Terreno Realty Corp 10-Q

Item 1. Financial Statements of Terreno Realty Corporation Terreno Realty Corporation Consolidated Balance Sheets (in thousands – except share and per share data) June 30, 2025 December 31, 2024 (unaudited) ASSETS Investments in real estate Land $ 2,619,297 $ 2,586,471 Buildings and improvements 2,093,987 2,107,312 Construction in progress 247,480 219,652 Intangible assets 213,461 208,475 Total investments in properties 5,174,225 5,121,910 Accumulated depreciation and amortization ( 483,273 ) ( 466,553 ) Net investments in properties 4,690,952 4,655,357 Properties held for sale, net 61,525 6,258 Net investments in real estate 4,752,477 4,661,615 Cash and cash equivalents 128,368 18,070 Restricted cash 467 282 Other assets, net 100,899 90,189 Total assets $ 4,982,211 $ 4,770,156 LIABILITIES AND EQUITY Liabilities Credit facility $ — $ 82,000 Term loans payable, net 199,498 199,380 Senior unsecured notes, net 473,187 472,953 Mortgage loan payable, net 69,701 69,104 Security deposits 40,123 39,758 Intangible liabilities, net 132,651 116,542 Dividends payable 50,629 48,871 Accounts payable and other liabilities 73,434 79,216 Total liabilities 1,039,223 1,107,824 Commitments and contingencies (Note 11) Equity Stockholders’ equity Common stock: $ 0.01 par value, 400,000,000 shares authorized, and 102,799,526 and 99,238,003 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively. 1,030 994 Additional paid-in capital 3,839,743 3,597,148 Common stock held in deferred compensation plan: 533,423 and 497,190 shares at June 30, 2025 and December 31, 2024, respectively. ( 33,217 ) ( 31,097 ) Retained earnings 135,432 95,287 Total stockholders’ equity 3,942,988 3,662,332 Total liabilities and equity $ 4,982,211 $ 4,770,156 The accompanying condensed notes are an integral part of these consolidated financial statements. 2 Table of Contents Terreno Realty Corporation Consolidated Statements of Operations (in thousands – except share and per share data) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 REVENUES Rental revenues and tenant expense reimbursements $ 112,234 $ 94,247 $ 222,654 $ 179,277 Total revenues 112,234 94,247 222,654 179,277 COSTS AND EXPENSES Property operating expenses 27,908 23,772 56,675 44,662 Depreciation and amortization 28,024 23,012 54,953 43,951 General and administrative 12,350 10,543 24,084 21,053 Acquisition costs and other 229 36 231 36 Total costs and expenses 68,511 57,363 135,943 109,702 OTHER INCOME (EXPENSE) Interest and other income 1,944 4,332 3,167 7,225 Interest expense, including amortization ( 7,037 ) ( 5,520 ) ( 14,964 ) ( 10,760 ) Gain on sales of real estate investments 54,643 — 66,485 5,715 Total other income (expense) 49,550 ( 1,188 ) 54,688 2,180 Net income 93,273 35,696 141,399 71,755 Allocation to participating securities ( 396 ) ( 156 ) ( 604 ) ( 310 ) Net income available to common stockholders $ 92,877 $ 35,540 $ 140,795 $ 71,445 EARNINGS PER COMMON SHARE - BASIC AND DILUTED: Net income available to common stockholders - basic $ 0.90 $ 0.37 $ 1.38 $ 0.77 Net income available to common stockholders - diluted $ 0.90 $ 0.37 $ 1.38 $ 0.77 BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 102,888,326 96,289,755 101,833,931 92,581,813 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 103,012,111 96,406,139 102,063,801 92,950,015 The accompanying condensed notes are an integral part of these consolidated financial statements. 3 Table of Contents Terreno Realty Corporation Consolidated Statements of Equity (in thousands – except share data) (Unaudited) Six months ended June 30, 2025: Common Stock Additional Paid- in Capital Common Shares Held in Deferred Compensation Plan Deferred Compensation Plan Retained Earnings Number of Shares Amount Total Balance as of December 31, 2024 99,238,003 $ 994 $ 3,597,148 497,190 $ ( 31,097 ) $ 95,287 $ 3,662,332 Net income — — — — — 48,126 48,126 Issuance of common stock, net of issuance costs of $ 4,041 3,547,563 36 233,346 — — — 233,382 Common shares acquired related to employee awards ( 23,185 ) — ( 1,942 ) — — — ( 1,942 ) Issuance of restricted stock 64,466 — — — — — — Stock-based compensation — — 4,252 — — — 4,252 Common stock dividends ($ 0.49 per share) — — — — — ( 50,625 ) ( 50,625 ) Deposits to deferred compensation plan ( 36,233 ) — 2,120 36,233 ( 2,120 ) — — Balance as of March 31, 2025 102,790,614 1,030 3,834,924 533,423 ( 33,217 ) 92,788 $ 3,895,525 Net income — — — — — 93,273 93,273 Issuance of common stock, net of issuance costs of $ 0 14,195 — — — — — — Forfeiture of common stock related to employee awards ( 5,713 ) — — — — — — Common shares acquired related to employee awards ( 1,347 ) — ( 51 ) — — — ( 51 ) Issuance of restricted stock 1,777 — — — — — — Stock-based compensation — — 4,870 — — — 4,870 Common stock dividends ($ 0.49 per share) — — — — — ( 50,629 ) ( 50,629 ) Balance as of June 30, 2025 102,799,526 $ 1,030 $ 3,839,743 533,423 $ ( 33,217 ) $ 135,432 3,942,988 Six months ended June 30, 2024: Common Stock Additional Paid- in Capital Common Shares Held in Deferred Compensation Plan Deferred Compensation Plan Retained Earnings Number of Shares Amount Total Balance as of December 31, 2023 87,487,098 $ 876 $ 2,849,961 508,663 $ ( 31,788 ) $ 95,578 $ 2,914,627 Net income — — — — — 36,059 36,059 Issuance of common stock, net of issuance costs of $ 3,226 8,678,278 87 534,955 — — — 535,042 Forfeiture of common stock related to employee awards ( 9,324 ) — — — — — — Common shares acquired related to employee awards ( 14,517 ) — ( 983 ) — — — ( 983 ) Issuance of restricted stock 53,904 — — — — — — Stock-based compensation — — 3,356 — — — 3,356 Common stock dividends ($ 0.45 per share) — — — — — ( 43,517 ) ( 43,517 ) Balance as of March 31, 2024 96,195,439 963 3,387,289 508,663 ( 31,788 ) 88,120 $ 3,444,584 Net income — — — — — 35,696 35,696 Issuance of common stock, net of issuance costs of $ 0 11,385 1 — — — — 1 Forfeiture of common stock related to employee awards ( 7,013 ) — — — — — — Common shares acquired related to employee awards ( 874 ) — ( 55 ) — — — ( 55 ) Issuance of restricted stock 13,306 — — — — — — Stock-based compensation — — 3,988 — — — 3,988 Common stock dividends ($ 0.45 per share) — — — — — ( 43,529 ) ( 43,529 ) Balance as of June 30, 2024 96,212,243 $ 964 3,391,222 508,663 $ ( 31,788 ) $ 80,287 3,440,685 The accompanying condensed notes are an integral part of these consolidated financial statements. 