Terreno Realty Corp 10-K

Item 9A. Controls And Procedures. Evaluation of Disclosure Controls and Procedures 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. 53 Table of Contents 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, 2022. 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, 2022, 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, 2022). 54 Table of Contents 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, 2022, 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, 2022, 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, 2022 and 2021, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15 of the Company and our report dated February 8, 2023 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 8, 2023 55 Table of Contents Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. On February 7, 2023, David M. Lee informed us that he would not stand for re-election at our 2023 Annual Meeting of Stockholders (the “Annual Meeting”) in order to focus on other commitments. Mr. Lee will continue to serve on our board of directors and maintain his committee memberships through the Annual Meeting. Mr. Lee’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, 2022 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, 2022 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, 2022 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, 2022 and is incorporated herein by reference. Item 14. Principal Accountant 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, 2022 and is incorporated herein by reference. 56 Table of Contents 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 ) 58 Consolidated Balance Sheets as of December 31, 2022 and 2021 60 Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 61 Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 62 Consolidated Statements of Equity for the years ended December 31, 2022, 2021 and 2020 63 Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 64 Notes to Consolidated Financial Statements 65 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. 57 Table of Contents 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, 2022 and 2021, the related consolidated statements of operations, comprehensive income , equity and cash flows for each of the three years in the period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 8, 2023 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. 58 Table of Contents Valuation of acquired properties Description of matter During the year ended December 31, 2022, the Company completed 20 real estate acquisitions for a total purchase price of $422.3 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. 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 8, 2023 59 Table of Contents Terreno Realty Corporation Consolidated Balance Sheets (in thousands – except share and per share data) December 31, 2022 December 31, 2021 ASSETS Investments in real estate Land $ 1,850,860 $ 1,556,952 Buildings and improvements 1,372,473 1,210,591 Construction in progress 51,896 65,157 Intangible assets 123,545 114,126 Total investments in properties 3,398,774 2,946,826 Accumulated depreciation and amortization ( 323,631 ) ( 279,062 ) Net investments in properties 3,075,143 2,667,764 Cash and cash equivalents 26,393 204,404 Restricted cash 1,690 397 Other assets, net 61,215 51,650 Total assets $ 3,164,441 $ 2,924,215 LIABILITIES AND EQUITY Liabilities Credit facility $ — $ — Term loans payable, net 198,993 99,495 Senior unsecured notes, net 571,825 621,175 Security deposits 27,454 23,914 Intangible liabilities, net 55,873 51,025 Dividends payable 30,753 25,618 Accounts payable and other liabilities 49,692 45,025 Total liabilities 934,590 866,252 Commitments and contingencies (Note 12) Equity Stockholders’ equity Common stock: $ 0.01 par value, 400,000,000 shares authorized, and 76,463,482 75,068,575 shares issued and outstanding at December 31, 2022 and 2021, respectively. 765 752 Additional paid-in capital 2,167,276 2,069,604 Common stock held in deferred compensation plan, 417,665 and 275,727 shares at December 31, 2022 and 2021, respectively. ( 26,462 ) ( 15,197 ) Retained earnings 88,272 2,804 Total stockholders’ equity 2,229,851 2,057,963 Total liabilities and equity $ 3,164,441 $ 2,924,215 The accompanying notes are an integral part of these consolidated financial statements. 60 Table of Contents Terreno Realty Corporation Consolidated Statements of Operations (in thousands – except share and per share data) For the Year Ended December 31, 2022 2021 2020 REVENUES Rental revenues and tenant expense reimbursements $ 276,212 $ 221,930 $ 186,884 Total revenues 276,212 221,930 186,884 COSTS AND EXPENSES Property operating expenses 68,903 56,248 49,096 Depreciation and amortization 65,763 50,687 45,875 General and administrative 31,192 26,964 23,489 Acquisition costs and other 1,465 172 271 Total costs and expenses 167,323 134,071 118,731 OTHER INCOME (EXPENSE) Interest and other income 809 822 873 Interest expense, including amortization ( 23,850 ) ( 18,054 ) ( 15,997 ) Gain on sales of real estate investments 112,166 16,627 26,766 Total other income (expense) 89,125 ( 605 ) 11,642 Net income 198,014 87,254 79,795 Allocation to participating securities ( 854 ) ( 311 ) ( 400 ) Net income available to common stockholders $ 197,160 $ 86,943 $ 79,395 EARNINGS PER COMMON SHARE - BASIC AND DILUTED: Net income available to common stockholders - basic $ 2.61 $ 1.23 $ 1.17 Net income available to common stockholders - diluted $ 2.61 $ 1.23 $ 1.16 BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 75,498,107 70,534,202 67,762,927 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 75,586,480 70,793,670 68,170,066 The accompanying notes are an integral part of these consolidated financial statements. 61 Table of Contents Terreno Realty Corporation Consolidated Statements of Comprehensive Income (in thousands) For the Year Ended December 31, 2022 2021 2020 Net income $ 198,014 $ 87,254 $ 79,795 Other comprehensive income: Cash flow hedge adjustment — 183 254 Comprehensive income $ 198,014 $ 87,437 $ 80,049 The accompanying notes are an integral part of these consolidated financial statements. 