Terreno Realty Corp

Previous wording

•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 this Quarterly Report on Form 10-Q, and in our other public filings;

Current wording

•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;

Previous wording

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. markets: Northern New Jersey/New York City; 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 77.5% of our total annualized base rent as of June 30, 2024), flex (including light industrial and research and development, or R&D) (approximately 3.8%), transshipment (approximately 6.5%) and improved land (approximately 12.2%). 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 June 30, 2024, we owned a total of 292 buildings aggregating approximately 18.1 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, nine properties under development or redevelopment and approximately 35.4 acres of land for future development. As of June 30, 2024, our buildings and improved land parcels were approximately 96.0% and 98.1% leased, respectively, to 668 customers, the largest of which accounted for approximately 3.4% 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, 2023 for a general description of these types of industrial real estate.

Current wording

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. markets: Northern New Jersey/New York City; 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 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%). 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. See “Item 1 – Our Investment Strategy – Industrial Facility General Characteristics” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a general description of these types of industrial real estate.

Previous wording

As of June 30, 2024, we owned nine properties under development or redevelopment that, upon completion, will consist of ten buildings aggregating approximately 1.1 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 $564.2 million, including redevelopment costs, capitalized interest and other costs.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

1 Includes approximately $4.4 million for both the three months ended June 30, 2024 and 2023, and approximately $6.5 million and $9.8 million for the six months ended June 30, 2024 and 2023, respectively, related to leasing acquired vacancy.

Current wording

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.

Previous wording

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. In addition, approximately 98.1% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years. We monitor the liquidity and creditworthiness of our tenants on an ongoing basis by reviewing outstanding accounts receivable balances, and as provided under the respective lease agreements, review the tenant’s financial condition periodically as appropriate. As needed, we hold discussions with the tenant’s management about their business and we conduct site visits of the tenant’s operations.

Current wording

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. In addition, approximately 97.6% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years. We monitor the liquidity and creditworthiness of our tenants on an ongoing basis by reviewing outstanding accounts receivable balances, and as provided under the respective lease agreements, review the tenant’s financial condition periodically as appropriate. As needed, we hold discussions with the tenant’s management about their business and we conduct site visits of the tenant’s operations.

Previous wording

1 Includes leases that expire on or after June 30, 2024 and month-to-month leases totaling approximately 53,107 square feet.

Current wording

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

Previous wording

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 June 30, 2024, leases representing approximately 3.7% of the total annualized base rent of our portfolio are scheduled to expire during the remainder of the year ending December 31, 2024. We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our remaining 2024 expirations will be above the rates currently being paid for the same space. Cash rent changes on new and renewed leases totaling approximately 0.5 million square feet and 18.9 acres of improved land commencing during the three months ended June 30, 2024 were approximately 45.9% higher as compared to the previous rental rates for that same space, and cash rent changes on new and renewed leases totaling approximately 1.2 million square feet and 22.2 acres commencing during the six months ended June 30, 2024 were approximately 46.5% higher as compared to the previous rental rates for that same space. We had a tenant retention ratio for the operating portfolio of 56.4% and 56.6%, respectively, for the three and six months ended June 30, 2024. We had a tenant retention ratio for the improved land portfolio of 61.2% and 65.7%, respectively, for the three and six months ended June 30, 2024. 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. The square footage or acreage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year are not included in the calculation.

Current wording

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. We currently expect that, on average, the rental rates we are likely to achieve on new (re-leased) or renewed leases for our remaining 2024 expirations will be above the rates currently being paid for the same space. Cash rent changes on new and renewed leases totaling approximately 0.5 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. 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. The square footage or acreage of tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year are not included in the calculation.

Previous wording

During the three months ended June 30, 2024, we acquired one industrial property and one portfolio of industrial properties, for a total purchase price of approximately $448.8 million. The properties were acquired from unrelated third parties using existing cash on hand, net proceeds from dispositions and net proceeds from the issuance of common stock. The following table sets forth the industrial property and the portfolio of industrial properties we acquired during the three months ended June 30, 2024:

Current wording

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:

Previous wording

1 Excludes intangible liabilities. The total aggregate initial investment was approximately $472.8 million, including $4.9 million in capitalized closing costs and acquisition costs, and $19.2 million in assumed intangible liabilities.