4 Table of Contents Terreno Realty Corporation Consolidated Statements of Cash Flows (in thousands) (Unaudited) For the Six Months Ended June 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 141,399 $ 71,755 Adjustments to reconcile net income to net cash provided by operating activities Straight-line rents ( 7,616 ) ( 3,404 ) Amortization of lease intangibles ( 10,342 ) ( 7,808 ) Depreciation and amortization 54,953 43,951 Gain on sales of real estate investments ( 66,485 ) ( 5,715 ) Deferred financing cost and mortgage fair value adjustment amortization 1,699 774 Stock-based compensation 9,122 7,344 Changes in assets and liabilities Other assets ( 5,570 ) ( 4,747 ) Accounts payable and other liabilities 4,907 9,219 Net cash provided by operating activities 122,067 111,369 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for property acquisitions ( 126,073 ) ( 468,934 ) Proceeds from sales of real estate investments, net 135,656 10,172 Additions to construction in progress ( 42,737 ) ( 71,526 ) Additions to buildings, improvements and leasing costs ( 28,921 ) ( 16,834 ) Net cash used in investing activities ( 62,075 ) ( 547,122 ) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 237,423 538,268 Issuance costs on issuance of common stock ( 3,443 ) ( 2,693 ) Repurchase of common stock related to employee awards ( 1,993 ) ( 1,038 ) Borrowings on credit facility 50,000 — Payments on credit facility ( 132,000 ) — Dividends paid to common stockholders ( 99,496 ) ( 82,570 ) Net cash provided by financing activities 50,491 451,967 Net increase in cash and cash equivalents and restricted cash 110,483 16,214 Cash and cash equivalents and restricted cash at beginning of period 18,352 166,236 Cash and cash equivalents and restricted cash at end of period $ 128,835 $ 182,450 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest, net of capitalized interest $ 12,141 $ 14,910 Supplemental disclosures of non-cash transactions Accounts payable related to capital improvements 24,826 34,324 Non-cash issuance of common stock to the deferred compensation plan ( 2,120 ) — Lease liability arising from recognition of right-of-use asset — 2,264 Reconciliation of cash paid for property acquisitions Acquisition of properties $ 152,781 $ 491,499 Assumption of other assets and liabilities ( 26,708 ) ( 22,565 ) Net cash paid for property acquisitions $ 126,073 $ 468,934 The accompanying condensed notes are an integral part of these consolidated financial statements. 5 Table of Contents Terreno Realty Corporation Condensed Notes to Consolidated Financial Statements (Unaudited) Note 1. Organization Terreno Realty Corporation (“Terreno”, and together with its subsidiaries, the “Company”) acquires, owns and operates industrial real estate in six major coastal U.S. markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these condensed notes to the consolidated financial statements are unaudited. As of June 30, 2025, the Company owned 297 buildings (including three properties consisting of eight buildings and one improved land parcel held for sale) aggregating approximately 18.9 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 for future development. The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2010. Note 2. Significant Accounting Policies Basis of Presentation. The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. In management’s opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The interim consolidated financial statements include all of the Company’s accounts and its subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. The financial statements should be read in conjunction with the financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the notes thereto, which was filed with the Securities and Exchange Commission on February 5, 2025. Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Capitalization of Costs. The Company capitalizes costs directly related to the development, redevelopment, renovation and expansion of its investment in real estate. Costs associated with such projects are capitalized as incurred. If the project is abandoned, these costs are expensed during the period in which the development, redevelopment, renovation or expansion project is abandoned. Costs considered for capitalization include, but are not limited to, construction costs, interest, real estate taxes and insurance, if appropriate. These costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress. In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed. Costs incurred for maintaining and repairing properties, which do not extend their useful lives, are expensed as incurred. Interest is capitalized based on actual capital expenditures from the period when development, redevelopment, renovation or expansion commences until the asset is ready for its intended use, at the weighted average borrowing rate during the period. Investments in Real Estate. Investments in real estate, including tenant improvements, leasehold improvements and leasing costs, are stated at cost, less accumulated depreciation, unless circumstances indicate that the cost cannot be recovered, in which case, an adjustment to the carrying value of the property is made to reduce it to its estimated fair value. The Company also reviews the impact of above and below-market leases, in-place leases and lease origination costs for acquisitions and records an intangible asset or liability accordingly. Impairment. Carrying values for financial reporting purposes are reviewed for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. Examples of such events or changes in circumstances may include classifying an asset to be held for sale, changing the intended hold period or when an asset remains vacant significantly longer than expected. The intended use of an asset either held for sale or held for use can significantly impact how impairment is measured. If an asset is intended to be held for the long-term, the recoverability is based on the undiscounted future cash flows. If the asset carrying value is not supported on an undiscounted 6 Table of Contents future cash flow basis, then the asset carrying value is measured against the lower of cost or the present value of expected cash flows over the expected hold period. An impairment charge to earnings is recognized for the excess of the asset’s carrying value over the lower of cost or the present values of expected cash flows over the expected hold period. If an asset is intended to be sold, impairment is determined using the estimated fair value less costs to sell. The estimation of expected future net cash flows is inherently uncertain and relies on assumptions, among other things, regarding