Form 8-K Amendment No.1

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 1)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported): May 30, 2012

 

 

Terreno Realty Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   001-34603   27-1262675

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

  (IRS Employer
Identification No.)

101 Montgomery Street, Suite 200

San Francisco, CA 94104

(Address of principal executive offices) (Zip Code)

(415) 655-4580

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


This Form 8-K/A amends and supplements the registrant’s Form 8-K, filed on May 31, 2012 reporting the acquisition of Garfield (the “Initial Report”), to include the historical financial statements and pro forma financial information required by Item 9.01(a) and (b) of Form 8-K. This Form 8-K/A should be read in conjunction with the Initial Report. This 8-K/A also includes the historical financial statements of Caribbean, which was acquired on July 3, 2012 and for which we are also filing a Form 8-K/A.

 

Item 9.01. Financial Statements and Exhibits

 

(a) Financial Statements Under Rule 3-14 of Regulation S-X

  

(i) Statements of Revenues and Certain Expenses of Garfield

  

Independent Auditors’ Report

     3   

Statements of Revenues and Certain Expenses for the period from January 1, 2012 to April  30, 2012 (unaudited) and the year ended December 31, 2011.

     4   

Notes to the Statements of Revenues and Certain Expenses

     5   

(ii) Statements of Revenues and Certain Expenses of Caribbean

  

Independent Auditors’ Report

     7   

Statements of Revenues and Certain Expenses for the period from January 1, 2012 to May  31, 2012 (unaudited) and the year ended December 31, 2011.

     8   

Notes to the Statements of Revenues and Certain Expenses

     9   

(b) Unaudited Pro Forma Condensed Consolidated Information

  

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2012

     12   

Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2012

     13   

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March  31, 2012

     14   

Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2012

     15   

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December  31, 2011

     16   

Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2011

     17   
  

(d) Exhibits

 

Exhibit

Number

  

Title

23.1*    Consent of Independent Auditor

 

* Filed herewith


Report of Independent Auditor

The Board of Directors and Stockholders of

Terreno Realty Corporation

San Francisco, California

We have audited the accompanying statement of revenues and certain expenses of Garfield (the “Property”) for the year ended December 31, 2011. This statement of revenues and certain expenses is the responsibility of the Company’s management. Our responsibility is to express an opinion on this statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and certain expenses is free of material misstatement. We were not engaged to perform an audit of the Property’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the basis of accounting used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenues and certain expenses of the Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K/A of Terreno Realty Corporation as described in Note 1, and is not intended to be a complete presentation of the Property’s revenues and expenses.

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses described in Note 1 of Garfield for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

San Francisco, California

July 27, 2012

 

3


Garfield

Statements of Revenues and Certain Expenses

For the Period from January 1, 2012 to April 30, 2012 (unaudited)

and the Year Ended December 31, 2011

(in thousands)

 

     For the Period from
January 1, 2012 to
April 30, 2012
(unaudited)
     For the Year Ended
December 31, 2011
 

Revenues:

     

Rental

   $ 812       $ 2,496   

Tenant reimbursements

     191         882   
  

 

 

    

 

 

 

Total revenues

     1,003         3,378   

Certain expenses:

     

Property operating expenses

     168         541   

Real estate taxes

     132         396   
  

 

 

    

 

 

 

Total expenses

     300         937   
  

 

 

    

 

 

 

Revenues in excess of certain expenses

   $ 703       $ 2,441   
  

 

 

    

 

 

 

See accompanying notes to statements of revenues and certain expenses.

 

4


Garfield

Notes to Statements of Revenues and Certain Expenses

For the Period from January 1, 2012 to April 30, 2012 (unaudited)

and the Year Ended December 31, 2011

 

1. Background and Basis of Presentation

The accompanying statements of revenues and certain expenses present the results of operations of Garfield (the “Property”) for the period from January 1, 2012 to April 30, 2012 and the year ended December 31, 2011. The Property was acquired by a wholly-owned subsidiary of Terreno Realty Corporation from a third-party seller, Dune-Westcore GBP, LLC, on May 30, 2012 for approximately $52.4 million. The Property is located in Commerce, California and consists of five multi-tenant industrial buildings containing 545,299 square feet (unaudited), which were approximately 79% leased (unaudited) to 14 tenants at the time of acquisition.