62 Table of Contents 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, 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 ) — — — — — — — Common shares acquired 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 Net income — — — — — 198,014 — 198,014 Issuance of common stock, net of issuance costs of $ 1,557 1,444,156 13 77,281 — — — — 77,294 Forfeiture of common stock related to employee awards ( 29,391 ) — — — — — — — Common shares acquired related to employee awards ( 14,823 ) — ( 1,045 ) — — — — ( 1,045 ) Issuance of restricted stock 136,903 — — — — — — — Stock-based compensation — — 10,171 — — — — 10,171 Common stock dividends ($ 1.48 per share) — — — — — ( 112,546 ) — ( 112,546 ) Deposits to deferred compensation plan, net of withdrawals ( 141,938 ) — 11,265 141,938 ( 11,265 ) — — — Other comprehensive income — — — — — — — — Balance as of December 31, 2022 76,463,482 $ 765 $ 2,167,276 417,665 $ ( 26,462 ) $ 88,272 $ — $ 2,229,851 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Contents Terreno Realty Corporation Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 198,014 $ 87,254 $ 79,795 Adjustments to reconcile net income to net cash provided by operating activities Straight-line rents ( 9,353 ) ( 8,683 ) ( 361 ) Amortization of lease intangibles ( 16,271 ) ( 7,686 ) ( 5,420 ) Depreciation and amortization 65,763 50,687 45,875 Gain on sales of real estate investments ( 112,166 ) ( 16,627 ) ( 26,766 ) Deferred financing cost amortization 1,371 1,335 1,391 Deferred senior secured loan fee amortization — — ( 57 ) Stock-based compensation 10,171 9,554 9,826 Changes in assets and liabilities Other assets ( 1,368 ) ( 3,669 ) ( 3,911 ) Accounts payable and other liabilities 7,049 20,043 678 Net cash provided by operating activities 143,210 132,208 101,050 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for property acquisitions ( 407,558 ) ( 644,956 ) ( 98,088 ) Proceeds from sales of real estate investments, net 162,145 41,082 70,685 Additions to construction in progress ( 25,638 ) ( 11,274 ) ( 8,989 ) Additions to buildings, improvements and leasing costs ( 66,611 ) ( 51,290 ) ( 31,611 ) Repayments on senior secured loan — — 15,915 Net cash used in investing activities ( 337,662 ) ( 666,438 ) ( 52,088 ) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 78,851 462,386 64,767 Issuance costs on issuance of common stock ( 1,163 ) ( 5,683 ) ( 940 ) Repurchase of common stock related to employee awards ( 1,045 ) ( 582 ) ( 9,837 ) Borrowings on credit facility 208,000 75,000 — Payments on credit facility ( 208,000 ) ( 75,000 ) — Borrowings on term loans payable 100,000 — — Borrowings on senior unsecured notes — 275,000 — Payments on senior unsecured notes ( 50,000 ) — — Payments on mortgage loan payable — ( 11,271 ) ( 33,077 ) Payment of deferred financing costs ( 1,498 ) ( 4,027 ) — Dividends paid to common stockholders ( 107,411 ) ( 84,628 ) ( 74,778 ) Net cash provided by financing activities 17,734 631,195 ( 53,865 ) Net (decrease) increase in cash and cash equivalents and restricted cash ( 176,718 ) 96,965 ( 4,903 ) Cash and cash equivalents and restricted cash at beginning of year 204,801 107,836 112,739 Cash and cash equivalents and restricted cash at end of year $ 28,083 $ 204,801 $ 107,836 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest, net of capitalized interest $ 25,219 $ 15,144 $ 16,315 Supplemental disclosures of non-cash transactions Accounts payable related to capital improvements 18,158 16,873 10,552 Non-cash issuance of common stock to the deferred compensation plan ( 11,265 ) ( 7,651 ) ( 7,546 ) Lease liability arising from recognition of right-of-use asset 1,192 3,287 — Reconciliation of cash paid for property acquisitions Acquisition of properties $ 422,298 $ 681,970 $ 100,391 Assumption of other assets and liabilities ( 14,740 ) ( 37,014 ) ( 2,303 ) Net cash paid for property acquisitions $ 407,558 $ 644,956 $ 98,088 The accompanying notes are an integral part of these consolidated financial statements. 64 Table of Contents 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, 2022, the Company owned 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. 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 65 Table of Contents 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, 2022, 2021 or 2020. 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 $ 16.3 million, $ 7.7 million and $ 5.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. The origination value of in-place leases is based on costs to execute similar leases, including commissions and other related costs. The origination value of in-place leases also includes real estate taxes, insurance and an estimate of lost rental revenue at market rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition. The remaining weighted average lease term related to these intangible assets and liabilities as of December 31, 2022 was 6.6 years. As of December 31, 2022 and 2021, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands): December 31, 2022 December 31, 2021 Gross Accumulated Amortization Net Gross Accumulated Amortization Net In-place leases $ 119,959 $ ( 83,222 ) $ 36,737 $ 110,351 $ ( 72,266 ) $ 38,085 Above-market leases 3,586 ( 3,558 ) 28 3,775 ( 3,706 ) 69 Below-market leases ( 95,638 ) 39,765 ( 55,873 ) ( 78,753 ) 27,728 ( 51,025 ) Total $ 27,907 $ ( 47,015 ) $ ( 19,108 ) $ 35,373 $ ( 48,244 ) $ ( 12,871 ) 66 Table of Contents Projected net amortization of the intangible assets and liabilities for the next five years and thereafter as of December 31, 2022 is as follows (dollars in thousands): 2023 $ ( 242 ) 2024 ( 1,278 ) 2025 ( 2,035 ) 2026 ( 2,150 ) 2027 ( 2,011 ) Thereafter ( 11,392 ) Total $ ( 19,108 ) 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, 2022 2021 2020 Beginning Cash and cash equivalents at beginning 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 Ending Cash and cash equivalents at end of year 26,393 204,404 107,180 Restricted cash 1,690 397 656 Cash and cash equivalents and restricted cash 28,083 204,801 107,836 Net (decrease) increase in cash and cash equivalents and restricted cash $ ( 176,718 ) $ 96,965 $ ( 4,903 ) 67 Table of Contents 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, 2022 and 2021, approximately $ 48.0 million and $ 39.7 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.6 million and $ 0.5 million as of December 31, 2022 and 2021, 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 $ 11.9 million and $ 10.6 million as of December 31, 2022 and 2021, 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, 2022 and 2021, 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, 2022, include years 2018 to 2021 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 68 Table of Contents 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 will be expressed as a number of shares of common stock and settled in shares of common stock. The grant date fair value of the Performance Share awards will be determined using a Monte Carlo simulation model on the date of grant and recognized on a straight-line basis over the performance period. Use of Derivative Financial 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. 