Executive Vice President & Chief Operating Officer, TERRENO REALTY CORP
Quickfire questions: Tom Walker meets Terreno Realty Corporation's CEO
Blake Baird, CEO of Terreno Realty Corporation, a major operator of industrial real estate in the US reveals more about how his ...
About John Meyer
In a September 2024 interview, John Meyer, Executive Vice President and Chief Operating Officer of Terreno Realty Corporation, was not directly quoted. However, the company’s CEO, Blake Baird, described the firm’s strategy and operations. Baird stated that Terreno Realty invests in industrial real estate in six U.S. markets, focusing on "urban infill locations" that are "the densest, closest to people assets." He characterized the company’s "jewel in the crown" as a focus on "growing per share results" rather than being the largest, and noted that the firm has made an acquisition every three weeks for 13 years, with an average acquisition size of $12 million, to build a $6 billion portfolio. Baird also discussed sustainability challenges, saying the marketplace often prioritizes features like bike racks in remote locations, while Terreno Realty focuses on "meaningful sustainable improvements" through repurposing urban infill buildings to minimize truck travel distances. He expressed that the company has reached a "critical mass" and is "ready for prime time" to demonstrate its track record of outperformance.
Transcript (25 segments)
I
Interviewer0:01
Welcome to the next edition of the Global Cities video series. I'm here today with Blake B, the CEO of Terreno. So Blake, welcome to London and it's great to have you over here. So you set up Terreno back in 2010, if I'm right. Can you remember what the US 10-year was back in 2010?
B
Blake B0:18
Ha, good question. I would say 5%. It was a low of about 2.6 and high of four, so not too bad. But you know, it makes today look interesting in comparison.
I
Interviewer0:38
So as you know, kind of quick-fire questions about the business that you run. Could you just quickly summarize your business for us?
B
Blake B0:42
Sure. We invest in industrial real estate in six markets: three on the West Coast of the US, three on the East Coast. And we try to focus on very urban infill locations, you know, the densest, closest to people assets that we can own. And Terreno means land in Italian, so we're really focused on owning the land underlying these buildings.
I
Interviewer1:09
Ignorantly, I never knew that. So that's good. Thank you for that. In terms of the demand for these assets, where does that come from?
B
Blake B1:13
You know, it comes from any place you can imagine. It comes all the way from Amazon wanting to deliver a box to your front door to the local plumbing supplier. In fact, in New York City we have a studio like this, because it's New York City and there are a lot of creative people. It's just a location they want to be. The important thread through all of it is customers that need to be in that location to make their business better.
I
Interviewer1:49
Great, thank you. And then, curious to see if your answer to this question kind of matches what we as a team think, but what do you kind of regard as the jewel in the crown of your business?
B
Blake B1:58
The jewel in the crown of our business is a focus on growing per share results, right? Not to be the biggest, but to be the best and to be the most profitable, and owning the real estate that allows us to do that.
I
Interviewer2:16
Yeah, okay. So our answer would have been, and it's kind of related, we would actually say you guys, the management team, your track record of achieving that. We back you to do that versus your peer group.
B
Blake B2:26
See, I was just too humble to say that. I'm not sure if you've been referred to as a jewel in the crown before, but we'll see.
I
Interviewer2:33
And then in terms of supply, how hard is it for somebody else, one of your peers, to try and recreate your portfolio?
B
Blake B2:39
We think it's not impossible, but as close to impossible as investing gets. I mean, we have made an acquisition every three weeks for 13 years, and the average acquisition size is only $12 million. So to create a $6 billion portfolio, one acquisition at a time, every three weeks for 13 years, it takes time.
I
Interviewer3:06
That's interesting. And as we look out over the next five years, what's the thing that most excites you about the business?
B
Blake B3:12
I think what excites us most is we have now gotten to a critical mass where we can support the infrastructure of a public company. We have a demonstrated track record of outperformance, and we're now sort of ready for prime time. We're ready to say we've created this portfolio over 13 years, we think it can do better than any other portfolio. Now let's show you what we can do.
I
Interviewer3:41
And then from a sustainability perspective, what do you think is the biggest challenge that you face?
B
Blake B3:47
The biggest challenge is actually getting the marketplace to understand what we do. We think repurposing urban infill buildings, where we're minimizing the distance trucks have to travel to serve their customers, is highly environmentally friendly. And the marketplace is focused on 'I'm building a building in the middle of nowhere and I put a bike rack there, so I get a good environmental score.' We're really focused on meaningful, sustainable improvements to the environment through repurposing facilities.
I
Interviewer4:24
Yeah, something we've been sort of looking at a bit, let go that lost trucking miles if you like, exactly what you refer to. Okay, and now three questions nothing to do with real estate. So who's the most famous person you've met?
B
Blake B4:35
Bruce Springsteen.
I
Interviewer4:37
Very good. We were just talking about rock stars. Who wins a fight between a lion and a tiger?
B
Blake B4:42
A lion.
I
Interviewer4:43
Agree. And what do you prefer, cheese or chocolate?
B
Blake B4:47
Cheese.
I
Interviewer4:49
Cheese, okay. I prefer chocolate. And then finally, what's your favorite city?
B
Blake B4:54
My favorite city is Porto.
I
Interviewer4:57
Very good. Thank you very much for joining us today, and thank you to everyone who has watched.