What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-06 · 174 added, 277 removed, 415 unchanged (52% of the section changed)

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

• the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission on February 7, 2024, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which was filed with the Securities and Exchange Commission on May 8, 2024, in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which was filed with the Securities and Exchange Commission on August 7, 2024, in this Quarterly Report on Form 10-Q, and in our other public filings;

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

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• adverse economic or real estate conditions or developments in the industrial real estate sector and/or in the markets in which we own properties;

• a decline in economic activity caused by ongoing changes and negotiations of trade polices, tariffs and related government actions;

• our dependence on key personnel and our reliance on third-party property managers;

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• decreased rental rates or increased vacancy rates;

• increased interest rates and operating costs;

• elevated interest rates and operating costs;

• declining real estate valuations and impairment charges;

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• our failure to successfully operate acquired properties;

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

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

• the impact of any future pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and on our business, financial condition and results of operations and that of our tenants;

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Terreno Realty Corporation (“Terreno”, and together with its subsidiaries, “we”, “us”, “our”, “our Company”, or “the Company”) acquires, owns and operates industrial real estate in six major coastal U.S.

Northern New Jersey/New York City;

San Francisco Bay Area;

Seattle and Washington, D.C.

We invest in several types of industrial real estate, including warehouse/distribution (approximately 77.9% of our total annualized base rent as of September 30, 2024), flex (including light industrial and research and development, or R&D) (approximately 3.7%), transshipment (approximately 6.4%) and improved land (approximately 12.0%).

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 (approximately 79.1% of our total annualized base rent as of March 31, 2025), flex (including light industrial and research and development, or R&D) (approximately 3.3%), transshipment (approximately 6.7%) and improved land (approximately 10.9%).

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

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

As of September 30, 2024, we owned a total of 294 buildings (including two properties consisting of three buildings held for sale) aggregating approximately 18.3 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, eight properties under development or redevelopment and approximately 35.4 acres of land for future development.

As of September 30, 2024, our buildings and improved land parcels were approximately 97.0% and 98.1% leased, respectively, to 675 customers, the largest of which accounted for approximately 3.3% of our total annualized base rent.

As of March 31, 2025, we owned a total of 298 buildings aggregating approximately 19.3 million square feet, 47 improved land parcels consisting of approximately 150.6 acres, five properties under development or redevelopment and approximately 22.4 acres of land for future development.

As of March 31, 2025, our buildings and improved land parcels were approximately 96.6% and 95.1% leased, respectively, to 663 customers, the largest of which accounted for approximately 5.5% of our total annualized base rent.

See “Item 1 – Our Investment Strategy – Industrial Facility General Characteristics” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a general description of these types of industrial real estate.

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

The following table summarizes by type our investments in real estate as of September 30, 2024:

The following table summarizes by type our investments in real estate as of March 31, 2025:

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

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Total 345 $ 327,769 100.0 %

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of September 30, 2024, multiplied by 12.

The following table summarizes by market our investments in real estate as of September 30, 2024:

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2025, multiplied by 12.

The following table summarizes by market our investments in real estate as of March 31, 2025:

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

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% of Total 19.9 % 15.1 % 23.1 % 16.4 % 14.2 % 11.3 % 100.0 %

Occupancy % as of September 30, 2024

Occupancy % as of March 31, 2025

95.9 % 96.8 % 95.0 % 98.9 % 96.5 % 97.6 % 96.6 %

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% of Total 41.4 % 20.5 % 6.6 % 9.5 % 17.2 % 4.8 % 100.0 %

Occupancy % as of September 30, 2024

Occupancy % as of March 31, 2025

100.0 % 96.4 % 100.0 % 100.0 % 75.7 % 100.0 % 95.1 %

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% of Total Gross Book Value 26.0 % 16.2 % 21.3 % 16.1 % 12.0 % 8.4 % 100.0 %

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of September 30, 2024, multiplied by 12.

2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of September 30, 2024, weighted by the respective square footage.

3 Includes eight properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and one approximately 2.8-acre improved land parcel, approximately 35.4 acres of land for future development and two properties consisting of three buildings held for sale with a gross book value of approximately $14.5 million.

As of September 30, 2024, we owned eight properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and one approximately 2.8-acre improved land parcel, and approximately 35.4 acres of land for future development, with a total expected investment of approximately $520.3

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

The following table summarizes our capital expenditures incurred during the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of March 31, 2025, multiplied by 12.

2 Weighted average remaining lease term is calculated by summing the remaining lease term of each lease as of March 31, 2025, weighted by the respective square footage.

3 Includes five properties under development or redevelopment that, upon completion, will consist of eight buildings aggregating approximately 0.8 million square feet and approximately 22.4 acres of land for future development.

As of March 31, 2025, we owned five properties under development or redevelopment that, upon completion, will consist of eight buildings aggregating approximately 0.8 million square feet and approximately 22.4 acres of land for future development, with a total expected investment of approximately $392.8 million, including redevelopment costs, capitalized interest and other costs.

The following table summarizes our capital expenditures incurred during the three months ended March 31, 2025 and 2024 (dollars in thousands):

For the Three Months Ended March 31,

Operating portfolio:

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Development, redevelopment, renovation and expansion $ 21,599 $ 34,756

1 Includes approximately $4.5 million and $4.0 million for the three months ended September 30, 2024 and 2023, respectively, and approximately $11.0 million and $13.8 million for the nine months ended September 30, 2024 and 2023, respectively, related to leasing acquired vacancy.

1 Includes approximately $2.1 million and $2.0 million for the three months ended March 31, 2025 and 2024, 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.

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

Our top 20 customers based on annualized base rent as of September 30, 2024 are as follows:

Our top 20 customers based on annualized base rent as of March 31, 2025 are as follows:

Customer Leases Rentable

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8 316,796 1.6 % — 4,623 1.4 %

5 O'Neill Logistics

2 429,692 2.3 % — 4,480 1.5 %

5 Meta Platforms, Inc.

2 299,775 1.6 % — 4,583 1.4 %

6 O'Neill Logistics

2 429,692 2.2 % — 4,546 1.4 %

3 171,707 0.9 % — 4,201 1.3 %

8 District of Columbia

8 245,888 1.3 % — 3,692 1.1 %

9 Fisica Inc.

(previously L3 Harris Applied Technologies, Inc.)

