What changed in this filing

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Item 2. Properties

2023-02-08 compared with 2022-02-09 · 26 added, 31 removed, 112 unchanged (34% of the section changed)

As of December 31, 2021, we owned a total of 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.

As of December 31, 2021, the buildings and improved land parcels were approximately 95.5% and 94.8% leased (including 0.4 million square feet of vacancy acquired during the fourth quarter of 2021), respectively, to 554 customers, the largest of which accounted for approximately 4.9% of our total annualized base rent.

As of December 31, 2022, we owned a total of 252 buildings aggregating approximately 15.3 million square feet, 46 improved land parcels consisting of approximately 161.4 acres and three properties under redevelopment that, upon completion, will consist of one building of approximately 34,000 square feet and two improved land parcels aggregating approximately 12.1 acres.

As of December 31, 2022, the buildings and improved land parcels were approximately 98.6% and 92.5% leased, respectively, to 569 customers, the largest of which accounted for approximately 4.3% of our total annualized base rent.

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

12 unchanged sentences

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

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

20 unchanged sentences

89.4 % 100.0 % 100.0 % 92.4 % 32.0 % 100.0 % 92.5 %

Annualized Base Rent

(in thousands) 1

Annualized Base Rent (in thousands) 1

$ 8,199 $ 11,423 $ 1,467 $ 3,882 $ 428 $ 1,953 $ 27,352

14 unchanged sentences

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

3 Includes four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.2 million square feet and two improved land parcels aggregating approximately 12.1 acres.

4 Includes 0.4 million square feet of vacancy acquired in Miami.

As of December 31, 2021, we owned 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.

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3 Includes three properties under redevelopment that, upon completion, will consist of one building of approximately 34,000 square feet and two improved land parcels aggregating approximately 12.1 acres.

As of December 31, 2022, we owned three properties under redevelopment that, upon completion, will consist of one building of approximately 34,000 square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $69.3 million, including redevelopment costs, capitalized interest and other costs.

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

13 unchanged sentences

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

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

3 unchanged sentences

(in thousands) 1

Base Rent Improved Land Acreage

1 Amazon.com 6 471,880 3.1 % $ 9,444 4.3 % 6.2

6 471,880 3.1 % $ 9,059 4.9 %

2 FedEx Corporation 6 246,779 1.6 % 4,943 2.3 % 7.7

6 246,779 1.6 % 4,814 2.6 %

3 Danaher 3 171,707 1.1 % 3,960 1.8 % —

1 unchanged sentence

5 District of Columbia 8 245,888 1.7 % 3,480 1.7 % —

6 O'Neill Logistics 2 237,692 1.6 % 2,069 1.1 %

6 DirectBuy Home Improvement 1 230,891 1.5 % 3,463 1.6 % —

8 Costco-Innovel Solutions LLC 1 219,910 1.5 % 1,870 1.0 %

7 Allied Brothers Intermodal Inc.

1 30,978 0.2 % 2,580 1.2 % —

8 O'Neill Logistics 2 237,692 1.6 % 2,131 1.0 % —

9 Port Kearny Security, Inc.

1 — — % 2,040 0.9 % 16.9

10 B&B Granite Block Sales, LLC

1 — — % 1,944 0.9 % 7.2

11 Costco-Innovel Solutions LLC 1 219,910 1.4 % 1,926 0.9 % —

12 Hanjin International America, Inc.

and Hanjin Transportation Co., LTD 1 114,061 0.7 % 1,848 0.8 % —

13 XPO Logistics 2 180,717 1.2 % 1,843 0.8 % —

14 Team Alliance Logistics Inc.

DBA A&V Transportation

2 — — % 1,805 0.8 % 4.4

15 L3 Harris Technologies, Inc.

1 147,898 1.0 % 1,751 0.8 % —

12 Exquisite Apparel Corporation 1 114,061 0.8 % 1,574 0.9 %

16 Divergent Technologies, Inc.

2 72,808 0.5 % 1,613 0.8 % 1.4

17 Bar Logistics 1 203,263 1.3 % 1,593 0.7 % —

1 unchanged sentence

1 190,000 1.2 % 1,552 0.7 % —

15 Envogue International 1 192,000 1.3 % 1,454 0.8 %

19 YRC 2 61,252 0.4 % 1,540 0.7 % —

17 United States Postal Service 2 53,000 0.4 % 1,438 0.8 %

18 Lilac Solutions Inc.

1 92,884 0.6 % 1,378 0.7 %

19 Saia Motor Freight Line LLC 1 52,086 0.3 % 1,315 0.7 %

20 Northrop Grumman Systems Corporation 1 103,200 0.7 % 1,300 0.7 %

20 PODS Enterprises, LLC 1 201,977 1.3 % 1,515 0.7 % —

Total 51 3,328,433 21.8 % $ 54,900 25.2 % 43.8

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of December 31, 2021, multiplied by 12.

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

3 Includes two improved land parcels consisting of approximately 7.7 acres.

4 Includes an improved land parcel consisting of approximately 16.9 acres.

1 Annualized base rent is calculated as contractual monthly base rent per the leases for rentable square feet and/or, if applicable, improved land, excluding any partial or full rent abatements, as of December 31, 2022, multiplied by 12.

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

13 unchanged sentences

3 Includes annualized base rent related to 46 improved land parcels totaling approximately 161.4 acres.

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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.

1 unchanged sentence

We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our 2023 expirations will be above the rates currently being paid for the same space.

Rent changes on new and renewed leases totaling approximately 0.6 million square feet commencing during the three months ended December 31, 2021 were approximately 34.4% higher as compared to the previous rental rates for that same space, and rent changes on new and renewed leases totaling approximately 2.6 million square feet commencing during the year ended December 31, 2021 were approximately 28.4% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio of 57.5% and 65.7%, respectively, for the three months and year ended December 31, 2021.

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 0.3 million square feet and 2.6 acres of improved land commencing during the three months ended December 31, 2022 were approximately 45.2% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 2.2 million square feet and 19.1 acres of improved land commencing during the year ended December 31, 2022 were approximately 49.5% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio for the operating portfolio of 80.6% and 56.6%, respectively, for the three months and year ended December 31, 2022.

We had a tenant retention ratio for the improved land portfolio of 0% and 65.0%, respectively, for the three months and year ended December 31, 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.

4 unchanged sentences

Not Applicable.

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

What changed 10-K

Item 2. Properties