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. As of December 31, 2022, the Company owned 43 buildings aggregating approximately 2.7 million square feet and 13 improved land parcels consisting of approximately 68.0 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 24.9 % of its annualized base rent. Such annualized base rent percentages are based on contractual base rent from leases in effect as of December 31, 2022, 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, 2022, 2021 and 2020. Note 4. Investments in Real Estate During the year ended December 31, 2022, the Company acquired 20 industrial properties with a total initial investment, including acquisition costs, of approximately $ 422.3 million, of which $ 316.0 million was recorded to land, $ 94.4 million to buildings and improvements, and $ 11.9 million to intangible assets. Additionally, the Company assumed $ 17.1 million in liabilities. The following table sets forth the wholly-owned industrial properties the Company acquired during the year ended December 31, 2022: 69 Table of Contents Property Name Location Acquisition Date Number of Buildings Square Feet Purchase Price (in thousands) 1 Improved Land Acreage Countyline #29 & #30 Hialeah, FL February 9, 2022 2 407,000 $ 73,200 — 33rd Place Bellevue, WA February 23, 2022 2 29,000 13,040 1.2 NE 91st Redmond, WA April 8, 2022 2 32,000 9,780 — 87 Doremus Newark, NJ April 18, 2022 — — 17,300 9.7 3660 Thomas Road Santa Clara, CA May 4, 2022 1 135,000 54,600 — 127 Doremus Avenue Newark, NJ May 19, 2022 — — 11,900 2.4 3660 Fee Ana Anaheim, CA May 24, 2022 — — 15,000 2.1 332 Hindry Avenue Inglewood, CA May 25, 2022 1 19,000 9,280 — 8320-8400 Isis Avenue Los Angeles, CA May 25, 2022 1 40,000 17,902 — Teagarden San Leandro, CA June 1, 2022 5 104,000 34,600 — 293 Roanoke Avenue Newark, NJ June 7, 2022 — — 13,000 1.8 8660 Willows Road Redmond, WA June 17, 2022 — — 19,900 3.5 8050 NW 90th St Medley, FL July 5, 2022 — — 20,000 6.7 4857 W 147th St Hawthorne, CA August 2, 2022 — — 6,500 1.3 19500 South Alameda St Rancho Dominguez, CA August 3, 2022 — — 32,075 3.0 3091 East Coronado St Anaheim, CA September 6, 2022 — — 7,325 1.2 7045 NW 46th St Miami, FL October 24, 2022 1 16,000 4,703 — 5401 West 104th St Los Angeles, CA November 1, 2022 1 26,000 17,000 — 629 Henry Elizabeth, NJ November 29, 2022 1 23,000 15,350 — 14805 S Maple Ave Rancho Dominguez, CA December 30, 2022 — — 22,358 2.8 Total/Weighted Average 17 831,000 $ 414,813 35.7 1 Excludes intangible liabilities and mortgage premiums, if any. The total aggregate initial investment was approximately $ 422.3 million, including $ 13.0 million in capitalized closing costs and acquisition costs and $ 14.1 million in assumed intangible liabilities and $ 19.6 million in other credits related to near term capital expenditures at the Countyline #29 & #30 properties. The Company recorded revenues and net income for the year ended December 31, 2022 of approximately $ 11.4 million and $ 3.2 million, respectively, related to the 2022 acquisitions. 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: 70 Table of Contents Property Name Location Acquisition Date Number of Buildings Square Feet Purchase Price (in thousands) 1 Improved Land 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. 71 Table of Contents 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. 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, 2022, the Company had 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. The following table summarizes certain information with respect to the properties under redevelopment as of December 31, 2022: Property Name Location Total Expected Investment (in thousands) 1 Estimated Post-Development Acreage Estimated Post-Development Square Feet Berryessa San Jose, CA $ 25,961 7.2 N/A Paterson Plank III Carlstadt, NJ 25,303 4.9 N/A 147th Street Hawthorne, CA 18,060 N/A 34,000 Total/Weighted Average $ 69,324 12.1 34,000 1 Total expected investment for the properties include the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization. During 2022, the Company completed redevelopment of three properties aggregating approximately 0.6 million square feet. The following table summarizes certain information with respect to the completed redevelopment properties as of December 31, 2022: Property Name Location Total Investment (in thousands) 1 Square Feet Completion Quarter America's Gateway Miami, FL $ 7,500 51,800 Q1 2022 Countyline #29 & #30 Hialeah, FL 75,539 407,084 Q2/Q3 2022 73rd Street Miami, FL 20,200 128,844 Q3 2022 Total/Weighted Average $ 103,239 587,728 1 Total investment for the properties include the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization. The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 2.6 million, $ 0.7 million and $ 1.6 million during the years ended December 31, 2022, 2021 and 2020, 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, 2022 and 2021, the Company did not have any properties held for sale. During the year ended December 31, 2022, the Company sold three properties located in the Northern New Jersey/New York City market for a total aggregate sales price of approximately $ 159.7 million, resulting in a gain of approximately $ 107.1 million, and one property located in the Seattle market for a sales price of approximately $ 8.6 million, resulting in a gain of approximately $ 5.1 million. 