2016
Annual Report

accomplishments

since 2006

62% of assets acquired or developed since IPO
52% of ABR comes from coastal markets, up from 29%
Increase of $2.8 billion in market cap
Opened 10 new market offices
$1.9 billion of acquisitions
$1.1 billion of development
$2.0 billion of dispositions

10
Years...

DCT Waters Ridge

Completed 2016 | Dallas, TX

Building.
AND
...

2016 Highlights

$378.9MM

Stabilized Developments

$240.5MM

Development Starts
97.2%
Operating Occupancy
As Of 12/31
31.5%
Total Shareholder Return
13.5%
FFO Growth Per Share
18.4%
Rent growth on a
straight-line basis
5.9%
Same-store cash NOI growth
DCT Jurupa Ranch

Completed in 2016 | Inland Empire West, CA

2016 WAS ANOTHER OUTSTANDING AND SUCCESSFUL YEAR FOR DCT.

It was also an exciting year, as we celebrated the 10-year anniversary of our IPO. Our objective from the very beginning was to build a company with a portfolio of high-quality distribution assets that would consistently deliver top-tier operating performance and shareholder returns.

In 10 years, we dramatically transformed and enhanced our portfolio by selling $2.0 billion of assets, exiting 10 markets, including Mexico, and redeploying that capital into $1.9 billion of acquisitions and $1.1 billion of development. As a result, 62% of our current assets are new to the Company since our IPO and DCT now has a total market capitalization of $6.2 billion.

Performance

Strong
Operating

DCT Rialto Logistics Center

Completed in 2015 | Inland Empire West, CA

In 2016, our operating portfolio continued to perform very well. Year-end occupancy increased from 94.4% in 2015 to 97.2% in 2016. Net effective rents on new or renewed leases grew by 18.4% compared to the prior leases (as measured by the average rents over the respective terms, including rent bumps and free rent). Due to both higher occupancy as well as higher rents, same-store NOI increased 5.9% on both a cash and straight-line basis over 2015, and Funds from Operations increased 13.5% per share over 2015. These results led us to increase our dividend by 6.9%.

Financial Highlights

Amounts in Thousands, Except per Share Data

2016

2015

Rental Revenues
$391,360
$353,091
Property Net Operating Income
$294,543
$260,877
Funds from Operations (FFO)*
$214,715
$186,389
FFO per Diluted Share*
$2.27
$2.00
Total Consolidated Operating Year-end Square Feet
64,667
62,215
Total Consolidated Operating Year-end Occupancy
97.2%
94.4%
*
Adjusted to exclude acquisition costs, severance costs and hedge ineffectiveness.

Return

Total
Shareholder

DCT Fairburn

Completed in 2016 | Atlanta, GA

In 2016, shareholders received a total return of 32%—22% greater than the SNL US Industrial REIT index and 267% greater than the broader MSCI US REIT index. This is not just a one-year phenomenon—over the past five years, an investment in DCT has returned a total of 179%—substantially greater than both the Industrial REIT and broader REIT indices.

Total Shareholder Return

 

DCT
SNL US REIT Industrial Index
MSCI US REIT Index
100%
32   %
26   %
2016
9   %
84   %
57   %
3-YEAR
45   %
179   %
123   %
5-YEAR
75   %

Development

Creating
Value Through

DCT Airport Distribution Center Building D

Completed in 2016 | Orlando, FL

2016 was our strongest year to date creating value through our active development program, with rents, leasing velocity and returns all exceeding initial expectations. We stabilized 16 projects totaling 5.1 million square feet with an investment of $379 million and an estimated yield of 7.8%.

$378.9MM

Stabilized developments
in 2016

$240.5MM

Development starts
in 2016

$190.9MM

Estimated value created
through development in 2016

$400.3MM

Estimated value created
through development from 2012

Market Breakdown of Development

Reflects Development Projects Stabilized from 2012

Market

SQUARE
FEET

(in thousands)

Projected
Investment

(in thousands)

Southern California
4,151
$247,896
Chicago
1,564
$160,764
Seattle
1,736
$137,614
Atlanta
2,320
$118,069
Houston
1,531
$107,377
Miami
855
$81,760
Dallas
1,019
$70,520
Baltimore/D.C.
478
$68,136
Northern California
796
$52,957
Pennsylvania
426
$25,012
Orlando
192
$13,126
Nashville
225
$7,993
Grand Total
15,293
$1,091,224