current and future economic and market conditions and the availability of capital. The Company determines the estimated fair values based on its assumptions regarding rental rates, lease-up and holding periods, as well as sales prices. When available, current market information is used to determine capitalization and rental growth rates. If available, current comparative sales values may also be used to establish fair value. When market information is not readily available, the inputs are based on the Company’s understanding of market conditions and the experience of the Company’s management team. Actual results could differ significantly from the Company’s estimates. The discount rates used in the fair value estimates represent a rate commensurate with the indicated holding period with a premium layered on for risk. There were no impairment charges recorded to the carrying values of the Company’s properties during the three or six months ended June 30, 2025 or 2024. Property Acquisitions. In accordance with Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not considered a business. To be a business, the set of acquired activities and assets must include inputs and one or more substantive processes that together contribute to the ability to create outputs. The Company has determined that its real estate property acquisitions will generally be accounted for as asset acquisitions under the clarified definition. Upon acquisition of a property the Company estimates the fair value of acquired tangible assets (consisting generally of land, buildings and improvements) and intangible assets and liabilities (consisting generally of the above and below-market leases and the origination value of all in-place leases). The Company determines fair values using Level 3 inputs such as replacement cost, estimated cash flow projections and other valuation techniques and applying appropriate discount and capitalization rates based on available market information. Mortgage loans assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the date of acquisition. Acquisition-related costs associated with asset acquisitions are capitalized to individual tangible and intangible assets and liabilities assumed on a relative fair value basis and acquisition-related costs associated with business combinations are expensed as incurred. The fair value of the tangible assets is determined by valuing the property as if it were vacant. Land values are derived from current comparative sales values, when available, or management’s estimates of the fair value based on market conditions and the experience of the Company’s management team. Building and improvement values are calculated as replacement cost less depreciation, or management’s estimates of the fair value of these assets using discounted cash flow analyses or similar methods. The fair value of the above and below-market leases is based on the present value of the difference between the contractual amounts to be received pursuant to the acquired leases (using a discount rate that reflects the risks associated with the acquired leases) and the Company’s estimate of the market lease rates measured over a period equal to the remaining term of the leases plus the term of any below-market fixed rate renewal options. The above and below-market lease values are amortized to rental revenues over the remaining initial term plus the term of any below-market fixed rate renewal options that are considered bargain renewal options of the respective leases. The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 5.3 million and $ 4.5 million for the three months ended June 30, 2025 and 2024, respectively, and approximately $ 10.3 million and $ 7.8 million for the six months ended June 30, 2025 and 2024, respectively. The origination value of in-place leases is based on costs to execute similar leases, including commissions and other related costs. The origination value of in-place leases also includes real estate taxes, insurance and an estimate of lost rental revenue at market rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition. The remaining weighted average lease term related to these intangible assets and liabilities as of June 30, 2025 was 8.0 years. As of June 30, 2025 and December 31, 2024, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands): June 30, 2025 December 31, 2024 Gross Accumulated Amortization Net Gross Accumulated Amortization Net In-place leases $ 211,451 $ ( 121,581 ) $ 89,870 $ 203,386 $ ( 111,927 ) $ 91,459 Above-market leases 4,652 ( 3,550 ) 1,102 5,089 ( 3,723 ) 1,366 Below-market leases ( 212,127 ) 79,476 ( 132,651 ) ( 185,995 ) 69,453 ( 116,542 ) Total $ 3,976 $ ( 45,655 ) $ ( 41,679 ) $ 22,480 $ ( 46,197 ) $ ( 23,717 ) 7 Table of Contents Depreciation and Useful Lives of Real Estate and Intangible Assets. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets or liabilities. The following table reflects the standard depreciable lives typically used to compute depreciation and amortization. However, such depreciable lives may be different based on the estimated useful life of such assets or liabilities. Description Standard Depreciable Life Land Not depreciated Building 40 years Building Improvements 5 - 40 years Tenant Improvements Shorter of lease term or useful life Leasing Costs Lease term In-place Leases Lease term Above/Below-Market Leases Lease term Held for Sale Assets. The Company considers a property to be held for sale when it meets the criteria established under Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment (See “Note 5 - Held for Sale/Disposed Assets”). Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. Cash and Cash Equivalents. Cash and cash equivalents consists of cash held in a major banking institution and other highly liquid short-term investments with original maturities of three months or less. Cash equivalents are generally invested in U.S. government securities, government agency securities or money market accounts. Restricted Cash. Restricted cash includes cash held in escrow in connection with property acquisitions and reserves for certain capital improvements, leasing, interest and real estate tax and insurance payments as required by certain mortgage loan obligations. The following summarizes the reconciliation of cash and cash equivalents and restricted cash as presented in the accompanying consolidated statements of cash flows (dollars in thousands): For the Six Months Ended June 30, 2025 2024 Beginning Cash and cash equivalents at beginning of period $ 18,070 $ 165,400 Restricted cash 282 836 Cash and cash equivalents and restricted cash 18,352 166,236 Ending Cash and cash equivalents at end of period 128,368 181,989 Restricted cash 467 461 Cash and cash equivalents and restricted cash 128,835 182,450 Net increase in cash and cash equivalents and restricted cash $ 110,483 $ 16,214 Revenue Recognition. The Company records rental revenue from operating leases on a straight-line basis over the term of the leases and maintains an allowance for estimated losses that may result from the inability of its tenants to make required payments. If tenants fail to make contractual lease payments that are greater than the Company’s allowance for doubtful accounts, security deposits and letters of credit, then the Company may have to recognize additional doubtful account charges in future periods. The Company monitors the liquidity and creditworthiness of its tenants on an ongoing basis by reviewing their financial condition periodically as appropriate. Each period the Company reviews its outstanding accounts receivable, including straight-line rents, for doubtful accounts and provides allowances as needed. The Company also records lease termination fees when a tenant has executed a definitive termination agreement with the Company and the payment of the termination fee is not subject to any conditions that must be met or waived before the fee is due to the Company. If a tenant remains in the leased space following the execution of a definitive termination agreement, the applicable termination will be deferred and recognized over the term of such tenant’s occupancy. Tenant expense reimbursement income includes payments and amounts due from tenants pursuant to their leases for real estate taxes, insurance and other recoverable property operating expenses and is recognized as revenues during the same period the related expenses are incurred. 8 Table of Contents As of June 30, 2025 and December 31, 2024, approximately $ 68.6 million and $ 62.9 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 5.8 million and $ 3.4 million as of June 30, 2025 and December 31, 2024, respectively, were included as a component of other assets in the accompanying consolidated balance sheets. Deferred Financing Costs. Costs incurred in connection with financings are capitalized and amortized to interest expense using the effective interest method over the term of the related loan. Deferred financing costs associated with the Company’s revolving credit facility are classified as an asset, as a component of other assets in the accompanying consolidated balance sheets, and deferred financing costs associated with debt liabilities are reported as a direct deduction from the carrying amount of the debt liability in the accompanying consolidated balance sheets. Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of deferred financing costs and net of accumulated amortization in the aggregate of approximately $ 16.3 million and $ 15.2 million as of June 30, 2025 and December 31, 2024, respectively. Mortgage Fair Value Adjustment. Mortgage fair value adjustment represents the excess of the principal debt assumed over the fair value of debt assumed in connection with property acquisitions. The adjustment is being amortized to interest expense over the term of the related debt instrument using the effective interest method. The net unamortized fair value mortgage adjustment as of June 30, 2025 and December 31, 2024 was approximately $ 3.0 million and $ 3.6 million, respectively, and was included as a component of mortgage loans payable in the accompanying consolidated balance sheets. Income Taxes. The Company elected to be taxed as a REIT under the Code and operates as such beginning with its taxable year ended December 31, 2010. In addition, certain properties are held indirectly through subsidiaries that intend to qualify as REITs for federal income tax purposes. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. If it fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the IRS grants it relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes it is organized and operates in such a manner as to qualify for treatment as a REIT. ASC 740-10, Income Taxes (“ASC 740-10”) , provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740-10 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year. As of June 30, 2025 and December 31, 2024, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months. The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of June 30, 2025, include years 2021 to 2024 for federal purposes. Stock-Based Compensation and Other Long-Term Incentive Compensation. The Company follows the provisions of ASC 718, Compensation-Stock Compensation, to account for its stock-based compensation plan, which requires that the compensation cost relating to stock-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The Company’s 2025 Equity Incentive Plan (the “2025 Plan”) provides, and the 2019 Equity Incentive Plan (the “2019 Plan”) previously provided for the grant of restricted stock awards, performance share awards, unrestricted shares or any combination of the foregoing. Stock-based compensation is recognized as a general and administrative expense in the accompanying consolidated statements of operations and measured at the fair value of the award on the date of grant. The Company estimates the forfeiture rate based on historical experience as well as expected behavior. The amount of the expense may be subject to adjustment in future periods depending on the specific characteristics of the stock-based award. In addition, the Company has awarded long-term incentive target awards (the “Performance Share awards”) under its Amended and Restated Long-Term Incentive Plan (the “LTIP”) to its executives that may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period, which is generally three years . The amount that may be earned is variable depending on the relative total shareholder return of the Company’s common stock as compared to the total shareholder return of the MSCI U.S. REIT Index (RMS) and the FTSE Nareit Equity Industrial Index over the pre-established performance measurement period. Under the LTIP, each participant’s Performance Share award granted will be expressed as a number of shares of common stock and settled in shares of common stock. The grant date fair value of the 9 Table of Contents Performance Share awards will be determined using a Monte Carlo simulation model on the date of grant and recognized on a straight-line basis over the performance period. Fair Value of Financial Instruments . ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) (See “Note 8 - Fair Value Measurements”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. ASC 820 requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). Segment Disclosure. ASC 280, Segment Reporting , establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company acquires, owns and operates industrial real estate in six major coastal U.S. markets. The Company invests in several types of industrial real estate, including warehouse/distribution, flex, transshipment, and improved land. The Company’s assets engage in leasing activities that generate revenues and incur operating expenses. Lease terms typically range from three to ten years . As each of the Company’s assets has similar economic characteristics, the assets have been aggregated into one reportable segment. The accounting policies for the reportable segment are the same as those described above. The Chief Operating Decision Maker (“CODM”) assesses segment performance and decides how to allocate resources based on net income, which is reported on the Consolidated Statements of Operations. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets. The CODM is comprised of the CEO and the President. The CODM reviews net income on an individual asset level and on a consolidated level and uses this information to monitor budget versus actual results, to evaluate returns on assets and to determine how to reinvest profits. The revenue, costs and expenses, and net income for the reportable segment are the same as those presented on the Consolidated Statements of Operations. New Accounting Standards. In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities to disaggregate certain expense captions on the income statement into specific categories in a tabular format in the notes to the financial statements. This standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating ASU 2024-03 and expects to provide additional information related to its income statement in the footnotes as required. Note 3. Concentration of Credit Risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company may maintain deposits in federally insured financial institutions in excess of federally insured limits. However, the Company’s management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. As of June 30, 2025, the Company owned 67 buildings aggregating approximately 3.9 million square feet and 13 improved land parcels consisting of approximately 62.3 acres located in New York City/Northern New Jersey, which accounted for a combined percentage of approximately 29.1 % of its annualized base rent. Such annualized base rent is based on contractual monthly base rent per the leases, for all buildings and improved land parcels, excluding any partial or full rent abatements as of June 30, 2025, multiplied by 12. Other real estate companies compete with the Company in its real estate markets. This results in competition for tenants to occupy space. The existence of competing properties could have a material impact on the Company’s ability to lease space and on the level of rent that can be achieved. The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of June 30, 2025. Note 4. Investments in Real Estate 10 Table of Contents During both the three and six months ended June 30, 2025, the Company acquired six industrial properties with a total initial investment, including acquisition costs, of approximately $ 152.8 million, of which $ 119.7 million was recorded to land, $ 24.9 million to buildings and improvements, and $ 8.2 million to intangible assets. Additionally, the Company assumed $ 26.9 million in liabilities. Redevelopment of one property commenced upon acquisition with a total expected investment of approximately $ 40.2 million. The Company recorded revenues and net income for both the three and six months ended June 30, 2025 of approximately $ 0.5 million and $ 0.2 million, respectively, related to the 2025 acquisitions. During the three months ended June 30, 2024, the Company acquired one industrial property and one portfolio of industrial properties, with a total initial investment, including acquisition costs, of approximately $ 472.8 million, of which $ 297.9 million was recorded to land, $ 143.5 million to buildings and improvements, and $ 31.4 million to intangible assets. Additionally, the Company assumed $ 22.4 million in liabilities. During the six months ended June 30, 2024, the Company acquired three industrial properties and one portfolio of industrial properties, with a total initial investment, including acquisition costs, of approximately $ 491.5 million, of which $ 313.0 million was recorded to land, $ 147.1 million to buildings and improvements, and $ 31.4 million to intangible assets. Additionally, the Company assumed $ 22.4 million in liabilities. The Company recorded revenues and net income for both the three and six months ended June 30, 2024 of approximately $ 6.5 million and $ 2.8 million, respectively, related to the 2024 acquisitions. The above assets and liabilities were recorded at fair value, which uses Level 3 inputs. The purchase price for each acquisition was allocated to the individual acquired assets and liabilities based on their relative fair values. The properties were acquired from unrelated third parties using existing cash on hand, proceeds from property sales and issuances of common stock and borrowings on the revolving credit facility. As of June 30, 2025, the Company had six properties under development or redevelopment that, upon completion, will consist of nine buildings aggregating approximately 0.9 million square feet. Additionally, the Company 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 June 30, 2025: Property Name Location Total Expected Investment (in thousands) 1 Estimated Post-Development Square Feet Properties under development or redevelopment: Countyline Phase IV 2 Countyline Building 32 Hialeah, FL $ 43,400 164,300 Countyline Building 33 Hialeah, FL 39,900 158,000 Countyline Building 34 Hialeah, FL 56,000 219,900 Paterson Plank III Carlstadt, NJ 35,200 47,300 27th Street Queens, NY 40,200 47,500 139th Street 3 Gardena, CA 104,600 223,500 Total $ 319,300 860,500 Land for future development: Countyline Phase IV 2 Countyline Phase IV Land Hialeah, FL $ 117,100 433,200 Total $ 117,100 433,200 1 Excludes below-market lease adjustments recorded at acquisition. Total expected investment for the properties includes the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization. 