72 Table of Contents 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 Northern New Jersey/New York City 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. Note 6. Debt As of December 31, 2022 and 2021, the Company had $ 775.0 million and $ 725.0 million, respectively, of unsecured debt and no secured debt. The following table summarizes the components of the Company’s indebtedness as of December 31, 2022 and 2021 (dollars in thousands): 2022 2021 Margin Above SOFR Interest Rate 1 Contractual Maturity Date Unsecured Debt: Credit Facility $ — $ — 1.1 % 2 N/A 8/20/2025 5 -Year Term Loan 100,000 100,000 1.3 % 2 5.6 % 1/15/2027 5 -Year Term Loan 100,000 — 1.3 % 2 5.4 % 1/15/2028 $ 50 M 7 -Year Unsecured 3, 4 — 50,000 n/a 4.2 % 9/1/2022 $ 100 M 7 -Year Unsecured 3 100,000 100,000 n/a 3.8 % 7/14/2024 $ 50 M 10 -Year Unsecured 3 50,000 50,000 n/a 4.0 % 7/7/2026 $ 50 M 12 -Year Unsecured 3 50,000 50,000 n/a 4.7 % 10/31/2027 $ 100 M 7 -Year Unsecured 3 100,000 100,000 n/a 2.4 % 7/15/2028 $ 100 M 10 -Year Unsecured 3 100,000 100,000 n/a 3.1 % 12/3/2029 $ 125 M 9 -Year Unsecured 3 125,000 125,000 n/a 2.4 % 8/17/2030 $ 50 M 10 -Year Unsecured 3 50,000 50,000 n/a 2.8 % 7/15/2031 Total Unsecured Debt 775,000 725,000 Less: Unamortized premium/discount and debt issuance costs ( 4,182 ) ( 4,330 ) Total $ 770,818 $ 720,670 1 Reflects the contractual interest rate under the terms of each loan as of December 31, 2022. 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 the Secured Overnight Financing Rate (“SOFR”) plus a SOFR margin. The SOFR margins will range from 1.10 % to 1.55 % ( 1.10 % as of December 31, 2022) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of December 31, 2022) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment. 3 Collectively, the “Senior Unsecured Notes”. 4 On August 1, 2022, the Company prepaid a $ 50 million tranche of 7-year senior unsecured notes using borrowings from the Company’s revolving credit facility. On September 2, 2022, the Company entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) to add an additional $ 100.0 million term loan that matures in January 2028. The Company drew the full amount available under the term loan upon entry into the Second Amendment. The Amended Facility consists of a $ 400.0 million revolving credit facility that matures in August 2025, a $ 100.0 million term loan that matures in January 2027 and a $ 100.0 million term loan that matures in January 2028. As of December 31, 2022 and 2021, there were no borrowings outstanding on the revolving credit facility and $ 200.0 million and $ 100.0 million, respectively, of borrowings outstanding on the term loans. 73 Table of Contents The aggregate amount of the Amended Facility may be increased by up to an additional $ 500.0 million to a maximum amount not to exceed $ 1.1 billion, 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 $ 400.0 million revolving credit facility, the $ 100.0 million term loan maturing in January 2027 and the $ 100.0 million term loan maturing in January 2028, or (ii) 60.0 % of the value of the unencumbered properties. Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at the Company’s 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, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25 %, or 1.25 % per annum. The applicable SOFR margin will range from 1.10 % to 1.55 % ( 1.10 % as of December 31, 2022) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of December 31, 2022) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s 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 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, 2022 and 2021. The scheduled principal payments of the Company’s debt as of December 31, 2022 were as follows (dollars in thousands): Credit Facility Term Loan Senior Unsecured Notes Total Debt 2023 $ — $ — $ — $ — 2024 — — 100,000 100,000 2025 — — — — 2026 — — 50,000 50,000 2027 — 100,000 50,000 150,000 Thereafter — 100,000 375,000 475,000 Total debt — 200,000 575,000 775,000 Deferred financing costs, net — ( 1,007 ) ( 3,175 ) ( 4,182 ) Total debt, net $ — $ 198,993 $ 571,825 $ 770,818 Weighted average interest rate N/A 5.5 % 3.1 % 3.7 % Note 7. Leasing The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of December 31, 2022. The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements (dollars in thousands): 2023 $ 213,038 2024 199,387 2025 171,544 2026 139,421 2027 98,428 Thereafter 182,046 Total $ 1,003,864 Note 8. Derivative Financial Instruments The Company had no interest rate caps as of December 31, 2022 or 2021. 74 Table of Contents 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, 2022, 2021 and 2020 (dollars in thousands): For the Year Ended December 31, 2022 2021 2020 Interest rate caps in cash flow hedging relationships: Amount of gain recognized in accumulated other comprehensive income (loss) (“AOCI”) on derivatives (effective portion) $ — $ — $ — Amount of gain reclassified from AOCI into interest expense (effective portion) $ — $ 183 $ 254 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, 2022 and 2021, 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 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, 2022 and 2021 (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, 2022 $ 700,926 $ — $ 700,926 $ — $ 770,818 December 31, 2021 $ 743,592 $ — $ 743,592 $ — $ 720,670 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 ($ 142.6 million remaining as of December 31, 2022) 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, 2022, the Company issued an aggregate of 1,286,125 shares of common stock at a weighted average offering price of $ 61.31 per share under the $ 300 Million ATM Program resulting in net proceeds of approximately $ 77.7 million and paying total compensation to the applicable sales agents of approximately $ 1.1 million. 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 75 Table of Contents 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 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, 2024. 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, 2022, the Company had not repurchased any shares of common stock pursuant to its share repurchase program. In connection with the Annual Meeting of Stockholders on May 3, 2022, the Company granted a total of 10,746 unrestricted shares of the Company's common stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 69.82 . 