LOS
ANGELES, July 19, 2023 /PRNewswire/ -- Rexford
Industrial Realty, Inc. (the "Company" or "Rexford Industrial")
(NYSE: REXR), a real estate investment trust ("REIT") focused on
creating value by investing in and operating industrial properties
within Southern California infill
markets, today announced financial and operating results for the
second quarter of 2023.
Second Quarter 2023 Financial and Operational
Highlights:
- Net income attributable to common stockholders of $51.6 million, or $0.26 per diluted share, as compared to
$36.1 million, or $0.22 per diluted share, for the prior year
quarter.
- Company share of Core FFO of $108.4
million, an increase of 32.8% as compared to the prior year
quarter.
- Company share of Core FFO per diluted share of $0.54, an increase of 10.2% as compared to the
prior year quarter.
- Consolidated Portfolio Net Operating Income (NOI) of
$149.8 million, an increase of 31.9%
as compared to the prior year quarter.
- Same Property Portfolio NOI increased 8.0% and Same Property
Portfolio Cash NOI increased 10.0% as compared to the prior year
quarter.
- 98.0% Average Same Property Portfolio occupancy.
- Comparable rental rates on 2.1 million rentable square feet of
new and renewal leases increased by 96.8% compared to prior rents
on a GAAP basis and by 74.8% on a cash basis.
- Completed five acquisitions for an aggregate purchase price of
$142.7 million including properties
closed subsequent to quarter end.
- Ended the quarter with a low-leverage balance sheet measured by
a net debt-to-enterprise value ratio of 16.0%.
"The Rexford Industrial team produced another quarter of
excellent results, demonstrating the strength of our value creation
focused business model within infill Southern California, the nation's largest
industrial market, benefiting from the lowest threat of disruption
from new supply of any major market due to an extreme scarcity of
developable land coupled with favorable long-term tenant demand
fundamentals," stated Michael
Frankel and Howard Schwimmer,
Co-Chief Executive Officers of the Company. "In the second quarter,
our team increased Core FFO by 33% and Core FFO per diluted share
by 10% compared to the prior year quarter. The Company's
differentiated portfolio delivered superior results driving 450,000
square feet of positive net absorption through the execution of 2.1
million square feet of leases with record-high leasing spreads of
97% and 75% on a GAAP and cash basis, respectively. During the
quarter, we stabilized four repositioning and redevelopment
projects generating an unlevered stabilized yield of 6.8% on total
cost, with 4.0% average annual contractual rent increases through
the term of the leases. Looking forward, Rexford Industrial remains
well-positioned to deliver significant embedded cash flow and NAV
growth through a) the proactive repositioning and redevelopment of
our near-term pipeline comprising 3.4 million square feet of
value-add projects within our in-place portfolio that are projected
to deliver an aggregate 6.4% unlevered yield on total investment,
combined with b) the opportunity to continue harvesting the
substantial mark-to-market of our in-place leases as we roll
in-place rents to higher market rates. Additionally, we have
completed approximately $905 million
dollars of accretive investments year to date with
approximately $235 million of
additional acquisitions under contract or accepted offer,
projecting an aggregate 6.1% stabilized unlevered cash yield, which
are subject to customary closing conditions. Our entrepreneurial
approach to value creation enabled by our investment grade,
low-leverage balance sheet favorably positions the company to
capitalize on accretive opportunities for our stakeholders."
Financial Results:
The Company reported net income attributable to common
stockholders for the second quarter of $51.6
million, or $0.26 per diluted
share, compared to $36.1 million, or
$0.22 per diluted share for the prior
year quarter. For the six months ended June 30, 2023, net
income attributable to common stockholders was $109.4 million, or $0.55 per diluted share, compared to $80.0 million, or $0.49 per diluted share for the prior year. Net
income for the six months ended June 30, 2023, includes
$12.1 million of gains on sale of
real estate, as compared to $8.5
million for the prior year.
The Company reported Core FFO for the second quarter of
$108.4 million, representing a 32.8%
increase compared to $81.7 million
for the prior year quarter. The Company reported Core FFO of
$0.54 per diluted share, representing
an increase of 10.2% compared to $0.49 per diluted share for the prior year
quarter. For the six months ended June 30, 2023, Core FFO was
$211.1 million, representing a 33.3%
increase compared to $158.3 million
for the prior year. For the six months ended June 30, 2023,
the Company reported Core FFO of $1.06 per diluted share, representing an increase
of 9.3% compared to $0.97 per diluted
share for the prior year.
In the second quarter, the Company's consolidated portfolio NOI
and Cash NOI increased 31.9% and 36.2%, respectively, compared to
the prior year quarter. For the six months ended June 30,
2023, the Company's consolidated portfolio NOI and Cash NOI
increased 32.3% and 34.6%, respectively, compared to the prior
year.
In the second quarter, the Company's Same Property Portfolio NOI
and Cash NOI increased 8.0% and 10.0%, respectively, compared to
the prior year quarter. For the six months ended June 30,
2023, the Company's Same Property Portfolio NOI and Cash NOI
increased 7.6% and 10.3%, respectively compared to the prior
year.