Current wording

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.

Previous wording

As of June 30, 2024, we had nine properties under development or redevelopment that, upon completion, will consist of ten buildings aggregating approximately 1.1 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 June 30, 2024:

Current wording

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:

Previous wording

4 Collectively, “Countyline Phase IV”, 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 our 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.

Current wording

4“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 our 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.

Previous wording

During the six months ended June 30, 2024, we completed development of two properties. The following table summarizes certain information with respect to the development properties completed during the six months ended June 30, 2024:

Current wording

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:

Previous wording

During the six months ended June 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.

Current wording

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.

Previous wording

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

Current wording

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):

Previous wording

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 ($155.2 million remaining as of June 30, 2024) 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 months ended June 30, 2024, we did not issue any common stock under the $500 Million ATM Program. During the six months ended June 30, 2024, we issued an aggregate of 2,353,278 shares of common stock at a weighted average offering price of $64.00 per share under the $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.

Current wording

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 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.

Previous wording

The U.S. 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. In recent years, inflation has increased construction costs, including tenant improvements and capital projects, goods and labor, and operating costs. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, leases with respect to approximately 65.3% 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.

Current wording

The U.S. 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. In recent years, inflation has increased construction costs, including tenant improvements and capital projects, goods and labor, and operating costs. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, leases with respect to approximately 63.5% 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.

Previous wording

We derive substantially all of our revenues from rents received from tenants under existing leases on each of our properties. These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants. Approximately 98.1% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years.

Current wording

We derive substantially all of our revenues from rents received from tenants under existing leases on each of our properties. These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants. Approximately 97.6% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years.

Previous wording

The analysis of our results below for the three and six months ended June 30, 2024 and 2023 includes the changes attributable to same store properties. The same store pool for the comparison of the three and six months ended June 30, 2024 and 2023 includes all properties that were owned and in operation as of June 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 June 30, 2024. As of June 30, 2024, the same store pool consisted of 246 buildings aggregating approximately 14.7 million square feet representing approximately 81.2% 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 June 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 June 30, 2024, consisted of 46 buildings aggregating approximately 3.4 million square feet, one improved land parcel consisting of approximately 7.1 acres, nine properties under development or redevelopment and approximately 35.4 acres of land for future development. As of June 30, 2024 and 2023, our consolidated same store pool occupancy was approximately 96.0% and 98.1%, respectively.

Current wording

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.

Previous wording

Revenues. Total revenues increased approximately $14.7 million for the three months ended June 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 18.9 acres of improved land commencing during the three months ended June 30, 2024 increased approximately 45.9% compared to the previous rental rates for that same space in the same period from the prior year. For the three months ended June 30, 2024 and 2023, approximately $2.1 million and $2.3 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.4 million and $0.2 million, respectively, was recorded in lease termination revenue. The increase in total revenues was partially offset by a decrease in occupancy for the three months ended June 30, 2024 compared to the same period from the prior year. The decrease in occupancy was primarily due to 99,000 square feet of acquired vacancy.

Current wording

Revenues. 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.

Previous wording

Property operating expenses. Total property operating expenses increased approximately $5.2 million during the three months ended June 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 $2.2 million attributable to property acquisitions during 2024 and 2023 as well as increases in insurance premiums and real estate taxes.

Current wording

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.

Previous wording

Depreciation and amortization. Depreciation and amortization increased approximately $4.8 million during the three months ended June 30, 2024 compared to the same period from the prior year primarily due to property acquisitions during 2024 and 2023.

Current wording

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.

Previous wording

General and administrative expenses. General and administrative expenses increased approximately $0.8 million during the three months ended June 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.

Current wording

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.

Previous wording

Interest and other income. Interest and other income increased approximately $3.4 million for the three months ended June 30, 2024 compared to the same period from the prior year primarily due to higher cash and cash equivalent balances and higher interest rates on those balances.

