What changed in this filing

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Item 2. Properties

2024-02-07 compared with 2023-02-08 · 63 added, 26 removed, 112 unchanged (44% of the section changed)

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

As of December 31, 2023, we owned a total of 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development.

As of December 31, 2023, the buildings and improved land parcels were approximately 98.5% and 94.6% leased, respectively, to 580 customers, the largest of which accounted for approximately 3.6% of our total annualized base rent.

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2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of December 31, 2023, weighted by the respective square footage.

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

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

3 Includes seven properties under development or redevelopment that, upon completion, will consist of six buildings aggregating approximately 1.0 million square feet and one approximately 2.8-acre improved land parcel, and approximately 62.7 acres of land entitled for future development.

4 Occupancy increased during the three months ended December 31, 2023 due, in part, to approximately 29,000 square feet of vacant space at our 1st Avenue property in Seattle being removed from the operating portfolio and repurposed as additional parking.

As of December 31, 2023, we owned seven properties under development or redevelopment that, upon completion, will consist of six buildings aggregating approximately 1.0 million square feet and one approximately 2.8-acre improved land parcel, and approximately 62.7 acres of land entitled for future development, with a total expected investment of approximately

$592.0 million, including redevelopment costs, capitalized interest and other costs.

The following table summarizes our capital expenditures incurred during the three months and years ended December 31, 2023 and 2022 (dollars in thousands):

4 unchanged sentences

Leasing commissions 2,454 4,410 11,821 19,584

Redevelopment, renovation and expansion 678 4,776 21,623 14,711

Development, redevelopment, renovation and expansion 51,098 678 139,974 21,623

Total capital expenditures 1

9 unchanged sentences

Square Feet % of Total

Square Feet Annualized

Square Feet Improved Land Acreage Annualized

(in thousands) 1

Base Rent Improved Land Acreage

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

5 471,880 2.9 % 2.8 $ 9,160 3.6 %

2 FedEx Corporation

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

5 242,889 1.5 % 7.7 5,181 2.0 %

3 O'Neill Logistics

2 429,692 2.7 % — 4,403 1.7 %

4 United States Government

8 300,732 1.9 % — 4,212 1.7 %

3 171,707 1.1 % — 4,078 1.6 %

6 District of Columbia

8 245,888 1.5 % — 3,585 1.4 %

7 DirectBuy Home Improvement 3

7 Allied Brothers Intermodal Inc.

1 230,891 1.4 % — 3,585 1.4 %

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

8 International Cargo Terminals Inc.

1 31,601 0.2 % — 3,300 1.3 %

9 Motivate LLC

3 101,234 0.6 % — 2,973 1.2 %

10 Meta Platforms, Inc.

1 225,678 1.4 % — 2,811 1.1 %

11 Lucid USA, Inc.

1 161,680 1.0 % — 2,598 1.0 %

12 Northrop Grumman Systems Corporation

2 148,458 0.9 % — 2,417 1.0 %

13 Sarcona Management Corporation

2 28,124 0.2 % 4.9 2,295 0.9 %

14 Port Kearny Security, Inc.

1 — — % 16.9 2,280 0.9 %

10 B&B Granite Block Sales, LLC

15 Triton Logistics Inc.

1 190,907 1.2 % — 2,273 0.9 %

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

12 Hanjin International America, Inc.

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

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

14 Team Alliance Logistics Inc.

DBA A&V Transportation

16 Bar Logistics, Inc.

2 243,513 1.5 % — 2,180 0.9 %

1 unchanged sentence

2 170,114 1.1 % — 2,163 0.9 %

16 Divergent Technologies, Inc.

18 B&B Granite Block Sales, LLC

1 — — % 7.2 2,160 0.9 %

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

18 Topaz Lighting Corp.

19 JAM'N Logistics Inc.

1 110,336 0.7 % — 2,145 0.8 %

19 YRC 2 61,252 0.4 % 1,540 0.7 % —

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

20 Costco-Innovel Solutions LLC

1 219,910 1.4 % — 1,984 0.8 %

Total 51 3,725,234 23.2 % 39.5 $ 65,783 26.0 %

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

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

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of December 31, 2023, multiplied by 12.

2 Total annualized base rent is calculated as contractual monthly base rent per the leases, for all buildings and improved land parcels, excluding any partial or full rent abatements, as of December 31, 2023, multiplied by 12.

3 On October 16, 2023, DirectBuy Home Improvement filed for Chapter 11 bankruptcy and we had fully reserved for all receivables as of December 31, 2023.

Any ultimate recovery of past due rent is undetermined at this time.

In January 2024, we commenced redevelopment of and executed a short-term lease for the existing property with an e-commerce firm that will expire in January 2026.

The following tables summarize the anticipated lease expirations for leases in place as of December 31, 2023, without giving effect to the exercise of unexercised renewal options or termination rights, if any, at or prior to the scheduled expirations:

Year Rentable Square Feet % of Total Rentable

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Total 15,804,874 98.5 % $ 248,586 87.1 %

Improved Land Parcels:

Year Improved Land Acreage % of Total Improved Land Acreage Annualized Base Rent

(in thousands) 2

% of Total Annualized

24.5 16.1 % $ 5,191 1.8 %

2025 14.9 9.8 % 3,626 1.3 %

2026 17.9 11.7 % 4,882 1.7 %

2027 12.2 8.0 % 4,156 1.5 %

2028 14.8 9.6 % 3,945 1.4 %

Thereafter 60.1 39.4 % 14,980 5.2 %

Total 144.4 94.6 % $ 36,780 12.9 %

Total Buildings and Improved Land Parcels:

Year Total Annualized Base Rent (in thousands) 3

% of Total Annualized Base Rent 3

$ 29,295 10.2 %

2025 37,822 13.3 %

2026 51,574 18.1 %

2027 45,124 15.9 %

2028 42,633 15.0 %

Thereafter 78,918 27.5 %

Total $ 285,366 100.0 %

1 Includes leases that expire on or after December 31, 2023 and month-to-month leases totaling approximately 164,073 square feet.

2 Annualized base rent is calculated as contractual monthly base rent per the leases at expiration, excluding any partial or full rent abatements, as of December 31, 2023, multiplied by 12.

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

3 Total annualized base rent is calculated as contractual monthly base rent per the leases at expiration, for all buildings and/or improved land parcels, excluding any partial or full rent abatements, as of December 31, 2023, multiplied by 12.

4 Includes leases that expire on or after December 31, 2023 and month-to-month leases totaling approximately 2.4 acres.

5 Includes leases that expire on or after December 31, 2023 and month-to-month leases disclosed in footnotes 1 and 4 of the table.

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

1 unchanged sentence

We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our 2024 expirations will be above the rates currently being paid for the same space.

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

Cash rent changes on new and renewed leases totaling approximately 0.3 million square feet and zero acres of improved land commencing during the three months ended December 31, 2023 were approximately 47.5% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 2.1 million square feet and 11.4 acres of improved land commencing during the year ended December 31, 2023 were approximately 55.5% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio for the operating portfolio of 75.6% and 57.7%, respectively, for the three months and year ended December 31, 2023.

9 unchanged sentences

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

What changed 10-K

Item 2. Properties