For the three months ended March 31, 2022 and 2021, approximately $1.8 million and $1.1 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants.

Total revenues increased approximately $25.4 million for the six months ended June 30, 2022 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases, property acquisitions during 2022 and 2021 and an increase in occupancy rate.

Cash rents on new and renewed leases totaling approximately 1.2 million square feet commencing during the six months ended June 30, 2022 increased approximately 42.8% compared to the same period from the prior year.

For the six months ended June 30, 2022 and 2021, approximately $3.2 million and $2.2 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.1 million and $0.2 million, respectively, was recorded in lease termination revenue.

Property operating expenses.

Total property operating expenses increased approximately $3.4 million during the three months ended March 31, 2022 compared to the same period from the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $2.0 million attributable to property acquisitions during 2022 and 2021 as well as increases in real estate taxes related to annual rate increases at certain of our properties.

Total property operating expenses increased approximately $6.0 million during the six months ended June 30, 2022 compared to the same period from the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $3.6 million attributable to property acquisitions during 2022 and 2021 as well increases in insurance premiums, real estate taxes related to annual rate increases and utilities expenses incurred at certain of our properties.

Depreciation and amortization.

Depreciation and amortization increased approximately $3.6 million during the three months ended March 31, 2022 compared to the same period from the prior year primarily due to property acquisitions during 2022 and 2021.

Depreciation and amortization increased approximately $6.9 million during the six months ended June 30, 2022 compared to the same period from the prior year primarily due to property acquisitions during 2021 and 2022.

General and administrative expenses.

General and administrative expenses increased approximately $1.9 million primarily due to increased restricted stock amortization and other compensation expenses due to an increase in the number of employees and salaries for the three months ended March 31, 2022 compared to the same period from the prior year.

General and administrative expenses increased approximately $2.4 million for the six months ended June 30, 2022 primarily due to increased restricted stock amortization and other compensation expenses, including an increase in bonus expense and an increase in the number of employees compared to the same period from the prior year.

Acquisition costs and other.

Acquisition costs and other increased approximately $0.9 million during the six months ended June 30, 2022 compared to the same period from the prior year primarily due to environmental remediation at our Avenue A property of approximately $1.0 million.

Interest and other income.

Interest and other income remained consistent for the three months ended March 31, 2022 compared to the same period from the prior year.

Interest and other income for the six months ended June 30, 2022 remained consistent with the same period in the prior year.

Interest expense, including amortization.

Interest expense increased approximately $0.9 million for the three months ended March 31, 2022 compared to the same period from the prior year primarily due to the issuance of approximately $150.0 million of senior unsecured notes on July 15, 2021 and $125.0 million of senior unsecured notes on October 28, 2021.

Interest expense increased approximately $2.0 million for the six months ended June 30, 2022 compared to the same period from the prior year.

This increase was primarily due to the issuance of approximately $150.0 million of senior unsecured notes on July 15, 2021 and $125.0 million of senior unsecured notes on October 28, 2021, partially offset by the repayment of an $11.3 million mortgage loan in 2021.

Gain on sales of real estate investments.

Gain on sales of real estate investments increased approximately $76.0 million for the six months ended June 30, 2022 compared to the same period from the prior year.

We sold one property during the six months ended June 30, 2022 and we did not sell any properties during the six months ended June 30, 2021.

Liquidity and Capital Resources

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We believe that our net cash provided by operations will be adequate to fund operating requirements, pay interest on any borrowings and fund distributions in accordance with the REIT requirements of the federal income tax laws.

In the near-term, we intend to fund future investments in properties

with cash on hand, term loans, senior unsecured notes, mortgages, borrowings under our revolving credit facility, perpetual preferred and common stock issuances and, from time to time, property dispositions.

In the near-term, we intend to fund future investments in properties with cash on hand, term loans, senior unsecured notes, mortgages, borrowings under our revolving credit facility, perpetual preferred and common stock issuances and, from time to time, property dispositions.

We expect to meet our long-term liquidity requirements, including with respect to other investments in industrial properties, property acquisitions, property redevelopments, renovations and expansions and scheduled debt maturities, through borrowings under our revolving credit facility, periodic issuances of common stock, perpetual preferred stock, and long-term unsecured and secured debt, and, from time to time, with proceeds from the disposition of properties.