1 181,022 0.9 % — 3,627 1.1 %

10 MD Turbines Inc.

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3 101,234 0.5 % — 3,070 0.9 %

12 Lucid USA, Inc.

13 Sentury Tire USA Inc.

1 161,787 0.8 % — 2,710 0.8 %

13 Northrop Grumman Systems Corporation

14 Lucid USA, Inc.

1 161,680 0.8 % — 2,676 0.8 %

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1 — — % 16.9 2,546 0.8 %

16 Northrop Grumman Systems Corporation

2 148,458 0.8 % — 2,532 0.8 %

17 Sarcona Management Corporation

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1 — — % 7.2 2,336 0.7 %

18 JAM'N Logistics Inc.

1 110,336 0.6 % — 2,231 0.7 %

19 Fisica Inc.

(previously L3 Harris Applied Technologies, Inc.)

1 170,114 0.9 % — 2,230 0.7 %

20 Costco-Innovel Solutions LLC

20 Cryoport Systems, LLC

1 91,500 0.5 % — 2,251 0.7 %

Total 53 4,442,830 23.1 % 39.5 $ 84,438 25.8 %

1 Annualized base rent is calculated as contractual monthly base rent per the leases, excluding any partial or full rent abatements, as of September 30, 2024, 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 September 30, 2024, multiplied by 12.

The following tables summarize the anticipated lease expirations for leases in place as of September 30, 2024, 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 March 31, 2025, multiplied by 12.

The following tables summarize the anticipated lease expirations for leases in place as of March 31, 2025, 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 $ 372,283 100.0 %

1 Includes leases that expire on or after September 30, 2024 and month-to-month leases totaling approximately 47,003 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 September 30, 2024, multiplied by 12.

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 September 30, 2024, multiplied by 12.

4 Includes leases that expire on or after September 30, 2024 and month-to-month leases totaling approximately 2.4 acres.

5 Includes leases that expire on or after September 30, 2024 and month-to-month leases disclosed in footnotes 1 and 4 of the table.

1 Includes leases that expire on or after March 31, 2025 and month-to-month leases totaling approximately 43,026 square feet.

Approximately 0.6 million square feet of the space expiring during 2025 has either been renewed or pre-leased as of March 31, 2025.

2 Annualized base rent is calculated as contractual monthly base rent per the leases at expiration, excluding any partial or full rent abatements, as of March 31, 2025, multiplied by 12.

4 Includes leases that expire on or after March 31, 2025 and month-to-month leases totaling approximately 2.4 acres.

5 Includes leases that expire on or after March 31, 2025 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.

As of September 30, 2024, leases representing approximately 2.3% of the total annualized base rent of our portfolio are scheduled to expire during the remainder of the year ending December 31, 2024.

As of March 31, 2025, leases representing approximately 8.8% of the total annualized base rent of our portfolio are scheduled to expire during the remainder of the year ending December 31, 2025.

We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our remaining 2025 expirations will be above the rates currently being paid for the same space.

Cash rent changes on new and renewed leases totaling approximately 0.5 million square feet and 0.3 acres of improved land commencing during the three months ended September 30, 2024 were approximately 24.1% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 1.6 million square feet and 22.5 acres commencing during the nine months ended September 30, 2024 were approximately 40.5% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio for the operating portfolio of 67.3% and 58.0%, respectively, for the three and nine months ended September 30, 2024.

We had a tenant retention ratio for the improved land portfolio of 100.0% and 66.3%, respectively, for the three and nine months ended September 30, 2024.

Cash rent changes on new and renewed leases totaling approximately 0.6 million square feet and 4.3 acres of improved land commencing during the three months ended March 31, 2025 were approximately 34.2% higher as compared to the previous rental rates for that same space.

We had a tenant retention ratio for the operating portfolio of 71.7% for the three months ended March 31, 2025.

We had a tenant retention ratio for the improved land portfolio of 0.0% for the three months ended March 31, 2025.

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

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Recent Developments

Acquisition Activity

During the three months ended September 30, 2024, we acquired one industrial property, for a total purchase price of approximately $7.6 million.

The property was acquired from an unrelated third party using existing cash on hand and net proceeds from the issuance of common stock.

The following table sets forth the industrial property we acquired during the three months ended September 30, 2024:

Property Name Location Acquisition Date Number of

Buildings Square

Feet Purchase Price

(in thousands) 1

3000 V Street NE Washington, D.C.

August 1, 2024 1 26,000 $ 7,600 5.6 %

1 Excludes intangible liabilities.

The total aggregate initial investment was approximately $7.9 million, including $0.3 million in capitalized closing costs and acquisition costs.

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

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

We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles.

These stabilized cap rates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our other public filings.

Development and Redevelopment Activity

As of September 30, 2024, we had eight properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet and one approximately 2.8-acre improved land parcel.

Additionally, we owned approximately 35.4 acres of land for future development that, upon completion, will consist of three buildings aggregating approximately 0.7 million square feet.

The following table summarizes certain information with respect to the properties under development or redevelopment and the land for future development as of September 30, 2024:

As of March 31, 2025, we had five properties under development or redevelopment that, upon completion, will consist of eight buildings aggregating approximately 0.8 million square feet.

Additionally, we owned approximately 22.4 acres of land for future development that, upon completion, will consist of two buildings aggregating approximately 0.4 million square feet.

The following table summarizes certain information with respect to the properties under development or redevelopment and the land for future development as of March 31, 2025:

Property Name Total Expected

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Stabilized Cap

Estimated Post-Development Square Feet Estimated Post-Development Acreage Estimated

Estimated Post-Development Square Feet Estimated

Stabilization

Quarter % Pre-leased September 30, 2024

Quarter % Pre-leased March 31, 2025

Properties under development or redevelopment:

Countyline Phase IV 4

Countyline Building 31

$ 42,000 $ 38,900 6.0 % 161,800 — Q4 2024 100.0 %

Countyline Building 32

40,100 29,400 6.0 % 164,300 — Q4 2025 — %

Countyline Building 33

39,000 32,500 5.9 % 158,000 — Q4 2025 66.6 %

15,600 15,600 5.3 % 31,400 — Q4 2024 — %

28,200 26,100 2.3 % — 2.8 Q4 2024 — %

Paterson Plank III

35,300 33,800 3.8 % 47,300 — Q1 2025 — %

East Garry Avenue

40,700 30,700 5.1 % 91,500 — Q2 2025 100.0 %

Countyline Building 32 $ 40,100 $ 33,500 6.0 % 164,300 Q4 2025 50.0 %

Countyline Building 33 39,900 36,900 5.9 % 158,000 Q3 2025 100.0 %

Countyline Building 34 55,900 33,400 5.7 % 219,900 Q4 2025 69.5 %

Paterson Plank III 35,200 34,200 3.8 % 47,300 Q3 2025 — %

139th Street 5

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The property was in the operating portfolio until January 2024 when redevelopment commenced.

