Terreno Realty Corporation has closed a $200 million five‑year unsecured term loan that matures on January 15, 2031. The loan is priced at SOFR plus 1.15 %—the current rate for the facility—and eliminates the 10‑basis‑point SOFR credit‑spread premium that previously applied to all of the company’s credit facility borrowings. Key arrangers include KeyBank, PNC, Regions, U.S. Bank, Huntington, and Citizens, with KeyBank serving as the administrative agent.
The proceeds are being used to pay down the company’s $600 million revolving credit facility and to fund general corporate purposes. By replacing short‑term, variable‑rate borrowing with a longer‑term, fixed‑rate instrument, Terreno reduces interest expense and extends its debt maturity profile, thereby improving liquidity and freeing capital for potential acquisitions in its six coastal markets. The move also aligns with the company’s stated capital‑recycling strategy, which seeks to sell lower‑return assets and reinvest in higher‑yield opportunities while maintaining a conservative capital structure—its debt‑to‑total‑capital ratio sits at 0.14 and its debt‑to‑equity ratio at 0.26, with a target of keeping debt plus preferred stock below 35 % of enterprise value.
Historically, Terreno has periodically amended its credit facilities to adjust capacity and maturity. In September 2024 the company amended its credit facility to $800 million, including a $600 million revolving component maturing in January 2029. Earlier amendments in 2022 and 2021 added $100 million and $350 million term loans, respectively, and shifted maturities to 2027 and 2028. The current $200 million term loan extends the company’s long‑term debt horizon to 2031, providing a stable funding base that supports its growth plans without increasing leverage beyond its disciplined limits.
The financing underscores Terreno’s focus on maintaining a low‑cost, long‑term debt structure while preserving flexibility for future capital needs. By eliminating the credit‑spread premium and securing a fixed rate, the company positions itself to capture favorable market conditions and pursue opportunistic acquisitions in high‑growth industrial markets. The transaction also signals confidence in the company’s ability to manage debt responsibly and continue its capital‑recycling strategy, which has been a key driver of shareholder value creation over the past several years.
Overall, the $200 million term loan strengthens Terreno Realty’s balance sheet, reduces interest expense, and enhances its capacity to invest in strategic assets, reinforcing the company’s long‑term growth trajectory.
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