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Equity Sources of Liquidity

The following sets forth certain information regarding our current at-the-market common stock offering program as of March 31, 2022:

The following sets forth certain information regarding our current at-the-market common stock offering program as of June 30, 2022:

ATM Stock Offering Program Date Implemented Maximum Aggregate Offering Price (in thousands) Aggregate Common Stock Available (in thousands)

$300 Million ATM Program June 11, 2021 $ 300,000 $ 219,375

The table below sets forth the activity under our at-the-market common stock offering programs during the three months ended March 31, 2022 and 2021, respectively (in thousands, except share and price per share data):

For the Three Months Ended Shares Sold Weighted Average Price Per Share Net Proceeds Sales Commissions

March 31, 2022 — $ — $ — $ —

March 31, 2021 706,524 $ 58.20 $ 40,526 $ 596

The table below sets forth the activity under our at-the-market common stock offering programs during the three and six months ended June 30, 2022 and 2021, respectively (in thousands, except share and price per share data):

For the Three Months Ended Shares Sold Weighted Average Price Per Share Net Proceeds

(in thousands) Sales Commissions

(in thousands)

June 30, 2022 27,087 $ 76.03 $ 2,030 $ 29

June 30, 2021 1,084,294 $ 64.21 $ 68,611 $ 1,010

For the Six Months Ended

Shares Sold Weighted Average

Price Per Share Net Proceeds

(in thousands) Sales Commissions

(in thousands)

June 30, 2022 27,087 $ 76.03 $ 2,030 $ 29

June 30, 2021 1,790,818 $ 61.84 $ 109,137 $ 1,606

Debt Sources of Liquidity

As of March 31, 2022, we had $50.0 million of senior unsecured notes that mature in September 2022, $100.0 million of senior unsecured notes that mature in July 2024, $50.0 million of senior unsecured notes that mature in July 2026, $50.0 million of senior unsecured notes that mature in October 2027, $100.0 million of senior unsecured notes that mature in July 2028, $100.0 million of senior unsecured notes that mature in December 2029, $125.0 million of senior unsecured notes that mature in August 2030, and $50.0 million of senior unsecured notes that mature in July 2031 (collectively, the “Senior Unsecured Notes”), and a credit facility (the “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.

As of both March 31, 2022 and 2021, there were no borrowings outstanding on our revolving credit facility and $100.0 million of borrowings outstanding on our term loan.

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

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

The applicable LIBOR margin will range from 1.00% to 1.45% (1.00% as of March 31, 2022) for the revolving credit facility and 1.15% to 1.65% (1.15% as of March 31, 2022) for the $100.0 million term loan, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value.

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

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

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

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

We were in compliance with the covenants under the Facility and the Senior Unsecured Notes as of March 31, 2022 and 2021.

As of March 31, 2022 and December 31, 2021, we held cash and cash equivalents totaling approximately $106.3 million and $204.4 million, respectively.

The following tables summarize our debt maturities and principal payments as of March 31, 2022 and our market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the three months ended March 31, 2022 and 2021 (dollars in thousands, except per share data):

As of June 30, 2022, we had $50.0 million of senior unsecured notes that mature in September 2022, $100.0 million of senior unsecured notes that mature in July 2024, $50.0 million of senior unsecured notes that mature in July 2026, $50.0 million of senior unsecured notes that mature in October 2027, $100.0 million of senior unsecured notes that mature in July 2028, $100.0 million of senior unsecured notes that mature in December 2029, $125.0 million of senior unsecured notes that mature in August 2030, and $50.0 million of senior unsecured notes that mature in July 2031 (collectively, the “Senior Unsecured Notes”).

The Amended Facility consists of a $400.0 million revolving credit facility that matures in August 2025 and a $100.0 million term loan that matures in January 2027.

As of June 30, 2022 and 2021, there were $12.0 million and $0, respectively, of borrowings outstanding on our revolving credit facility and $100.0 million of borrowings outstanding on our term loan.

The aggregate amount of the Amended Facility may be increased up to $500.0 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 $400.0 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 our option, either (i) SOFR plus the applicable SOFR 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 SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25%.

The applicable SOFR margin will range from 1.10% to 1.55% (1.10% as of June 30, 2022) for the revolving credit facility and 1.25% to 1.75% (1.25% as of June 30, 2022) for the $100.0 million term loan, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value and includes a 10 basis points SOFR credit adjustment..