Current wording

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.

Previous wording

Interest expense, including amortization. Interest expense decreased approximately $0.4 million for the three months ended June 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, partially offset by higher average interest rates on the unsecured term loans during the three months ended June 30, 2024.

Current wording

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.

Previous wording

2 Includes 2023 and 2024 acquisitions and dispositions, one improved land parcel, nine properties under development or redevelopment and approximately 35.4 acres of land entitled for future development.

Current wording

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.

Previous wording

Revenues. Total revenues increased approximately $25.1 million for the six months ended June 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 1.2 million square feet and 22.2 acres commencing during the six months ended June 30, 2024 increased approximately 46.5% compared to the same space in the same period from the prior year. For the six months ended June 30, 2024 and 2023, approximately $3.3 million and $4.1 million, respectively, was recorded in straight-line rental revenues related to contractual rent abatements given to certain tenants and approximately $0.5 million and $0.2 million, respectively, was recorded in lease termination revenue. The increase in total revenues was partially offset by a decrease in occupancy for the six months ended June 30, 2024 compared to the same period from the prior year. The decrease in occupancy was primarily due to 99,000 square feet of acquired vacancy.

Current wording

Revenues. 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.

Previous wording

Property operating expenses. Total property operating expenses increased approximately $7.7 million during the six months ended June 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 $3.2 million attributable to property acquisitions during 2024 and 2023 as well as increases in insurance premiums and real estate taxes.

Current wording

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.

Previous wording

Depreciation and amortization. Depreciation and amortization increased approximately $7.6 million during the six months ended June 30, 2024 compared to the same period from the prior year primarily due to property acquisitions during 2024 and 2023.

Current wording

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.

Previous wording

General and administrative expenses. General and administrative expenses increased approximately $2.0 million for the six months ended June 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.

Current wording

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.

Previous wording

Interest and other income. Interest and other income increased approximately $4.3 million during the six months ended June 30, 2024 compared to the same period from the prior year primarily due to higher cash and cash equivalent balances and higher interest rates on those balances.

Current wording

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.

Previous wording

Interest expense, including amortization. Interest expense decreased approximately $2.5 million for the six months ended June 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, partially offset by higher average interest rates on the unsecured term loans during the six months ended June 30, 2024.

Current wording

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. 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 nine months ended September 30, 2024.

Previous wording

Gain on sales of real estate investments. Gain on sales of real estate investments decreased approximately $6.5 million for the six months ended June 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 six months ended June 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.

Current wording

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.

Previous wording

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

Current wording

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:

Previous wording

As of June 30, 2024, we had $100.0 million of senior unsecured notes that mature in July 2024, $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”).

Current wording

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”).

Previous wording

Our Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) consists of a $400.0 million revolving credit facility that matures in August 2025, a $100.0 million term loan that matures in January 2027 and a $100.0 million term loan that matures in January 2028. As of both June 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.

Current wording

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.

Previous wording

The aggregate amount of the Amended Facility may be increased by up to an additional $500.0 million to a maximum amount not to exceed $1.1 billion, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts. Outstanding borrowings under the Amended Facility are limited to the lesser of (i) the sum of the $400.0 million revolving credit facility, the $100.0 million term loan maturing in January 2027 and the $100.0 million term loan maturing in January 2028, or (ii) 60.0% of the value of the unencumbered properties. Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at 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 June 30, 2024) for the revolving credit facility and 1.25% to 1.75% (1.25% as of June 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.

Current wording

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. 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.

Previous wording

As of June 30, 2024 and December 31, 2023, we held cash and cash equivalents totaling approximately $182.0 million and $165.4 million, respectively.

Current wording

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.

Previous wording

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

Current wording

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):

Previous wording

1 Includes 426,404 and 373,897 shares of unvested restricted stock outstanding as of June 30, 2024 and 2023, respectively. Also includes 508,663 and 514,539 shares held in the Deferred Compensation Plan as of June 30, 2024 and 2023, respectively.

Current wording

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.