FORM 8-K/A

 

 

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 20, 2011

 

 

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.)

16 Maiden Lane, Fifth Floor

San Francisco, CA 94108

(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 23, 2011 reporting the acquisition of Belleville, located in Kearny, New Jersey, from a third-party seller, Saw Mill Park, LLC (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.

Item 9.01. Financial Statements and Exhibits

 

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

  

Terreno Realty Corporation (the “Company”) previously reported the following historical financial statements for Belleville in the Company’s Current Report on Form 8-K filed on May 2, 2011, which historical financial statements are incorporated herein by reference:

  

Statements of Revenues and Certain Expenses for the three months ended March 31, 2011 (unaudited) and the year ended December 31, 2010

  

(b) Unaudited Pro Forma Condensed Consolidated Information

  

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2011

     5   

Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2011

     6   

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March  31, 2011

     7   

Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2011

     8   

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December  31, 2010

     9   

Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2010

     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 initial public offering and concurrent private placement were approximately $169.8 million after deducting the full underwriting discount of approximately $10.5 million and other estimated offering expenses of approximately $1.7 million.

On May 20, 2011, a wholly-owned subsidiary (the “Subsidiary”) of the Company acquired from a third-party seller an industrial property, Belleville, located in Kearny, New Jersey consisting of one building, aggregating approximately 211,000 square feet for a purchase price of approximately $32.6 million. As part of this acquisition, the Subsidiary assumed a mortgage loan with a total principal amount of approximately $14.8 million with a fixed annual interest rate of 5.49%. The mortgage loan requires equal payments of interest and principal payable based on a 30-year amortization schedule with a maturity date of March 31, 2021.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2011 is based on the Company’s historical condensed consolidated balance sheet and reflects the acquisition of Belleville and the related mortgage loan assumption as if such transaction had occurred on March 31, 2011. The unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2011 has been prepared to reflect the acquisition of properties during the period from January 1, 2011 to May 20, 2011 (the “2011 Acquisitions”) as if such transactions had occurred on January 1, 2011. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2010 has been prepared to reflect the incremental effect of the IPO, the acquisition of properties by the Company during the period from February 16, 2010 (commencement of operations) to December 31, 2010 (the “2010 Acquisitions”) and the 2011 Acquisitions as if such transactions had occurred on January 1, 2010. The following tables summarize the 2011 and 2010 Acquisitions:

2011 Acquisitions:

 

Property Name

  

Location

  

Acquisition Date

   Purchase Price
(in thousands)
     Assumed Debt
(in thousands)
 

Dorsey

   Jessup, MD    March 25, 2011    $ 5,800       $ —     

Belleville

   Kearny, NJ    May 20, 2011      32,600         14,769   
        

 

 

    

 

 

 

2011 Acquisitions

         $ 38,400       $ 14,769   
        

 

 

    

 

 

 

 

3


2010 Acquisitions:

 

Property Name

  

Location

  

Acquisition Date

   Purchase Price
(in  thousands)
     Assumed Debt
(in thousands)
 

Warm Springs I and II

   Fremont, CA    March 26, 2010    $ 7,264       $ —     

Fortune/Qume

   San Jose, CA    March 30, 2010      5,550         —     

238/242 Lawrence

   South San Francisco, CA    August 13, 2010      9,620         1,723   

Rialto

   San Bernardino, CA    September 15, 2010      12,152         —     

Maltese

   Totowa, NJ    September 21, 2010      16,500         —     

Middlebrook

   Bound Brook, NJ    September 24, 2010      27,000         15,459   

130 Interstate

   South Brunswick, NJ    September 29, 2010      22,450         —     

299 Lawrence

   South San Francisco, CA    November 9, 2010      2,550         —     

Kent 188

   Kent, WA    December 14, 2010      8,275         —     

Ahern

   Union City, CA    December 15, 2010      6,255         —     

10th Avenue

   Hialeah, FL    December 20, 2010      9,000         —     

60th Avenue

   Miami Lakes, FL    December 20, 2010      7,750         —     
        

 

 

    

 

 

 

2010 Acquisitions

         $ 134,366       $ 17,182   
        

 

 

    

 

 

 

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 completion of the IPO or 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 audited financial statements included in the 2010 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on February 24, 2011 and the Quarterly Report on Form 10-Q for the three months ended March 31, 2011, which was filed with the Securities and Exchange Commission on May 5, 2011.