Operating Results:
Second quarter 2023 leasing activity demonstrates strong
tenant demand fundamentals within Rexford Industrial's target
Southern California infill
markets:
|
|
Q2-2023 Leasing
Activity
|
|
|
|
|
|
|
Releasing
Spreads
|
|
|
# of Leases
Executed
|
|
SF of
Leasing
|
|
GAAP
|
|
Cash
|
New
Leases
|
|
53
|
|
961,235
|
|
83.8 %
|
|
66.9 %
|
Renewal
Leases
|
|
76
|
|
1,165,452
|
|
100.2 %
|
|
76.8 %
|
Total
Leases
|
|
129
|
|
2,126,687
|
|
96.8 %
|
|
74.8 %
|
As of June 30, 2023, the Company's Same Property Portfolio
occupancy was 98.1%. Average Same Property Portfolio occupancy for
the second quarter was 98.0%. As of June 30, 2023, the
Company's consolidated portfolio, excluding value-add repositioning
assets, was 97.3% occupied and 97.4% leased, and the Company's
consolidated portfolio, including value-add repositioning assets,
was 94.0% occupied and 94.2% leased. As of June 30, 2023,
lease expirations for the remainder of 2023 totaled 2.6 million
rentable square feet, representing approximately 5.9% of portfolio
rentable square feet.
Transaction Activity:
During the second quarter of 2023, the Company completed three
acquisitions with 0.2 million square feet of buildings on 15 acres
of land for an aggregate purchase price of $83.3 million. In April, the Company acquired the
following transaction not previously disclosed:
- 2395-2399 Bateman Avenue, Irwindale, located in the LA – San Gabriel
Valley submarket, through an off-market transaction, for
$41.2 million, or $305 per square foot. The 6.4 acre site
encompasses three modern industrial buildings, totaling 134,942
square feet, and is leased at rents estimated to be approximately
60% below current market rates. Upon near-term expirations, the
Company intends to drive accretive cash flow growth through the
renewal of the existing tenants or through re-tenanting following a
value-add repositioning of the property. The investment is
projected to generate a 5.4% unlevered stabilized cash yield on
total investment. According to CBRE, the vacancy rate in the 161
million square foot LA – San Gabriel Valley submarket was 1.5% at
the end of the second quarter 2023.
Subsequent to the second quarter of 2023, the Company completed
two acquisitions for an aggregate purchase price of $59.4 million:
- 27712-27756 Avenue Mentry, Santa
Clarita, located in the LA – Greater San Fernando Valley
submarket, through an off-market transaction, for $38.0 million, or $172 per square foot. The 9.1 acre site is
improved with two buildings totaling 220,752 square feet and is
subject to a long-term lease to a single tenant. The investment
generates an initial unlevered cash yield of 5.3%. According to
CBRE, the vacancy rate in the 179 million square foot LA – Greater
San Fernando Valley submarket was 1.0% at the end of the second
quarter 2023.
- 5630 Cerritos Avenue, Cypress, located in the OC – West
submarket for $21.4 million, or
$281 per square foot. The 76,032
square foot single-tenant building on 3.6 acres is subject to a
long-term lease generating an initial unlevered cash yield of 6.4%.
According to CBRE, the vacancy rate in the 42 million square foot
OC – West submarket was 0.8% at the end of the second quarter
2023.
The $904.9 million of investments
completed year to date, including transactions closed subsequent to
quarter end, are projected to generate a weighted average unlevered
initial yield of 5.1% and a projected weighted average unlevered
stabilized yield on total investment of 5.9%.
During the second quarter of 2023, the Company stabilized four
repositioning and redevelopment projects representing 374,564
square feet of buildings and a 208,976 square foot Industrial
Outdoor Storage site representing a total investment of
$131 million. The projects achieved a
weighted average unlevered stabilized yield on total investment of
6.8%.
Balance Sheet:
The Company ended the second quarter with $136.3 million in cash on hand and $1.0 billion available under its unsecured
revolving credit facility. As of June 30, 2023, the Company
had $2.2 billion of outstanding debt,
with an average interest rate of 3.6%, an average term-to-maturity
of 5.1 years and no floating rate debt exposure. Including
extension options available at the Company's option, the Company
has no significant debt maturities until 2026.
During the second quarter of 2023, the Company completed a
public offering of 13,500,000 shares of common stock subject to
forward equity sale agreements at a public offering price of
$55.60 per share for an offering
value of $750.6 million.
Subsequent to the second quarter of 2023, the Company partially
settled the outstanding forward equity sale agreements related to
the public offering by issuing 5,400,000 shares of common stock in
exchange for net proceeds of $298.4
million.
As of July 19, 2023, the Company
had approximately $447.8 million of
forward net proceeds remaining for settlement prior to October 11, 2024.
During the second quarter of 2023, the Company did not execute
on its at-the-market equity offering program ("ATM Program"). As of
June 30, 2023, the Company's at-the-market equity offering
program had approximately $1.1
billion of remaining capacity.