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 our outstanding consolidated indebtedness to the value of our consolidated gross asset value.

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

The Amended Facility and the Senior Unsecured Notes are not secured by our 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 we must comply.

We were in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of June 30, 2022 and 2021.

As of June 30, 2022 and December 31, 2021, we held cash and cash equivalents totaling approximately $7.2 million and $204.4 million, respectively.

The following tables summarize our debt maturities and principal payments as of June 30, 2022 and our market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the six months ended June 30, 2022 and 2021 (dollars in thousands, except per share data):

Facility Term Loan Senior

3 unchanged sentences

2025 12,000 — — 12,000

2026 — — 50,000 50,000

Thereafter — 100,000 425,000 525,000

2 unchanged sentences

Total Debt, net $ 12,000 $ 99,545 $ 621,514 $ 733,059

Weighted average interest rate n/a 1.3% 3.2% 3.0%

As of March 31, 2022 As of March 31, 2021

Weighted average interest rate 2.3% 2.8% 3.2% 3.1%

1 On August 1, 2022, we prepaid a $50.0 million tranche of the Senior Unsecured Notes using borrowings from our revolving credit facility.

The notes bore interest at 4.23% and had an original maturity date of September 1, 2022.

As of June 30, 2022 As of June 30, 2021

Total Debt, net $ 733,059 $ 448,154

15 unchanged sentences

Weighted Average Maturity of Total Debt (years) 5.4 4.1

1 Includes 308,677 and 216,047 shares of unvested restricted stock outstanding as of March 31, 2022 and 2021, respectively.

Also includes 423,012 and 270,546 shares held in the Deferred Compensation Plan as of March 31, 2022 and 2021, respectively.

2 Closing price of our shares of common stock on the New York Stock Exchange on March 31, 2022 and 2021, respectively, in dollars per share.

3 Total debt-to-total investments in properties is calculated as total debt, including premiums and net of deferred financing costs, divided by total investments in properties, including one property held for sale as of March 31, 2022 with a gross book value of approximately $42.3 million.

1 Includes 292,524 and 215,962 shares of unvested restricted stock outstanding as of June 30, 2022 and 2021, respectively.

Also includes 426,594 and 275,727 shares held in the Deferred Compensation Plan as of June 30, 2022 and 2021, respectively.

2 Closing price of a share of our common stock on the New York Stock Exchange on June 30, 2022 and 2021, respectively, in dollars per share.

3 Total debt-to-total investments in properties is calculated as total debt, including premiums and net of deferred financing costs, divided by total investments in properties.

4 Total debt-to-total market capitalization is calculated as total debt, including premiums and net of deferred financing costs, divided by total market capitalization.

5 Floating rate debt as a percentage of total debt is calculated as floating rate debt, including premiums and net of deferred financing costs, divided by total debt, including premiums and net of deferred financing costs.

Floating rate debt includes our $100.0 million variable-rate term loan borrowings, of which $50.0 million was subject to an interest

rate cap of 4.0% plus 1.20% to 1.70%, depending on leverage, as of March 31, 2021.

The interest rate cap expired on May 4, 2021.

See “Note 8 - Derivative Financial Instruments” in our condensed notes to consolidated financial statements for more information regarding our prior interest rate cap.

6 Unhedged floating rate debt as a percentage of total debt is calculated as unhedged floating rate debt, including premiums and net of deferred financing costs, divided by total debt, including premiums and net of deferred financing costs.

Hedged debt includes our $100.0 million variable-rate term loan borrowings, of which $50.0 million was subject to an interest rate cap of 4.0% plus 1.20% to 1.70%, depending on leverage, as of March 31, 2021.

The interest rate cap expired on May 4, 2021.

See “Note 8 - Derivative Financial Instruments” in our condensed notes to consolidated financial statements for more information regarding our prior interest rate cap.

7 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the three months ended March 31, 2022 and 2021, respectively.

7 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the six months ended June 30, 2022 and 2021, respectively.

See “Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q for a definition and reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.