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 $ 0.8 million in compensation costs for the year ended December 31, 2022 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, 2022, 2021 and 2020, 150,867 , 136,503 and 139,224 shares of common stock, respectively, were deposited into the Deferred Compensation Plan. During the years ended December 31, 2022, 2021 and 2020, 8,929 , 0 and 0 shares of common stock, respectively, were withdrawn from the Deferred Compensation Plan. As of December 31, 2022, 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 735,392 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, 2022 ranged from $ 14.20 to $ 78.33 . The fair value of the restricted stock that was granted during the year ended December 31, 2022 was approximately $ 9.1 million and the vesting period for the restricted stock is typically between one and five years . As of December 31, 2022, the Company had approximately $ 13.2 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 3.2 years. The Company recognized compensation costs of approximately $ 4.9 million, $ 3.6 million and $ 2.6 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to the restricted stock issuances. 76 Table of Contents 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, 2022, 2021 and 2020: Restricted Stock Activity: Shares Weighted Average Grant Date Fair Value 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 Granted 136,903 66.35 Forfeited ( 29,391 ) 59.69 Vested ( 40,066 ) 56.06 Non-vested shares outstanding as of December 31, 2022 356,632 $ 59.58 The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of December 31, 2022: Non-vested Shares Vesting Schedule Number of Shares 2023 63,160 2024 99,177 2025 66,689 2026 43,990 2027 83,616 Thereafter — Total Non-vested Shares 356,632 Long-Term Incentive Plan: As of December 31, 2022, there were three open performance measurement periods for the Performance Share awards: January 1, 2020 to December 31, 2022, January 1, 2021 to December 31, 2023, and January 1, 2022 to December 31, 2024. The expense related to the open Performance Share awards granted prior to January 1, 2020 varies quarter to quarter based on the Company’s relative share price performance. The following table summarizes certain information with respect to the Performance Share awards granted prior to January 1, 2020 (dollars in thousands): Fair Value Performance Share Period Maximum Potential Payout Fair Value December 31, 2022 Accrual December 31, 2022 Expense for the Year Ended December 31, 2022 2021 2020 January 1, 2018 - December 31, 2020 $ — $ — $ — $ — $ — $ 3,138 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 and includes the forfeiture of certain of the Performance Share awards during the years ended December 31, 2022, 2021 and 2020 (dollars in thousands): 77 Table of Contents Performance Share Period Fair Value on Date of Grant 1 Expense for the Year Ended December 31, 2022 2021 2020 January 1, 2019 - December 31, 2021 $ 4,829 $ — $ 1,609 $ 1,610 January 1, 2020 - December 31, 2022 4,882 1,168 1,858 1,857 January 1, 2021 - December 31, 2023 4,820 1,393 1,822 — January 1, 2022 - December 31, 2024 5,789 1,929 — — Total $ 20,320 $ 4,490 $ 5,289 $ 3,467 1 Reflects the fair value on date of grant for all performance shares outstanding at December 31, 2022. Dividends: The following table sets forth the cash dividends paid or payable per share during the years ended December 31, 2022 and 2021: 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 September 30, 2022 Common stock $ 0.40 August 2, 2022 September 30, 2022 October 14, 2022 December 31, 2022 Common stock $ 0.40 November 1, 2022 December 30, 2022 January 13, 2023 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 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 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, 2022, 2021 and 2020. In accordance with the Company’s policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the net income (loss) per common share is adjusted for earnings distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method. Under this method, allocations were made to 322,866 , 245,075 and 341,673 of weighted average unvested restricted shares outstanding for the years ended December 31, 2022, 2021 and 2020, respectively. 78 Table of Contents 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 88,373 , 259,468 and 407,139 for the years ended December 31, 2022, 2021 and 2020. 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 7, 2023, the Company had four outstanding contracts with third-party sellers to acquire four industrial properties for a total purchase price of approximately $ 259.5 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. One of the purchase contracts is for the acquisition, for a total purchase price of approximately $ 173.6 million, of a 121 -acre project entitled for 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to the Company’s seven fully-leased buildings within Countyline. The project, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is 29.8 %% pre-leased with one 191,000 square foot rear-load industrial distribution building and one 506,000 square foot cross-dock industrial distribution building under construction. At expected completion in 2025 the project is expected to contain ten LEED-certified industrial distribution buildings totaling approximately 2.2 million square feet for a total expected investment of approximately $ 491.1 million. Note 13. Subsequent Events On February 7, 2023, the Company’s board of directors declared a cash dividend in the amount of $ 0.40 per share of its common stock payable on April 6, 2023 to the stockholders of record as of the close of business on March 31, 2023. 79 Table of Contents Terreno Realty Corporation Schedule III Real Estate Investments and Accumulated Depreciation As of December 31, 2022 (in thousands) Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2022 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 $ 181 2017 1951 5401 West 104th St 1 Los Angeles, CA — 15,721 1,463 — 15,721 1,463 17,184 5 2022 1951 139th Street 2 Carson, CA — 21,236 15,783 600 21,236 16,383 37,619 2,158 2017 1965/2003 630 Glasgow 1 Inglewood, CA — 2,245 1,855 475 2,245 2,330 4,575 888 2011 1988 747 Glasgow 1 Inglewood, CA — 1,759 1,555 510 1,759 2,065 3,824 608 2014 1981 1150 & 1250 W. Trenton Ave 2 Orange, CA — 7,491 2,488 — 7,491 2,488 9,979 100 2021 1980 & 1971 13020 & 13030 Cerise 2 Hawthorne, CA — 6,986 1,371 58 6,986 1,429 8,415 56 2021 1956 & 1958 13025 Cerise 1 Hawthorne, CA — 6,864 1,330 — 6,864 1,330 8,194 45 2021 1955 14611 Broadway 1 Gardena, CA — 4,757 1,243 1,584 4,757 2,827 7,584 1,254 2013 1962 3660 Fee Ana — Anaheim, CA — 14,213 1,147 446 14,213 1,594 15,807 23 2022 1966/1993 19601 Hamilton 1 Torrance, CA — 7,409 4,072 1,881 7,409 5,953 13,362 1,794 2011 1985 8320-8400 Isis Avenue 1 Los Angeles, CA 14,963 