Dividends:
On July 17, 2023, the Company's Board of Directors declared
a dividend in the amount of $0.38 per
share for the third quarter of 2023, payable in cash on
October 16, 2023, to common stockholders and common unit
holders of record as of September 29, 2023.
On July 17, 2023, the Company's Board of Directors declared
a quarterly dividend of $0.367188 per
share of its Series B Cumulative Redeemable Preferred Stock and a
quarterly dividend of $0.351563 per
share of its Series C Cumulative Redeemable Preferred Stock,
payable in cash on September 29, 2023, to preferred
stockholders of record as of September 15, 2023.
Guidance
The Company is updating its full year 2023 guidance as indicated
below. The Core FFO guidance refers to the Company's in-place
portfolio as of July 19, 2023 including the imminent closing
of a $210.0 million transaction in
the LA — Mid-Counties market, and does not include any assumptions
for additional acquisitions, dispositions or related balance sheet
activities that have not closed. Please refer to the Company's
supplemental information package for a complete detail of guidance
and 2023 Guidance Rollforward.
2023 Outlook
(1)
|
|
Q2 2023
Updated
Guidance
|
|
Q1 2023
Guidance
|
Net Income Attributable
to Common Stockholders per diluted share
|
|
$1.03 -
$1.06
|
|
$1.01 -
$1.05
|
Company share of Core
FFO per diluted share
|
|
$2.13 -
$2.16
|
|
$2.11 -
$2.15
|
Same Property Portfolio
NOI Growth - GAAP
|
|
7.75% -
8.50%
|
|
7.75% -
8.50%
|
Same Property Portfolio
NOI Growth - Cash
|
|
9.50% -
10.25%
|
|
9.50% -
10.25%
|
Average Same Property
Portfolio Occupancy (Full Year) (2)
|
|
97.5% -
98.0%
|
|
97.5% -
98.0%
|
General and
Administrative Expenses (3)
|
|
$75.0M -
$76.0M
|
|
$75.0M -
$76.0M
|
Net Interest
Expense
|
|
$64.5M -
$65.5M
|
|
$65.0M -
$66.0M
|
|
|
(1)
|
2023 Guidance
represents the in-place portfolio as of July 19, 2023 including the
imminent closing of a $210.0 million transaction in the LA —
Mid-Counties market, and does not include any assumptions for
additional prospective acquisitions, dispositions or related
balance sheet activities that have not closed.
|
(2)
|
2023 Same Property
Portfolio ending occupancy is projected to be approximately
98.0%.
|
(3)
|
2023 General and
Administrative expense guidance includes estimated non-cash equity
compensation expense of $31.0 million. Non-cash equity compensation
includes restricted stock, time-based LTIP units and performance
units that are tied to the Company's overall performance and may or
may not be realized based on actual results.
|
A number of factors could impact the Company's ability to
deliver results in line with its guidance, including, but not
limited to, the potential impacts related to interest rates,
inflation, the economy, the supply and demand of industrial real
estate, the availability and terms of financing to the Company or
to potential acquirers of real estate and the timing and yields for
divestment and investment. There can be no assurance that the
Company can achieve such results.
Supplemental Information and Investor Presentation:
The Company's supplemental financial reporting package as well
as an updated investor presentation are available on the Company's
investor relations website at www.ir.rexfordindustrial.com.
Earnings Release, Investor Conference Webcast and Conference
Call:
A conference call with senior management will be held on
Thursday, July 20, 2023, at 1:00 p.m.
Eastern Time.
To participate in the live telephone conference call, please
access the following dial-in numbers at least five minutes prior to
the start time.
1-877-407-0789 (for domestic callers)
1-201-689-8562 (for international callers)
Conference call playback will be available through August 20, 2023, and can be accessed using the
following numbers and pass code 13734481.
1-844-512-2921 (for domestic callers)
1-412-317-6671 (for international callers)
A live webcast and replay of the conference call will also be
available at www.ir.rexfordindustrial.com.
About Rexford Industrial:
Rexford Industrial creates value by investing in, operating and
redeveloping industrial properties throughout infill Southern California, the world's fourth
largest industrial market and consistently the highest-demand with
lowest-supply major market in the nation. The Company's highly
differentiated strategy enables internal and external growth
opportunities through its proprietary value creation and asset
management capabilities. Rexford Industrial's high-quality,
irreplaceable portfolio comprises 367 properties with approximately
44.5 million rentable square feet occupied by a stable and diverse
tenant base. Structured as a real estate investment trust (REIT)
listed on the New York Stock Exchange under the ticker "REXR,"
Rexford Industrial is an S&P MidCap 400 Index member. For more
information, please visit www.rexfordindustrial.com.
Forward Looking Statements:
This press release may contain forward-looking statements within
the meaning of the federal securities laws, which are based on
current expectations, forecasts and assumptions that involve risks
and uncertainties that could cause actual outcomes and results to
differ materially. Forward-looking statements relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. In some cases, you can
identify forward-looking statements by the use of forward-looking
terminology such as "may," "will," "should," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "predicts," or
"potential" or the negative of these words and phrases or similar
words or phrases which are predictions of or indicate future events
or trends and which do not relate solely to historical matters.