5 unchanged sentences

The following table sets forth the cash dividends paid or payable per share during the three months ended March 31, 2022:

For the Three Months Ended Security Dividend per

The following table sets forth the cash dividends paid or payable per share during the six months ended June 30, 2022:

For the Three

Months Ended Security Dividend per

Share Declaration Date Record Date Date Paid

March 31, 2022 Common stock $ 0.34 February 8, 2022 March 25, 2022 April 8, 2022

June 30, 2022 Common stock $ 0.34 May 3, 2022 June 30, 2022 July 14, 2022

Sources and Uses of Cash

Our principal sources of cash are cash from operations, borrowings under loans payable, draws on our Facility, common and preferred stock issuances, proceeds from property dispositions and issuances of unsecured notes.

Our principal sources of cash are cash from operations, borrowings under loans payable, draws on our Amended Facility, common and preferred stock issuances, proceeds from property dispositions and issuances of unsecured notes.

Our principal uses of cash are asset acquisitions, debt service, capital expenditures, operating costs, corporate overhead costs and common stock dividends.

Cash From Operating Activities.

Net cash provided by operating activities totaled approximately $28.0 million for the three months ended March 31, 2022 compared to approximately $26.2 million for the three months ended March 31, 2021.

Net cash provided by operating activities totaled approximately $63.2 million for the six months ended June 30, 2022 compared to approximately $59.2 million for the six months ended June 30, 2021.

This increase in cash provided by operating activities is primarily attributable to additional cash flows generated from the properties acquired during 2022 and 2021 and increased rents on new and renewed leases at our same store properties.

Cash From Investing Activities.

Net cash used in investing activities was approximately $96.8 million and $112.4 million for the three months ended March 31, 2022 and 2021, respectively, which consisted primarily of cash paid for property acquisitions of approximately $68.1 million and $104.4 million, respectively, and additions to capital improvements of approximately $28.8 million and $8.0 million, respectively.

Net cash used in investing activities was approximately $219.1 million and $183.4 million for the six months ended June 30, 2022 and 2021, respectively, which consisted primarily of cash paid for property acquisitions of approximately $277.0 million and $160.0 million, respectively, and additions to capital improvements of approximately $48.9 million and $23.4 million, respectively.

Cash From Financing Activities.

Net cash used in financing activities was approximately $26.5 million for the three months ended March 31, 2022, which consisted primarily approximately $25.6 million in equity dividend payments.

Net cash provided by financing activities was approximately $8.8 million for the three months ended March 31, 2021, which consisted primarily of approximately $40.5 million in net common stock issuance proceeds, partially offset by approximately $19.9 million in equity dividend payments and approximately $11.3 million in mortgage loan payments.

Net cash used in financing activities was approximately $38.6 million for the six months ended June 30, 2022, which consisted primarily of approximately $51.3 million in equity dividend payments, partially offset by a $12.0 million draw on our revolving credit facility and approximately $1.5 million in net proceeds from the issuance of common stock.

Net cash provided by financing activities was approximately $59.1 million for the six months ended June 30, 2021, which consisted primarily of approximately $111.0 million in net proceeds from the issuance of common stock, partially offset by approximately $40.0 million in equity dividend payments and approximately $11.3 million in mortgage loan payments.

Critical Accounting Policies

1 unchanged sentence

Material Cash Commitments

As of May 3, 2022, we have ten outstanding contracts with third-party sellers to acquire ten industrial properties for a total aggregate purchase price of $177.7 million.

As of August 2, 2022, we have three outstanding contracts with third-party sellers to acquire three industrial properties for a total aggregate purchase price of $51.3 million.

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

The following table summarizes our material cash commitments due by period as of March 31, 2022 (dollars in thousands):

The following table summarizes our material cash commitments due by period as of June 30, 2022 (dollars in thousands):

Material Cash Commitments Less than 1

6 unchanged sentences

Total $ 121,007 $ 135,509 $ 190,969 $ 458,330 $ 905,815

1 As of May 3, 2022

As of May 3, 2022, we executed three non-binding letters of intent with third-party sellers to acquire three industrial properties for a total anticipated purchase price of approximately $108.4 million.

In the normal course of its business, we enter into non-binding letters of intent to purchase properties from third parties that may obligate us 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.

1 As of August 2, 2022

As of August 2, 2022, we executed three non-binding letters of intent with third-party sellers to acquire three industrial properties for a total anticipated purchase price of approximately $78.5 million.

satisfactory completion of various due diligence matters.

There can be no assurance that we 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.

9 unchanged sentences

As a result, we believe that the use of FFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance.