3,429 41 14,963 3,470 18,433 56 2022 1979 332 Hindry Avenue 1 Inglewood, CA — 6,977 2,800 133 6,977 2,933 9,910 50 2022 1983 709 Hindry 1 Inglewood, CA — 2,105 2,972 460 2,105 3,432 5,537 581 2016 1984 Acacia 1 Compton, CA — 5,143 1,985 511 5,143 2,496 7,639 420 2017 1972 Anderson 5 Los Angeles, CA — 17,095 1,271 4,761 17,095 6,032 23,127 409 2019 1912-1987 Aviation — Inglewood, CA — 9,544 498 827 9,544 1,325 10,869 95 2020 2013 Ceres Ave 2 Los Angeles, CA — 4,825 2,833 — 4,825 2,833 7,657 81 2021 2015 Dominguez — Los Angeles, CA — 11,370 1,535 3,235 11,370 4,770 16,140 832 2017 3091 East Coronado St — Anaheim, CA — 7,140 464 134 7,140 598 7,738 11 2022 2,017 Garfield 5 Commerce, CA — 27,539 22,694 6,523 27,539 29,217 56,756 10,248 2012 2002 Gladwick 1 Rancho Dominguez, CA — 11,636 5,998 211 11,636 6,209 17,845 435 2020 2009 Gramercy Place 1 Torrance, CA — 4,846 1,503 252 4,846 1,756 6,602 99 2021 2015 Hawthorne 8 Hawthorne, CA — 17,226 10,069 2,370 17,226 12,439 29,665 2,398 2017 1952/1986 Las Hermanas 1 Compton, CA — 3,330 751 956 3,330 1,707 5,037 584 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 48 2020 1982 Manhattan Beach 1 Redondo Beach, CA — 7,874 5,641 1,791 7,874 7,432 15,306 2,078 2012 1963/1970 Maple — Rancho Dominguez, CA — 9,371 607 592 9,371 1,199 10,570 166 2020 1978 Maple II — Rancho Dominguez, CA — 14,102 183 495 14,102 678 14,780 70 2021 1 Table of Contents Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2022 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed 14805 S Maple Ave — Rancho Dominguez, CA — 22,419 682 — 22,419 682 23,102 1 2022 1963/1983 Porter 1 Los Angeles, CA — 3,791 399 — 3,791 399 4,190 23 2020 1911 & 1968 San Pedro — Gardena, CA — 7,598 1,523 296 7,598 1,819 9,417 112 2021 Shoemaker — Santa Fe Springs, CA — 4,759 1,099 234 4,759 1,333 6,092 176 2018 1986/1997 Slauson — Santa Fe Springs, CA — 4,679 697 957 4,679 1,654 6,333 176 2019 1967/1973 19500 South Alameda St — Rancho Dominguez, CA — 30,176 2,364 — 30,176 2,364 32,540 26 2022 1982/1985 South Main 2 Carson, CA — 16,371 7,045 17,464 16,371 24,508 40,879 8,122 2012/2014 2016 South Main III 1 Gardena, CA — 11,521 12,467 1,062 11,521 13,529 25,050 1,974 2017 2016 Telegraph Springs 2 Santa Fe Springs, CA — 7,063 7,236 631 7,063 7,867 14,930 1,341 2017 2007 Vermont 1 Torrance, CA — 10,173 7,105 290 10,173 7,395 17,568 1,054 2018 1978 1215 Walnut 1 Compton, CA — 6,130 2,522 621 6,130 3,143 9,273 432 2017 1969/1990 Walnut II 1 Compton, CA — 6,097 5,069 955 6,097 6,024 12,121 895 2018 1969 Northern New Jersey/ New York City 1 Dodge Drive 1 West Caldwell, NJ — 3,819 2,982 2,767 3,819 5,749 9,568 2,087 2013 1985 17 Madison 1 Fairfield, NJ — 974 1,647 673 974 2,320 3,294 835 2013 1979 22 Madison 1 Fairfield, NJ — 1,365 1,607 1,140 1,365 2,747 4,112 545 2015 1979 48th 3rd and 286 Central 1 Kearny, NJ — 12,061 1,664 452 12,061 2,116 14,177 269 2019 1978/1983 49th Street 1 Queens, NY — 21,674 2,999 1,435 21,674 4,434 26,108 877 2019 1966 50 Kero 2 Carlstadt, NJ — 10,343 3,876 3,978 10,343 7,854 18,197 1,464 2017 1970 51 Kero — Carlstadt, NJ — 3,236 589 313 3,236 902 4,138 67 2019 1956-1966 74th North Bergen 1 North Bergen, NJ — 2,933 1,817 1,204 2,933 3,021 5,954 691 2016 1973 81 N. Hackensack — Kearny, NJ — 25,901 — 1,263 25,901 1,263 27,164 199 2019 85 Doremus — Newark, NJ — 5,918 513 26 5,918 539 6,457 83 2018 87 Doremus — Newark, NJ — 21,595 550 — 21,595 550 22,146 12 2022 N/A 127 Doremus — Newark, NJ — 12,111 430 318 12,111 749 12,859 10 2022 N/A 97 Third Street — Kearny, NJ — 25,580 1,566 1,663 25,580 3,228 28,809 194 2021 1970 190 Morgan 1 Brooklyn, NY — 4,363 249 952 4,363 1,201 5,564 38 2021 1969 341 Michele 1 Carlstadt, NJ — 2,372 4,798 1,273 2,372 6,071 8,443 1,646 2013 1973 422 Frelinghuysen — Newark, NJ — 16,728 — 6,781 16,728 6,781 23,509 1,395 2017 465 Meadow 1 Carlstadt, NJ — 713 1,618 297 713 1,915 2,628 448 2013 1972 550 Delancy 1 Newark, NJ — 9,230 4,855 2,395 9,230 7,250 16,480 2,175 2013 1987 620 Division 1 Elizabeth, NJ — 6,491 3,568 6,268 6,491 9,836 16,327 3,789 2011 1980 629 Henry 1 Elizabeth, NJ — 13,734 1,690 — 13,734 1,690 15,425 6 2022 2004 7777 West Side 1 North Bergen, NJ — 4,525 8,856 — 4,525 8,856 13,381 1,299 2017 1967 900 Hart 1 Piscataway, NJ — 3,202 3,866 1,787 3,202 5,653 8,855 1,585 2014 1983 901 North 1 Elizabeth, NJ — 8,035 913 829 8,035 1,742 9,777 661 2016 2016 228 North Ave 1 Elizabeth, NJ — 40,671 5,218 1,234 40,671 6,451 47,123 175 2021 1975 2 Table of Contents Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2022 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed 256 Patterson Plank 1 Carlstadt, NJ — 9,478 1,284 1,754 9,478 3,038 12,516 202 2021 1960 293 Roanoke Avenue — Newark, NJ — 11,395 2,217 512 11,395 2,729 14,124 55 2022 N/A Avenue A 4 Carlstadt, NJ — 7,516 4,660 1,422 7,516 6,082 13,598 1,271 2017 1951/1957 Belleville 1 Kearny, NJ — 12,845 18,041 1,847 12,845 19,888 32,733 5,730 2011 2006 Commerce 1 Carlstadt, NJ — 1,656 1,544 128 1,656 1,672 3,328 205 2018 1969 Dell 1 Carlstadt, NJ — 6,641 771 833 6,641 1,604 8,245 457 2011 1972 Ethel 2 Piscataway, NJ — 2,748 3,801 1,916 2,748 5,717 8,465 1,831 2013 1981/1984 Interstate 2 South Brunswick, NJ — 13,686 12,135 16,198 13,686 28,333 42,019 8,800 2010/2013 1999/2014 JFK Airgate 4 Queens, NY — 18,282 32,933 6,636 18,282 39,569 57,851 11,896 2013 1986/1991 Manor 1 East Rutherford, NJ — 4,076 5,262 3,713 4,076 8,975 13,051 1,681 2015 1968 Morgan 2 Brooklyn, NY — 71,051 10,888 6,014 71,051 16,902 87,953 1,581 2019 1960/1980 & 1967 New Dutch 1 Fairfield, NJ — 4,773 2,004 — 4,773 2,004 6,777 395 2017 1976 Paterson Plank 1 Carlstadt, NJ — 4,127 455 761 4,127 1,216 5,343 229 2016 1998 Stockton — Newark, NJ — 12,327 1,282 882 12,327 2,164 14,491 597 2017 Terminal Way 2 Avenel, NJ — 3,537 3,598 1,327 3,537 4,925 8,462 1,100 2014 1950/1968 Whelan 1 East Rutherford, NJ — 6,366 5,704 598 6,366 6,302 12,668 644 2019 2005 Wilson 1 Newark, NJ — 2,016 484 813 2,016 1,297 3,313 461 2016 1970 Woodside 1 Queens, NY — 23,987 3,796 4,047 23,987 7,843 31,830 1,352 2018 2018 San Francisco Bay Area 20th Street 1 Oakland, CA — 18,092 6,730 1,978 18,092 8,708 26,800 963 2019 1970 & 2003 238/242 Lawrence 2 South San Francisco, CA — 6,674 2,655 1,972 6,674 4,627 11,301 2,057 2010 1986 240 Littlefield 1 South San Francisco, CA — 5,107 3,293 2,806 5,107 6,099 11,206 1,599 2013 2013 299 Lawrence 1 South San Francisco, CA — 1,352 1,198 471 1,352 1,669 