While forward-looking statements reflect the Company's good faith
beliefs, assumptions and expectations, they are not guarantees of
future performance. In addition, projections, assumptions and
estimates of our future performance and the future performance of
the industry in which we operate are necessarily subject to a high
degree of uncertainty and risk due to a variety of factors,
including those described above. These and other factors could
cause results to differ materially from those expressed in our
estimates and beliefs and in the estimates prepared by independent
parties. For a further discussion of these and other factors that
could cause the Company's future results to differ materially from
any forward-looking statements, see the reports and other filings
by the Company with the U.S. Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K for the year
ended December 31, 2022, and other
filings with the Securities and Exchange Commission. The Company
disclaims any obligation to publicly update or revise any
forward-looking statement to reflect changes in underlying
assumptions or factors, of new information, data or methods, future
events or other changes.
Definitions / Discussion of Non-GAAP Financial
Measures:
Funds from Operations (FFO): We calculate FFO in
accordance with the standards established by the National
Association of Real Estate Investment Trusts ("NAREIT"). FFO
represents net income (loss) (computed in accordance with GAAP),
excluding gains (or losses) from sales of depreciable operating
property, gains (or losses) from sales of assets incidental to our
business, impairment losses of depreciable operating property or
assets incidental to our business, real estate related depreciation
and amortization (excluding amortization of deferred financing
costs and amortization of above/below-market lease intangibles) and
after adjustments for unconsolidated joint ventures. Management
uses FFO as a supplemental performance measure because, in
excluding real estate related depreciation and amortization, gains
and losses from property dispositions, other than temporary
impairments of unconsolidated real estate entities, and impairment
on our investment in real estate, it provides a performance measure
that, when compared year over year, captures trends in occupancy
rates, rental rates and operating costs. We also believe that, as a
widely recognized measure of performance used by other REITs, FFO
may be used by investors as a basis to compare our operating
performance with that of other REITs. However, because FFO excludes
depreciation and amortization and captures neither the changes in
the value of our properties that result from use or market
conditions nor the level of capital expenditures and leasing
commissions necessary to maintain the operating performance of our
properties, all of which have real economic effects and could
materially impact our results from operations, the utility of FFO
as a measure of our performance is limited. Other equity REITs may
not calculate or interpret FFO in accordance with the NAREIT
definition as we do, and, accordingly, our FFO may not be
comparable to such other REITs' FFO. FFO should not be used as a
measure of our liquidity and is not indicative of funds available
for our cash needs, including our ability to pay dividends. FFO
should be considered only as a supplement to net income computed in
accordance with GAAP as a measure of our performance. A
reconciliation of net income, the nearest GAAP equivalent, to FFO
is set forth below in the Financial Statements and Reconciliations
section. "Company Share of FFO" reflects FFO attributable to common
stockholders, which excludes amounts allocable to noncontrolling
interests, participating securities and preferred stockholders.
Core Funds from Operations (Core FFO): We calculate
Core FFO by adjusting FFO for non-comparable items outlined in the
"Reconciliation of Net Income to Funds From Operations and Core
Funds From Operations" table which is located in the Financial
Statements and Reconciliations section below. We believe that Core
FFO is a useful supplemental measure and that by adjusting for
items that are not considered by the Company to be part of its
on-going operating performance, provides a more meaningful and
consistent comparison of the Company's operating and financial
performance period-over-period. Because these adjustments have a
real economic impact on our financial condition and results from
operations, the utility of Core FFO as a measure of our performance
is limited. Other REITs may not calculate Core FFO in a consistent
manner. Accordingly, our Core FFO may not be comparable to other
REITs' Core FFO. Core FFO should be considered only as a supplement
to net income computed in accordance with GAAP as a measure of our
performance. "Company Share of Core FFO" reflects Core FFO
attributable to common stockholders, which excludes amounts
allocable to noncontrolling interests, participating securities and
preferred stockholders.
Reconciliation of Net Income Attributable to Common
Stockholders per Diluted Share Guidance to Company Share of Core
FFO per Diluted Share Guidance:
The following is a reconciliation of the Company's 2023 guidance
range of net income attributable to common stockholders per diluted
share, the most directly comparable forward-looking GAAP financial
measure, to Company share of Core FFO per diluted share.