The accompanying statements of revenues and certain expenses have been prepared on the accrual basis of accounting. The statements of revenues and certain expenses have been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission and for inclusion in this Current Report on Form 8-K/A of Terreno Realty Corporation and are not intended to be a complete presentation of the revenues and expenses of the Property for the period from January 1, 2012 to April 30, 2012 and for the year ended December 31, 2011 as certain expenses, primarily depreciation and amortization expense and other costs not comparable to the proposed future operations of the Property have been excluded. Management is not aware of any material factors at the Property other than those disclosed above, that would cause the reported financial information not to be necessarily indicative of future operating results.

 

2. Summary of Significant Accounting Policies

Revenue Recognition

Rental revenues from operating leases are recorded on a straight-line basis over the term of the leases. Tenant reimbursements represent recoveries from tenants for utilities and certain property maintenance expenses. Tenant reimbursements are recognized as revenues in the period the applicable costs are accrued.

Property Operating Expenses

Property operating expenses represent the direct expenses of operating the Property and include maintenance, utilities, property management fees, repairs, and insurance costs that are expected to continue in the ongoing operations of the Property. Expenditures for maintenance and repairs are charged to operations as incurred.

 

5


Use of Estimates

The preparation of the statements of revenues and certain expenses in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions of the reported amounts of revenues and certain expenses during the reporting period. Actual results could differ from those estimates used in the preparation of the statements of revenues and certain expenses.

Interim Statements

The statement of revenues and certain expenses for the period from January 1, 2012 to April 30, 2012 is unaudited, however, in the opinion of management of Terreno Realty Corporation, all significant adjustments necessary for a fair presentation of the statement for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year of the operation of the Property.

Tenant Concentration

For the year ended December 31, 2011, two tenants accounted for approximately 29% of rental revenues.

Future Minimum Rental Income

Future minimum rents to be received under non-cancelable lease agreements as of December 31, 2011 were as follows (in thousands):

 

2012

   $  2,452   

2013

     2,265   

2014

     1,995   

2015

     1,174   

2016

     281   

Thereafter

     260   
  

 

 

 

Total

   $ 8,427   
  

 

 

 

 

6


Report of Independent Auditor

The Board of Directors and Stockholders of

Terreno Realty Corporation

San Francisco, California

We have audited the accompanying statement of revenues and certain expenses of Caribbean (the “Property”) for the year ended December 31, 2011. This statement of revenues and certain expenses is the responsibility of the Company’s management. Our responsibility is to express an opinion on this statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and certain expenses is free of material misstatement. We were not engaged to perform an audit of the Property’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the basis of accounting used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenues and certain expenses of the Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K/A of Terreno Realty Corporation as described in Note 1, and is not intended to be a complete presentation of the Property’s revenues and expenses.

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses described in Note 1 of Caribbean for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

San Francisco, California

July 27, 2012

 

7


Caribbean

Statements of Revenues and Certain Expenses

For the Period from January 1, 2012 to May 31, 2012 (unaudited)

and the Year Ended December 31, 2011

(in thousands)

 

     For the Period from
January 1, 2012 to
May 31, 2012
(unaudited)
     For the Year Ended
December 31, 2011
 

Revenues:

     

Rental

   $ 1,120       $ 2,529   

Tenant reimbursements

     243         486   
  

 

 

    

 

 

 

Total revenues

     1,363         3,015   

Certain expenses:

     

Property operating expenses

     114         279   

Real estate taxes

     98         238   
  

 

 

    

 

 

 

Total expenses

     212         517   
  

 

 

    

 

 

 

Revenues in excess of certain expenses

   $ 1,151       $ 2,498   
  

 

 

    

 

 

 

See accompanying notes to statements of revenues and certain expenses.

 

8


Caribbean

Notes to Statements of Revenues and Certain Expenses

For the Period from January 1, 2012 to May 31, 2012 (unaudited)

and the Year Ended December 31, 2011

 

1. Background and Basis of Presentation

The accompanying statements of revenues and certain expenses present the results of operations of Caribbean (the “Property”) for the period from January 1, 2012 to May 31, 2012 and the year ended December 31, 2011. The Property was acquired by a wholly-owned subsidiary of Terreno Realty Corporation from a third-party seller, Arden Realty Limited Partnership, on July 3, 2012 for approximately $33.7 million. The Property is located in Sunnyvale, California and consists of three multi-tenant industrial buildings containing 171,707 square feet (unaudited), which were 100% leased (unaudited) to 2 tenants at the time of acquisition.