The following table reflects the calculation of FFO reconciled from net income for the three months ended March 31, 2022 and 2021 (dollars in thousands except per share data):

For the Three Months Ended March 31,

2022 2021 $ Change % Change

The following table reflects the calculation of FFO reconciled from net income for the three and six months ended June 30, 2022 and 2021 (dollars in thousands except per share data):

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

2022 2021 $ Change % Change 2022 2021 $ Change % Change

$ 97,033 $ 17,378 $ 79,655 458.4 % $ 116,695 $ 33,635 $ 83,060 246.9 %

Gain on sales of real estate investments (76,048) — (76,048) n/a (76,048) — (76,048) n/a

Depreciation and amortization 15,288 11,968 3,320 27.7 % 30,270 23,344 6,926 29.7 %

13 unchanged sentences

1 To be consistent with our policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the FFO per common share is adjusted for FFO distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method.

Under this method, allocations were made to 303,666 and 211,746 of weighted average unvested restricted shares outstanding for the three months ended March 31, 2022 and 2021, respectively.

2 Includes performance share award expense of approximately $1.5 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively.

Under this method, allocations were made to 295,247 and 216,025 of weighted average unvested restricted shares outstanding for the three

months ended June 30, 2022 and 2021, respectively, and 299,433 and 213,897 of weighted average unvested restricted shares outstanding for the six months ended June 30, 2022 and 2021, respectively.

2 Includes performance share award expense of approximately $0.4 million and $1.3 million for the three months ended June 30, 2022 and 2021, respectively, and approximately $1.9 million and $2.6 million for the six months ended June 30, 2022 and 2021, respectively.

See “Note 10 – Stockholders’ Equity” in our condensed notes to consolidated financial statements for more information regarding our performance share awards.

FFO increased by approximately $6.9 million for the three months ended March 31, 2022, compared to the same period from the prior year due primarily to same store NOI growth of approximately $3.2 million for the three months ended March 31, 2022 compared to the same period from the prior year, as well as property acquisitions during 2022.

The FFO increase was partially offset by increased weighted average common shares outstanding and increased general and administrative expenses due to additional headcount for the three months ended March 31, 2022 compared to the same period from the prior year.

FFO increased by approximately $6.9 million and $13.8 million for the three and six months ended June 30, 2022, respectively, compared to the same periods from the prior year due primarily to property acquisitions during 2021 and 2022 as well as same store NOI growth of approximately $2.6 million and $5.8 million for the three and six months ended June 30, 2022, respectively, compared to the same periods from the prior year.

The FFO increase was partially offset by increased weighted average common shares outstanding, increased acquisition costs and other due to environmental remediation at our Avenue A property and increased general and administrative expenses due to additional headcount for the three and six months ended June 30, 2022 compared to the same periods from the prior year.

We compute Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, gain on sales of real estate investments, acquisition costs and stock-based compensation.

2 unchanged sentences

As we are currently in a growth phase, acquisition costs are excluded from Adjusted EBITDA to allow for the comparison of our operating performance to that of stabilized companies.

The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three months ended March 31, 2022 and 2021 (dollars in thousands):

For the Three Months Ended March 31,

2022 2021 $ Change % Change

The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

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

2022 2021 $ Change % Change 2022 2021 $ Change % Change

Net income $ 97,033 $ 17,378 $ 79,655 458.4 % $ 116,695 $ 33,635 $ 83,060 246.9 %

Gain on sales of real estate investments (76,048) — (76,048) n/a (76,048) — (76,048) n/a

Depreciation and amortization 15,288 11,968 3,320 27.7 % 30,270 23,344 6,926 29.7 %

1 unchanged sentence

Stock-based compensation 2,010 2,677 (667) (24.9) % 4,839 4,647 192 4.1 %

Acquisition costs 28 55 (27) (49.1) %

Acquisition costs and other 1,027 117 910 777.8 % 1,055 172 883 513.4 %

Adjusted EBITDA $ 44,357 $ 36,156 $ 8,201 22.7 % $ 86,939 $ 69,959 $ 16,980 24.3 %

3 unchanged sentences

We compute cash-basis same store NOI as same store NOI excluding straight-line rents and amortization of lease intangibles.

The same store pool includes all properties that were owned and in operation as of March 31, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of March 31, 2022.