|
2023
Estimate
|
|
Low
|
|
High
|
Net income
attributable to common stockholders
|
$
1.03
|
|
$
1.06
|
Company share of
depreciation and amortization
|
1.16
|
|
1.16
|
Company share of gains
on sale of real estate
|
(0.06)
|
|
(0.06)
|
Company share of
FFO
|
$
2.13
|
|
$
2.16
|
Net Operating Income (NOI): NOI is a non-GAAP
measure, which includes the revenue and expense directly
attributable to our real estate properties. NOI is calculated as
rental income from real estate operations less property expenses
(before interest expense, depreciation and amortization). We use
NOI as a supplemental performance measure because, in excluding
real estate depreciation and amortization expense and gains (or
losses) from property dispositions, it provides a performance
measure that, when compared year over year, captures trends in
occupancy rates, rental rates and operating costs. We also believe
that NOI will be useful to investors as a basis to compare our
operating performance with that of other REITs. However, because
NOI excludes depreciation and amortization expense and captures
neither the changes in the value of our properties that result from
use or market conditions, nor the level of capital expenditures and
leasing commissions necessary to maintain the operating performance
of our properties (all of which have a real economic effect and
could materially impact our results from operations), the utility
of NOI as a measure of our performance is limited. Other equity
REITs may not calculate NOI in a similar manner and, accordingly,
our NOI may not be comparable to such other REITs' NOI.
Accordingly, NOI should be considered only as a supplement to net
income as a measure of our performance. NOI should not be used as a
measure of our liquidity, nor is it indicative of funds available
to fund our cash needs.
NOI should not be used as a substitute for cash flow from
operating activities in accordance with GAAP. We use NOI to help
evaluate the performance of the Company as a whole, as well as the
performance of our Same Property Portfolio. A calculation of NOI
for our Same Property Portfolio, as well as a reconciliation of net
income to NOI for our Same Property Portfolio, is set forth below
in the Financial Statements and Reconciliations section.
Cash NOI: Cash NOI is a non-GAAP measure, which we
calculate by adding or subtracting from NOI: (i) fair value lease
revenue and (ii) straight-line rent adjustments. We use Cash NOI,
together with NOI, as a supplemental performance measure. Cash NOI
should not be used as a measure of our liquidity, nor is it
indicative of funds available to fund our cash needs. Cash NOI
should not be used as a substitute for cash flow from operating
activities computed in accordance with GAAP. We use Cash NOI to
help evaluate the performance of the Company as a whole, as well as
the performance of our Same Property Portfolio. A calculation of
Cash NOI for our Same Property Portfolio, as well as a
reconciliation of net income to Cash NOI for our Same Property
Portfolio, is set forth below in the Financial Statements and
Reconciliations section.
Same Property Portfolio: Our 2023 Same Property
Portfolio is a subset of our consolidated portfolio and includes
properties that were wholly owned by us for the period from
January 1, 2022 through June 30,
2023, and excludes (i) properties that were acquired or sold during
the period from January 1, 2022
through June 30, 2023, and (ii) properties acquired prior to
January 1, 2022 that were or will be
classified as repositioning/redevelopment (current and future) or
lease-up during 2022 and 2023 and select buildings in "Other
Repositioning," which we believe will significantly affect the
properties' results during the comparative periods. As of
June 30, 2023, our 2023 Same Property Portfolio consists of
buildings aggregating 32,496,302 rentable square feet at 256 of our
properties.
Properties and Space Under Repositioning: Typically
defined as properties or units where a significant amount of space
is held vacant in order to implement capital improvements that
improve the functionality (not including basic refurbishments,
i.e., paint and carpet), cash flow and value of that space. A
repositioning is generally considered complete once the investment
is fully or nearly fully deployed and the property is available for
occupancy. We consider a repositioning property to be stabilized at
the earlier of the following: (i) upon reaching 90% occupancy or
(ii) one year from the date of completion of repositioning
construction work.
Net Debt to Enterprise Value: As of June 30,
2023, we had consolidated indebtedness of $2.2 billion, reflecting a net debt to enterprise
value of approximately 16.0%. Our enterprise value is defined as
the sum of the liquidation preference of our outstanding preferred
stock and preferred units plus the market value of our common stock
excluding shares of nonvested restricted stock, plus the aggregate
value of common units not owned by us, plus the value of our net
debt. Our net debt is defined as our consolidated indebtedness
less cash and cash equivalents.
Contact:
investorrelations@rexfordindustrial.com
Financial Statements and Reconciliations:
Rexford Industrial
Realty, Inc.
