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TRNO > SEC Filings for TRNO > Form 8-K on 24-Jun-2013All Recent SEC Filings

Show all filings for TERRENO REALTY CORP

Form 8-K for TERRENO REALTY CORP


24-Jun-2013

Other Events, Financial Statements and Exhibits


Item 8.01. Other Events.

In connection with our filing on or about the date hereof of a registration statement on Form S-3, we are filing this Current Report on Form 8-K to present certain additional disclosures to be incorporated by reference therein, including disclosures relating to:

Certain historical financial statements related to certain of our completed acquisitions; and

Certain unaudited pro forma financial information regarding our completed acquisitions.



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 America's Gateway
  Report of Independent Auditors                                                 4
  Statements of Revenues and Certain Expenses for the three months ended
March  31, 2013 (unaudited) and the year ended December 31, 2012                 6
  Notes to the Statements of Revenues and Certain Expenses                       7
(ii) Statements of Revenues and Certain Expenses of Route 100
  Report of Independent Auditors                                                 9
  Statements of Revenues and Certain Expenses for the three months ended
March  31, 2013 (unaudited) and the year ended December 31, 2012                11
  Notes to the Statements of Revenues and Certain Expenses                      12
(iii) Statements of Revenues and Certain Expenses of Manhattan Beach
  Report of Independent Auditors                                                14
  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                                                               16
  Notes to the Statements of Revenues and Certain Expenses                      17
(iv) Statements of Revenues and Certain Expenses of 26th Street
  Report of Independent Auditors                                                19
  Statements of Revenues and Certain Expenses for the six months ended
June  30, 2012 (unaudited) and the year ended December 31, 2011                 21
  Notes to the Statements of Revenues and Certain Expenses                      22
(v) Statements of Revenues and Certain Expenses of South Main
  Report of Independent Auditors                                                24
  Statements of Revenues and Certain Expenses for the period from
January 1, 2012 to November  30, 2012 (unaudited) and the year ended
December 31, 2011                                                               26
  Notes to the Statements of Revenues and Certain Expenses                      27

(b) Unaudited Pro Forma Condensed Consolidated Information

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2013 31 Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2013 32 Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2013 33 Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2013 34


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Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012 35 Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2012 36

(d) Exhibits

                    Exhibit
                    Number    Title

                    23.1*     Consent of Independent Auditors

* Filed herewith


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Report of Independent Auditors

The Board of Directors and Stockholders of

Terreno Realty Corporation

We have audited the accompanying statement of revenues and certain expenses of America's Gateway (the "Property"), for the year ended December 31, 2012, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the statement of revenues and certain expenses that are free of material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the statement of revenues and certain expenses 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues and certain expenses. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the statement of revenues and certain expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the statement of revenues and certain expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the statement of revenues and certain expenses.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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 America's Gateway for the year ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.


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Basis of Accounting

As described in Note 1 to the financial statements, the statement of revenues and certain expenses of the Property have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K of Terreno Realty Corporation, and is not intended to be a complete presentation of the Property's revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

San Francisco, California

June 24, 2013


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                               America's Gateway

                  Statements of Revenues and Certain Expenses

             For the Three Months Ended March 31, 2013 (unaudited)

                      and the Year Ended December 31, 2012

                                 (in thousands)



                                                For the Three Months
                                                Ended March 31, 2013           For the Year Ended
                                                     (unaudited)                December 31, 2012
Revenues:
Rental                                          $                 323          $             1,743
Tenant reimbursements                                              83                          387

Total revenues                                                    406                        2,130
Certain expenses:
Property operating expenses                                       110                          460
Real estate taxes                                                  98                          286

Total expenses                                                    208                          746

Revenues in excess of certain expenses          $                 198          $             1,384

See accompanying notes to statements of revenues and certain expenses.


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America's Gateway

Notes to Statements of Revenues and Certain Expenses

For the Three Months Ended March 31, 2013 (unaudited)

and the Year Ended December 31, 2012

1. Background and Basis of Presentation

The accompanying statements of revenues and certain expenses present the results of operations of America's Gateway (the "Property") for the three months ended March 31, 2013 (unaudited) and the year ended December 31, 2012. The Property was acquired by a wholly-owned subsidiary of Terreno Realty Corporation from a third-party seller, The Realty Associates Fund VI, L.P., on May 22, 2013 for approximately $23.7 million. The Property is located in Miami, Florida and consists of six multi-tenant industrial buildings containing 306,924 square feet (unaudited), which were approximately 70% leased to 15 tenants (unaudited) 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 of Terreno Realty Corporation and are not intended to be a complete presentation of the revenues and expenses of the Property for the three months ended March 31, 2013 and the year ended December 31, 2012 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 terms 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.