The amount spent to date includes the total initial investment and capital expenditures

incurred prior to redevelopment and excludes accumulated depreciation recorded since acquisition.

The amount spent to date includes the total initial investment and capital expenditures incurred prior to redevelopment and excludes accumulated depreciation recorded since acquisition.

We expect a total incremental investment of approximately $64.0 million.

6 On October 21, 2024, we commenced development of Countyline Building 34 in Countyline Phase IV.

Upon completion, which is expected to occur in the third quarter of 2025, Countyline Building 34 will consist of one approximately 220,000 square foot industrial building with a total expected investment of approximately $55.9 million and an estimated stabilized cap rate of 5.7%.

The building is 70% pre-leased.

The lease will commence upon completion of the building and tenant improvements and will expire in February 2033.

During the nine months ended September 30, 2024, we completed development of three properties.

The following table summarizes certain information with respect to the development properties completed during the nine months ended September 30, 2024:

Property Name Location Total

During the three months ended March 31, 2025, we completed the redevelopment of one property.

The following table summarizes certain information with respect to that redevelopment property completed during the three months ended March 31, 2025:

Property Name Location Total Expected

Investment (in

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Post-Development Square Feet Post-Development Acreage Completion Quarter

Countyline Building 38 Hialeah, FL $ 88,500 5.0 % 506,215 — Q2 2024

Countyline Building 39 Hialeah, FL 43,800 5.8 % 178,201 — Q3 2024

Countyline Building 40 Hialeah, FL 43,800 6.3 % 186,107 — Q2 2024

Total/Weighted Average $ 176,100 5.5 % 870,523 —

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.

East Garry Avenue Santa Ana, CA $ 41,300 5.1 % 91,500 — Q1 2025

1 Total investment for the property include the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

2 Estimated stabilized cap rates are calculated as estimated annualized cash basis net operating income for the properties stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property.

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We capitalized interest associated with development, redevelopment and expansion activities of approximately $1.3 million and $3.1 million during the three months ended March 31, 2025 and 2024, respectively.

Disposition Activity

During the nine months ended September 30, 2024, we sold one property located in the Seattle market for a sales price of approximately $11.0 million, resulting in a gain of approximately $5.7 million.

The following summarizes the condensed results of operations of the property sold during the three and nine months ended September 30, 2024 (dollars in thousands):

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

The following table summarizes the properties we sold during the three months ended March 31, 2025 (dollars in thousands):

Market Number of Properties Total Sales Price Total Gain

San Francisco Bay Area 2 $ 24,880 $ 11,842

The following summarizes the condensed results of operations of the properties sold during the three months ended March 31, 2025 (dollars in thousands):

For the Three Months Ended March 31,

Rental revenues $ 142 $ 301

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Income from operations $ 146 $ 201

Senior Unsecured Notes

In July 2024, we repaid the $100.0 million tranche of our 7-year senior unsecured notes using existing cash on hand.

The notes bore interest at 3.8% and had an original maturity date of July 14, 2024.

Public Offering

On March 27, 2024, we completed a public offering of 6,325,000 shares of common stock at a price per share of $62.00, which included the underwriters’ full exercise of their option to purchase an additional 825,000 shares.

The net proceeds of the

offering were approximately $387.1 million after deducting the underwriting discount and offering costs of approximately $5.0 million.

We used the net proceeds for acquisitions.

We have an at-the-market equity offering program (the "$500 Million ATM Program") pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $500.0 million ($438.3 million remaining as of September 30, 2024) in amounts and at times as we determine from time to time.

Prior to the implementation of the $500 Million ATM Program, we had a previous at-the-market equity program (the “Previous $500 Million ATM Program”), which was substantially utilized as of August 27, 2024 and which is no longer active.

We have an at-the-market equity offering program (the “$500 Million ATM Program”) pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $500.0 million ($200.8 million remaining as of March 31, 2025) in amounts and at times as we determine from time to time.

We intend to use the net proceeds from the offering of the shares under the $500 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions, redevelopments and repayment of indebtedness, including borrowings under our revolving credit facility.

During the three and nine months ended September 30, 2024, we issued an aggregate of 2,976,266 and 5,329,544 shares, respectively, of common stock at a weighted average offering price of $68.70 and $66.62 per share, respectively, under the Previous $500 Million ATM Program and the $500 Million ATM Program, resulting in net proceeds of approximately $201.5 million and $349.9 million, respectively, and paying total compensation to the applicable sales agents of approximately $3.0 million and $5.1 million, respectively.

During the three months ended March 31, 2025, we issued an aggregate of 3,506,371 shares of common stock at a weighted average offering price of $67.71 per share under the $500 Million ATM Program, resulting in net proceeds of approximately $234.0 million and paying total compensation to the applicable sales agents of approximately $3.4 million.

Share Repurchase Program

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The program may be suspended or discontinued at any time.

As of September 30, 2024, we had not repurchased any shares of our common stock pursuant to our share repurchase program.

As of March 31, 2025, we had not repurchased any shares of our common stock pursuant to our share repurchase program.

Dividend and Distribution Activity

On November 5, 2024, our board of directors declared a cash dividend in the amount of $0.49 per share of our common stock payable on January 7, 2025 to the stockholders of record as of the close of business on December 13, 2024.

On May 6, 2025, our board of directors declared a cash dividend in the amount of $0.49 per share of our common stock payable on July 11, 2025 to the stockholders of record as of the close of business on June 27, 2025.

Contractual Commitments

As of November 5, 2024, we had two outstanding contracts to acquire two industrial properties for a total price of $163.9 million, as described under the heading “Material Cash Commitments” in this Quarterly Report on Form 10-Q.

In addition, we have a commitment to assume existing debt of approximately $72.9 million secured by one of the properties.

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

As of May 6, 2025, we had two outstanding contracts with third-party sellers to acquire two industrial properties for a total purchase price of approximately $49.0 million.

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

As of May 6, 2025, we had three non-binding letters of intent with third-party sellers to acquire three industrial properties for a total anticipated purchase price of approximately $75.8 million.

In the normal course of its business, we enter into non-binding letters of intent to purchase properties from third parties that may obligate us to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters.

There can be no assurance that we will enter into a purchase and sale agreement with respect to these properties or otherwise complete any such prospective purchases on the terms described or at all.

economy experienced a significant increase in inflation rates in recent years.

A wide variety of industries and sectors have been, and will continue to be, affected by increasing commodity prices.

A wide variety of industries and sectors have been, and may continue to be, affected by increasing commodity prices.

In recent years, inflation has increased construction costs, including tenant improvements and capital projects, goods and labor, and operating costs.

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In addition, leases with respect to approximately 68.0% of our total rentable square feet and improved land acreage expire within five years which enables us to seek to replace existing leases with new leases at the then-existing market rate.

Trade Policies, Tariffs and Related Government Actions

There have been significant changes, and continue to be ongoing discussion and commentary regarding potential significant changes, to U.S.

and foreign trade policies, tariffs, non-tariff barriers and related government actions.

Such changes and potential changes have created significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, tariffs and related government actions.

These developments, or the perception that certain potential developments could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between certain foreign countries and the United States.

Any of these impacts could depress economic activity, including consumption, and have a material adverse effect on the businesses of our current and future tenants as well as on our business, financial condition and results of operations.

“Risk Factors” in this Quarterly Report on Form 10-Q for additional disclosure regarding trade policies, tariffs and related government actions.

Financial Condition and Results of Operations

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Our primary cash expenses consist of our property operating expenses, which include:

real estate taxes, repairs and maintenance, management expenses, insurance, utilities, general and administrative expenses, which include compensation costs, office expenses, professional fees and other administrative expenses, acquisition costs, which include third-party costs paid to brokers and consultants, and interest expense, primarily on our revolving credit facility, term loans and senior unsecured notes.

paid to brokers and consultants, and interest expense, primarily on our revolving credit facility, term loans, mortgage loan and senior unsecured notes.

Our consolidated results of operations often are not comparable from period to period due to the impact of property acquisitions at various times during the course of such periods.

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

The analysis of our results below for the three and nine months ended September 30, 2024 and 2023 includes the changes attributable to same store properties.

The same store pool for the comparison of the three and nine months ended September 30, 2024 and 2023 includes all properties that were owned and in operation as of September 30, 2024 and since January 1, 2023 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of September 30, 2024.

As of September 30, 2024, the same store pool consisted of 243 buildings aggregating approximately 14.6 million square feet representing approximately 79.8% of our total square feet owned and 44 improved land parcels consisting of approximately 145.3 acres representing approximately 95.3% of our total acreage owned.

As of September 30, 2024, the non-same store properties, which we acquired, developed or redeveloped, or sold during 2024 and 2023 or were held for sale or in development or redevelopment as of September 30, 2024, consisted of 51 buildings (including two properties consisting of three buildings held for sale) aggregating approximately 3.7 million square feet, one improved land parcel consisting of approximately 7.1 acres, eight properties under development or redevelopment and approximately 35.4 acres of land for future development.

As of September 30, 2024 and 2023, our consolidated same store pool occupancy was approximately 97.3% and 98.4%, respectively.

The analysis of our results below for the three months ended March 31, 2025 and 2024 includes the changes attributable to same store properties.

The same store pool for the comparison of the three months ended March 31, 2025 and 2024 includes all properties that were owned and in operation as of March 31, 2025 and since January 1, 2024 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of March 31, 2025.

As of March 31, 2025, the same store pool consisted of 251 buildings aggregating approximately 15.6 million square feet representing approximately 80.9% of our total square feet owned and 45 improved land parcels consisting of approximately 146.7 acres representing approximately 97.4% of our total acreage owned.

As of March 31, 2025, the non-same store properties, which we acquired, developed or redeveloped, or sold during 2025 and 2024 or were held for sale or in development or redevelopment as of March 31, 2025, consisted of 47 buildings aggregating approximately 3.7 million square feet, two improved land parcels consisting of approximately 3.9 acres, five properties under development or redevelopment and approximately 22.4 acres of land for future development.

As of March 31, 2025 and 2024, our consolidated same store pool occupancy was approximately 97.4% and 96.3%, respectively.

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

Comparison of the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023:

For the Three Months Ended September 30,

Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024:

For the Three Months Ended March 31,

2025 2024 $ Change % Change

24 unchanged sentences

General and administrative 11,734 10,510 1,224 11.6 %

Acquisition costs and other 11 51 (40) (78.4) %

Acquisition costs and other 2 — 2 n/a

Total other costs and expenses 38,665 31,449 7,216 22.9 %

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Interest expense, including amortization (7,927) (5,240) (2,687) 51.3 %

Gain on sales of real estate investments 11,842 5,715 6,127 107.2 %

Total other (expense) income 5,138 3,368 1,770 52.6 %

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

2 Includes 2024 and 2023 acquisitions and dispositions, one improved land parcel, eight properties under development or redevelopment, approximately 35.4 acres of land for future development and two properties consisting of three buildings held for sale as of September 30, 2024.

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

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

Total revenues increased approximately $16.7 million for the three months ended September 30, 2024 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases and property acquisitions during 2024 and 2023.

Cash rents on new and renewed leases totaling approximately 0.5 million square feet and 0.3 acres of improved land commencing during the three months ended September 30, 2024 increased approximately 24.1% compared to the previous rental rates for that same space in the same period from the prior year.

For the three months ended September 30, 2024 and 2023, approximately $2.1 million and $1.8 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $10,000 and $0.1 million, respectively, was recorded in lease termination revenue.

The increase in total revenues for the three months ended September 30, 2024 was partially offset by a decrease in occupancy for the operating portfolio.

Additionally, total revenues for both the three months ended September 30, 2024 and 2023 were partially offset by approximately $0.1 million of bad debt write-offs.

Property operating expenses.

Total property operating expenses increased approximately $5.1 million during the three months ended September 30, 2024 compared to the same period from the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $3.8 million attributable to property acquisitions during 2024 and 2023 as well as increases in insurance premiums and real estate taxes.

Depreciation and amortization.

Depreciation and amortization increased approximately $5.8 million during the three months ended September 30, 2024 compared to the same period from the prior year primarily due to property acquisitions during 2024 and 2023.

General and administrative expenses.

General and administrative expenses increased approximately $1.7 million during the three months ended September 30, 2024 compared to the same period from the prior year primarily due to increased compensation expenses including increased restricted stock amortization, LTIP expense and bonus expense, and an increase in the number of employees and salaries compared to the same period from the prior year.

Interest and other income.

Interest and other income increased approximately $1.3 million for the three months ended September 30, 2024 compared to the same period from the prior year primarily due to higher cash and cash equivalent balances.

Interest expense, including amortization.