Consolidated Balance
Sheets
(In thousands except
share data)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
Land
|
$
6,400,698
|
|
$
5,841,195
|
Buildings and
improvements
|
3,723,837
|
|
3,370,494
|
Tenant
improvements
|
155,182
|
|
147,632
|
Furniture, fixtures,
and equipment
|
132
|
|
132
|
Construction in
progress
|
127,416
|
|
110,934
|
Total real estate held
for investment
|
10,407,265
|
|
9,470,387
|
Accumulated
depreciation
|
(695,129)
|
|
(614,332)
|
Investments in real
estate, net
|
9,712,136
|
|
8,856,055
|
Cash and cash
equivalents
|
136,282
|
|
36,786
|
Rents and other
receivables, net
|
14,126
|
|
15,227
|
Deferred rent
receivable, net
|
103,192
|
|
88,144
|
Deferred leasing
costs, net
|
54,848
|
|
45,080
|
Deferred loan costs,
net
|
4,139
|
|
4,829
|
Acquired lease
intangible assets, net
|
147,990
|
|
169,986
|
Acquired
indefinite-lived intangible
|
5,156
|
|
5,156
|
Interest rate swap
asset
|
19,869
|
|
11,422
|
Other
assets
|
19,055
|
|
24,973
|
Acquisition related
deposits
|
8,700
|
|
1,625
|
Total
Assets
|
$
10,225,493
|
|
$
9,259,283
|
LIABILITIES &
EQUITY
|
|
|
|
Liabilities
|
|
|
|
Notes
payable
|
$
2,227,154
|
|
$
1,936,381
|
Accounts payable,
accrued expenses and other liabilities
|
109,881
|
|
97,496
|
Dividends and
distributions payable
|
79,370
|
|
62,033
|
Acquired lease
intangible liabilities, net
|
130,511
|
|
147,384
|
Tenant security
deposits
|
81,163
|
|
71,935
|
Prepaid
rents
|
42,600
|
|
20,712
|
Total
Liabilities
|
2,670,679
|
|
2,335,941
|
Equity
|
|
|
|
Rexford Industrial
Realty, Inc. stockholders' equity
|
|
|
|
Preferred stock, $0.01
par value per share, 10,050,000 shares authorized:
|
|
|
|
5.875%
series B cumulative redeemable preferred
stock, 3,000,000 shares
outstanding at June 30, 2023 and December 31, 2022
($75,000 liquidation
preference)
|
72,443
|
|
72,443
|
5.625%
series C cumulative redeemable preferred
stock, 3,450,000 shares
outstanding at June 30, 2023 and December 31, 2022
($86,250 liquidation
preference)
|
83,233
|
|
83,233
|
Common Stock,$ 0.01
par value per share, 489,950,000 authorized and
201,041,741 and 189,114,129 shares outstanding at June 30,
2023 and
December 31, 2022, respectively
|
2,010
|
|
1,891
|
Additional paid in
capital
|
7,311,458
|
|
6,646,867
|
Cumulative
distributions in excess of earnings
|
(298,367)
|
|
(255,743)
|
Accumulated other
comprehensive loss
|
16,525
|
|
8,247
|
Total stockholders'
equity
|
7,187,302
|
|
6,556,938
|
Noncontrolling
interests
|
367,512
|
|
366,404
|
Total
Equity
|
7,554,814
|
|
6,923,342
|
Total Liabilities
and Equity
|
$
10,225,493
|
|
$
9,259,283
|
Rexford Industrial
Realty, Inc.
Consolidated Statements
of Operations
(Unaudited and in
thousands, except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUES
|
|
|
|
|
|
|
|
Rental
income
|
$
194,098
|
|
$
148,987
|
|
$
379,262
|
|
$
289,575
|
Management and leasing
services
|
171
|
|
130
|
|
361
|
|
293
|
Interest
income
|
1,497
|
|
1
|
|
2,379
|
|
2
|
TOTAL
REVENUES
|
195,766
|
|
149,118
|
|
382,002
|
|
289,870
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
Property
expenses
|
44,310
|
|
35,405
|
|
87,135
|
|
68,834
|
General and
administrative
|
18,267
|
|
14,863
|
|
36,464
|
|
29,580
|
Depreciation and
amortization
|
58,793
|
|
46,609
|
|
118,222
|
|
89,080
|
TOTAL OPERATING
EXPENSES
|
121,370
|
|
96,877
|
|
241,821
|
|
187,494
|
OTHER
EXPENSES
|
|
|
|
|
|
|
|
Other
expenses
|
306
|
|
295
|
|
953
|
|
333
|
Interest
expense
|
17,180
|
|
10,168
|
|
30,881
|
|
19,851
|
TOTAL
EXPENSES
|
138,856
|
|
107,340
|
|
273,655
|
|
207,678
|
Loss on extinguishment
of debt
|
—
|
|
(877)
|
|
—
|
|
(877)
|
Gains on sale of real
estate
|
—
|
|
—
|
|
12,133
|
|
8,486
|
NET
INCOME
|
56,910
|
|
40,901
|
|
120,480
|
|
89,801
|
Less: net income
attributable to noncontrolling interests
|
(2,717)
|
|
(2,290)
|
|
(5,781)
|
|
(4,774)
|
NET INCOME
ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
|
54,193
|
|
38,611
|
|
114,699
|
|
85,027
|
Less: preferred stock
dividends
|
(2,315)
|
|
(2,315)
|
|
(4,629)
|
|
(4,629)
|
Less: earnings
attributable to participating securities
|
(318)
|
|
(203)
|
|
(638)
|
|
(404)
|
NET INCOME
ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
51,560
|
|
$
36,093
|
|
$
109,432
|
|
$
79,994
|
Net income
attributable to common stockholders per share – basic
|
$
0.26
|
|
$
0.22
|
|
$
0.55
|
|
$
0.49
|
Net income
attributable to common stockholders per share – diluted
|
$
0.26
|
|
$
0.22
|
|
$
0.55
|
|
$
0.49
|
Weighted-average
shares of common stock outstanding – basic
|
200,611
|
|
164,896
|
|
198,003
|
|
162,774
|
Weighted-average
shares of common stock outstanding – diluted
|
200,667
|
|
165,201
|
|
198,238
|
|
163,136
|
Rexford Industrial
Realty, Inc.
