Terreno Realty (TRNO) risk factors, FY2025 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 tenants72% rewritten
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 generally85% rewritten
8. 08income produced by our properties. In the event of a tenant default, we may experience delays in enforcing our rights as landlord and may incur substantial costs, including litigation and related expenses, in protecting our investment and re-leasing our propertyNew
9. 09Declining real estate valuations and impairment charges could adversely affect our earnings and financial condition
10. 10We utilize local third-party managers for day-to-day property management for substantially all of our properties
11. 11Our development, redevelopment, renovation or expansion strategies may not be successful
12. 12We may not acquire the industrial properties that we have entered into agreements or non-binding letters of intent to acquire
13. 13We depend on key personnel
14. 14The use of artificial intelligence presents risks and challenges that may adversely impact our business and operating results or that of our tenantsNew
15. 15We 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
16. 16We 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. 17If we cannot obtain additional financing, our growth will be limited
2. 18difficult 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. 19Debt 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. 20The 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. 21We may acquire outstanding debt or provide a loan, in each case secured by an industrial property, which will expose us to risks
6. 22If we provide debtor-in-possession financing or provide a loan, a default by the borrower could adversely affect our cash flows
7. 23Adverse changes in our credit rating could negatively affect our financing activity
8. 24Failure to hedge effectively against interest rate changes may adversely affect results of operations
9. 25Our existing stockholders may experience dilution if we issue additional common stock
10. 26We 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. 27Volatility in the capital and credit markets could materially and adversely impact us

Risks Related to the Real Estate Industry

1. 28Investments in real estate properties are subject to risks that could adversely affect our business
2. 29Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties
3. 30Real estate investments are not as liquid as other types of assets, which may reduce economic returns to investors
4. 31Uninsured or underinsured losses relating to real property may adversely affect our returns
5. 32Environmentally hazardous conditions may adversely affect our operating results
6. 33Costs 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. 34We 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. 35Compliance or failure to comply with regulatory requirements could result in substantial costs
9. 36We 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. 37Our board of directors may change significant corporate policies without stockholder approval
2. 38We could increase the number of authorized shares of stock and issue stock without stockholder approval
3. 39Certain provisions of Maryland law could inhibit changes in control78% rewritten
4. 40stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested sharesNew
5. 41Our 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. 42Failure 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. 43In 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. 44Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows
4. 45We 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. 46REIT distribution requirements could adversely affect our liquidity and may force us to borrow funds or sell assets during unfavorable market conditions
6. 47Dividends payable by REITs generally do not qualify for reduced tax rates
7. 48We 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. 49Complying with the REIT requirements may cause us to forego otherwise attractive opportunities or to liquidate otherwise attractive investments
9. 50A failure to comply with the limits relating to TRSs would jeopardize our REIT qualification and may result in the imposition of certain taxes
10. 51The 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. 52We may face risks in connection with Section 1031 Exchanges
12. 53We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our common stock

General Risks

1. 54Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal controls over financial reporting
2. 55Trade policies, tariffs and related government actions may cause a decline in economic activity and disrupt supply chains, which could have a material adverse impact on our businessNew
3. 56The 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