Interest expense decreased approximately $0.9 million for the three months ended September 30, 2024 compared to the same period from the prior year.

This was primarily due to an increase in capitalized interest for the development and redevelopment properties, and lower outstanding debt due to the repayment of the $100 million tranche of 7-year Senior Unsecured Notes during the three months ended September 30, 2024.

Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023:

For the Nine Months Ended September 30,

2024 2023 $ Change % Change

(Dollars in thousands)

Rental revenues 1

Same store $ 180,931 $ 174,111 $ 6,820 3.9 %

Non-same store operating properties 2

38,635 13,855 24,780 178.9 %

Total rental revenues 219,566 187,966 31,600 16.8 %

Tenant expense reimbursements 1

Same store 51,467 45,294 6,173 13.6 %

Non-same store operating properties 2

7,879 3,846 4,033 104.9 %

Total tenant expense reimbursements 59,346 49,140 10,206 20.8 %

Total revenues 278,912 237,106 41,806 17.6 %

Property operating expenses

Same store 58,648 52,869 5,779 10.9 %

Non-same store operating properties 2

11,613 4,567 7,046 154.3 %

Total property operating expenses 70,261 57,436 12,825 22.3 %

Net operating income 3

Same store 173,750 166,536 7,214 4.3 %

Non-same store operating properties 2

34,901 13,134 21,767 165.7 %

Total net operating income $ 208,651 $ 179,670 $ 28,981 16.1 %

Other costs and expenses

Depreciation and amortization 68,009 54,636 13,373 24.5 %

General and administrative 31,828 28,205 3,623 12.8 %

Acquisition costs and other 47 126 (79) (62.7) %

Total other costs and expenses 99,884 82,967 16,917 20.4 %

Other income (expense)

Interest and other income 9,572 4,029 5,543 137.6 %

Interest expense, including amortization (15,660) (19,089) 3,429 (18.0) %

Gain on sales of real estate investments 5,715 12,257 (6,542) (53.4) %

Total other (expense) income (373) (2,803) 2,430 (86.7) %

Net income $ 108,394 $ 93,900 $ 14,494 15.4 %

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

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

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

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

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

2 Includes 2023 and 2024 acquisitions and dispositions, one improved land parcel, eight properties under development or redevelopment, approximately 35.4 acres of land entitled for future development and two properties consisting of three buildings held for sale as of September 30, 2024.

2 Includes 2025 and 2024 acquisitions and dispositions, two improved land parcels, five properties under development or redevelopment and approximately 22.4 acres of land for future development.

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

Total revenues increased approximately $41.8 million for the nine months ended September 30, 2024 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases and property acquisitions during 2024 and 2023.

Cash rents on new and renewed leases totaling approximately 1.6 million square feet and 22.5 acres commencing during the nine months ended September 30, 2024 increased approximately 40.5% compared to the same space in the same period from the prior year.

For the nine months ended September 30, 2024 and 2023, approximately $5.4 million and $5.9 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.5 million and $0.3 million, respectively, was recorded in lease termination revenue.

The increase in total revenues for the nine months ended September 30, 2024 was partially offset by a decrease in occupancy for the operating portfolio.

Additionally, total revenues for the nine months ended September 30, 2024 and 2023 were partially offset by approximately $0.2 million and $0.4 million, respectively, of bad debt write-offs.

Total revenues increased approximately $25.4 million for the three months ended March 31, 2025 compared to the same period from the prior year due primarily to increased revenue on new and renewed leases during 2025 and 2024 and property acquisitions during 2024.

Cash rents on new and renewed leases totaling approximately 0.6 million square feet and 4.3 acres of improved land commencing during the three months ended March 31, 2025 increased approximately 34.2% compared to the previous rental rates for that same space in the same period from the prior year.

For the three months ended March 31, 2025 and 2024, approximately $3.5 million and $1.2 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.2 million and $0.1 million, respectively, was recorded in lease termination revenue.

Additionally, total revenues for both the three months ended March 31, 2025 and 2024 were partially offset by approximately $1.7 million and $0.3 million, respectively, of bad debt expense.

Bad debt expense for the three months ended March 31, 2025 included a straight-line rent reserve of approximately $0.4 million related to a Seattle-based third-party logistics tenant that occupies approximately 0.1 million square feet at our Kent 188 property.

Property operating expenses.

Total property operating expenses increased approximately $12.8 million during the nine months ended September 30, 2024 compared to the same period from the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $7.0 million attributable to property acquisitions during 2024 and 2023 as well as increases in insurance premiums and real estate taxes.

Total property operating expenses increased approximately $7.9 million during the three months ended March 31, 2025 compared to the same period from the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $5.7 million attributable to property acquisitions during 2024 as well as increases in insurance premiums and real estate taxes.

Depreciation and amortization.

Depreciation and amortization increased approximately $13.4 million during the nine months ended September 30, 2024 compared to the same period from the prior year primarily due to property acquisitions during 2024 and 2023.

Depreciation and amortization increased approximately $6.0 million during the three months ended March 31, 2025 compared to the same period from the prior year primarily due to property acquisitions during 2024.

General and administrative expenses.

General and administrative expenses increased approximately $3.6 million for the nine months ended September 30, 2024 compared to the same period from the prior year primarily due to increased compensation expenses including increased restricted stock amortization, LTIP expense and bonus expense, and an increase in the number of employees and salaries compared to the same period from the prior year.

General and administrative expenses increased approximately $1.2 million during the three months ended March 31, 2025 compared to the same period from the prior year primarily due to increased compensation expenses, including increased restricted stock amortization, Performance Share award expense and bonus expense, and an increase in the number of employees and salaries compared to the same period from the prior year.

Interest and other income.

Interest and other income increased approximately $5.5 million during the nine months ended September 30, 2024 compared to the same period from the prior year primarily due to higher cash and cash equivalent balances.

Interest and other income decreased approximately $1.7 million for the three months ended March 31, 2025 compared to the same period from the prior year primarily due to lower cash and cash equivalent balances and lower interest rates on those balances.

Interest expense, including amortization.

Interest expense decreased approximately $3.4 million for the nine months ended September 30, 2024 compared to the same period from the prior year.

Interest expense increased approximately $2.7 million for the three months ended March 31, 2025 compared to the same period from the prior year.

This was primarily due to a decrease in capitalized interest for the development and redevelopment properties.

Gain on sales of real estate investments.

Gain on sales of real estate investments decreased approximately $6.5 million for the nine months ended September 30, 2024 compared to the same period from the prior year.

We recognized a gain of approximately $5.7 million from the sale of one property during the nine months ended September 30, 2024, as compared to a gain of approximately $12.3 million from the sale of one property during the same period from the prior year.

Gain on sales of real estate investments increased approximately $6.1 million for the three months ended March 31, 2025 compared to the same period from the prior year.

We recognized an aggregate gain of approximately $11.8 million from the sale of two properties during the three months ended March 31, 2025 and an aggregate gain of approximately $5.7 million from the sale of one property during the three months ended March 31, 2024.

Liquidity and Capital Resources

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We intend to preserve a flexible capital structure with a long-term goal to maintain our investment grade rating and be in a position to issue additional unsecured debt and perpetual preferred stock.

We intend to primarily utilize senior unsecured notes, term loans, credit facilities, dispositions of properties, and proceeds from the issuance of common stock and perpetual preferred stock.

We may also assume debt in connection with property acquisitions which may have a higher loan-to-value ratio.

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Equity Sources of Liquidity

The net proceeds of the offering were approximately $387.1 million after deducting the underwriting discount and offering costs of approximately $5.0 million.

We used the net proceeds for acquisitions.

The following sets forth certain information regarding our current at-the-market common stock offering program as of September 30, 2024:

The following sets forth certain information regarding our current at-the-market common stock offering program as of March 31, 2025:

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

$500 Million ATM Program August 28, 2024 $ 500,000 $ 200,836

The tables below set forth the activity under our at-the-market common stock offering programs during the three and nine months ended September 30, 2024 and 2023, respectively:

The table below sets forth the activity under our at-the-market common stock offering program during the three months ended March 31, 2025 and 2024:

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

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(in thousands)

September 30, 2024 2,976,266 $ 68.70 $ 201,495 $ 2,964

September 30, 2023 1,575,173 $ 60.78 $ 94,357 $ 1,388

For the Nine Months Ended

Shares Sold Weighted Average

Price Per Share Net Proceeds

(in thousands) Sales Commissions

(in thousands)

September 30, 2024 5,329,544 $ 66.62 $ 349,919 $ 5,148

September 30, 2023 2,542,279 $ 61.61 $ 154,355 $ 2,271

March 31, 2025 3,506,371 $ 67.71 $ 233,980 $ 3,443

March 31, 2024 2,353,278 $ 64.00 $ 148,424 $ 2,184

Debt Sources of Liquidity

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

In July 2024, we repaid the $100.0 million tranche of 7-year Senior Unsecured Notes using existing cash on hand.

The notes bore interest at 3.8% and had an original maturity date of July 14, 2024.

On September 24, 2024, we entered into the Third Amendment to the Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) in order to, among other things, (i) increase the borrowing capacity of the revolving credit facility by $200.0 million to $600.0 million and (ii) extend the maturity date of the revolving credit facility from August 2025 to January 2029.

As of March 31, 2025, we had $50.0 million of senior unsecured notes that mature in July 2026, $50.0 million of senior unsecured notes that mature in October 2027, $100.0 million of senior unsecured notes that mature in July 2028, $100.0 million of senior unsecured notes that mature in December 2029, $125.0 million of senior unsecured notes that mature in August 2030, and $50.0 million of senior unsecured notes that mature in July 2031 (collectively, the “Senior Unsecured Notes”).

The Amended Facility consists of a $600.0 million revolving credit facility that matures in January 2029, 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 both September 30, 2024 and December 31, 2023, there were no borrowings outstanding on the revolving credit facility and $200.0 million of borrowings outstanding on the term loans.

The aggregate amount of the Amended Facility may be increased by up to an additional $450.0 million to a maximum amount not to exceed $1.25 billion, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

As of March 31, 2025, there were no borrowings outstanding on the revolving credit facility and $200.0 million of borrowings outstanding on the term loans.

As of December 31, 2024, there were $82.0 million of borrowings outstanding on the revolving credit facility and $200.0 million of borrowings outstanding on the term loans.

The aggregate amount of the Amended Facility may be increased by up to an additional $450.0 million to a maximum aggregate amount not to exceed $1.25 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 $600.0 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 our option, either (i) the Secured Overnight Financing Rate (“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 September 30, 2024) for the revolving credit facility and 1.25% to 1.75% (1.25% as of September 30, 2024) for the term loans, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

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

The applicable SOFR margin will range from 1.10% to 1.55% (1.10% as of March 31, 2025) for the revolving credit facility and 1.25% to 1.75% (1.25% as of March 31, 2025) for the term loans, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

The Amended Facility requires quarterly

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

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

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

We were in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of September 30, 2024 and December 31, 2023.

As of September 30, 2024 and December 31, 2023, we held cash and cash equivalents totaling approximately $243.7 million and $165.4 million, respectively.

The following tables summarize our debt maturities and principal payments as of September 30, 2024 and our market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the nine months ended September 30, 2024 and 2023 (dollars in thousands, except per share data):

We were in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of March 31, 2025 and December 31, 2024.

As of March 31, 2025 and December 31, 2024, we had 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 March 31, 2025 and December 31, 2024 was approximately $3.3 million and $3.6 million, respectively.

As of March 31, 2025 and December 31, 2024, we held cash and cash equivalents totaling approximately $156.5 million and $18.1 million, respectively.

The following tables summarize our debt maturities and principal payments as of March 31, 2025 and our market capitalization, capitalization ratios, Adjusted EBITDA, interest coverage, fixed charge coverage and debt ratios as of and for the three months ended March 31, 2025 and 2024 (dollars in thousands, except per share data):

Facility Term Loan Senior

Notes Total Debt

Notes Mortgage

Payable Total Debt

2025 (9 months) $ — $ — $ —

2 unchanged sentences

2028 — 100,000 100,000 72,879 272,879

2029 — — 100,000 — 100,000

Thereafter — — 175,000 — 175,000

Subtotal — 200,000 475,000 72,879 747,879

Unamortized fair value adjustment — — — (3,306) (3,306)

Total Debt — 200,000 475,000 69,573 744,573

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Weighted average interest rate n/a 5.6% 3.0% 3.9% 3.8%

As of September 30, 2024 As of September 30, 2023

As of March 31, 2025 As of March 31, 2024

Total Debt, net $ 741,912 $ 771,770

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Weighted Average Maturity of Total Debt (years) 3.5 4.1

1 Includes 426,887 and 419,500 shares of unvested restricted stock outstanding as of September 30, 2024 and 2023, respectively.

Also includes 508,663 and 514,539 shares held in the Deferred Compensation Plan as of September 30, 2024 and 2023, respectively.

2 Closing price of a share of our common stock on the New York Stock Exchange on September 30, 2024 and 2023, respectively, in dollars per share.

3 Total debt-to-total investments in properties is calculated as total debt, net of deferred financing costs, divided by total investments in properties, including two properties consisting of three buildings held for sale as of September 30, 2024.

1 Includes 446,411 and 422,563 shares of unvested restricted stock outstanding as of March 31, 2025 and 2024, respectively.

Also includes 533,423 and 508,663 shares held in the Deferred Compensation Plan as of March 31, 2025 and 2024, respectively.

2 Closing price of a share of our common stock on the New York Stock Exchange on March 31, 2025 and March 28, 2024, respectively, in dollars per share.

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

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

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

6 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the nine months ended September 30, 2024 and 2023, respectively.

6 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the three months ended March 31, 2025 and 2024, respectively.

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

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

The following table sets forth the cash dividends paid or payable per share during the nine months ended September 30, 2024:

The following table sets forth the cash dividends paid or payable per share during the three months ended March 31, 2025:

For the Three

2 unchanged sentences

March 31, 2025 Common Stock $ 0.49 February 4, 2025 March 27, 2025 April 4, 2025

June 30, 2024 Common Stock $ 0.45 May 7, 2024 June 28, 2024 July 12, 2024

September 30, 2024 Common Stock $ 0.49 August 6, 2024 September 30, 2024 October 11, 2024

Sources and Uses of Cash

2 unchanged sentences

Cash From Operating Activities.

Net cash provided by operating activities totaled approximately $181.4 million for the nine months ended September 30, 2024 compared to approximately $140.6 million for the nine months ended September 30, 2023.

This increase in cash provided by operating activities is primarily attributable to additional cash flows generated from the properties acquired during 2024 and 2023 and increased rents on new and renewed leases at our same store properties.

Net cash provided by operating activities totaled approximately $61.4 million for the three months ended March 31, 2025 compared to approximately $47.0 million for the three months ended March 31, 2024.

This increase in cash provided by operating activities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is primarily attributable to additional cash flows generated from the properties acquired during 2024 and increased rents on new and renewed leases at our same store properties.

Cash From Investing Activities.

Net cash used in investing activities was approximately $605.4 million and $479.6 million for the nine months ended September 30, 2024 and 2023, respectively, which consisted primarily of cash paid for property acquisitions of approximately $476.8 million and $392.5 million, respectively, additions to capital improvements of approximately $138.8 million and $111.7 million, respectively, and was partially offset by proceeds from sales of real estate investments of approximately $10.2 million and $24.6 million, respectively.

Net cash used in investing activities was approximately $23.8 million and $48.6 million for the three months ended March 31, 2025 and 2024, respectively.

Such amounts consisted primarily of additions to capital improvements of approximately $47.9 million and $40.1 million during the three months ended March 31, 2025 and 2024, respectively, and cash paid for property acquisitions of approximately $18.7 million in the three months ended March 31, 2024.

Such amounts were partially offset by proceeds from sales of real estate investments during the three months ended March 31, 2025 and 2024 of approximately $24.0 million and $10.2 million, respectively.

Cash From Financing Activities.

Net cash provided by financing activities was approximately $501.8 million for the nine months ended September 30, 2024, which consisted primarily of approximately $737.0 million in net proceeds from the issuance of common stock, partially offset by approximately $126.1 million in equity dividend payments and payment of a $100.0 million tranche of the Senior Unsecured Notes.

Net cash provided by financing activities was approximately $411.2 million for the nine months ended September 30, 2023, which consisted primarily of approximately $510.2 million in net proceeds from the issuance of common stock, partially offset by approximately $97.4 million in equity dividend payments.

Net cash provided by financing activities was approximately $101.2 million for the three months ended March 31, 2025, which consisted primarily of approximately $234.0 million in net proceeds from the issuance of common stock, and $50.0 million in revolving credit facility borrowings, partially offset by approximately $48.9 million in equity dividend payments, and repayment of $132.0 million of borrowings on the revolving credit facility.

Net cash provided by financing activities was approximately $495.8 million for the three months ended March 31, 2024, which consisted primarily of approximately $535.8 million in net proceeds from the issuance of common stock, partially offset by approximately $39.1 million in equity dividend payments.

Critical Accounting Policies And Estimates

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Material Cash Commitments

As of November 5, 2024, we had two outstanding contracts with third-party sellers to acquire two industrial properties for a total price of $163.9 million.

In addition, we have a commitment to assume existing debt of approximately $72.9 million secured by one of the properties.

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

The following table summarizes our material cash commitments due by period as of September 30, 2024 (dollars in thousands):

As of May 6, 2025, we had two outstanding contracts with third-party sellers to acquire two industrial properties for a total price of $49.0 million.

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

The following table summarizes our material cash commitments due by period as of March 31, 2025 (dollars in thousands):

Material Cash Commitments Less than 1

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Operating lease commitments 962 1,942 1,111 — 4,015

Material construction contracts 18,034 — — — 18,034

Purchase obligations 1

1 unchanged sentence

Total $ 81,453 $ 406,968 $ 219,059 $ 179,328 $ 886,808

1 As of November 5, 2024.

1 As of May 6, 2025.

Non-GAAP Financial Measures

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

The following table reflects the calculation of FFO reconciled from net income for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands except per share data):

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

The following table reflects the calculation of FFO reconciled from net income for the three months ended March 31, 2025 and 2024 (dollars in thousands except per share data):

For the Three Months Ended March 31,

2025 2024 $ Change % Change

$ 48,126 $ 36,059 $ 12,067 33.5 %

Gain on sales of real estate investments — — — n/a (5,715) (12,257) 6,542 (53.4) %

Gain on sales of real estate investments (11,842) (5,715) (6,127) 107.2 %

Depreciation and amortization 26,929 20,939 5,990 28.6 %

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

Under this method, allocations were made to 422,856 and 404,010 of weighted average unvested restricted shares outstanding for the three

months ended September 30, 2024 and 2023, respectively, and 430,782 and 384,239 of weighted average unvested restricted shares outstanding for the nine months ended September 30, 2024 and 2023, respectively.

FFO increased by approximately $12.1 million and $34.3 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods from the prior year due primarily to property acquisitions during 2023 and 2024 as well as same store NOI growth of approximately $1.8 million and $7.2 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods from the prior year.