Same Property Portfolio
Occupancy and NOI and Cash NOI
(Unaudited, dollars in
thousands)
|
|
Same Property
Portfolio Occupancy:
|
|
June
30,
|
|
|
|
2023
|
|
2022
|
|
Change (basis
points)
|
Quarterly Weighted
Average Occupancy:(1)
|
|
|
|
|
|
Los Angeles
County
|
98.0 %
|
|
98.8 %
|
|
(80) bps
|
Orange
County
|
98.9 %
|
|
99.0 %
|
|
(10) bps
|
Riverside / San
Bernardino County
|
96.9 %
|
|
99.0 %
|
|
(210) bps
|
San Diego
County
|
98.4 %
|
|
98.8 %
|
|
(40) bps
|
Ventura
County
|
99.2 %
|
|
98.7 %
|
|
50 bps
|
Same Property
Portfolio Weighted Average Occupancy
|
98.0 %
|
|
98.9 %
|
|
(90) bps
|
|
|
|
|
|
|
Ending
Occupancy:
|
98.1 %
|
|
98.6 %
|
|
(50) bps
|
|
|
(1)
|
Calculated by averaging
the occupancy rate at the end of each month in 2Q-2023 and March
2023 (for 2Q-2023) and the end of each month in 2Q-2022 and March
2022 (for 2Q-2022).
|
Same Property
Portfolio NOI and Cash NOI:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
|
2023
|
|
2022
|
|
$
Change
|
|
%
Change
|
Rental
income
|
$
136,632
|
|
$
128,005
|
|
$
8,627
|
|
6.7 %
|
|
$
270,241
|
|
$
254,070
|
|
$ 16,171
|
|
6.4 %
|
Property
expenses
|
30,091
|
|
29,343
|
|
748
|
|
2.5 %
|
|
59,854
|
|
58,475
|
|
1,379
|
|
2.4 %
|
Same Property
Portfolio NOI
|
$
106,541
|
|
$
98,662
|
|
$
7,879
|
|
8.0 %
|
|
$
210,387
|
|
$
195,595
|
|
$ 14,792
|
|
7.6 %
|
Straight line rental
revenue adjustment
|
(5,415)
|
|
(5,546)
|
|
131
|
|
(2.4) %
|
|
(9,237)
|
|
(11,152)
|
|
1,915
|
|
(17.2) %
|
Amortization of
above/below market lease intangibles
|
(3,651)
|
|
(4,505)
|
|
854
|
|
(19.0) %
|
|
(7,400)
|
|
(8,772)
|
|
1,372
|
|
(15.6) %
|
Same Property
Portfolio Cash NOI
|
$
97,475
|
|
$
88,611
|
|
$
8,864
|
|
10.0 %
|
|
$
193,750
|
|
$
175,671
|
|
$ 18,079
|
|
10.3 %
|
Rexford Industrial
Realty, Inc.
Reconciliation of Net
Income to NOI, Cash NOI, Same Property Portfolio NOI and
Same Property Portfolio
Cash NOI
(Unaudited and in
thousands)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
$
56,910
|
|
$
40,901
|
|
$
120,480
|
|
$
89,801
|
General and
administrative
|
18,267
|
|
14,863
|
|
36,464
|
|
29,580
|
Depreciation and
amortization
|
58,793
|
|
46,609
|
|
118,222
|
|
89,080
|
Other
expenses
|
306
|
|
295
|
|
953
|
|
333
|
Interest
expense
|
17,180
|
|
10,168
|
|
30,881
|
|
19,851
|
Loss on extinguishment
of debt
|
—
|
|
877
|
|
—
|
|
877
|
Deduct:
|
|
|
|
|
|
|
|
Management and leasing
services
|
(171)
|
|
(130)
|
|
(361)
|
|
(293)
|
Interest
income
|
(1,497)
|
|
(1)
|
|
(2,379)
|
|
(2)
|
Gains on sale of real
estate
|
—
|
|
—
|
|
(12,133)
|
|
(8,486)
|
Net operating income
(NOI)
|
$
149,788
|
|
$
113,582
|
|
$
292,127
|
|
$
220,741
|
Straight line rental
revenue adjustment
|
(8,653)
|
|
(8,441)
|
|
(16,281)
|
|
(15,342)
|
Amortization of
above/below market lease intangibles(1)
|
(6,232)
|
|
(6,126)
|
|
(14,522)
|
|
(11,217)
|
Cash NOI
|
$
134,903
|
|
$
99,015
|
|
$
261,324
|
|
$
194,182
|
|
|
|
|
|
|
|
|
NOI
|
$
149,788
|
|
$
113,582
|
|
$
292,127
|
|
$
220,741
|
Non-Same Property
Portfolio rental income
|
(57,466)
|
|
(20,982)
|
|
(109,021)
|
|
(35,505)
|
Non-Same Property
Portfolio property expenses
|
14,219
|
|
6,062
|
|
27,281
|
|
10,359
|
Same Property Portfolio
NOI
|
$
106,541
|
|
$
98,662
|
|
$
210,387
|
|
$
195,595
|
Straight line rental
revenue adjustment
|
(5,415)
|
|
(5,546)
|
|
(9,237)
|
|
(11,152)
|
Amortization of
above/below market lease intangibles
|
(3,651)
|
|
(4,505)
|
|
(7,400)
|
|
(8,772)
|
Same Property Portfolio
Cash NOI
|
$
97,475
|
|
$
88,611
|
|
$
193,750
|
|
$
175,671
|
|
|
(1)
|
The amortization of net
below-market lease intangibles for the six months ended June 30,
2023 includes the write-off of $1,318 that is attributable to a
below-market fixed rate renewal option that was not exercised due
to the termination of the lease at the end of the initial lease
term.
