-

a focused investment strategy. Terreno has selected its target markets based on our founders’ experiences investing and operating in over 50 global markets as President and CFO of AMB Property Corporation for eight years. Terreno’s portfolio is built building-by-building exclusively in infill locations within our six coastal markets.

-

conservative targeted leverage and a focus on per share returns. Financial flexibility is important to long-term performance and the ability to take advantage of investment opportunities. We plan to operate with debt levels not higher than 40% of enterprise value and a fixed-charge coverage ratio in excess of 2.0x; and with a focus on per share, rather than aggregate, results.

-

highly aligned compensation structure. We believe executive compensation should be aligned with long-term stockholder value creation. That’s why our executive management team’s incentive compensation is based solely on delivering superior total stockholder return.

-

commitment to strong corporate governance. Here are a few examples of our industry leading governance: Terreno’s independent directors will stand for election annually and we’ve opted out of anti-takeover provisions and stockholder rights plans. We won’t opt back in to those provisions without stockholder approval.

-

a demonstrated track record. Our founders’ experience helped transform AMB from a U.S. owner of 64 msf of shopping centers and industrial buildings into a leading developer, owner and operator of 125 msf of industrial properties globally. During their tenure, total return to stockholders was 313% versus the benchmark’s return of 285% in the same period. ¹

¹Tenure = January 20, 1999 to November 20, 2006; benchmark = MSCI REIT index.