1476150--3/29/2010--Terreno_Realty

related topics

{investment, property, distribution}

{loan, real, estate}

{tax, income, asset}

{stock, price, share}

{regulation, change, law}

{acquisition, growth, future}

{provision, law, control}

{cost, regulation, environmental}

{interest, director, officer}

{cost, contract, operation}

{debt, indebtedness, cash}

{capital, credit, financial}

{control, financial, internal}

{personnel, key, retain}

{operation, natural, condition}

{financial, litigation, operation}

{operation, international, foreign}

Our senior management s past experience in operating a publicly traded REIT may not be sufficient to successfully operate our company. Our investments will be concentrated in the industrial real estate sector, and our business would be adversely affected by an economic downturn in that sector. Events or occurrences that affect areas in which our properties will be located may impact financial results. We depend on key personnel. Failure of the projected improvement in industrial operating fundamentals may adversely affect our ability to execute our business plan. Our long-term growth will depend upon future acquisitions of properties, and we may be unable to consummate acquisitions on advantageous terms, the acquired properties may not perform as we expect, or we may be unable to quickly and efficiently integrate our new acquisitions into our existing operations. We may be unable to source off-market deal flow in the future. Our real estate redevelopment strategies may not be successful. Actions of our joint venture partners could negatively impact our performance. If we invest in a limited partnership as a general partner, we could be responsible for all liabilities of such partnership. We will utilize local third party managers for day-to-day property management. We may not realize any investment opportunities from our use of third parties to manage our properties. The availability and timing of cash distributions is uncertain. We will be dependent on tenants for our revenues. We may not have funding for future tenant improvements. We may be unable to renew leases, lease vacant space or re-lease space as leases expire. We face potential adverse effects from the bankruptcies or insolvencies of tenants. Declining real estate valuations and impairment charges could adversely affect our earnings and financial condition. If we cannot obtain financing, our growth will be limited. Future debt 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. Failure to hedge effectively against interest rate changes may adversely affect results of operations. Our senior revolving credit facility contains, and we expect that our future indebtedness will contain, covenants that could limit our operations and our ability to make distributions to our stockholders. We may acquire outstanding debt secured by an industrial property, which may expose us to risks. Adverse changes in our credit ratings could negatively affect our financing activity. Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting. We may make acquisitions, which pose integration and other risks that could harm our business. Our property taxes could increase due to property tax rate changes or reassessment, which would impact our cash flows. The conflict of interest policies we have adopted may not adequately address all of the conflicts of interest that may arise with respect to our activities. Risks Related to the Real Estate Industry Our performance and value are subject to general economic conditions and risks associated with our real estate assets. Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of the properties we acquire. Real estate investments are not as liquid as other types of assets, which may reduce economic returns to investors. Uninsured or underinsured losses relating to real property may adversely affect our returns. Contingent or unknown liabilities could adversely affect our financial condition. Environmentally hazardous conditions may adversely affect our operating results. Costs of complying with governmental laws and regulations with respect to properties we acquire may adversely affect our income and the cash available for any distributions. The impacts of climate-related initiatives at the U.S. federal and state levels remain uncertain at this time but could result in increased operating costs. We are exposed to the potential impacts of future climate change and climate-change related risks. Compliance or failure to comply with the Americans with Disabilities Act and other similar regulations could result in substantial costs. We 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. If we sell properties and provide financing to purchasers, defaults by the purchasers would adversely affect our cash flows. Risks Related to Our Organizational Structure Our board of directors may change significant corporate policies without stockholder approval. We could increase the number of authorized shares of stock and issue stock without stockholder approval. Certain provisions of Maryland law could inhibit changes in control. Our 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 Failure to qualify as a REIT would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distributions to stockholders. Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows. REIT distribution requirements could adversely affect our liquidity and may force us to borrow funds or sell assets during unfavorable market conditions. Dividends payable by REITs generally do not qualify for reduced tax rates. We may in the future choose to pay dividends in our stock instead of cash, in which case stockholders may be required to pay income taxes in excess of the cash dividends they receive. Complying with REIT requirements may cause us to forego otherwise attractive opportunities or to liquidate otherwise attractive investments. If we fail to invest a sufficient amount of the net offering proceeds of our initial public offering and the concurrent private placement in real estate assets within one year from the receipt of the proceeds of the offering, we could jeopardize our REIT status. Our relationship with any TRS will be limited, and a failure to comply with the limits would jeopardize our REIT qualification and may result in the application of a 100% excise tax. The ability of our board of directors to revoke our REIT qualification without stockholder approval may subject us to federal income tax and reduce distributions to our stockholders. We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our common stock. Risks Related to Our Common Stock Level of cash distributions, market interest rates and other factors may affect the value of our common stock. The number of shares of our common stock available for future sale could adversely affect the market price of our common stock. An active public market for our common stock may not develop or be sustained. The market price and trading volume of our common stock may be volatile.

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1476150--3/29/2010--Terreno_Realty_Corp