|
Rexford Industrial
Realty, Inc.
Reconciliation of Net
Income to Funds From Operations and Core Funds From
Operations
(Unaudited and in
thousands, except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
income
|
$
56,910
|
|
$
40,901
|
|
$
120,480
|
|
$
89,801
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
58,793
|
|
46,609
|
|
118,222
|
|
89,080
|
Gains on sale of real
estate
|
—
|
|
—
|
|
(12,133)
|
|
(8,486)
|
Funds From
Operations (FFO)
|
$
115,703
|
|
$
87,510
|
|
$
226,569
|
|
$
170,395
|
Less: preferred stock
dividends
|
(2,315)
|
|
(2,315)
|
|
(4,629)
|
|
(4,629)
|
Less: FFO attributable
to noncontrolling interests(1)
|
(4,812)
|
|
(4,131)
|
|
(9,645)
|
|
(7,918)
|
Less: FFO attributable
to participating securities(2)
|
(451)
|
|
(307)
|
|
(878)
|
|
(603)
|
Company share of
FFO
|
$
108,125
|
|
$
80,757
|
|
$
211,417
|
|
$
157,245
|
|
|
|
|
|
|
|
|
Company Share of FFO
per common share – basic
|
$
0.54
|
|
$
0.49
|
|
$
1.07
|
|
$
0.97
|
Company Share of FFO
per common share – diluted
|
$
0.54
|
|
$
0.49
|
|
$
1.07
|
|
$
0.96
|
|
|
|
|
|
|
|
|
FFO
|
$
115,703
|
|
$
87,510
|
|
$
226,569
|
|
$
170,395
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition
expenses
|
247
|
|
56
|
|
320
|
|
92
|
Impairment of
right-of-use asset
|
—
|
|
—
|
|
188
|
|
—
|
Loss on extinguishment
of debt
|
—
|
|
877
|
|
—
|
|
877
|
Amortization of loss
on termination of interest rate swaps
|
59
|
|
23
|
|
118
|
|
135
|
Non-capitalizable
demolition costs
|
—
|
|
—
|
|
340
|
|
—
|
Write-offs of
below-market lease intangibles related to unexercised renewal
options(3)
|
—
|
|
—
|
|
(1,318)
|
|
—
|
Core
FFO
|
$
116,009
|
|
$
88,466
|
|
$
226,217
|
|
$
171,499
|
Less: preferred stock
dividends
|
(2,315)
|
|
(2,315)
|
|
(4,629)
|
|
(4,629)
|
Less: Core FFO
attributable to noncontrolling interest(1)
|
(4,823)
|
|
(4,169)
|
|
(9,632)
|
|
(7,962)
|
Less: Core FFO
attributable to participating securities(2)
|
(452)
|
|
(311)
|
|
(877)
|
|
(607)
|
Company share of
Core FFO
|
$
108,419
|
|
$
81,671
|
|
$
211,079
|
|
$
158,301
|
|
|
|
|
|
|
|
|
Company share of Core
FFO per common share – basic
|
$
0.54
|
|
$
0.50
|
|
$
1.07
|
|
$
0.97
|
Company share of Core
FFO per common share – diluted
|
$
0.54
|
|
$
0.49
|
|
$
1.06
|
|
$
0.97
|
|
|
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding – basic
|
200,611
|
|
164,896
|
|
198,003
|
|
162,774
|
Weighted-average shares
of common stock outstanding – diluted
|
200,667
|
|
165,201
|
|
198,238
|
|
163,136
|
|
|
(1)
|
Noncontrolling
interests relate to interests in the Company's operating
partnership, represented by common units and preferred units
(Series 1, 2 & 3 CPOP units) of partnership interests in
the operating partnership that are owned by unit holders other than
the Company.
|
(2)
|
Participating
securities include unvested shares of restricted stock, unvested
LTIP units and unvested performance units.
|
(3)
|
Reflects the write-off
of the portion of a below-market lease intangible attributable to a
below-market fixed rate renewal option that was not exercised due
to the termination of the lease at the end of the initial lease
term.
|
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SOURCE Rexford Industrial Realty, Inc.