11 Table of Contents 2 “Countyline Phase IV” is a 121 -acre project entitled for 2.2 million square feet of industrial distribution buildings located in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to the Company’s seven buildings within Countyline. Countyline Phase IV, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is expected to contain ten LEED-certified industrial distribution buildings at completion. 3 This redevelopment property was initially acquired in 2017 for a total initial investment, including closing costs and acquisition costs, of approximately $ 39.9 million. 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 Company expects a total incremental investment of approximately $ 64.0 million. During the first quarter of 2025, the Company completed the redevelopment of one property. The following table summarizes certain information with respect to the redevelopment property completed during the six months ended June 30, 2025: Property Name Location Total Expected Investment (in thousands) 1 Post-Development Square Feet Completion Quarter East Garry Avenue Santa Ana, CA $ 41,300 91,500 Q1 2025 1 Total investment for the property includes the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization. The Company capitalized interest associated with development, redevelopment, renovation or expansion activities of approximately $ 1.1 million and $ 2.8 million during the three months ended June 30, 2025 and 2024, respectively, and approximately $ 2.4 million and $ 5.9 million during the six months ended June 30, 2025 and 2024, respectively. Note 5. Held for Sale/Disposed Assets The Company considers a property to be held for sale when it meets the criteria established under ASC 360, Property, Plant, and Equipment . Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. As of June 30, 2025, the Company had three properties held for sale. These properties included one improved land parcel located in the Seattle market (net book value of approximately $ 6.7 million and net liabilities of approximately $ 0.2 million), which sold on July 28, 2025 for a sales price of approximately $ 9.5 million, one property consisting of six buildings located in the Miami market (net book value of approximately $ 24.5 million and net liabilities of approximately $ 1.3 million), which sold on July 28, 2025 for a sales price of approximately $ 82.3 million, and one property consisting of two buildings located in the New York City/Northern New Jersey market (net book value of approximately $ 30.3 million and net liabilities of approximately $ 0.2 million). The following table summarizes the properties sold by the Company during the six months ended June 30, 2025 (dollars in thousands): Market Number of Properties Total Sales Price Total Gain Los Angeles 1 $ 97,000 $ 49,523 San Francisco Bay Area 2 24,880 11,842 Seattle 1 17,500 5,120 Total 4 $ 139,380 $ 66,485 The following table summarizes the properties sold by the Company during the six months ended June 30, 2024 (dollars in thousands): Market Number of Properties Total Sales Price Total Gain Seattle 1 $ 11,000 $ 5,715 Note 6. Debt The following table summarizes the components of the Company’s indebtedness as of June 30, 2025 and December 31, 2024 (dollars in thousands): 12 Table of Contents June 30, 2025 December 31, 2024 Margin Above SOFR Interest Rate 1 Contractual Maturity Date Unsecured Debt: Credit Facility $ — $ 82,000 1.1 % 2 n/a 1/15/2029 5 -Year Term Loan 100,000 100,000 1.3 % 2 5.6 % 1/15/2027 5 -Year Term Loan 100,000 100,000 1.3 % 2 5.6 % 1/15/2028 $ 50 M 10 -Year Unsecured 3 50,000 50,000 n/a 4.0 % 7/7/2026 $ 50 M 12 -Year Unsecured 3 50,000 50,000 n/a 4.7 % 10/31/2027 $ 100 M 7 -Year Unsecured 3 100,000 100,000 n/a 2.4 % 7/15/2028 $ 100 M 10 -Year Unsecured 3 100,000 100,000 n/a 3.1 % 12/3/2029 $ 125 M 9 -Year Unsecured 3 125,000 125,000 n/a 2.4 % 8/17/2030 $ 50 M 10 -Year Unsecured 3 50,000 50,000 n/a 2.8 % 7/15/2031 Total Unsecured Debt 675,000 757,000 Secured Debt: 280 Richards Street 72,879 72,879 n/a 3.9 % 3/1/2028 Total Secured Debt 72,879 72,879 Total Unsecured and Secured Debt 747,879 829,879 Less: Unamortized fair value adjustment and debt issuance costs ( 5,493 ) ( 6,442 ) Total $ 742,386 $ 823,437 1 Reflects the contractual interest rate under the terms of each loan as of June 30, 2025. Excludes the effects of unamortized debt issuance costs. 2 The interest rates on these loans are the Secured Overnight Financing Rate (“SOFR”) plus a SOFR margin. The SOFR margins will range from 1.10 % to 1.55 % ( 1.10 % as of June 30, 2025) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of June 30, 2025) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment. 3 Collectively, the “Senior Unsecured Notes”. The Company’s Sixth Amended and Restated Senior Credit Agreement (as amended, 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 June 30, 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 the Company’s option, either (i) SOFR plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50 % above the federal funds effective rate, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25 %, or 1.25 % per annum. The applicable SOFR margin will range from 1.10 % to 1.55 % ( 1.10 % as of June 30, 2025) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of June 30, 2025) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment. The Amended Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15 % to 0.30 %, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value. 13 Table of Contents The Amended Facility and the Senior Unsecured Notes are guaranteed by the Company and by substantially all of the current and to-be-formed subsidiaries of the Company that own an unencumbered property. The Amended Facility and the Senior Unsecured Notes are not secured by the Company’s properties or by interests in the subsidiaries that hold such properties. The Amended Facility and the Senior Unsecured Notes include a series of financial and other covenants with which the Company must comply. The Company was in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of June 30, 2025 and December 31, 2024. As of June 30, 2025, the Company had one mortgage loan payable totaling approximately $ 69.7 million, net of deferred financing costs of $ 0.2 million and unamortized fair value adjustment of approximately $ 3.0 million, which bore interest at a weighted average fixed annual rate of 3.9 %. The mortgage loan payable is collateralized by one property, is non-recourse and requires monthly interest payments until it matures in March 2028. As