Terreno Realty (TRNO) risk factors, FY2024 10-K

Risks Related to Our Business and Our Properties

1. 01Our long-term growth will depend, in part, upon future acquisitions of properties, and we may acquire properties that pose integration and other risks that could harm our business
2. 02The availability and timing of cash distributions is uncertain and is limited by the requirements of Maryland law
3. 03Any future pandemic, epidemic or outbreak of any highly infectious disease could have an adverse effect on our business, financial condition, results of operations and cash flows and the business, financial condition, results of operations and cash flows of our tenants
4. 04Events or occurrences that affect areas in which our properties are located may materially adversely impact our financial results
5. 05We may be unable to renew leases, lease vacant space, including vacant space resulting from tenant defaults, or re-lease space as leases expire
6. 06We may be required to fund future tenant improvements, and we may not have funding for those improvements
7. 07We face potential adverse effects from the bankruptcies or insolvencies of tenants or from tenant defaults generally
8. 08Declining real estate valuations and impairment charges could adversely affect our earnings and financial condition
9. 09We utilize local third-party managers for day-to-day property management for substantially all of our properties
10. 10Our development, redevelopment, renovation or expansion strategies may not be successful
11. 11We may not acquire the industrial properties that we have entered into agreements or non-binding letters of intent to acquire
12. 12We depend on key personnel
13. 13We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (“IT”) networks and related systems
14. 14We may from time to time be subject to litigation that may negatively impact our cash flow, financial condition, results of operations and market price of our common stock

Risks Related to Financing and Capital

1. 15If we cannot obtain additional financing, our growth will be limited
2. 16difficult to obtain additional financing, and we cannot assure you that we will be able to obtain additional debt or equity financing or that we will be able to obtain it on favorable terms
3. 17Debt service obligations could adversely affect our overall operating results, may require us to sell industrial properties and could adversely affect our ability to make distributions to our stockholders and the market price of our shares of common stock
4. 18The agreements relating to our existing debt contain, and we expect that agreements relating to our future indebtedness will contain, covenants that could limit our operations and our ability to make distributions to our stockholders
5. 19We may acquire outstanding debt or provide a loan, in each case secured by an industrial property, which will expose us to risks
6. 20If we provide debtor-in-possession financing or provide a loan, a default by the borrower could adversely affect our cash flows
7. 21Adverse changes in our credit rating could negatively affect our financing activity
8. 22Failure to hedge effectively against interest rate changes may adversely affect results of operations
9. 23Our existing stockholders may experience dilution if we issue additional common stock
10. 24We may issue preferred stock or debt securities and may also incur other future indebtedness which would rank senior to our common stock upon liquidation and may adversely affect the market price of our common stock
11. 25Volatility in the capital and credit markets could materially and adversely impact us

Risks Related to the Real Estate Industry

1. 26Investments in real estate properties are subject to risks that could adversely affect our business
2. 27Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties
3. 28Real estate investments are not as liquid as other types of assets, which may reduce economic returns to investors
4. 29Uninsured or underinsured losses relating to real property may adversely affect our returns
5. 30Environmentally hazardous conditions may adversely affect our operating results
6. 31Costs of complying with governmental laws and regulations with respect to our properties may adversely affect our income and the cash available for any distributions
7. 32We are exposed to the potential impacts of climate change and climate-change related risks, which may result in unanticipated losses that could affect our business and financial condition
8. 33Compliance or failure to comply with regulatory requirements could result in substantial costs
9. 34We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely affect the return on an investment in our common stock

Risks Related to Our Organizational Structure

1. 35Our board of directors may change significant corporate policies without stockholder approval
2. 36We could increase the number of authorized shares of stock and issue stock without stockholder approval
3. 37Certain provisions of Maryland law could inhibit changes in control
4. 38Our rights and the rights of our stockholders to take action against our directors and officers are limited

Risks Related to Our Status as a REIT

1. 39Failure to qualify as a REIT would cause us to be taxed as a regular C corporation, which would substantially reduce funds available for distributions to stockholders
2. 40In addition, we would no longer be required to pay distributions. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it could adversely affect the value of our common stock
3. 41Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows
4. 42We may be subject to a 100% penalty tax on any prohibited transactions that we enter into, or may be required to forego certain otherwise beneficial opportunities in order to avoid the penalty tax on prohibited transactions
5. 43REIT distribution requirements could adversely affect our liquidity and may force us to borrow funds or sell assets during unfavorable market conditions
6. 44Dividends payable by REITs generally do not qualify for reduced tax rates
7. 45We may choose to pay dividends in our stock instead of cash, in which case stockholders may be required to pay income taxes in excess of any cash dividends they receive
8. 46Complying with the REIT requirements may cause us to forego otherwise attractive opportunities or to liquidate otherwise attractive investments
9. 47A failure to comply with the limits relating to TRSs would jeopardize our REIT qualification and may result in the imposition of certain taxes
10. 48The ability of our board of directors to revoke our REIT qualification without stockholder approval may subject us to U.S. federal income tax and reduce distributions to our stockholders
11. 49We may face risks in connection with Section 1031 Exchanges
12. 50We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our common stock

General Risks

1. 51Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal controls over financial reporting
2. 52The market price and trading volume of our common stock may be volatile and may trade at prices that are higher or lower than our net asset value per share