Terreno Realty Corporation Announces Quarterly Operating, Investment and Capital Markets Activity

• 97.2% quarter-end occupancy compared to prior quarter of 97.9% and prior year of 98.5%
• 99.0% quarter-end same-store occupancy compared to prior quarter of 98.8% and prior year of 98.7%
• 30.2% increase in cash rents on new and renewed leases; 17.9% increase year-to-date
• $141.2 million of acquisitions; $252.0 million year-to-date
• 1,458,630 shares of common stock issued under ATM for gross proceeds of $73.3 million
• Priced private placement of $100 million of senior unsecured notes with a ten-year term at 3.14%

Terreno Realty Corporation TRNO, an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, announced today its operating, investment and capital markets activity for the third quarter of 2019.

Operating

As of September 30, 2019, Terreno Realty Corporation owned 220 buildings aggregating approximately 13.4 million square feet and 18 improved land parcels consisting of approximately 76.7 acres. In addition, Terreno Realty Corporation had four properties under redevelopment that upon completion will contain approximately 505,000 square feet:

• The operating portfolio, excluding four properties under redevelopment, was 97.2% leased at September 30, 2019 to 497 tenants as compared to 97.9% at June 30, 2019 and 98.5% at September 30, 2018. Third quarter 2019 occupancy decreased from second quarter 2019 primarily due to acquired vacancy of 128,000 square feet (approximately 94 bps);
• The same-store portfolio of approximately 12.0 million square feet was 99.0% leased at September 30, 2019 as compared to 98.8% at June 30, 2019 and 98.7% at September 30, 2018;
• The improved land portfolio of 18 parcels totaling approximately 76.7 acres was 93.2% leased at September 30, 2019 as compared to 93.0% at June 30, 2019 and 73.6% at September 30, 2018;
• Cash rents on new and renewed leases totaling approximately 0.2 million square feet commencing during the third quarter increased approximately 30.2%. Cash rents on new and renewed leases totaling approximately 1.8 million square feet commencing during the nine months ended September 30, 2019 increased approximately 17.9%; and
• Subsequent to quarter-end, executed a full-building seven-year lease with a leading e-commerce firm stabilizing a property in Maspeth Queens, New York. The transshipment property was acquired in February 2019 for $24.0 million with a short-term lease and estimated stabilized cap rate of 5.3%.

Investment

During the third quarter of 2019, Terreno Realty Corporation acquired six industrial properties consisting of 11 buildings containing approximately 442,000 square feet and one improved land parcel containing approximately 2.0 acres for an aggregate purchase price of approximately $141.2 million. The third quarter investment activity was as follows:

• 11770-11780 Slauson Avenue: Two industrial buildings containing approximately 30,000 square feet on 1.8 acres in Santa Fe Springs, California. The property provides four grade-level loading positions and parking for 43 cars. The property was acquired vacant for a purchase price of approximately $5.3 million with an estimated stabilized cap rate of 5.2%;
• 1700 20^th Street: One industrial building containing approximately 93,000 square feet on 4.7 acres in Oakland, California. The property is adjacent to the eastern terminus of the San Francisco-Oakland Bay Bridge and the Port of Oakland Seaport, and provides 19 dock-high and six grade-level loading positions, and parking for 28 cars. The property was acquired vacant for a purchase price of approximately $23.8 million with an estimated stabilized cap rate of 4.8%;
• 134-154 Morgan Ave: Two industrial buildings containing approximately 196,000 square feet on 6.0 acres in the East Williamsburg neighborhood of Brooklyn, New York. The property provides 31 dock-high and ten grade-level loading positions, parking for 45 cars, and was 100% leased to eight tenants, all of which expire within four years. The property was acquired for approximately $80.5 million with an estimated stabilized cap rate of 4.0%;
• 1620 Industry Drive SW: One industrial building containing approximately 70,000 square feet on 3.9 acres adjacent to Valley Freeway and State Route 167 in Auburn, Washington. The property provides 13 dock-high and seven grade-level loading positions, parking for 37 cars, and is 100% leased to six tenants. The property was acquired for approximately $9.5 million with an estimated stabilized cap rate of 5.1%;
• 130-134 and 140-148 Anderson St, 1319 Mono St,135-151 South Utah St: Five industrial buildings containing approximately 53,000 square feet on 1.9 acres adjacent to the Downtown Los Angeles Arts District in Los Angeles, California. The property provides 11 grade-level loading positions, parking for 83 cars, and was 90% leased to seven tenants, all of which expire within the next three years. The property was acquired for approximately $18.1 million with an estimated stabilized cap rate of 5.2%; and
• 51 Kero Road: One improved land parcel of approximately 2.0 acres adjacent to Terreno Realty Corporation's properties at 50 and 100 Kero Road, and less than two miles from the Meadowlands Sports Complex and Exit 16W of the New Jersey Turnpike in Carlstadt, New Jersey. The property was acquired 100% leased for a purchase price of approximately $4.0 million and an estimated stabilized cap rate of 5.0%.

Year-to-date through third quarter 2019, Terreno Realty Corporation acquired ten industrial properties consisting of 15 buildings containing approximately 608,000 square feet and three improved land parcels of approximately 21.7 acres for an aggregate purchase price of approximately $252.0 million.

As of September 30, 2019, Terreno Realty Corporation had four properties under redevelopment (SoDo Row North, SoDo Row South, 6^th Avenue South, and Kent 192) that upon completion will contain approximately 505,000 square feet with a total expected investment of approximately $120 million.

During the third quarter of 2019, Terreno Realty Corporation sold one 107,000 square foot industrial building that was under redevelopment in Doral, Florida for approximately $14.0 million generating an unleveraged internal rate of return of approximately 7.2%. The property was purchased in 2015 for approximately $9.9 million and was vacant at disposition. Year-to-date through the third quarter of 2019, Terreno Realty Corporation sold two properties containing approximately 197,000 square feet for approximately $26.4 million generating an unleveraged internal rate of return of approximately 9.8%.

Terreno Realty Corporation has approximately $14.9 million of acquisitions under contract containing approximately 62,000 square feet. Terreno Realty Corporation has one 88,000 square foot property that is under contract for sale for approximately $7.5 million. There is no assurance that Terreno Realty Corporation will acquire or dispose of the properties under contract because the proposed acquisitions and disposition are subject to the completion of satisfactory due diligence and closing conditions.

Capital Markets

During the third quarter of 2019, Terreno Realty Corporation issued 1,458,630 shares of common stock with a weighted average offering price of $50.28 per share, receiving gross proceeds of $73.3 million under the Company's at-the-market equity offering program. Year-to-date through the third quarter of 2019, Terreno Realty Corporation issued 5,822,701 shares of common stock with a weighted average offering price of $45.40 per share, receiving gross proceeds of $264.3 million under the Company's at-the-market equity offering program. Terreno Realty Corporation did not repurchase any shares of common stock pursuant to the Company's share repurchase authorization.

During the third quarter of 2019, Terreno Realty Corporation priced the private placement of $100 million of senior unsecured notes with a ten-year term that bears interest at a fixed annual rate of 3.14%. The private placement is expected to close on or around December 2, 2019, and the Company intends to use the proceeds to pay down existing loans and for other corporate purposes.

Additional information is available on the Company's website at www.terreno.com. Terreno Realty Corporation expects to file its quarterly report on Form 10-Q for the period ended September 30, 2019 on or about October 30, 2019.

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. We caution investors that forward-looking statements are based on management's beliefs and on assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "result," "should," "will," "seek," "target," "see," "likely," "position," "opportunity," "outlook," and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2018 and our other public filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

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