of December 31, 2024, the Company had one mortgage loan payable totaling approximately $ 69.1 million, net of deferred financing costs of $ 0.2 million and unamortized fair value adjustment of approximately $ 3.6 million. The scheduled principal payments of the Company’s debt as of June 30, 2025 were as follows (dollars in thousands): Credit Facility Term Loan Senior Unsecured Notes Mortgage Loan Payable Total Debt Remainder of 2025 $ — $ — $ — $ — $ — 2026 — — 50,000 — 50,000 2027 — 100,000 50,000 — 150,000 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 — — — ( 3,023 ) ( 3,023 ) Total Debt — 200,000 475,000 69,856 744,856 Deferred financing costs, net — ( 502 ) ( 1,813 ) ( 155 ) ( 2,470 ) Total Debt, net $ — $ 199,498 $ 473,187 $ 69,701 $ 742,386 Weighted average interest rate n/a 5.6 % 3.0 % 3.9 % 3.8 % Note 7. Leasing The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of June 30, 2025. The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements (dollars in thousands): Remainder of 2025 $ 159,640 2026 308,313 2027 259,461 2028 203,869 2029 154,928 Thereafter 423,759 Total $ 1,509,970 Note 8. Fair Value Measurements ASC 820 requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). Financial Instruments Disclosed at Fair Value. As of June 30, 2025 and December 31, 2024, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of 14 Table of Contents these investments or liabilities based on Level 1 inputs. The fair values of the Company’s mortgage loan and Senior Unsecured Notes were estimated by calculating the present value of principal and interest payments, based on borrowing rates available to the Company, which are Level 2 inputs, adjusted with a credit spread, as applicable, and assuming the loans are outstanding through maturity. The fair value of the Company’s Amended Facility approximated its carrying value because the variable interest rates approximate market borrowing rates available to the Company, which are Level 2 inputs. The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of June 30, 2025 and December 31, 2024 (dollars in thousands): Fair Value Measurement Using Total Fair Value Quoted Price in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Carrying Value Liabilities Debt at: June 30, 2025 $ 708,928 $ — $ 708,928 $ — $ 742,386 December 31, 2024 $ 773,456 $ — $ 773,456 $ — $ 823,437 Note 9. Stockholders’ Equity The Company’s authorized capital stock consists of 400,000,000 shares of common stock, $ 0.01 par value per share, and 100,000,000 shares of preferred stock, $ 0.01 par value per share. The Company has an at-the-market equity offering program (the “$ 500 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 500.0 million (approximately $ 200.8 million remaining as of June 30, 2025) in amounts and at times to be determined by the Company from time to time. Prior to the implementation of the $ 500 Million ATM Program, the Company had a previous at-the-market equity offering program (the “Previous $ 500 Million ATM Program”), which was substantially utilized as of August 27, 2024 and is no longer active. Actual sales under the $ 500 Million ATM Program, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock, determinations by the Company of the appropriate sources of funding for the Company and potential uses of funding available to the Company. During the three months ended June 30, 2025, the Company did not issue any common stock under the $ 500 Million ATM Program. During the six months ended June 30, 2025, the Company 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. During the three months ended June 30, 2024, the Company did not issue any common stock under the Previous $ 500 Million ATM Program. During the six months ended June 30, 2024, the Company issued an aggregate of 2,353,278 shares of common stock at a weighted average offering price of $ 64.00 per share under the Previous $ 500 Million ATM Program, resulting in net proceeds of approximately $ 148.4 million and paying total compensation to the applicable sales agents of approximately $ 2.2 million. On March 27, 2024, the Company 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. The Company used the net proceeds for acquisitions. In connection with the Annual Meeting of Stockholders on May 6, 2025, the Company granted a total of 14,195 unrestricted shares of the Company's common stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 56.36 . The grant date fair value of the common stock was determined using the closing price of the Company’s common stock on the date of the grant. The Company recognized approximately $ 0.8 million in compensation costs for both the three and six months ended June 30, 2025 related to this issuance. The Company has a share repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its outstanding common stock from time to time through December 31, 2026. Purchases made pursuant to the program will be made in either the open market or in privately negotiated transactions as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time. As of June 30, 2025, the Company had not repurchased any shares of common stock pursuant to its share repurchase program. 15 Table of Contents The Company has a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) maintained for the benefit of select employees and members of the Company’s Board of Directors, in which certain of their cash and equity-based compensation may be deposited. Deferred Compensation Plan assets are held in a rabbi trust, which is subject to the claims of the Company’s creditors in the event of bankruptcy or insolvency. The shares held in the Deferred Compensation Plan are classified within stockholders’ equity in a manner similar to the manner in which treasury stock is classified. Subsequent changes in the fair value of the shares are not recognized. During both the three months ended June 30, 2025 and 2024, no shares of common stock were deposited into the Deferred Compensation Plan. During the six months ended June 30, 2025 and 2024, 36,233 and 0 shares of common stock, respectively, were deposited into the Deferred Compensation Plan. During each of the three and six months ended June 30, 2025 and 2024, no shares of common stock were withdrawn from the Deferred Compensation Plan. On May 6, 2025, the Company’s stockholders approved the 2025 Plan, which replaces the 2019 Plan. As of June 30, 2025, there were 2,258,368 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2025 Plan, of which 2,248,109 were remaining and available for issuance. The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to