 

4


Terreno Realty Corporation

Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2011

(in thousands – except share and per share data)

(Unaudited)

 

     Terreno Realty
Corporation (1)
    Belleville (2)     Pro Forma
Terreno Realty
Corporation
 

ASSETS

      

Investments in real estate, net

   $ 140,620      $ 32,600      $ 173,220   

Cash and cash equivalents

     47,947        (17,979     29,968   

Deferred financing costs, net

     709        148        857   

Other assets, net

     4,395        —          4,395   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 193,671      $ 14,769      $ 208,440   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

      

Liabilities

      

Credit facility

   $ —        $ —        $ —     

Mortgage loans payable

     17,471        14,769        32,240   

Security deposits

     879        —          879   

Intangible liabilities

     801        —          801   

Deferred underwriting fee payable

     7,000        —          7,000   

Accounts payable and other liabilities

     3,132        —          3,132   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     29,283        14,769        44,052   

Commitments and contingencies

      

Equity

      

Stockholders’ equity

      

Preferred stock: $0.01 par value, 100,000,000 shares authorized, and no shares issued and outstanding

     —          —          —     

Common stock: $0.01 par value, 400,000,000 shares authorized, and 9,290,960 shares issued and outstanding

     91        —          91   

Additional paid-in capital

     170,993        —          170,993   

Accumulated deficit

     (6,696     —          (6,696
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     164,388        —          164,388   
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 193,671      $ 14,769      $ 208,440   
  

 

 

   

 

 

   

 

 

 

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

 

5


Terreno Realty Corporation

Notes to Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2011

(Unaudited)

 

(1) Represents the historical condensed consolidated balance sheet of Terreno Realty Corporation (the “Company”) as of March 31, 2011. See the historical condensed consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011, which was filed with the Securities and Exchange Commission on May 5, 2011.

 

(2) Reflects the acquisition of Belleville as if it had occurred on March 31, 2011. In connection with the acquisition, the Company assumed a mortgage loan with a total principal balance of approximately $14.8 million. The pro forma adjustment also reflects the following:

 

   

Cash paid of approximately $148,000 for deferred financing costs in connection with assuming the existing mortgage loan.

 

6


Terreno Realty Corporation

Pro Forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2011

(in thousands – except share and per share data)

(Unaudited)

 

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

REVENUES

        

Rental revenues

   $ 3,370      $ 658 (2)    $ —        $ 4,028   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     3,370        658        —          4,028   
  

 

 

   

 

 

   

 

 

   

 

 

 

COSTS AND EXPENSES

        

Property operating expenses

     1,463        167 (2)      —          1,630   

Depreciation and amortization

     959        147 (2)      —          1,106   

General and administrative

     1,608        —          —          1,608   

Acquisition costs

     282        —          (282 )(3)      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     4,312        314        (282     4,344   
  

 

 

   

 

 

   

 

 

   

 

 

 

OTHER INCOME (EXPENSE)

        

Interest and other income

     4        —          —          4   

Interest expense, including amortization

     (368     (207 )(2)      —          (575
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income and expenses

     (364     (207     —          (571
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income available to common stockholders

   $ (1,306   $ 137      $ 282      $ (887
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss available to common stockholders per share

   $ (0.14       $ (0.10
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and Diluted Weighted Average Common Shares Outstanding

     9,132,766            9,132,766   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

7


Terreno Realty Corporation

Notes to Pro Forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2011

(Unaudited)

 

(1) Represents the historical condensed consolidated operations of Terreno Realty Corporation (the “Company”) for the three months ended March 31, 2011. See the historical condensed consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011, which was filed with the Securities and Exchange Commission on May 5, 2011.

 

(2) The following table sets forth the incremental rental revenues, operating expenses, depreciation and amortization and interest expense of the 2011 Acquisitions for the three months ended March 31, 2011 based on the historical 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
 

Dorsey

     March 25, 2011       $ —         $ —         $ —         $ —     

Belleville

     May 20, 2011         658         167         147         207   
     

 

 

    

 

 

    

 

 

    

 

 

 

2011 Acquisitions

      $ 658       $ 167       $ 147       $ 207   
     

 

 

    

 

 

    

 

 

    

 

 

 

Rental revenues set forth above include adjustments for straight-line rents and amortization of lease intangibles.

Depreciation and amortization represent adjustments using the new basis based on the allocation of the respective purchase price.

Interest expense includes monthly interest expense paid and the amortization of deferred financing costs on assumed debt.

Dorsey was acquired from an unrelated third-party as a sale/leaseback transaction and did not have historical revenues and expenses as the property was owned and operated by the tenant prior to March 25, 2011. As such, no property operations have been reflected in the accompanying unaudited pro forma condensed consolidated statement of operations related to this acquisition.

 

(3) Reflects the adjustment to acquisition costs of $0.3 million as if the 2011 Acquisitions had occurred on January 1, 2011.