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Use of Estimates

The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles 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 three months ended March 31, 2013 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, 2012, one tenant accounted for approximately 17% of rental revenues.

Future Minimum Rental Income

Future minimum rents to be received under non-cancelable lease agreements as of
December 31, 2012 were as follows (in thousands):



                                 2013    $  1,318
                                 2014         932
                                 2015         524
                                 2016         336
                                 2017         152

                                 Total   $  3,262


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Report of Independent Auditors

The Board of Directors and Stockholders of

Terreno Realty Corporation

We have audited the accompanying statement of revenues and certain expenses of Route 100 (the "Property"), for the year ended December 31, 2012, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the statement of revenues and certain expenses that are free of material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the statement of revenues and certain expenses 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues and certain expenses. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the statement of revenues and certain expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the statement of revenues and certain expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the statement of revenues and certain expenses.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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 Route 100 for the year ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.


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Basis of Accounting

As described in Note 1 to the financial statements, the statement of revenues and certain expenses of the Property have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K of Terreno Realty Corporation, and is not intended to be a complete presentation of the Property's revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

San Francisco, California

June 24, 2013


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                                   Route 100

                  Statements of Revenues and Certain Expenses

             For the Three Months Ended March 31, 2013 (unaudited)

                      and the Year Ended December 31, 2012

                                 (in thousands)



                                                For the Three Months
                                                Ended March 31, 2013           For the Year Ended
                                                     (unaudited)                December 31, 2012
Revenues:
Rental                                          $                 300          $             1,243
Tenant reimbursements                                              56                          281

Total revenues                                                    356                        1,524
Certain expenses:
Property operating expenses                                        60                          288
Real estate taxes                                                  42                          167

Total expenses                                                    102                          455

Revenues in excess of certain expenses          $                 254          $             1,069

See accompanying notes to statements of revenues and certain expenses.


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Route 100

Notes to Statements of Revenues and Certain Expenses

For the Three Months Ended March 31, 2013 (unaudited)

and the Year Ended December 31, 2012

1. Background and Basis of Presentation

The accompanying statements of revenues and certain expenses present the results of operations of Route 100 (the "Property") for the three months ended March 31, 2013 (unaudited) and the year ended December 31, 2012. The Property was acquired by a wholly-owned subsidiary of Terreno Realty Corporation from a third-party seller, Fund VI/Kaiser I and III L.L.C., on June 12, 2013 for approximately $16.7 million. The Property is located in Elkridge, Maryland and consists of two multi-tenant industrial buildings containing 348,810 square feet (unaudited), which were approximately 64% leased to seven tenants (unaudited) 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 of Terreno Realty Corporation and are not intended to be a complete presentation of the revenues and expenses of the Property for the three months ended March 31, 2013 and the year ended December 31, 2012 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 terms 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.


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Use of Estimates

The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles 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 three months ended March 31, 2013 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, 2012, three tenants accounted for approximately 50% of rental revenues.

Future Minimum Rental Income

Future minimum rents to be received under non-cancelable lease agreements as of
December 31, 2012 were as follows (in thousands):



                                 2013    $   989
                                 2014        777
                                 2015        382
                                 2016        182

                                 Total   $ 2,330


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Report of Independent Auditors

The Board of Directors and Stockholders of

Terreno Realty Corporation

We have audited the accompanying statement of revenues and certain expenses of Manhattan Beach (the "Property"), for the year ended December 31, 2011, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the statement of revenues and certain expenses that are free of material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the statement of revenues and certain expenses 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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues and certain expenses. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the statement of revenues and certain expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the statement of revenues and certain expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the statement of revenues and certain expenses.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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 Manhattan Beach for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.


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Basis of Accounting

As described in Note 1 to the financial statements, the statement of revenues and certain expenses of the Property have been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K of Terreno Realty Corporation, and is not intended to be a complete presentation of the Property's revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

San Francisco, California

June 24, 2013


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                                Manhattan Beach

                  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
. . .
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