June 30, 2025 ranged from $ 14.20 to $ 78.33 . The fair value of the restricted stock that was granted during the three and six months ended June 30, 2025 was approximately $ 0.1 million and $ 4.3 million, respectively, and the vesting period for the restricted stock is typically between three and five years . As of June 30, 2025, the Company had approximately $ 15.7 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 2.7 years. The Company recognized compensation costs of approximately $ 1.8 million and $ 1.7 million for the three months ended June 30, 2025 and 2024, respectively, and approximately $ 3.7 million and $ 3.1 million for the six months ended June 30, 2025 and 2024, respectively, related to the restricted stock issuances. The following is a summary of the total restricted shares granted to the Company’s executive officers and employees with the related weighted average grant date fair value share prices for the six months ended June 30, 2025: Restricted Stock Activity: Shares Weighted Average Grant Date Fair Value Non-vested shares outstanding as of December 31, 2024 426,388 $ 63.06 Granted 66,243 65.55 Forfeited ( 5,713 ) 62.36 Vested ( 48,411 ) 62.56 Non-vested shares outstanding as of June 30, 2025 438,507 $ 63.50 The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of June 30, 2025: Non-vested Shares Vesting Schedule Number of Shares Remainder of 2025 49,320 2026 98,401 2027 124,619 2028 94,997 2029 71,170 Thereafter — Total Non-vested Shares 438,507 Long-Term Incentive Plan: As of June 30, 2025, there were three open performance measurement periods for the Performance Share awards: January 1, 2023 to December 31, 2025, January 1, 2024 to December 31, 2026, and January 1, 2025 to December 31, 2027. During the six months ended June 30, 2025, the Company issued 41,192 shares of common stock at a price of $ 58.51 per share related to the Performance Share awards for the performance period from January 1, 2022 to December 31, 2024. The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2022 and includes the forfeiture of certain of the Performance Share awards during 2024 (dollars in thousands): 16 Table of Contents Performance Share Period Fair Value on Date of Grant 1 Expense for the Three Months Ended June 30, Expense for the Six Months Ended June 30, 2025 2024 2025 2024 January 1, 2022 - December 31, 2024 $ 5,618 $ — $ 326 $ — $ 808 January 1, 2023 - December 31, 2025 8,583 715 601 1,430 1,240 January 1, 2024 - December 31, 2026 9,261 772 736 1,544 1,526 January 1, 2025 - December 31, 2027 9,824 819 — 1,638 — Total $ 33,286 $ 2,306 $ 1,663 $ 4,612 $ 3,574 1 Reflects the fair value on date of grant for all performance shares outstanding at June 30, 2025. Dividends: The following table sets forth the cash dividends paid or payable per share during the six months ended June 30, 2025: For the Three Months Ended Security Dividend per Share Declaration Date Record Date Date Paid March 31, 2025 Common Stock $ 0.49 February 4, 2025 March 27, 2025 April 4, 2025 June 30, 2025 Common Stock $ 0.49 May 6, 2025 June 27, 2025 July 11, 2025 Note 10. Net Income (Loss) Per Share Pursuant to ASC 260-10-45, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities , unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing earnings per share allocates earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s non-vested shares of restricted stock are considered participating securities since these share-based awards contain non-forfeitable rights to dividends irrespective of whether the awards ultimately vest or expire. The Company had no antidilutive securities or dilutive restricted stock awards outstanding for the three and six months ended June 30, 2025 and 2024. In accordance with the Company’s policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the net income (loss) per common share is adjusted for earnings distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method. Under this method, allocations were made to 439,918 and 439,993 of weighted average unvested restricted shares outstanding for the three months ended June 30, 2025 and 2024, respectively, and 442,825 and 434,788 of weighted average unvested restricted shares outstanding for the six months ended June 30, 2025 and 2024, respectively. Performance Share awards which may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period are included as contingently issuable shares in the calculation of diluted weighted average common shares of stock outstanding assuming the reporting period is the end of the measurement period, and the effect is dilutive. Diluted shares related to the Performance Share awards were 123,785 and 116,384 for the three months ended June 30, 2025 and 2024, respectively, and 229,870 and 368,202 for the six months ended June 30, 2025 and 2024, respectively. Note 11. Commitments and Contingencies Contractual Commitments. As of August 5, 2025, the Company had three outstanding contracts with third-party sellers to acquire two industrial properties and one portfolio of industrial properties for a total purchase price of $ 472.5 million. There is no assurance that the Company will acquire the properties under contracts because the proposed acquisitions are subject to due diligence and various closing conditions. 17 Table of Contents As of August 5, 2025, the Company had executed two non-binding letters of intent with third-party sellers to acquire two industrial properties for a total anticipated purchase price of approximately $ 26.7 million. In the normal course of its business, the Company enters into non-binding letters of intent to purchase properties from third parties that may obligate the Company 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 the Company 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. Note 12. Subsequent Events On August 5, 2025, the Company’s board of directors declared a cash dividend in the amount of $ 0.52 per share of its common stock payable on October 10, 2025 to the stockholders of record as of the close of business on September 29, 2025. On July 28, 2025, the Company sold one industrial property in Doral, FL, for a total sales price of approximately $ 82.3 million (net book value of approximately $ 24.5 million). The property was held for sale as of June 30, 2025. On July 28, 2025, the Company sold one industrial property in Tukwila, WA, for a total sales price of approximately $ 9.5 million (net book value of approximately $ 6.7 million). The property was held for sale as of June 30, 2025. 18 Table of Contents