The FFO increase was partially offset by increased weighted average common shares outstanding and increased general and administrative expenses due to increased restricted stock amortization and other compensation expenses, including an increase in bonus expense and an increase in the number of employees and salaries for the three and nine months ended September 30, 2024 compared to the same periods from the prior year.

Under this method, allocations were made to 445,765 and 429,583 of weighted average unvested restricted shares outstanding for the three months ended March 31, 2025 and 2024, respectively.

FFO increased by approximately $11.9 million for the three months ended March 31, 2025 compared to the same period from the prior year due primarily to property acquisitions during 2024 as well as same store NOI growth of approximately $2.1 million for the three months ended March 31, 2025 compared to the same period from the prior year.

The FFO increase was partially offset by increased weighted average common shares outstanding and increased general and administrative expenses due to increased restricted stock amortization and other compensation expenses, including an increase in bonus expense and an increase in the number of employees and salaries for the three months ended March 31, 2025 compared to the same period from the prior year.

Additionally, the increase in FFO for both the three months ended March 31, 2025 and 2024 was also partially offset by approximately $1.7 million and $0.3 million, respectively, of bad debt expense.

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

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

The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three months ended March 31, 2025 and 2024 (dollars in thousands):

For the Three Months Ended March 31,

2025 2024 $ Change % Change

Net income $ 48,126 $ 36,059 $ 12,067 33.5 %

Gain on sales of real estate investments — — — n/a (5,715) (12,257) 6,542 (53.4) %

Gain on sales of real estate investments (11,842) (5,715) (6,127) 107.2 %

Depreciation and amortization 26,929 20,939 5,990 28.6 %

1 unchanged sentence

Stock-based compensation 4,252 3,356 896 26.7 %

Acquisition costs and other 11 51 (40) (78.4) % 47 126 (79) (62.7) %

Acquisition costs and other 2 — 2 n/a

Adjusted EBITDA $ 75,394 $ 59,879 $ 15,515 25.9 %

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

The same store pool includes all properties that were owned and in operation as of September 30, 2024 and since January 1, 2023 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of September 30, 2024.

As of September 30, 2024, the same store pool consisted of 243 buildings aggregating approximately 14.6 million square feet representing approximately 79.8% of our total square feet owned and 44 improved land parcels containing approximately 145.3 acres representing approximately 95.3% of our total acreage owned.

The same store pool includes all properties that were owned and in operation as of March 31, 2025 and since January 1, 2024 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of March 31, 2025.

As of March 31, 2025, the same store pool consisted of 251 buildings aggregating approximately 15.6 million square feet representing approximately 80.9% of our total square feet owned and 45 improved land parcels containing approximately 146.7 acres representing approximately 97.4% of our total acreage owned.

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

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

The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 $ Change % Change 2024 2023 $ Change % Change

The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three months ended March 31, 2025 and 2024 (dollars in thousands):

For the Three Months Ended March 31,

2025 2024 $ Change % Change

$ 48,126 $ 36,059 $ 12,067 33.5 %

1 unchanged sentence

General and administrative 11,734 10,510 1,224 11.6 %

Acquisition costs and other 11 51 (40) (78.4) % 47 126 (79) (62.7) %

Acquisition costs and other 2 — 2 n/a

Total other income and expenses (5,138) (3,368) (1,770) 52.6 %

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Cash-basis same store NOI excluding termination fees $ 61,786 $ 57,783 $ 4,003 6.9 %

1 Includes approximately $10,000 and $0.1 million of lease termination income for the three months ended September 30, 2024 and 2023, respectively, and approximately $0.5 million and $0.3 million of lease termination income for the nine months ended September 30, 2024 and 2023, respectively.

2 Includes 2023 and 2024 acquisitions and dispositions, one improved land parcel, eight properties under development or redevelopment, approximately 35.4 acres of land for future development and two properties consisting of three buildings held for sale as of September 30, 2024.

1 Includes approximately $0.2 million and $0.1 million of lease termination income for the three months ended March 31, 2025 and 2024, respectively.

2 Includes 2025 and 2024 acquisitions and dispositions, two improved land parcels, five properties under development or redevelopment and approximately 22.4 acres of land for future development.

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

Cash-basis same store NOI increased by approximately $3.4 million for the three months ended September 30, 2024 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases and contractual rent increases on pre-existing leases.

For the three months ended September 30, 2024 and 2023, total contractual rent abatements of approximately $0.4 million and $0.6 million, respectively, were given to certain tenants in the same store pool and approximately $10,000 and $0.1 million, respectively, in lease termination income was received from certain tenants in the same store pool.

In addition, approximately $0.9 million of the increase in cash-basis same store NOI for the three months ended September 30, 2024 related to properties that were acquired vacant or with near term expirations in 2022.

The increase in cash-basis same store NOI was partially offset by a decrease in same store occupancy for the three months ended September 30, 2024 compared to the same period from the prior year.

Additionally, total cash-basis same store NOI for the three months ended September 30, 2024 and 2023 was partially offset by approximately $0.1 million and $25,100, respectively, of bad debt write-offs in the same store pool.

Cash-basis same store NOI increased by approximately $14.2 million for the nine months ended September 30, 2024 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases.

For the nine months ended September 30, 2024 and 2023, total contractual rent abatements of approximately $1.1 million and $4.1 million, respectively, were given to certain tenants in the same-store pool and approximately $0.5 million and $0.2 million, respectively, in lease termination income was received from certain tenants in the same store pool.

In addition, approximately

$2.6 million of the increase in cash-basis same store NOI for the nine months ended September 30, 2024 related to properties that were acquired vacant or with near term expirations in 2022.

The increase in cash-basis same store NOI was partially offset by a decrease in same store occupancy for the nine months ended September 30, 2024 compared to the same period from the prior year.

Additionally, total cash-basis same store NOI for the nine months ended September 30, 2024 and 2023 was partially offset by approximately $0.2 million and $0.3 million, respectively, of bad debt write-offs in the same store pool.

Cash-basis same store NOI increased by approximately $4.0 million for the three months ended March 31, 2025 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases and contractual rent increases on pre-existing leases.

For the three months ended March 31, 2025 and 2024, total contractual rent abatements of approximately $1.2 million and $1.1 million, respectively, were given to certain tenants in the same store pool and approximately $0.1 million and $0.1 million, respectively, in lease termination income was received from certain tenants in the same store pool.

In addition, approximately $0.5 million of the increase in cash-basis same store NOI for the three months ended March 31, 2025 related to properties that were acquired vacant or with near term expirations in 2024.

We compute net debt as total debt, less deferred financing costs and cash and cash equivalents.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis