Rexford Industrial Realty (REXR) 14 Feb 182017 Q4 Earnings call transcript

Greetings, and welcome to Rexford Industrial Realty Fourth Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode, and a brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Steve Swett. Thank you. ahead. go Please

to Industrial’s like for us joining We quarter thank XXXX Rexford fourth earnings for would you conference call.

Securities the in posted and your forward-looking package at www.rexfordindustrial.com. In XXXX. closed, answers Investor Relations our to to press today’s the of our yesterday the as Litigation distributed statements, addition website on after results we Reform in have contain additional call, a questions with supplemental On Private may section quarterly Act defined details on release market management’s remarks

statements the similar Forward-looking or expects, use words such and seeks, are plans, should, predicts words may, such expressions. estimates, believes, of variations usually identified of potential, will, by as intends, projects, anticipates,

may Examples results discussed or cause from those Forward-looking operating forward-looking to of differ actual to address statements that that are to today. matters include guidance. income subject revenue, those statements financial related uncertainties risks and

current to in the Industrial encourage discussions As filings represent Rexford the more contained these assumes a related in SEC. the with statements Company’s estimates. forward-looking detailed to obligation management’s forward-looking no future. to any review statements statements forward-looking the listeners reminder, We update

some call questions. then investors. Adeel the Officers, an conference information Officer, yesterday together of your to measures. the believes will presented Chief In Michael represents Schwimmer which useful financial and Howard we call call is financial by explanation Company and present reconciliations They such Company’s and website, with package, Rexford Khan. remarks, Company’s GAAP afternoon, released supplemental open non-GAAP measures and financial addition, why earnings appropriate information Co-Chief for make Frankel on were Today’s and measures non-GAAP are hosted release on will certain the of Industrial’s Executive are this prepared available the to the Financial

Michael. call to the turn I’ll Now, over

another of for follow Thank our will with then with fourth financial our an summary overview and Howard call. welcome for year exceptional begin will will results. Rexford financial Adeel to provide will activity. transaction was more operating results on a and quarter our you. for guidance our Industrial’s earnings Rexford our I XXXX introduce XXXX and markets of and details shareholders. XXXX. And

In strong on grew in California XX.X Our partially million We located by locations, acquired we stand Southern portfolio our million $XX out. focus dispositions. singular of to alone, industrial XX% are square value infill XXXX of million creation prime, growth feet. and which funded through $XXX high-demand property

impact is by NOI transactions about share cash higher rental team environment. cost, similar XXXX, major today’s core a our During year, XX% marketed completed generating totaling lease-up revenue feet. and by than tenant projects, perspective, XXX XXX,XXX weighted From by points an to basis growing Company the FFO have average economy, and opportunity And highest yield repositioning unlevered as in target we square our are shorter operating expansion, market, XX%. of within regard to and mile built With fundamentals ecommerce our we further the see from to last levels of with grow. distribution seen platform continue in time. careers demand out, long X.X% renovation of economic of on of essentially the we due These projects quality, continues margin total we at our grew the the which in and strong demands delivery XX%,

market. occupancy a high. foreseeable experience is our Southern than replaced converted alternative core to And continue demand or at markets as rent industrial California our spreads future persisting to through imbalance Consequently, net product supply new an uses is supply infill removed can high the see yes, continue construction. all-time the we more levels be existing at into in of reduction space overall in rent Our historically our and

excluding million, $XX We XX% increase achieved results. FFO a was prior of Now XX% represents basis, of over year which cash by quarter from quarter. year-over-year. GAAP increase on from property to after our a share a NOI and the impact same by FFO X.X% a increased turning X% property $X.XX, the property NOI Core a X.X% share core repositioning, and same basis lease-up per which On fourth NOI X.X%. increased and basis is GAAP increased Company the cash of on

signed feet. square During X.X XXX the million quarter, approximately we leases for

were on XX.X% Our cash leasing GAAP and leases, GAAP the a from basis on XXX in new spreads basis-point XX.X% at a property XX.X% XX.X%. stabilized our On We occupancy were year. prior a year-end, achieved increase and XX.X% spreads were cash same portfolio basis. spreads

of acquisitions an $XX disposition. quarter eight completed was which million, also during approximately for partially the million of price We $XXX by aggregate purchase funded

the of total strong in increase are initial of performance, $X.XX offering. result XX% increase the announce cash pleased and the dividend This to a we to our As share. Company’s quarterly our growth now per dividend XXXX public since XX% our represents in

into Company growth foreseeable the future. positioned strong for ahead, the embedded look we As is internal

Our any about current portfolio, additional add driven the XX XX has NOI over the to to the potential by without of acquisition, next months, factors. several considering growth benefit XX%

First, repositioning expected the NOI. $XX.X completion of is and generate lease-up additional million of our to properties and

XX% the market with to contribute of Second, million leases incremental million X.X XXXX rolling be square of current are in-place estimated feet about $X.X rent below to for NOI. projected

of years. all NOI. estimated year of next is is in contribute full expected year nearly of fourth cash over the acquisitions leases X% $X.X of to bump earlier embedded add the during rate additional Separately, rental $X.X quarter an to million and the annualized this million few rate run our XXXX Third, completed the of rent

couldn’t As our we long-term more and be prospects. Company’s near ahead, excited about we look

square the million stages early in our substantially to growth. Although we the XX.X of we’ve feet, are grown portfolio still

performance. model, X potential an located exceptionally us. and business throughout value-add feet billion upon this our our is prime square are we With continued product the investment capitalize to to And And to our very Rexford sheet, thank the in balance built XXXX fact, represents for drive the low over opportunity we’re value before providing creation infill XXXX, and well we to creation In occur. they our prior should growth market market target support. disruptions, leveraged opportunities of their value pleased flexible committed any positioned deep focused mind, with markets cycle. community of with in Again,

opportunities for We positioned a the IPO, ourselves, sector-leading thought set And thank and the high very with us returns for we pleased tremendous to Company on is it XXXX your today. well I’m remain Although, largest California. stockholder and capitalizing believe Southern total bar industrial we been as in infill to We’d like hard Howard. markets the our with in work, that, entire over has turn performance. XXXX never to laser-focused the before Rexford since and nation’s the and team most in acknowledge call after also dedication, as

transaction And then from our joining us recent everyone discuss Michael. our start strong. CBRE thank our markets, With remain Thanks, today. regard with utilizing I’ll data update to and you fundamentals a for brief markets, activity. on extremely

Our which market Inland with and target XXXX of infill the closed industrial near X.X% weighted XX.X% occupancy excludes Southern California average asking capacity Empire, on increased basis. Eastern a rents

poised rate strong and growth available the ahead. the demand, is market With believe of continued rental for we sustaining strong space lack

Turning to transaction activity.

volume opportunities these a acquisitions X.X In value-add On totaling XX% million rents the our acquired square infill us within of weighted average be project Southern of estimated California below to feet of we completion of have about million, and market, yield available rolling aggregate, with XXXX, initial we XX market target in-place the return on X.X%. X.X%. improvement During stabilized cost to rents of for indicative $XXX properties markets.

to on investment moving recent Now, activity.

industrial During the fourth eight million quarter, and acquisitions value-add completed totaling $XXX we properties. core both of

continued service immediately fully sold with feet premium submarket $XX.X Bay Figueroa a market and sale the rent. of in into Two South four-building leased below is market to is is we state Los used the internal unlevered on and acquisition the on better $XX.X West In part located Avenue and Site closed Ontario, are located to buildings we Rivera, square-foot a with a submarket XX,XXX Bay the approximately November, improved million. We allowing In square-foot an square exchange. yard of a square-foot the We’ll leased Eucalyptus Both X.X%. a Western platform approximately yields. of initial Street, at facility LAX, total mid-XXXX, the million. South X.X%. square Angeles upon XXX,XXX a approximately in asset at retenanting, located acquired property, at renovate in through two building vacant The Empire research million. Street located stabilize or proceeds to renewal recently ideally constructed Slauson our yield and access broker Pico immediately XX,XXX stabilized submarket. yield of X-acre portfolio a square-foot cash in is at part Avenue, at mile and is for below for retenanting. art Angeles, to Avenue properties short-term building for opportunities, is a achieve located $X each industrial an of rents XXX% provides leased building us the renewal Central Brickell project and a gain Los Avenue, off-market return XX-foot air contractor December, of or In single-tenant XXXX West X%. the totaling and Los XX% South XXX% acquisitions cost this as this Angeles. Los to company Also, a Upon in is October, than XX,XXX a feet X% building, and Rockefeller The We $X.X X.X% acquisition million. leased October, market. to officially property. XXX,XXX for a of cross-dock from return purchased relationships FedEx in properties the both for basis Rexford leverage industrial are building acquired our ecommerce and Angeles freight utilize projected a deep single-tenant totaling leased funded publicly of clear lease modernize to XX,XXX current single-tenant substantially delivery to landsite a traded we initial on long-term value-add to last Inland of XX% submarket are equity flowing the

an a and yield is the Subsequent market. and achieve to or industrial of square yield to Avenue, a about tenant retenanting, Angeles XXX% leased square XX% XXX,XXX which renewal begin as a Way, lease stabilized functional cosmetic The this fourth noncore square million. XX-tenant renewal is of is XXX,XXX submarket expect a and below West to The entrenched containing a initial property located renovations of year. building to a property, in XXXX submarket. basis property, feet providing functional included located than completing yield on XXXX. building acquired to rents capture Further, long-term Monarch below a a XX% additional in rental accretion. Empire Street, Los X.X% achieving we X.X%, containing and a leased enhancements, lease funded Norton in-place The in are County on management located leased single-tenant in The to at asset expect proceeds an XXX,XXX yield. initial submarket. Hanan roll to industrial this of foot July X% The a portfolio for initial from estimated be the projected and plan fully quarter-end, with Property we estimated acquisition rents, West after a X.X% on sale to yield Central of be is market, single-tenant rate Orange portfolio to leases is We more was we two-building X.X%. cosmetic in increase Inland populated in higher the the feet, densely XXX% stabilized $XX.X the also

program. our to repositioning Turning property

expected of physical, We to and an to implementing leasing begin We and functional projected weighted square a X.X% of flow on average value XXX,XXX space and improvements. feet currently yield in generate drive cash we an to expect incremental repositioning XXXX operating creation continue that have basis. deliver by stabilized

investments have of a with robust under we or million Additionally, of acquisition LOI $XXX opportunities pipeline new contract.

believe we have for consolidator proprietary better methodologies are the our research-driven truly excited value-add markets, differentiator. and We in continue the our now enter infill we’re turn year sourcing and XXXX a and strong positioned I’ll be Adeel. to to ever over before, call We than a opportunity ahead. to expertise

Thank you, our Howard. results. operating Beginning with

income million the $X.XX for to This net stockholders XXXX, quarter share $XX.X approximately diluted or $X.X share. fully fourth the $X.XX of XXXX. per quarter diluted common was to million fully or fourth compares attributable per For

same $X.XX XX% was On FFO the compared Company months For compared interest increased share portfolio basis, activity, FFO December of the $XX months to core ended XXXX, per quarter three strong share recorded of XX, partially Company in months a and to growth, in $X.XX per to past higher fully three due was increase diluted and million share for XX share, diluted as the was expense completed the a Core acquisition September of share per FFO million offset higher same fully share per share XX, which ended XXXX. core count. by diluted $XX XXXX. property

Rexford share income common the or net net million as For common approximately attributable share diluted fully diluted XXXX. $XX.X XXXX, reported per stockholders full $XX.X to year to million $X.XX fully or attributable stockholders $X.XX per to of of compared income for

quarter, full of share reported Company For XXXX. a FFO NOI $X.XX million fourth On XXXX, compared year million of full $XX.X to X%. same core Rexford diluted Company FFO was Same-property to the XXXX per million share, compared $XX.X reported $XX.X year XX, fully XXXX. million quarter for year of per in compared to increase of $X.XX increase diluted XXXX the per an in the fully $XX.X was share ended share core which share in December a of basis, X.X%

Our On NOI driven due NOI fourth a same of in GAAP a items. basis, to maintenance increased basis. cash by increased increase property a year-over-year. NOI X.X% by expenses, on and rental revenue X.X% an on Net cash contribution and timing total in XXXX X.X% property X.X% repositioning, mainly operating from property same was and income certain property same properties X.X% basis quarter increase

a of X.X% repositioning, revenue cash X.X% NOI in a property property and the and on from driven compared NOI Net For increased XXXX. basis. basis On operating X% contribution cash and property to GAAP properties increase X.X%, same same property XXXX, expenses. the same by on by full-year basis, increase a X.X% increased in increased NOI an XXXX X.X%

Turning financing and now to our balance activity. sheet

in maintain provides for healthy Redeemable and of November, proceeds and million. with beyond. capital, balance net our XXXX diversified $XX.X funding which B to continue Cumulative plan we with priced Preferred a approximately of sheet Stock ample sources us Series In We growth received our

Additionally, ATM we elected utilize $XXX million our to program.

approximately shares to yielded stock XXX,XXX approximately During of at $XX.X per the issued price quarter, net average which we $XX.XX proceeds weighted common Rexford million. fourth of of share, a

ended $XXX million quarter under approximately with million result cash, activity, ATM program. million a of our the this availability As facility of we $XXX and credit $XXX $XXX $X.X million of on available available million

the very in maturities the on remain cash dividend, of over a we dividend quarter Finally, in XXXX, our just With February increase we our have first strong and March of regard $X.XX to XX% dividend, payable and and position. on Directors per record liquidity $XX Board no XXth, XXXX. on of XXXX to April million debt XX, XXXX, share XXXX stock unitholders prior declared in a for of XX, a common

our stock Additionally, approximately per cash to stockholders preferred payable the XXXX. XXXX our XXXX Directors March quarter a $X.XX of preferred March share at Board dividend declared for of XX, first XX, of on

our to I’d XXXX. Finally, introduce for like outlook

include not as of been infill our to dispositions yet only acquisitions, have today any portfolio transactions, and or for capital refers which guidance assumptions Our announced. does not

we core that not expect to guidance to calculating metric. share FFO include achieve other a For range Please $X.XX $X.XX Company in per costs this of as core of excluded for XXXX, costs typically or within note our does FFO share. acquisition a

factors. Our guidance is supported several by

occupancy within XX% within a a property year-end same XX.X% stabilized to We property occupancy of expect range to of and year-end XX%. XX% same range

consolidated our property NOI note December square XXXX. NOI properties XX for stabilized of same XXXX for XX.X% approximately million growth X% Please of with representing year our portfolio aggregate X% expect and feet, footage. at to was to X.X%. We of square the same achieve portfolio X% XXX of occupied same year growth This XX% the property to property an pool that comprises XX.X

Operator? we anticipate million about non-cash completes lines For open G&A, That year a questions. million our compensation. $XX of that to $XX remarks. prepared any million including take full the With range equity of to we’ll $X.X

from Fargo. comes Blaine Our your ahead go with the with [Operator Heck Instructions] question line first question. Please of Wells

out Thanks. there. Good morning

Just with out a on guidance. wanted start clarification to

Is think, are level NOI GAAP rent think Where those are when mark-to-market the XXXX going implied those you assuming guidance? Michael in And you’re on a cash spreads. are spreads drivers. I of mentioned growth I’m basis? that the through XX% that do

guidance. Adeel. XXXX years, getting for our what projections his into those Blaine. GAAP Actually, it’s two actually Yes. quoted spreads, actually for XX script, to question. the Thanks months, in and Hi, for so the higher the Michael -- it’s are GAAP XX little that’s spreads they’re

from numbers from you So, proxy the little that of not of years. as a to that’s cash our that, that use and a GAAP what’s XXXX And two feeding what back the to numbers -- scale can blend -- because the higher a little perspective, bit guiding the year of we’re of actually are a numbers current guidance. were, kind kind straight are But XX but perspective. into numbers

of and Okay, levels. occupancy stabilized your XX.X%. great. any there wondering hard reading it bit reversion was in levels? or were I same normal is driving correctly, it’s decrease guys And a implies a just current you general if Obviously, to of But, expect little to kind move-outs if that more from known I’m store maintain were towards that it guidance occupancy

This I’ll is Adeel, take question the Yes. again. first.

is reminder, square pool XX.X of a reset, consolidated about feet did XX% that it’s same the X/X/XX, portfolio. just So, million our which effectively

the there. So, reference number we basis year did a that’s on XX.X. to at end stabilized And one point

feet could and in range, XX% XX%. store. totality it’s about still that So, million roughly on Naturally, X.X at of the square same year expiring the be about upper end there’s of this

guidance. And year. our this guidance year, move gives turn us similar the is put we of just some to year. ability the some as sort that tighten last initial through full to the So, And for in we projections

move perspective we think of a for in I forward terms the conservative those leases. rolling it’s year more in just as So,

and Blaine, in our this this really I expirations. is that more might terms is Howard. that blocking year about of add to tackling

is at expiration a size, they only the square XXX,XXX only expirations, largest Our feet. about XXX,XXX you total And look square top XX if feet. in

So, it’s really just blocking tackling. and

agreeing comment recently, measurements? discussion? helpful. guys kept I question, so, some industrial from to Last guess, Can you I kind That’s it guys the think, in Okay. of standardized non-GAAP same very included whether for of majority the the just if adopted metrics. you guidelines And that your peers were REIT was you what on

Blaine, it’s Adeel, again.

what we So, understanding, -- say discussions. and line the a as we out our we being fairly with clarity to are up thing already But, in is to with said, That doing. of part group almost -- policies are supplemental, very clear were disclosures community. think not message strive one can I that taken we transparent and the we’ve a investor are came our put in always provide that largely

Hey, Blaine. Hey, it’s Mike.

the Just tell doing. to from but results, and will because QX to pleased we’ve detail add full the was to know we we already what is what very been models yet, essentially I that, it don’t that come see, with can

it’s great that reaffirmation disclosure. So, and procedures policies Rexford’s with to a respect of

question Korchman is with the Citi. with question. Manny line of from next Our Please your go ahead

Adeel, trajectory to in guidance where do higher but give we maybe color ended load how You XXXX? stick a some XQ, the give on if can year, of compare that you the just the throughout second, we the you G&A year? a for of then guidance rest to us usually

set Manny, terms pace typically, does think, bit the rate. little of I run a Well, QX in

XXXX at for $X.XX. first the ended $X.XX at the how and looked the we at FFO then year the of year we the look a quarter our beginning year, reported how take you If with ended versus

plateau over of set a seen years. have two in we the So, last that terms does new what

good thing of this And about So, minds. on kind of to that’s just year initial consolidated back our That we feet square the in kind a X.X roll this being of million said, keep the a have of is guidance obviously. basis.

so and some put and probability rates in so of terms sort forth. of have You on and to of level retention renewal

that replacement bit matter. when back have play little those that rents back for a come does rents a or into renewal So play as timing impact of into to come

anything different year the in past have past than do two what of that lag. years experienced you bit a little matter. we’ve that’s So, And for not or

and also the in we’ve consistent. certainly one G&A one all main we’ve the on out been that process into head terms So, right, the beyond, in coming of And G&A, it’s the the thing state third of of and executive were last in out an stated this else from year basically; would grants on. very you terms But is terms should about XXXX before that the in that step cycling the G&A it XXXX the on be be I cycling and is that point thing should process XXXX. steady beginning officers, we equal, would granted of increase. -- did back that point

So, you color. gives that some

comfortable full We full basis, you guidance. on have during see basis, guided can on years. the the fluctuations year the But the with remain year obviously, we

So, if been then, much re-lease And the the has space you versus two, to question more that four where much or you downtime or don’t seven or and think of much of or eight pool months that it? about how how how retain, six guess, to redevelopment going is three is or of intend months…? it trying I the to

here. Adeel again, So,

the and square to that’s about From period. expiring enter there’s also come Again, on been same all that’s pool, going repositioning listed dates been disclosed to Naturally in of out And potentially the XXX,XXX of those the periods is on period. the the there foot, square our currently disclosed all square repositioning have some of that’s target XXXX in We going feet terms get page, of about repositioning completion feet lease-up could have footage within page and XXX,XXX is it in time. there timing. into repositioning time XXXX. and repositioning be square delivered dates

already bake guidance year. into in go numbers our for and that the of you the full that And can year. So, overall back happen question that baked factor initial to during terms to what in important that’s is guidance does asked and certainly been to the the the an

question. with comes of questions Feldman Please with America. the from Bank of your ahead line go Jamie next Our

see rates thank you was certainly, maybe Great, in markets. can talk months about year. And but cap you kind I then, about quarter, what acquisition tie just I about kind over that like guidance, yields thinking but you. your six into, does to can the there? your And of the hoping get thinking how in stuff done out think what you have have you know of what even guess, don’t a you pipeline? in I that’s

Howard. we’ve Class Hi, I If seen tremendous a in range. all. change X the have rate Jamie. It’s Interest maybe don’t rates. B way we’ve in one is not Class moved think think Yes. sub of type little increases, them still trading or the products. so a anything, another cap seen far X in seen we’ve or tightening bit A I at

think, how off And as lot we an can as of the million not of how year, are forward really asset. you, stabilize eight of transactions. focused market going accomplish we in nine what under tell an our now. we how we Rexford, far results research, actually LOI $XXX contract by rate is a and on a off had transactions. active properties, or acquisitions mentioned and we I As And buyer; That’s is of market see we example is always those of right the a our cap that we’re team

we’ll And a well of core our we And is value-add So, right year. now. be see lot expect this buying results products. mission some and working to good

yield, the the you at it’s that to if in cost. high just X% looking in total the look It’s of and Jamie. on at mid want repositioning the range, if range; last add yield year, I hopper, to look results, that X% you Michael. mid-X to what’s pace we were the and at unlevered Hey,

we question, what the really to on of haven’t achieve, that that second we’re any part I in way assets buying. was on the So, a impact material your think seen we’re able

efforts to marketed through rightly to that or we make oftentimes again, which value, create transaction. so, And off identify that goes to opportunities the market are

this growth, year? about do what thoughts how versus growth underwrite, cap your rent like you as And rent are last rate you maybe and think today on exit Okay. time

as range the exit taken in to transactions. as that achieving on cap And higher that We’ve what basis-point always I Well, than be example the underwritten cap in Michael entry market, of exit rates, far we’ll as it, we’ve achieve are rates. our an our value-add to rates far always said rates cap cap conservative view. able point XXX as XXX think, we’re

If you at of stabilized And on we X.X% entry full-year aggregate the XX% X.X%. mentioned we’re those vacancy. those cap look rent. entered at were in below point including the we and about acquisitions, Those rates all in market about bought the assets also about

numbers So, the I any and more don’t at think the I you’ve way any comfortable moment. little will can’t what or core expect we’re past, a changes those seen year, But one we in big value-add, pretty far don’t sometimes -- buy one we forward, skew we predict a another. in or with the and as as going

make X.X% did markets rents just in are Okay. up And to sure, XXXX? all across say your asking you

X.X the we really number. markets excluding out foot focus infill that Yes, Inland the East. words, were square Those market, over Empire that correct is of little that billion other on; billion square feet, X the in

year And this something do you could in think XXXX? you similar see

highest Well, the changed I market. see growth don’t you something make we in new achieve anything achieve we think spreads think, right that really active and be now. rents won’t us is quarter and see saw moment, us similar on that rent overall type of in the in the team at And our fourth leasing very the in our that’s the to able to marketplace

with Stifel. your Our Please questions. proceed next Guinee John questions from of come line with the

great, you. Great, thank

like X.X-acre when about sense looks a coverage, a me It transaction of to Just seems questions lot me. detailed square-foot to site building couple XX% bought was XX,XXX Slauson to on activity. your make Avenue, the you

kind a of lease, your of forecast flying do walk of rationalize brother couple $XXX long-term you’re the to What it you -- trying town into when on cap, foot before how some and the like sounds the and you buying a However, Eucalyptus, through that? FedEx deals almost can us weekend. buy of

Sure.

For was ground. figure conceived that mind over at of the a there stadium coming one, that building be originally about the land And value foot out when cost. buying replacement back building was was that going we We about a keep in there to $XXX going a really knew nobody are years, three now. probably

So, really and here. their changed. about is want tenant’s facility it the ecommerce an other standpoint, the they that today closing marketplace And delivery FedEx that’s and to is, LA from aspect down replacing West it completely interesting

west So, and to handle a price this if really you’ll LA XX side air around within minutes market, you freight it But, look in their is Angeles the Los of closest that assets. per foot, are square line is much as estate building Segundo, can from markets that this facility the the can this that quality actually with needs deliver priced away lower find right to in building, real from El West XX well.

the aspect those this that we XXXX assets, we So, of a transaction. building dollars a to vacant other while as of like for on had one we in it of was were basis. the couple been equity on and a the long-term And sell which the then, building a was, able used market

Michael comes the ahead [Operator Instructions] Our with of JPMorgan. go Please question question. next line your Mueller from with

Hi. Couple of questions.

going through or along the all, platform Michael, at lines. up you potentially when saying those the with were remarks, I think, wrapped something of essentially First out beginning, was built something you your

still yet have to what to be built just out? of So, aspects I’m curious it as

appreciate platform, we Hey, question. Yes, are you; hear I mean, fully offices Michael. say I built meaning out, the to our physical when regional the our established. fully presence, regional Great from

any be overall next feet. operational many we that the Southern to It’s higher terribly property of headcount, And the with end add us not material accounting terms see in material years over you’ll impacts, essentially we a mean, terms When out, or regard add two two and establishing scales of but person. And I or us from probably Company. scales are offices an the built more as I of person complexion in that’ll operational an add executive the see in more occasional don’t California. to from manager well. fully very, have perspective of very won’t millions well, You headcount, regional people that square we

in just leasing both can Adeel, buckets, relative expectations what through thinking CapEx, TIs for for you’re about was of ‘XX wondering, CapEx terms you to go then, about ‘XX? and talk And I commissions,

reported, and I’ll bucket the I it some starting that from the take focus with CapEx, the was full year I’ll add XXXX and there. So, on off color biggest of think, kind

And So, about efforts of primarily XX% year the talking we another and CapEx. been about non-recurring throughout $XX.X down due property about that to repositioning spent bought then was work in to the good there’s but property. we’ve million repositioning was due at underwritten solid from time other the bring XX% didn’t we X% the it a to all the perspective, measured that that

forward those colors. you basis, on a From numbers that So, $X.XX it’s lower you clearly if a different. year. look dramatically gives than that the I efforts TI have year, perspective, go don’t some last full And repositioning think and for that’s

point really out us I not XX-year industrial necessarily at being and full you I don’t chunk think about numbers Western this spend. leased that at have for $X.X was player, maybe lot. which common million change there. to a really contributed primarily a that’s And Again, $X.XX will number, asset, were about trend whole year $X.XX. terms a going lease big a a we year, higher the to longer complexion cost commission very a So, a is Leasing exclude that XXXXX bit that repositioning did we’re in one lease. little number of of have if lease to

last tick the than also in that’s complexion period. terms a before, time is lease due or the year higher that year to of So, little but the

from question your with with go is ahead questions. follow-up Please the Heck next a of Blaine Wells line Our Fargo.

are add talked of bucket, is XXX million just you you couple and of mix Howard, between Can about and LOI core deals the or contracts. give under deals more that a little and that what color more. guess a that on I Just there? us bit value

a don’t they lot are not Well, mainly may we in feel them transactions are or report closed due close. we really contract, on of the some diligence, because until typically,

you just newer there’s there’s of to going most say, are we mention we’d high-quality what a tell in add here. it’s market buildings really value to buy. transactions, mostly couple briefly, mean, going they of that down. there’s generally part, transactions, close. details when at they more I I But, pin give mix So, the hard to they’re to really mean, them favorable prefer for I’d But, I really as off stabilize we’re think we yields. But,

to And the put then, the in were how specific agreement. can rates changed place. when since like place you fixed? in was you. amended put swaps Obviously, Adeel, recently. XXXX in versus But, up term just it they was kind if that to the one in gone swaps on those economics were think, And agreement $XXX million you be facility? XXXX? loan forward will swap of put talk with the place have But, talk Can you about in just the through your looks I maybe have

go -- the million, -- in $XXX for effective on today, So, becomes Blaine, and swaps remaining $XXX the effective effective XXth, million August. and the actually, becomes

the -- being said, reducing entire after only I fixed caveat rate, only will entirely on under company’s mean portfolio. floating debt. bps the what was only facility have and be rate peers. is credit we so for the -- any the benefiting that all That amended that’s the swapped years The note remainder So essentially essentially the the five the that borrowings or base we’re where XX rate -- by of we by on that

from or variable fixed swapped facility. benefits we’re economic versus not essentially But, all bottom-line. XXX% credit the just debt, the that’s to fixed, think down rate I floating So, including

a till but really perspective, coming from up we’re we really ask you really, didn’t situation. have in don’t maturity So, XXXX. a And anything this I good -- really know,

So, really, nice the a sitting Company is really position. in

the line go coming with And from our of Jefferies. is Jon Peterson Please next ahead. question

you. Thank

actually beyond looking So, on per guess, that mix those the XXXX, over I and are expiration it is the years. years you you easier the the lower or comps of guys, is, square getting at if between actually and what I’m rent about for what few rent? out I in XXXX getting leasing of in there next spreads, curious was can is as your is markets you lower a thinking lease with more look at it’s comment mix XXXX. XXXX than schedule foot,

the I and discernible over we terms It’s trend those think probably a of lease leases just more reflection when in recent you’ll have a notice put average probably that our less gotten quarters, place. And of longer.

So, was lease today. if you materially look that lower see two into place you probably than three put are out, meaning, in rates were the years to near-term, they product when

more of not than but there’s line trend a that. bit a probably So, much little

are questions line Capital of next with Chris question. with from proceed Our Lucas the One. Please your

guys. Hi,

Just quick ones. two

guidance? of the that On guidance, Adeel, as you part of retention built-in your a sort what tenant guys have

full we use We quarters, that out, that time visibility. we the into typically happened itself right? the factor I XX probability in least rate again, think down our I’ve these which start, tends the then And itself when earlier weighted of forward what’s is couple -- have move essentially as number because pointed appropriate over quarters, last out quarters, I out at retention XX, into guidance. more XXXX, to But models that the think year tighten what is to to we we and relative XX-XX, few

industry which from standard. it, model probably conservative we is how pretty an essentially that’s So

Okay.

is here. This Michael

bottoms business very a we’re we up; Just look very our we’re at reminder, very, when as Chris, internally, granular.

We’re of how do in we as looking our space. likelihood at element is We the that necessary of level we value the in that retenanting Rexford, retention every or a assessing key highest don’t we single create can space look actually can at at in And measure. what look space, at renewing. business

And tenant. tenant an Rexford times, but to who a to stay, higher so, much you would might often moving roll otherwise find where see opportunity that we out tenants paying

So, of business that’s a model. our big piece

I in conversations tell, then, -- regular guess, guys And your market. just I but great. and property owners with to you Okay, know maybe too have early

as them curious thinking any ownership to whether as tax two in people the any the to change perspectives? how had it made Either long-term to the about with policy? from or have relates those to their Just you rising either rates changes conversations changes are recent of

liabilities. terms actually and think reduced tax Hi, ownership positive the issues of from Howard. Chris; changes assets; really I create entities don’t tax the of changes it’s they’re the any both in

that getting activity the activity generally slow, of February. gates end changes $XXX a those quarter said, have positive. for Usually, don’t our the from just we are of million coming the January, over that So, But kind first hangover the or mentioned nine us is LOI We at typically out today, we interesting contract. fairly in had under fairly see it’s transactions I all the of year.

are for of that have do the cycle. it’s there an transacting we But, partnerships is the how of part in a issue smaller perception am in that marketplace. from of where the receptiveness could is I well interest laws, our opportunity maybe pointing the be and from And to markets. lot particular what individuals perhaps terms of of receptiveness lot all we change there’s So, of their one the us any tax saying or a in aside from in boding view

floor the you. answer-session. back to This like management comments. turn question-and I the Thank would concludes to closing for

continued Industrial, very happy On for and everybody Day. today Thank everybody Rexford a and your Valentine’s behalf thank want for team listening I entire to at support the of wish you.

our Thank conference. concludes you. This

your and your You at disconnect for participation. lines you this may thank time