The same store pool includes all properties that were owned and in operation as of June 30, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of June 30, 2022.

We believe that presenting NOI, same store NOI and cash-basis same store NOI provides useful information to investors regarding the operating performance of our properties because NOI excludes certain items that are not considered to be controllable in connection with the management of the properties, such as depreciation, amortization, general and administrative expenses, acquisition costs and interest expense.

By presenting same store NOI and cash-basis same store NOI, the operating results on a same store basis are directly comparable from period to period.

The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three months ended March 31, 2022 and 2021 (dollars in thousands):

For the Three Months Ended March 31,

2022 2021 $ Change % Change

The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

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

2022 2021 $ Change % Change 2022 2021 $ Change % Change

$ 97,033 $ 17,378 $ 79,655 458.4 % $ 116,695 $ 33,635 $ 83,060 246.9 %

1 unchanged sentence

General and administrative 7,333 6,866 467 6.8 % 14,860 12,448 2,412 19.4 %

Acquisition costs 28 55 (27) (49.1) %

Total other income and expenses 4,960 3,909 1,051 26.9 %

Acquisition costs and other 1,027 117 910 777.8 % 1,055 172 883 513.4 %

Total other income and expenses (71,116) 3,795 (74,911) n/a (66,156) 7,704 (73,860) n/a

Net operating income 49,565 40,124 9,441 23.5 % 96,724 77,303 19,421 25.1 %

9 unchanged sentences

Cash-basis same store NOI excluding termination fees $ 37,825 $ 34,047 $ 3,778 11.1 % $ 74,194 $ 66,659 $ 7,535 11.3 %

1 Includes approximately $0.1 million of lease termination income for both the three months ended March 31, 2022 and 2021.

2 Includes 2021 and 2022 acquisitions and dispositions, 13 improved land parcels consisting of approximately 36.8 acres, four properties under redevelopment, one completed redevelopment property with an aggregate book value of approximately $ 7.5 million and one property consisting of 18 buildings held for sale with a gross book value of approximately $42.3 million, as of March 31, 2022.

1 Includes approximately $0.1 million and $0.1 million of lease termination income for the three months ended June 30, 2022 and 2021, respectively, and approximately $0.2 million and $0.2 million of lease termination income for the six months ended June 30, 2022 and 2021, respectively.

2 Includes 2021 and 2022 acquisitions and dispositions, 18 improved land parcels consisting of approximately 56.2 acres and four properties under redevelopment and one completed redevelopment property with an aggregate book value of approximately $37.7 million as of June 30, 2022.

3 Includes straight-line rents and amortization of lease intangibles for the same store pool only.

Cash-basis same store NOI increased by approximately $3.8 million for the three months ended March 31, 2022 compared to the same period from the prior year due to increased rental revenue on new and renewed leases and contractual rent increases.

For both the three months ended March 31, 2022 and 2021, total contractual rent abatements of approximately $0.9 million, were given to certain tenants in the same-store pool and approximately $0.1 million in lease termination income was received from certain tenants in the same store pool.

In addition, for the three months ended March 31, 2022 and 2021, cash-basis same store NOI included approximately $0.1 million related to properties that were acquired vacant or with near term expirations in 2020.

Cash-basis same store NOI increased by approximately $3.8 million for the three months ended June 30, 2022 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases and contractual rent increases included in pre-existing leases.

For the three months ended June 30, 2022 and 2021, total contractual rent abatements of approximately $0.5 million and $0.7 million, respectively, were given to certain tenants in the same-store pool and approximately $0.1 million and $0 million, respectively, in lease termination income was received from certain tenants in the same store pool.

In addition, approximately $0.1 million of the increase in cash-basis same store NOI for the three months ended June 30, 2022 related to properties that were acquired vacant or with near term expirations in 2020.

Cash-basis same store NOI increased by approximately $7.6 million for the six months ended June 30, 2022 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases and increased occupancy.

For the six months ended June 30, 2022 and 2021, total contractual rent abatements of approximately $1.4 million and $1.6 million, respectively, were given to certain tenants in the same-store pool and approximately $0.2 million and $0.1 million, respectively, in lease termination income was received from certain tenants in the same store pool.

In addition, approximately $0.2 million of the increase in cash-basis same store NOI for the six months ended June 30, 2022 related to properties that were acquired vacant or with near term expirations in 2020.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis