What changed in this filing

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Item 2. Properties

2025-02-05 compared with 2024-02-07 · 28 added, 26 removed, 149 unchanged (27% of the section changed)

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, 2024, we owned a total of 299 buildings (including one building held for sale) aggregating approximately 19.3 million square feet, 47 improved land parcels consisting of approximately 150.6 acres, six properties under development or redevelopment and approximately 22.4 acres of land entitled for future development.

As of December 31, 2024, the buildings and improved land parcels were approximately 97.4% and 95.1% leased, respectively, to 670 customers, the largest of which accounted for approximately 5.5% of our total annualized base rent.

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

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

We invest in several types of industrial real estate, including warehouse/distribution buildings, flex buildings (including light industrial and research and development, or R&D), transshipment buildings and improved land parcels.

12 unchanged sentences

The following table summarizes by market our investments in real estate as of December 31, 2024:

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

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

Total/Weighted Average

34 unchanged sentences

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of December 31, 2024, multiplied by 12.

Annualized base rent for our New York City assets was $38.0 million as of December 31, 2024.

2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of December 31, 2024, weighted by the respective square footage.

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.

3 Includes six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and approximately 22.4 acres of land entitled for future development.

4 Occupancy decreased from 98.5% at December 31, 2023 to 97.4% at December 31, 2024 due, in part, to approximately 176,000 square feet of acquired vacancy, 42,000 square feet of which have leases that commence in January 2025.

As of December 31, 2024, we owned six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and approximately 22.4 acres of land entitled for

future development, with a total expected investment of approximately $432.9 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, 2024 and 2023 (dollars in thousands):

1 unchanged sentence

2024 2023 2024 2023

Building improvements $ 7,440 $ 6,165 $ 27,516 $ 40,337

Tenant improvements 1,386 252 5,959 11,533

Operating Portfolio:

Building and tenant improvements $ 10,476 $ 8,826 $ 37,853 $ 33,475

Leasing commissions 3,056 2,454 12,927 11,821

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

Total capital expenditures 1

$ 13,532 $ 11,280 $ 50,780 $ 45,296

1 Includes approximately $54.7 million and $6.2 million for the three months ended December 31, 2023 and 2022, respectively, and approximately $157.4 million and $61.1 million for the years ended December 31, 2023 and 2022, respectively, related to leasing acquired vacancy, redevelopment construction in progress and renovation and expansion projects (stabilization capital) at 23 and 20 properties for the three months ended December 31, 2023 and 2022, respectively, and at 30 and 34 properties for the years ended December 31, 2023 and 2022, respectively.

Properties under development and redevelopment:

Development, redevelopment, renovation and expansion $ 18,949 $ 51,098 $ 129,564 $ 139,974

1 Includes approximately $4.8 million and $3.6 million for the three months ended December 31, 2024 and 2023, respectively, and approximately $15.8 million and $17.4 million for the years ended December 31, 2024 and 2023, respectively, of costs incurred related to leasing acquired vacancy, renovation and expansion projects (stabilization capital).

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

11 unchanged sentences

6 308,889 1.6 % 7.7 6,677 2.1 %

3 O'Neill Logistics

3 Imperial Bag & Paper Co LLC

1 505,729 2.6 % — 4,729 1.5 %

1 unchanged sentence

8 316,796 1.6 % — 4,620 1.4 %

5 O'Neill Logistics

2 429,692 2.2 % — 4,546 1.4 %

6 Meta Platforms, Inc.

2 299,775 1.6 % — 4,496 1.4 %

3 171,707 0.9 % — 4,201 1.3 %

8 District of Columbia

8 245,888 1.3 % — 3,692 1.2 %

7 DirectBuy Home Improvement 3

9 MD Turbines Inc.

2 284,161 1.5 % — 3,580 1.1 %

3 unchanged sentences

3 101,234 0.5 % — 3,070 1.0 %

10 Meta Platforms, Inc.

12 Sentury Tire USA Inc.

1 161,787 0.8 % — 2,710 0.8 %

3 unchanged sentences

2 148,458 0.8 % — 2,489 0.8 %

13 Sarcona Management Corporation

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

15 Port Kearny Security, Inc.

1 — — % 16.9 2,460 0.8 %

15 Triton Logistics Inc.

1 190,907 1.2 % — 2,273 0.9 %

16 Bar Logistics, Inc.

16 Sarcona Management Corporation

2 28,124 0.1 % 4.9 2,383 0.7 %

17 L3 Harris Technologies, Inc.

17 Triton Logistics Inc.

1 190,907 1.0 % — 2,349 0.7 %

3 unchanged sentences

1 110,336 0.6 % — 2,231 0.7 %

20 Costco-Innovel Solutions LLC

20 Fisica Inc.

(previously L3 Harris Applied Technologies, Inc.)

1 170,114 0.9 % — 2,230 0.7 %

2 unchanged sentences

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, 2024, 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.

As of December 31, 2024, one of our properties with a net book value of approximately $179.1 million was encumbered by a mortgage loan payable with a total contractual principal amount of approximately $72.9 million which bears interest at a contractual fixed interest rate of 3.9% and matures in March 2028.

The mortgage was assumed in an acquisition and was recorded at fair value in the amount of $69.2 million using an effective interest rate of 5.6%.

The unamortized fair value adjustment as of December 31, 2024 was approximately $3.6 million.

The following tables summarize the anticipated lease expirations for leases in place as of December 31, 2024, without giving effect to the exercise of unexercised renewal options or termination rights, if any, at or prior to the scheduled expirations:

39 unchanged sentences

We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our 2025 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 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.

Cash rent changes on new and renewed leases totaling approximately 0.7 million square feet commencing during the three months ended December 31, 2024 were approximately 26.7% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 2.3 million square feet and 22.5 acres of improved land commencing during the year ended December 31, 2024 were approximately 36.5% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio for the operating portfolio of 82.4% and 61.6%, respectively, for the three months and year ended December 31, 2024.

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