 

8


Terreno Realty Corporation

Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2010

(in thousands – except share and per share data)

(Unaudited)

 

     Terreno Realty
Corporation (1)
    2010
Acquisitions
    Other 2010
Acquisitions
    2011
Acquisitions
    Pro Forma
Adjustments
    Pro Forma
Terreno
Realty
Corporation
 

REVENUES

            

Rental revenues

   $ 4,031      $ 6,707 (2)    $ 1,544 (2)    $ 2,642 (2)    $ —        $ 14,924   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     4,031        6,707        1,544        2,642        —          14,924   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

COSTS AND EXPENSES

            

Property operating expenses

     1,287        2,274 (2)      1,324 (2)      676 (2)      —          5,561   

Depreciation and amortization

     1,263        1,258 (2)      1,815 (2)      583 (2)      —          4,919   

General and administrative

     4,122        —          —          —          543 (3)      4,665   

Acquisition costs

     2,289        —          —          —          (2,289 )(4)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     8,961        3,532        3,139        1,259        (1,746     15,145   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

OTHER INCOME (EXPENSE)

            

Interest and other income

     64        —          —          —          —          64   

Interest expense, including amortization

     (524     (543 )(2)      —   (2)      (838 )(2)      (203 )(5)      (2,108
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income and expenses

     (460     (543     —          (838     (203     (2,044
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income available to common stockholders

   $ (5,390   $ 2,632      $ (1,595   $ 545      $ 1,543      $ (2,265
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss available to common stockholders per share

   $ (0.59           $ (0.25
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and Diluted Weighted Average Common Shares Outstanding

     9,112,000                9,112,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

 

9


Terreno Realty Corporation

Notes to Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2010

(Unaudited)

 

(1) Represents the audited historical consolidated operations of Terreno Realty Corporation (the “Company”) for the period from February 16, 2010 (commencement of operations) to December 31, 2010. See the historical consolidated financial statements and notes thereto included in the Company’s 2010 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on February 24, 2011.

 

(2) The following table sets forth the incremental rental revenues, operating expenses, depreciation and amortization and interest expense of the 2011 and 2010 Acquisitions for the year ended December 31, 2010 based on the historical operations of such properties for the periods prior to acquisition by the Company as if the properties were acquired on January 1, 2010 (dollars in thousands).

 

    

Acquisition Date

   Rental Revenues      Operating Expenses      Depreciation and
Amortization
     Interest
Expense
 

Dorsey

   March 25, 2011    $ —         $ —         $ —         $ —     

Belleville

   May 20, 2011      2,642         676         583         838   
     

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal 2011 Acqusitions

        2,642         676         583         838   

Warm Springs I and II

   March 26, 2010      217         80         55         —     

Fortune/Qume

   March 30, 2010      154         40         49         —     

238/242 Lawrence

   August 13, 2010      588         180         103         68   

Maltese

   September 21, 2010      1,274         226         247         —     

Middlebrook

   September 24, 2010      2,820         1,344         375         475   

130 Interstate

   September 29, 2010      1,654         404         429         —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal 2010 Acqusitions

        6,707         2,274         1,258         543   

Rialto

   September 15, 2010      —           —           —           —     

299 Lawrence

   November 9, 2010      161         59         24         —     

Kent 188

   December 14, 2010      748         207         328         —     

Ahern

   December 15, 2010      537         137         368         —     

10th Avenue

   December 20, 2010      —           519         1,036         —     

60th Avenue

   December 20, 2010      98         402         59         —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Other 2010 Acquisitions

        1,544         1,324         1,815         —     
     

 

 

    

 

 

    

 

 

    

 

 

 

Total

      $ 10,893       $ 4,274       $ 3,656       $ 1,381   
     

 

 

    

 

 

    

 

 

    

 

 

 

Rental revenues set forth above include adjustments for straight-line rents and amortization of lease intangibles.

Depreciation and amortization represent adjustments using the new basis based on the allocation of the respective purchase price.

Interest expense includes monthly interest expense paid and the amortization of deferred financing costs on assumed debt.

 

10


Dorsey was acquired from an unrelated third-party as a sale/leaseback transaction and did not have historical revenues and expenses as the property was owned and operated by the tenant prior to March 25, 2011. As such, no property operations have been reflected in the accompanying unaudited pro forma condensed consolidated statement of operations related to this acquisition.

Rialto was acquired from an unrelated third-party after a sale/leaseback transaction was consummated and did not have historical revenues and expenses as the property was owned and operated by the tenant prior to June 30, 2010. As such, no property operations have been reflected in the accompanying unaudited pro forma condensed consolidated statement of operations related to this acquisition.

 

(3) The Company commenced operations on February 16, 2010 and thus there were no corresponding corporate general and administrative expenses prior to February 16, 2010. Reflects the adjustments to include corporate general and administrative expenses for the period on an annualized basis as if the commencement of operations occurred on January 1, 2010.

 

(4) Reflects the adjustment to acquisition costs of $2.3 million as if the 2011 and 2010 Acquisitions had occurred on January 1, 2010.

 

(5) As of December 31, 2010, the Company had an $80.0 million senior revolving credit facility which matures on March 22, 2013 and has an unused facility fee, payable quarterly, which is between 35.0 and 50.0 basis points of the unused portion of the facility depending on the amounts drawn. The credit facility has been reflected as if it was in-place on January 1, 2010 and has been carried through December 31, 2010 assuming no amounts were drawn and only the unused facility fee was payable.

 

11


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: August 4, 2011     By:  

/s/ Michael A. Coke

      Michael A. Coke
      President and Chief Financial Officer

 

12