The accompanying statements of revenues and certain expenses have been prepared on the accrual basis of accounting. The statements of revenues and certain expenses have been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission and for inclusion in this Current Report on Form 8-K/A of Terreno Realty Corporation and are not intended to be a complete presentation of the revenues and expenses of the Property for the period from January 1, 2012 to May 31, 2012 and for the year ended December 31, 2011 as certain expenses, primarily depreciation and amortization expense and other costs not comparable to the proposed future operations of the Property have been excluded. Management is not aware of any material factors at the Property other than those disclosed above, that would cause the reported financial information not to be necessarily indicative of future operating results.

 

2. Summary of Significant Accounting Policies

Revenue Recognition

Rental revenues from operating leases are recorded on a straight-line basis over the term of the leases. Tenant reimbursements represent recoveries from tenants for utilities and certain property maintenance expenses. Tenant reimbursements are recognized as revenues in the period the applicable costs are accrued.

Property Operating Expenses

Property operating expenses represent the direct expenses of operating the Property and include maintenance, utilities, property management fees, repairs, and insurance costs that are expected to continue in the ongoing operations of the Property. Expenditures for maintenance and repairs are charged to operations as incurred.

 

9


Use of Estimates

The preparation of the statements of revenues and certain expenses in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions of the reported amounts of revenues and certain expenses during the reporting period. Actual results could differ from those estimates used in the preparation of the statements of revenues and certain expenses.

Interim Statements

The statement of revenues and certain expenses for the period from January 1, 2012 to May 31, 2012 is unaudited, however, in the opinion of management of Terreno Realty Corporation, all significant adjustments necessary for a fair presentation of the statement for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year of the operation of the Property.

Tenant Concentration

For the year ended December 31, 2011, one tenants accounted for approximately 79% of rental revenues.

Future Minimum Rental Income

Future minimum rents to be received under non-cancelable lease agreements as of December 31, 2011 were as follows (in thousands):

 

2012

   $ 2,712   

2013

     1,538   

2014

     2,088   

2015

     2,143   

2016

     2,316   

Thereafter

     8,012   
  

 

 

 

Total

   $ 18,809   
  

 

 

 

 

10


UNAUDITED PRO FORMA FINANCIAL INFORMATION OF TERRENO REALTY

CORPORATION

Terreno Realty Corporation (the “Company”) commenced operations with the completion of its initial public offering (“IPO”) of 8,750,000 shares of common stock and a concurrent private placement of an aggregate of 350,000 shares of common stock to its executive officers at a price per share of $20.00 on February 16, 2010. The net proceeds of the IPO and concurrent private placement were approximately $169.8 million after deducting the full underwriting discount of approximately $10.5 million and other offering expenses of approximately $1.7 million. On January 13, 2012, the Company completed a public follow-on offering of 4,000,000 shares of common stock at a price per share of $14.25. On February 13, 2012, the Company sold an additional 61,853 shares of common stock at a price per share of $14.25 upon the exercise by underwriters of their option to purchase additional shares. The net proceeds of the offering, after deducting the underwriting discount and offering expenses, were approximately $54.7 million.

On July 19, 2012, the Company completed an offering of 1,840,000 shares of 7.75% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock), including the sale of 240,000 shares upon the exercise by the underwriters of their option to purchase additional shares, at a price per share of $25.00. The estimated net proceeds of the preferred offering, after deducting the underwriting discount and estimated offering expenses, were approximately $44.3 million.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2012 is based on the Company’s consolidated balance sheet and reflects the acquisition of Garfield and Caribbean, as well as the preferred stock offering, as if such transactions had occurred on March 31, 2012. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011 have been prepared to reflect the incremental effect of the acquisition of properties by the Company during the period from January 1, 2012 to July 3, 2012 (the “2012 Acquisitions”) and the preferred stock offering on July 19, 2012 as if such transactions had occurred on January 1, 2011. The following table summarizes the 2012 Acquisitions:

 

Property Name

   Location    Acquisition Date      Purchase Price
(in  thousands)
 

Global Plaza

   Sterling, VA      March 16, 2012       $ 6,100   

Garfield

   Commerce, CA      May 30, 2012         52,400   

Whittier

   Whittier, CA      June 12, 2012         16,100   

Caribbean

   Sunnyvale, CA      July 3, 2012         33,718   
        

 

 

 

2012 Acquisitions

         $ 108,318   
        

 

 

 

The unaudited pro forma financial information is not necessarily indicative of what the Company’s results of operations or financial condition would have been assuming the acquisition of properties had occurred at the beginning of the periods presented, nor is it indicative of the Company’s results of operations or financial condition for future periods. In management’s opinion, all adjustments necessary to reflect the effects of these transactions have been made. The unaudited pro forma financial information and accompanying notes should be read in conjunction with the Company’s financial statements included on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the three months ended March 31, 2012.