3,021 727 2010 1968 631 Brennan 1 San Jose, CA — 1,932 2,245 959 1,932 3,204 5,136 1,053 2012 1975 3660 Thomas Road 1 Santa Clara, CA — 43,053 13,887 617 43,053 14,503 57,557 234 2022 1973 Ahern 2 Union City, CA — 3,246 2,749 1,518 3,246 4,267 7,513 1,663 2010 1986 Ahern II 1 Union City, CA — 2,467 4,527 753 2,467 5,280 7,747 1,238 2015 1997 Burroughs 3 San Leandro, CA — 5,400 7,092 1,630 5,400 8,722 14,122 2,285 2014 1966 Caribbean 3 Sunnyvale, CA — 17,483 14,493 2,920 17,483 17,413 34,896 5,501 2012 1980/1981 Carlton Court 1 South San Francisco, CA — 2,036 1,475 722 2,036 2,197 4,233 622 2012 1981 Clawiter 1 Hayward, CA — 5,964 1,159 189 5,964 1,348 7,312 354 2011 1967 East Gish — San Jose, CA — 6,759 726 2 6,759 729 7,487 42 2021 1959 Edison 3 San Leandro, CA — 14,797 2,806 1,416 14,797 4,221 19,018 265 2021 1975 Foley Street 2 Hayward, CA — 5,023 3,281 538 5,023 3,819 8,842 173 2021 1976 & 1972 Hotchkiss 1 Fremont, CA — 4,163 3,152 1,074 4,163 4,226 8,389 800 2017 1997 Hotchkiss II 1 Fremont, CA — 3,042 3,081 355 3,042 3,436 6,478 447 2018 1997 3 Table of Contents Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2022 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed Merced 4 San Leandro, CA — 25,621 9,318 3,497 25,621 12,815 38,436 1,896 2018 1958 Michele 1 South San Francisco, CA — 2,710 2,540 822 2,710 3,362 6,072 596 2016 1979 Minnesota and Tennessee 2 San Francisco, CA — 34,738 13,141 2,203 34,738 15,344 50,082 1,399 2019 1963 Old Bayshore — San Jose, CA — 10,244 1,609 57 10,244 1,666 11,910 180 2020 1955 San Clemente 1 Hayward, CA — 5,126 3,938 315 5,126 4,253 9,379 565 2018 1982 Teagarden 5 San Leandro, CA — 19,172 15,221 399 19,172 15,620 34,792 221 2022 1970/1972 Starlite 1 South San Francisco, CA — 3,738 144 2,185 3,738 2,329 6,067 86 2020 1966 & 1972 West 140th 2 San Leandro, CA — 9,578 6,297 3,745 9,578 10,042 19,620 2,096 2016 1959 Whitney 3 San Leandro, CA — 13,821 9,016 2,242 13,821 11,258 25,079 1,834 2018 1974 Wicks 1 San Leandro, CA — 2,224 298 86 2,224 384 2,608 56 2018 1976 Central Pacific Business Park I 3 Union City, CA — 8,468 14,165 2,163 8,468 16,328 24,796 4,112 2014 1989 Central Pacific Business Park II 4 Union City, CA — 13,642 23,658 6,337 13,642 29,995 43,637 8,645 2015 2015 Seattle 1st Ave 1 Seattle, WA — 29,441 30,537 7,755 29,441 38,292 67,733 1,907 2018 1937 & 1967 33rd Place 2 Bellevue, WA — 10,655 3,930 85 10,655 4,015 14,671 95 2022 1968-2009 6th Ave South 1 Seattle, WA — 7,215 8,670 94 7,215 8,764 15,979 775 2020 1960 68th Kent 2 Kent, WA — 7,465 2,263 139 7,465 2,401 9,866 114 2021 1976 84th Kent — Kent, WA — 4,552 136 257 4,552 393 4,945 100 2020 1963 & 2000 117th Place NE 1 Kirkland, WA — 23,846 9,842 624 23,846 10,466 34,312 533 2021 1978 917 Valley 1 Puyallup, WA — 2,203 4,551 373 2,203 4,924 7,127 441 2019 2006 3401 Lind 1 Renton, WA — 2,999 6,707 1,451 2,999 8,158 11,157 1,766 2014 1984/2012 4225 2nd Avenue 1 Seattle, WA — 4,236 4,049 2,258 4,236 6,307 10,543 1,438 2015 1957 4930 3rd Avenue South 1 Seattle, WA — 3,984 2,424 831 3,984 3,255 7,239 800 2016 1964 12119 East Marginal — Tukwila, WA — 4,950 1,740 — 4,950 1,740 6,690 100 2020 1996 17600 West Valley Highway 1 Tukwila, WA — 3,361 5,260 1,862 3,361 7,122 10,483 2,409 2012 1986 Auburn 400 1 Auburn, WA — 4,415 5,234 408 4,415 5,642 10,057 607 2019 2000 Auburn 1307 1 Auburn, WA — 4,253 5,034 613 4,253 5,647 9,900 1,403 2014 2002 Dawson 1 Seattle, WA — 3,902 278 334 3,902 612 4,514 229 2017 1964 Denver 1 Seattle, WA — 3,203 1,345 491 3,203 1,836 5,039 592 2016 1953 East Valley 1 Renton, WA — 2,693 2,959 387 2,693 3,346 6,039 369 2018 1991 East Marginal — Renton, WA — 2,618 380 114 2,618 494 3,112 96 2019 1991 Hudson 1 Seattle, WA — 4,471 912 248 4,471 1,160 5,631 90 2020 2006 Kent 188 1 Kent, WA — 3,251 4,719 2,317 3,251 7,036 10,287 2,377 2010 1979 Kent 190 1 Kent, WA — 4,560 5,561 1,346 4,560 6,907 11,467 1,537 2015 1992/1999 Kent 192 1 Kent, WA — 12,752 20,642 533 12,752 21,175 33,927 1,732 2020 4 Table of Contents Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2022 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed Kent 202 1 Kent, WA — 5,761 9,114 2,810 5,761 11,924 17,685 3,261 2015 1981 Kent 216 1 Kent, WA — 3,672 5,408 1,028 3,672 6,436 10,108 1,745 2014 1996 Kent Corporate Park 4 Kent, WA — 5,032 6,916 2,416 5,032 9,332 14,364 2,612 2015 1980/1981 Lucile 1 Seattle, WA — 4,498 3,504 1,385 4,498 4,889 9,387 1,257 2017 1976 Lund 1 Auburn, WA — 2,573 4,399 356 2,573 4,755 7,328 903 2016 1999 Occidental Avenue 3 Seattle, WA — 12,550 3,300 656 12,550 3,956 16,506 194 2021 1988 Olympic 1 Tukwila, WA — 1,499 1,431 713 1,499 2,144 3,643 763 2015 1978 MLK 9801 — Seattle, WA — 14,388 1,360 429 14,208 1,789 15,997 60 2021 MLK 9845 — Seattle, WA — 14,436 531 88 15,389 619 16,008 ( 22 ) 2021 MLK 9600 — Seattle, WA — 20,849 1,395 653 20,077 2,048 22,125 213 2021 1957 NE 91st 2 Redmond, WA — 7,944 1,866 — 7,944 1,866 9,810 35 2022 1986/1987 SeaTac 8th Avenue 1 Burien, WA — 2,501 4,020 1,957 2,501 5,977 8,478 1,843 2013 1988 SE 32nd Street 1 Bellevue, WA — 9,059 2,081 1,196 9,059 3,277 12,336 320 2020 1982 SW 16th Street — Renton, WA — 6,251 2,001 — 6,251 2,001 8,252 87 2021 1962 SW 34th 1 Renton, WA — 2,912 3,289 555 2,912 3,844 6,756 1,062 2014 1996/2010 Valley Corporate 2 Kent, WA — 5,264 9,096 2,303 5,264 11,399 16,663 4,063 2011 1987 Woodinville 1 Woodinville, WA — 12,490 12,244 2 12,490 12,246 24,736 380 2021 1996 Woodinville II 2 Woodinville, WA — 20,941 12,949 31 20,941 12,980 33,921 350 2021 1999 Willows — Redmond, WA — 3,067 581 148 3,067 729 3,796 17 2021 1970 8660 Willows Road — Redmond, WA — 18,034 2,180 211 18,034 2,391 20,425 35 2022 1987 Miami 26th Street 1 Miami, FL — 3,444 4,558 1,272 3,444 5,830 9,274 1,620 2012 1973 48th Avenue 2 Miami Gardens, FL — 4,322 2,187 1,002 4,322 3,189 7,511 827 2011 1987 70th Avenue 1 Miami, FL — 1,434 2,333 469 1,434 2,802 4,236 842 2011 1999 70th Avenue II 1 Miami, FL — 2,152 3,418 1,052 2,152 4,470 6,622 888 2016 1969 70th Avenue III 1 Miami, FL — 2,543 3,167 690 2,543 3,857 6,400 726 2016 1974 70th Avenue IV 1 Miami, FL — 1,119 1,456 449 1,119 1,905 3,024 328 2017 1969 70th Avenue V 1 Miami, FL — 5,036 3,419 2,295 5,036 5,714 10,750 704 2017 1974 73rd Street 2 Miami, FL — 6,130 13,932 276 6,130 14,208 20,338 165 2021 2022 74th Avenue 1 Miami, FL — 2,327 3,538 692 2,327 4,230 6,557 870 2016 1986 78th Avenue 1 Doral, FL — 2,445 1,755 2,973 2,445 4,728 7,173 1,644 