Terreno Realty : Q2 2021 Update

Terreno Realty Corporation

Q2 2021 Update

August 4, 2021

Forward Looking Statements

This presentation contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements and, in some cases, can be identified by the use of the words "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "result," "should," "will," "seek," "target," "see," "likely," "position," "opportunity," "outlook," "potential," "enthusiastic," "future," and similar expressions. 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 the impact of the COVID-19 pandemic on our business, our tenants and the national and local economies. 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 caution investors that forward-looking statements are based on management's beliefs and on assumptions made by, and information currently available to, management. Factors that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: (i) our ability to identify and acquire industrial properties on terms favorable to us; (ii) general volatility of the capital markets and the market price of our stock; (iii) adverse economic or real estate conditions or developments in the industrial real estate sector and/or in the markets in which we acquire properties; (iv) our dependence on key personnel and our reliance on third parties to property manage the majority of our industrial properties; (v) our dependence upon tenants; (vi) our ability to comply with the laws, rules and regulations applicable to companies, and in particular, public companies; (vii) our ability to manage our growth effectively; (viii) tenant bankruptcies and defaults on or non-renewal of leases by tenants; (ix) decreased rental rates or increased vacancy rates; (x) increased interest rates and operating costs; (xi) declining real estate valuations and impairment charges; (xii) our expected leverage, our failure to obtain necessary outside financing, and future debt obligations; (xiii) our ability to make distributions to our stockholders; (xiv) our failure to successfully hedge against interest rate increases; (xv) our failure to successfully operate acquired properties; (xvi) our failure to maintain our status as a real estate investment trust ("REIT") and possible adverse changes to tax laws; (xvii) uninsured or underinsured losses relating to our properties; (xviii) environmental uncertainties and risks related to natural disasters; (xix) financial market fluctuations; (xx) changes in real estate and zoning laws and increases in real property tax rates; and (xxi) the impact of COVID-19 on the U.S., regional and global economies and the business, financial condition and results of operations of our Company and our tenants. Other factors that could materially affect results can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, including those set forth under the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Company's preliminary prospectus supplement relating to the offering under the section titled "Risk Factors", and in our other public filings.

We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise. 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.

2

Investment Strategy

Unique and Highly Selective			Functional Assets
Market Approach			in Infill Locations
 Acquire, own and operate industrial real estate in six		 Broad product opportunity set (1)
major coastal U.S. markets. Exclusively.		-	Warehouse / distribution (81.0%)
- Mix of core and value-add investments		- Flex (including light industrial and R&D) (5.1%)
- No greenfield development		-	Transshipment (5.8%)
- No complex joint ventures		- Improved land (8.1%) (2)
- Emphasis on discount to replacement cost provides		 Functional and flexible assets
margin of safety		- Cater to sub-market tenant demands, including

 Superior market fundamentals

- Strong demand generators (high population densities,

last-mile distribution

- Generally suitable for multiple tenants

- Opportunity for higher and better use over time

high volume distribution points, logistics infrastructure)

- Physical and regulatory constraints to new supply

• Shrinking supply in certain submarkets

Goal: Superior same store NOI and per share NAV growth

	(1)	Reflects Terreno portfolio composition based on annualized base rent as of June 30, 2021. Excludes three properties under redevelopment
		that upon completion will contain approximately 0.4 million square feet.
3	(2)	Includes 27 improved land parcels totaling approximately 97.6 acres that are 98.0% leased as of June 30, 2021. Such land is used for
	industrial outdoor storage and may be redeveloped to higher and better use.

Financial Highlights

Net Income Per Share		FFO Per Share(1)

Cash Same Store NOI Growth (1)(2)		Cash SSNOI Excluding Termination Fees(1)(2)

4 (1) This is a non-GAAP financial measure, please see our Reporting Definitions for further explanation.

1. Approximately $0.9 million (300bps) of the increase in cash-basis same store NOI for the three months ended June 30, 2021 was related to properties that were acquired vacant or with near term expirations. Same store NOI for the three months ended September 30, 2020 included approximately $3.3 million of termination fees at our Belleville Turnpike property

Recent Highlights

Investment Highlights

Q2 2021 Acquisitions	$54.2 million
YTD Acquisitions (1)	$221.1 million
Acquisitions Under Contract(1)(2)	$107.1 million
Acquisitions Under LOI(1)(2)	$59.9 million

Capital Markets Activities

• Issued 1,084,294 shares of common stock under the ATM during the three months ended June 30, 2021 with a weighted average offering price of $64.21 per share, receiving gross proceeds of approximately $69.6 million. Issued 1,790,818 shares of common stock under the ATM program during the six months ended June 30, 2021 with a weighted average offering price of $61.84, receiving gross proceeds of approximately $110.7 million.
• Issued $100 million senior unsecured green notes with seven-year term at 2.41% and $50 million senior unsecured notes with ten-year term at 2.84% in a private placement on July 15, 2021. The net proceeds of the senior unsecured green notes will be allocated to recently completed and future LEED certified buildings.

Operating Highlights

• Cash rents on new and renewed leases commencing during the three months ended June 30, 2021 increased approximately 21.1% on approximately 0.8 million square feet; tenant retention during the three months ended June 30, 2021 was 64.3%. Cash rents on new and renewed leases commencing during the six months ended June 30, 2021 increased approximately 19.7% on approximately 1.1 million square feet; tenant retention during the six months ended June 30, 2021 was 73.0%.
• Total portfolio, excluding three properties under redevelopment and 27 improved land parcels, was 97.5% leased as of June 30, 2021 as compared to 96.1% at March 31, 2021 and 96.0% at June 30, 2020.
• The same store portfolio of approximately 12.7 million square feet, representing approximately 92.0% of our total square feet, was 97.8% leased as of June 30, 2021 as compared to 97.4% as of March 31, 2021 and 96.1% as of June 30, 2020.

1. As of August 3, 2021.
2. There is no assurance that we will acquire or dispose of properties under contract or letter of intent because the proposed acquisitions and dispositions are subject to the

5	completion of satisfactory due diligence and various closing conditions and, in the case of properties under letter of intent, purchase and sale agreements.