 

11


Terreno Realty Corporation

Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2012

(in thousands – except share and per share data)

(Unaudited)

 

     Terreno Realty
Corporation (1)
    Garfield (2)     Caribbean (3)     Other
Transactions (4)
    Pro Forma
Terreno Realty
Corporation
 

ASSETS

          

Investments in real estate, net

   $ 264,660      $ 52,400      $ 33,718      $ 16,100      $ 366,878   

Cash and cash equivalents

     16,778        (8,400     (718     149        7,809   

Restricted cash

     2,185        —          —          1,100        3,285   

Deferred financing costs, net

     1,542        —          —          431        1,973   

Other assets, net

     4,964        —          —          —          4,964   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 290,129      $ 44,000      $ 33,000      $ 17,780      $ 384,909   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

          

Liabilities

          

Credit facility

   $ —        $ 44,000      $ 33,000      $ (66,271   $ 10,729   

Term loan payable

     10,050        —          —          —          10,050   

Mortgage loans payable

     58,021        —          —          39,780        97,801   

Security deposits

     1,946        —          —          —          1,946   

Intangible liabilities, net

     841        —          —          —          841   

Accounts payable and other liabilities

     7,013        —          —          —          7,013   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     77,871        44,000        33,000        (26,491     128,380   

Commitments and contingencies

          

Equity

          

Stockholders’ equity

          

Preferred stock: $0.01 par value, 100,000,000 shares authorized, and 1,840,000 shares issued and outstanding

     —          —          —          44,271        44,271   

Common stock: $0.01 par value, 400,000,000 shares authorized, and 13,413,473 shares issued and outstanding

     132        —          —          —          132   

Additional paid-in capital

     221,512        —          —          —          221,512   

Accumulated deficit

     (9,386     —          —          —          (9,386
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     212,258        —          —          44,271        256,529   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 290,129      $ 44,000      $ 33,000      $ 17,780      $ 384,909   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated balance sheet.

 

12


Terreno Realty Corporation

Notes to Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2012

(Unaudited)

 

(1) Represents the unaudited historical consolidated balance sheet of Terreno Realty Corporation (the “Company”) as of March 31, 2012. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

 

(2) Reflects the acquisition of Garfield as if it had occurred on March 31, 2012 for approximately $52.4 million. The acquisition was funded by cash on hand and borrowings under the Company’s credit facility.

 

(3) Reflects the acquisition of Caribbean as if it had occurred on March 31, 2012 for approximately $33.7 million. The acquisition was funded by borrowings under the Company’s credit facility.

 

(4) The pro forma adjustments reflect the following transactions:

 

   

The Series A Preferred Stock offering of 1,840,000 shares at a price per share of $25.00 for estimated net proceeds of approximately $44.3 million after deducting the underwriting discount and other estimated offering expenses of approximately $1.7 million. The proceeds were used to pay down the credit facility.

 

   

The acquisition of Whittier as if it had occurred on March 31, 2012 for approximately $16.1 million. The acquisition was funded by borrowings under the Company’s credit facility.

 

   

The $39.8 million non-recourse mortgage loan as if the transaction had occurred on March 31, 2012. The mortgage loan has a fixed annual interest rate of 3.65%, matures on March 5, 2020 and is secured by mortgages on three of the Company’s properties. The Company paid approximately $0.4 million in deferred financing costs related to this mortgage loan and approximately $1.1 million of the loan proceeds were recorded as restricted cash due to holdbacks for leasing reserves. The loan proceeds were used to pay down the credit facility and for general business purposes.

 

13


Terreno Realty Corporation

Pro Forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2012

(in thousands – except share and per share data)

(Unaudited)

 

     Terreno Realty
Corporation (1)
    2012
Acquisitions
         Pro Forma
Adjustments
          Pro Forma
Terreno
Realty
Corporation
 

REVENUES

             

Total revenues

   $ 6,606      $ 2,071      (2)    $ —          $ 8,677   
  

 

 

   

 

 

      

 

 

     

 

 

 

COSTS AND EXPENSES

             

Property operating expenses

     1,908        418      (2)      —            2,326   

Depreciation and amortization

     1,825        577      (2)      —            2,402   

General and administrative

     1,415        —             —            1,415   

Acquisition costs

     714        —             (714     (3)        —     
  

 

 

   

 

 

      

 

 

     

 

 

 

Total costs and expenses

     5,862        995           (714       6,143   
  

 

 

   

 

 

      

 

 

     

 

 

 

OTHER INCOME (EXPENSE)

             

Interest and other income

     1        —             —            1   

Interest expense, including amortization

     (1,012     —             (437     (4)        (1,449
  

 

 

   

 

 

      

 

 

     

 

 

 

Total other income and expenses

     (1,011     —             (437       (1,448
  

 

 

   

 

 

      

 

 

     

 

 

 

Net (loss) income

     (267     1,076           277          1,086   

Preferred stock dividends

     —          —             (891     (5     (891
  

 

 

   

 

 

      

 

 

     

 

 

 

Net (loss) income available to common stockholders

   $ (267   $ 1,076         $ (614     $ 195   
  

 

 

   

 

 

      

 

 

     

 

 

 

Net loss available to common stockholders per share

   $ (0.02            $ 0.01   
  

 

 

   

 

 

      

 

 

     

 

 

 

Basic and Diluted Weighted Average Common Shares Outstanding

     12,686,573             562,885        (6     13,249,458   
  

 

 

   

 

 

      

 

 

     

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated statement of operations.

 

14


Terreno Realty Corporation

Notes to Pro Forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2012

(Unaudited)

 

(1) Represents the unaudited historical consolidated operations of Terreno Realty Corporation (the “Company”) for the three months ended March 31, 2012. See the historical condensed consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.
(2) The following table sets forth the incremental rental revenues, operating expenses, depreciation and amortization and interest expense of the 2012 Acquisitions for the three months ended March 31, 2012 based on the historical and pro forma operations of such properties for the periods prior to acquisition by the Company as if the properties were acquired on January 1, 2011 (dollars in thousands).

 

     Acquisition Date      Rental Revenues      Operating Expenses      Depreciation and
Amortization
     Interest
Expense
 

Global Plaza

     March 16, 2012       $ 162       $ 20       $ 20       $ —     

Garfield

     May 30, 2012         742         225         276         —     

Whittier

     June 12, 2012         319         46         137         —     

Caribbean

     July 3, 2012         848         127         144         —     
     

 

 

    

 

 

    

 

 

    

 

 

 

2012 Acqusitions

      $ 2,071       $ 418       $ 577       $ —     
     

 

 

    

 

 

    

 

 

    

 

 

 

 

(3) Reflects the adjustment to acquisitions costs as if the 2012 Acquisitions had occurred on January 1, 2011.
(4) Reflects the adjustment to interest expense as if the $39.8 million non-recourse mortgage loan at a fixed annual interest rate of 3.65% and draws of approximately $10.7 million on the Company’s credit facility at an interest rate of 2.75% had occurred on January 1, 2011.
(5) Reflects the adjustment to preferred stock dividends as if the 7.75% Series A Preferred Stock offering of 1,840,000 shares at a price per share of $25.00 had occurred on January 1, 2011.
(6) Reflects the adjustment to the basic and diluted weighted average common shares outstanding as if the follow-on offering of 4,061,853 shares of common stock at a price per share of $14.25 had occurred on January 1, 2011.

 

15


Terreno Realty Corporation

Pro Forma Condensed Consolidated Statement of Operations

For Year Ended December 31, 2011

(in thousands – except share and per share data)

(Unaudited)

 

     Terreno Realty
Corporation (1)
    2011
Acquisitions
        2012
Acquisitions
        Pro Forma
Adjustments
        Pro Forma
Terreno
Realty
Corporation
 

REVENUES

                

Total revenues

   $ 17,502      $ 6,050      (2)   $ 8,517      (2)   $ —          $ 32,069   
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

COSTS AND EXPENSES

                

Property operating expenses

     6,330        1,165      (2)     1,734      (2)     —            9,229   

Depreciation and amortization

     4,899        1,558      (2)     2,322      (2)     —            8,779   

General and administrative

     5,407        —            —            —            5,407   

Acquisition costs

     1,981        —            —            (1,981   (3)     —     
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total costs and expenses

     18,617        2,723          4,056          (1,981       23,415   
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

OTHER INCOME (EXPENSE)

                

Interest and other (expense)

     (2     —            —            —            (2

Interest expense, including amortization

     (2,612     (518   (2)     —            (1,747   (4)     (4,877
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Total other income and expenses

     (2,614     (518       —            (1,747       (4,879
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net (loss) income

     (3,729     2,809          4,461          234          3,775   

Preferred stock dividends

     —          —            —            (3,565   (5)     (3,565
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net (loss) income available to common stockholders

   $ (3,729   $ 2,809        $ 4,461        $ (3,331     $ 210   
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Net loss available to common stockholders per share

   $ (0.41               $ 0.02   
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

Basic and Diluted Weighted Average Common Shares Outstanding

     9,161,805                4,061,853      (6)     13,223,658   
  

 

 

   

 

 

     

 

 

     

 

 

     

 

 

 

See accompanying notes to unaudited pro forma condensed consolidated statement of operations.

 

16


Terreno Realty Corporation

Notes to Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2011

(Unaudited)

 

(1) Represents the audited historical consolidated operations of Terreno Realty Corporation (the “Company”) for the year ended December 31, 2011. See the historical consolidated financial statements and notes thereto included in the Company’s 2011 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on February 22, 2012.
(2) The following table sets forth the incremental rental revenues, operating expenses, depreciation and amortization and interest expense of the 2012 and 2011 Acquisitions for the year ended December 31, 2011 based on the historical and pro forma operations of such properties for the periods prior to acquisition by the Company as if the properties were acquired January 1, 2011 (dollars in thousands).

 

    

Acquisition Date

   Rental Revenues      Operating Expenses      Depreciation and
Amortization
     Interest
Expense
 

Global Plaza

   March 16, 2012    $ 768       $ 96       $ 96       $ —     

Garfield

   May 30, 2012      3,337         937         1,102         —     

Whittier

   June 12, 2012      1,276         184         548         —     

Caribbean

   July 3, 2012      3,136         517         576         —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal 2012 Acqusitions

        8,517         1,734         2,322         —     

Dorsey

   March 25, 2011    $ 77       $ 37       $ 33       $ —     

Belleville

   May 20, 2011      1,005         257         222         319   

630 Glasgow

   June 2, 2011      141         22         32         —     

8730 Bollman

   June 24, 2011      324         49         108         —     

Dell

   June 28, 2011      365         81         29         —     

70th Avenue

   June 28, 2011      181         43         51         —     

19601 Hamilton

   July 20, 2011      559         95         184         199   

39th Street

   August 19, 2011      208         30         75         —     

620 Division

   October 7, 2011      1,104         369         213         —     

48th Avenue

   December 15, 2011      567         —           129         —     

Clawiter

   December 15, 2011      611         —           87         —     

Valley Corporate

   December 30, 2011      908         182         395         —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal 2011 Acqusitions

        6,050         1,165         1,558         518   
     

 

 

    

 

 

    

 

 

    

 

 

 

Total

      $ 14,567       $ 2,899       $ 3,880       $ 518   
     

 

 

    

 

 

    

 

 

    

 

 

 

 

(3) Reflects the adjustment to acquisitions costs as if the 2012 and 2011 Acquisitions had occurred on January 1, 2011.
(4) Reflects the adjustment to interest expense as if the $39.8 million non-recourse mortgage loan at a fixed annual interest rate of 3.65% and draws of approximately $10.7 million on the Company’s credit facility at an interest rate of 2.75% had occurred on January 1, 2011.
(5) Reflects the adjustment to preferred stock dividends as if the 7.75% Series A Preferred Stock offering of 1,840,000 shares at a price per share of $25.00 had occurred on January 1, 2011.
(6) Reflects the adjustment to the basic and diluted weighted average common shares outstanding as if the follow-on offering of 4,061,853 shares of common stock at a price per share of $14.25 had occurred on January 1, 2011.

 

17


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Terreno Realty Corporation
Date: July 27, 2012     By:  

    /s/ Michael A. Coke

      Michael A. Coke
      President and Chief Financial Officer

 

18


Exhibit Index

 

Exhibit

Number

  

Title

23.1*    Consent of Independent Auditor

 

* Filed herewith

 

19