2012 1977 81st Street 2 Medley, FL — 2,938 5,242 1,540 2,938 6,782 9,720 1,820 2015 1996/2003 94th Avenue 1 Doral, FL — 3,000 3,580 403 3,000 3,983 6,983 602 2017 1989 107th Avenue 1 Medley, FL — 2,787 2,036 884 2,787 2,920 5,707 958 2013 2001 101st Road 1 Medley, FL — 2,647 3,258 675 2,647 3,933 6,580 1,290 2013 2012 131st Street 1 Medley, FL — 2,903 5,729 735 2,903 6,464 9,367 1,703 2014 1999 7045 NW 46th St 1 Miami, FL — 2,517 2,261 206 2,517 2,467 4,984 12 2022 1986 5 Table of Contents Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount Carried at December 31, 2022 Property Name No. of Bldgs. Location Encumbrances Land Buildings & Improvements Land Buildings & Improvements Total Accumulated Depreciation Year Acquired Year Constructed 8050 NW 90th St — Medley, FL — 18,612 2,067 1,690 18,612 3,757 22,369 31 2022 N/A 12950 SW South River 1 Medley, FL — 1,971 4,029 804 1,971 4,833 6,804 917 2016 2000 Americas Gateway 5 Doral, FL — 9,088 9,552 5,157 9,088 14,709 23,797 4,511 2013 1978/1982 Americas Gateway 5 1 Doral, FL — 2,064 4,326 390 2,064 4,716 6,780 143 2013 2022 Countyline #24 & #25 2 Hialeah, FL — 15,552 27,898 6,636 15,552 34,534 50,086 2,055 2021 2021 & 2021 Countyline #26 1 Hialeah, FL — 11,826 24,407 4,958 11,826 29,365 41,191 1,405 2021 2021 Countyline #27 & #28 2 Hialeah, FL — 18,595 49,052 9,764 18,595 58,816 77,411 2,110 2021 2021 & 2021 Countyline #29 & #30 2 Hialeah, FL — 19,370 52,925 6,227 19,370 59,152 78,522 722 2022 2022 Miami International Trade Center 4 Medley, FL — 5,063 10,958 2,623 5,063 13,581 18,644 3,019 2015 1996 Washington, D.C. 75th Ave 5 Landover, MD — 10,658 18,615 5,919 10,658 24,534 35,192 5,960 2014 1987/1990 2920 V Street 1 Washington, D.C. — 2,248 1,670 1,499 2,248 3,169 5,417 561 2017 1958 3601 Pennsy 1 Landover, MD — 2,331 4,375 1,566 2,331 5,941 8,272 1,706 2013 1996 4230 Forbes 1 Lanham, MD — 1,736 2,395 1,207 1,736 3,602 5,338 932 2013 2003 4501 46th Street — Bladensburg, MD — 9,576 1,984 1,045 9,576 3,029 12,605 60 2021 1955 Business Parkway 1 Lanham, MD — 3,038 3,007 210 3,038 3,217 6,255 533 2016 2002 Eisenhower 3 Alexandria, VA — 36,755 23,768 2,089 36,755 25,857 62,612 645 2021 1974 Hampton Overlook 3 Capitol Heights, MD — 4,602 7,521 2,123 4,602 9,644 14,246 1,637 2016 1989/1990 New Ridge — Hanover, MD — 5,689 1,567 443 5,689 2,010 7,699 393 2016 Pickett 1 Alexandria, VA — 6,256 2,850 477 6,256 3,328 9,584 113 2021 1963 Tuxedo — Hyattsville, MD — 6,867 1,266 1,006 6,867 2,272 9,139 46 2021 1962 V Street 6 Washington, D.C. — 67,132 41,299 19,329 67,132 60,628 127,759 14,814 2015 1955/1963 Subtotal 252 — 1,850,860 1,060,256 312,218 1,850,860 1,372,473 3,223,333 236,851 Unamortized net premiums Unamortized net deferred financing costs Intangible assets 123,545 86,780 Total 252 $ — $ 1,850,860 $ 1,060,256 $ 312,218 $ 1,850,860 $ 1,372,473 $ 3,346,878 $ 323,631 6 Table of Contents Terreno Realty Corporation Schedule III Real Estate Investments and Accumulated Depreciation – (Continued) As of December 31, 2022 (in thousands) A summary of activity for real estate and accumulated depreciation for the years ended December 31, 2022 and 2021 is as follows: 2022 2021 Investment in Properties Balance at beginning of year $ 2,946,826 $ 2,231,228 Acquisition of properties 422,298 681,970 Disposition of properties ( 65,379 ) ( 30,934 ) Construction in progress 21,623 14,711 Improvements, net of write-offs 73,406 49,851 Balance at end of year $ 3,398,774 $ 2,946,826 2022 2021 Accumulated Depreciation Balance at beginning of year $ 279,062 238,073 Amortization of lease intangible assets 14,253 9,581 Depreciation expense 48,771 39,498 Disposition of properties and write-offs ( 18,455 ) ( 8,090 ) Balance at end of year $ 323,631 $ 279,062 7 Table of Contents 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 Contents 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 First Amendment, dated as of June 29, 2022, to the Sixth Amended and Restated Senior Credit Agreement, among Terreno Realty LLC, as “Borrower”, 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 July 5, 2022 and incorporated herein by reference). 10.16 Second Amendment, dated as of September 2, 2022, to the Sixth Amended and Restated Senior Credit Agreement, among Terreno Realty LLC, as “Borrower”, 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 September 6, 2022 and incorporated herein by reference). 10.17 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). 10.18 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). 10.19 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). 10.20 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). 10.21+ 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). 10.22+ 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). 10.23 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). 10.24 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 8, 2023. 31.2* Rule 13a-14(a)/15d-14(a) Certification dated February 8, 2023. 31.3* Rule 13a-14(a)/15d-14(a) Certification dated February 8, 2023. 9 Table of Contents 32.1** 18 U.S.C. § 1350 Certification dated February 8, 2023. 32.2** 18 U.S.C. § 1350 Certification dated February 8, 2023. 32.3** 18 U.S.C. § 1350 Certification dated February 8, 2023. 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 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 Contents 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 8, 2023. 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. 1 Table of Contents 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. Signature Title Date /s/ W. Blake Baird Chairman, Chief Executive Officer and Director (principal executive officer) February 8, 2023 W. Blake Baird /s/ Michael A. Coke President and Director February 8, 2023 Michael A. Coke /s/ Jaime J. Cannon Executive Vice President and Chief Financial Officer (principal financial officer) February 8, 2023 Jaime J. Cannon /s/ Melinda Weston Chief Accounting Officer (principal accounting officer) February 8, 2023 Melinda Weston /s/ Linda Assante Director February 8, 2023 Linda Assante /s/ Gary N. Boston Director February 8, 2023 Gary N. Boston /s/ LeRoy E. Carlson Director February 8, 2023 LeRoy E. Carlson /s/ David M. Lee Director February 8, 2023 David M. Lee /s/ Irene H. Oh Director February 8, 2023 Irene H. Oh /s/ Douglas M. Pasquale Director February 8, 2023 Douglas M. Pasquale /s/ Dennis Polk Director February 8, 2023 Dennis Polk 2