Rexford Industrial Realty (REXR) 2 Nov 192019 Q3 Earnings call transcript

Greetings. And welcome to the Rexford Industrial Realty Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]

conference recorded. this reminder, a is being As It Steve Swett my pleasure your host, to introduce of is now ICR. Thank you, sir.

You may begin.

We Rexford Industrial’s call. joining us XXXX for conference thank earnings third you quarter for

supplemental distributed In to market posted Investor at our the section release www.rexfordindustrial.com. package addition yesterday the in press close, after we on website Relations a

On forward-looking Reform in defined Securities Litigation statements Act management’s XXXX. the and to answers remarks call, as today’s your contain of questions Private

uncertainties that are cause subject Forward-looking that statements and from today. may results risks discussed address differ to matters actual to those

about you in obligation statements information SEC to XX-K more filings. these review other forward-looking any the For risk future. factors, encourage and no update to we Rexford assumes Industrial our

measures. In addition, information non-GAAP on certain presented this call financial represents

package an and reconciliations financial GAAP non-GAAP such release explanation why are earnings useful investors. and measures Our supplemental to of present

hosted prepared Co-Chief Howard Adeel Today’s Rexford some make Schwimmer; conference then for the your with questions. call Officers, and Khan. Chief together by call Financial Officer, we will remarks Michael will Frankel open is Industrial’s and They Executive

will over turn call to the Michael. I Now,

to welcome Rexford third earnings call. quarter And you. Thank XXXX Industrial’s

We Rexford as extremely operating of both strength the as pleased the California which third the with ongoing performance, are quarter well infill within our reflects market. focus platform, Southern Industrial our industrial

results, been has financial and team guidance. results all of quarter and an Adeel our on perspective, an on a the terms it’s In tremendous cylinders. far. But been elaborate exceptional year will so firing operational from

million approximately We signed XX leases square feet. X for

GAAP portfolio a quarter, end And spreads were occupied. the cash our the a basis Our a leasing our XX.X% On and basis. of stabilized were new GAAP XX.X% basis on on at leases, same-property cash XX.X% and a was on XX.X% basis. spreads XX.X% on

of our originations closed We completed XX% acquisitions investment platform. transactions, $XXX leveraging through lightly volume including of is million the quarter proprietary million, transactions in with year’s off-market approximately or this investments marketed our and end, after year-to-date acquired quarter $XXX

yields, will Further, our continue completions upon Howard which shortly. generate our value-add acquisitions, market strong repositioning from as our elaborate well as work cash to above

sharpest the near unique. As our the Rexford key we seems diminishing supply begin industrial year, market and with somewhat within is in industrial unique opportunity constrained located scarce performance Rexford’s infill of where industrial with, of supply elements exceptionally largest reflect extremely briefly barrier the market, of over high nation, REIT. time. it a is the the focus the XXX% property focus any on submarket California end appropriate few is is that generally our the industrial make To the of and Rexford on opportunity to the Southern by portfolio

tenant infill magnified demand is are within this by long-term principally imbalance, values. fundamentals markets target supply/demand increasing our which land by urban driven Key

be compared of market through when more cycles non-infill to decades also markets. economic this or that tends to experience demonstrated secondary industrial Our have stable

Further, from consumption and timeframes largest and U.S. California in industrial as no shorter the nation’s delivery benefit growth is demand comprising for market. the the to like first Southern e-commerce the distribution, of last positioned largest infill zone other of mile

to proximity closer and and centers. exclusively many submarkets business Rexford’s is among in warehouses reasons consumers are portfolio for population demand in infill one increased driving that are these businesses, dynamics These of focused

which lower big over representative XXX,XXX are growth square five-year opposed rent of non-infill locations Rexford’s focus. feet, sized Southern which California represent sized below just the of infill that rate the warehouses square for for study markets XX% CBRE prior over released rental growth to over as that same warehouses California of more Southern a fact, research the In years found within XX% larger period much box are above five XXX,XXX totaled XX% feet, not

California to construct comprised our creative of However, investing, infill key Southern value-add approach to proprietary with enabling portfolio to is to platform originations locations and ability premier Rexford’s superior us functionality. strategy within our leverage a

when their them reposition outcompete to acquire those enable renovate Consequently, properties within vintage to and proactively submarkets. assets, generally we we

result a of market. are nation’s constructing irreplaceable approach, the we supply As superior an this largest constrained portfolio quality within of

proprietary to driven shareholders. of to conveys our significant benefits company a begin volume high acquisition to methodology with, the originations our our investments. platform by and lightly or ability catalyze originations Rexford’s is off-market accretive, and volume To marketed

a the longer NAV mandate market we cycle. Consequently, irrespective on new our and of term lift per to the to lift successfully acquisitions over with incorporate executing to are generate medium curate to to portfolio capacity the FFO capital and share

execute more compared opportunities on importantly, to and and substantially investment fully on transactions. generating platform higher of Second originations stabilized our cash marketed to similar to capable value-add and returns as identify us enables investment

driven Consequently, merely driven by somewhat market a is by also of is throughout our of our value-add over unique, at growth our time. significant is NOI continuous Rexford, in-place growth Therefore, not of leases. execution growth volume the portfolio it NOI mark-to-market as or improvements profile rent

our growth. value-add of irrespective through growth NOI market generate to positioned work are We rent

our at only over of identify SoCal billion infill accretive over substantial to ability and prior within currently into built share market just future. our markets, to and invest in leverage Rexford’s foreseeable to With is platform X% target originations feet, XXXX market X with the the value-add square opportunities our

as for since grown every positioned growth and As full on XX% a have quarter IPO a given year-over-year magnitude XXXX prospects. we go-forward And is basis, of NOI our result, growth accretive Rexford internal a positioned historical growth consolidated our also are external basis. on the basis, company. a we an by a average on uniquely On

differentiator Rexford great our your greatest Rexford’s and building to dedication and team Finally, to commitment of our for company. we like one outstanding our is thank staff each

over now I to Howard. call very to turn the pleased am

us that remains rents and investor infill owners exceptionally for benefiting Southern you strong, imbalance a drive Thanks, levels industrial today. Michael, thank with occupancy estate. supply/demand and California of to market real The well-located joining everyone continues

weighted months. average markets, at basis a XX which on Inland X% over Empire ended vacancy, second the of Our the Eastern rents past asking the X.X% target with exclude quarter

our we With all estimated feet completed XX.X% these market, regard third square with sites a $XXX million, below to e-commerce broker ones during acquisitions approximately totaling or about mile paved the for XXX,XXX excess Seven be off-market the marketed last in-place aggregate or sourced In is through relationships. these our which XX% in use. for adding and to portfolio. were recent and nine ideal land investment proprietary and lightly to acquisitions transactions parking, coverage of container vehicle quarter, research activity, rents our are low

clear foot and a leased of was In escrow at building tenant site the a Diego total paved yield Central over acquired X for coverage, XX-foot acres with national XX,XXX has only during Eastgate yard on submarket land July, to square XX% we long-term The X.X% large on $X.X building a million. stabilizing in San Drive, cost. a

paved million. a for Commerce We acquired in interest for Rexford-owned Center fee the LA, within submarket Glendale parking land the at a Valley lot the $X San located lease X-acre Fernando

positions value. low facility. in size XXX,XXX just we $XX.X Ana submarket a acres Street, XX East at transaction, to land to we and lease located is LA X.X% a and foot and The building implement land initial yield South loading of August sale leaseback on million Bay acquired logistics add building roll In square value X.X the equivalent plan plan creating reduce for a coverage within add the to

on initial there. square Street, fully an a million. and $X.X increasing We low The a long-term for leased basis site XX,XXX industrial acquired submarket the X.X% in property growing also by and X% yield covers LA is year Bay generates from to foot three Main of South

dock Diego submarket We leased acres acquired Avenida at with land positions Del County within last North clear the foot XX Oro, long-term has facility for and yield leased San of The square XX-foot million. XX.X an XXX,XXX a initial modern paved mile X.X%. and has excess distribution building $XX.X

either nearing lease their renewal the plan entrenched XX,XXX feet land Bellflower existing lease land in market the of buildings stabilized site Boulevard, The acre property LA for of we projected with is expiration tenant for In $XX.X we redevelopment yield the cost to square total a excess and X.X September, or approximately to the acquired redevelopment is lead million. execute site. X%. and Mid-County industrial a substantial on The or renew an

We in acre and short-term leaseback container LA and Highway, yard the enhancements. submarket value-add roll million. lease for following a storage $XX.X trucking X.X a acquired Mid Counties sale We property the the Imperial and in acquired

We the approximately yield total X.X% costs. on at expect property to stabilize

to Parkway, for $XX.X an submarket X.X% is it XXX,XXX is there. XX% South grow square increased Project feet XX% buildings acquired and million. eight market. Storm to year initial building modern We two foot projected XX,XXX leased at Bay XX LA of and the below square industrial yield the from X.X% rents within tenants The XX,XXX contains square in from to estimated complex to feet be

estimated $XX.X for complex multi-tenant Park to market Teller XX% at County XX X.X% yield XXX,XXX Newbury be in initial Finally, million. to below upon of is submarket Ventura foot we acquired within increase XX% to Road, X.X% The tenants September an rents to approximately located leased stabilization. projected the in property and generates square

$XX.X quarter of located to LA complex $XX.X within foot submarket three the XXX,XXX Commerce for end, an completed Subsequent at We acquired yield square industrial million. transactions initial million we Center, a Central about Slauson for X%.

LA million Manville submarket building of in for at a South X.X%. We acquired foot Bay Street, initial XX,XXX $XX.X the square an West yield

a million submarket Point, square initial yield in at Crestmar $X foot Central the acquired an also XX,XXX for X.X%. Diego San We building of

a million in capital. expect sales, and to property and With recycle $X.X pursue end of quarter we we July completed million. opportunistically unlock sales sold asset to to one to for property have $XX.X regard continue $XX to sold and dispositions we million asset Year-to-date, we value subsequent for

completions totaling Turning cost million on to have under We several for projects by future an of with five or X.X%. targeted our feet year feet year-to-date X.X return have currently space repositioning of development XXX,XXX activity, square square we stabilized end. aggregate total

Finally, industry $XXX of of have contract diligence of customary and new of to relationships or currently our leverage subject closing satisfaction we under deep to our as to proprietary acquisitions. research due and our add we LOI completion conditions. million We investments continue pipeline

We transactions will as completed. provide are details more

over I will the Adeel. call turn now to

operating approximately the common fully This compares fully with diluted $X.X income attributable share or XXXX, diluted per Beginning to share. $X.X or million quarter million for $X.XX XXXX. was third for the quarter results, to $X.XX net per of Howard. you, third Thank stockholders

a XX% share, the FFO $XX.X was XX, $XX.X XXXX, FFO core million, months For of increase. per of a per On year-over-year. was XXXX, September diluted September share representing increase core share months representing share XX.X% three $X.XX compared as basis, XX, the million a for the company fully company ended to three

million, basis on up year-over-year. Consolidated property on $XX.X was basis GAAP a a by cash NOI XX% and XX%

in the third $XX.X XXXX, in for compares was quarter of $XX.X increase quarter, which an NOI same X.X%. Same-property million the million to

and was basis, revenue same-property operating X.X% NOI driven a increase On same-property rental by a year-over-year. cash in by same-property NOI increased Our increase same-property a in X.X% X.X% expense.

activity. financing and sheet balance our to now Turning

to growth, we long-term opportunities to maintain position and maximum strong and flexibility a As seek to sheet intend continue to liquidity us drive balance favorable to capacity we capital. allow access

we shares which quarter, at issued $XX.XX average proceeds program million of through third $XX.X per stock net in ATM the million. common of our price X.X During approximately Rexford share, a to of approximately weighted resulted

a Net $XX.X D to an on fund acquisitions be activity. closed will Preferred we million repositioning September, used proceeds offering, X.XXX% and Stock. Series near-term

cash, of the the our third had of credit on full availability million end $XXX we At quarter, approximately facility. $XXX.X

We with of our $XXX.X the program. also ended quarter ATM on availability million

had strong X.X debt total XX.X% net about with enterprise At ratio and value. is XXXX to no we to liquidity maturities of equating debt-to-EBITDA September XX, until position debt our times, a

Directors January of to fourth XX, XXXX. of to Board regard dividend per unit the dividend, common cash on XXXX, holders for October a December payable and of XX, our stock of With XXXX, record on declared XX, our $X.XXX quarter on share XXXX,

Stock XX, Board to preferred cash of share per Preferred $X.XX stock approximately as fourth Directors December of Series XXXX, A XXXX. XXXX, dividend a declared our quarter Additionally, on and December of for XX, our the holders payable for B

Series declared to approximately fourth XX, our holders Preferred of XXXX, quarter share stock Also, and quarter for dividend our December third of per the for Board a payable on cash December prorated C XX, Stock XXXX. as of preferred $X.XX the Directors for XXXX,

to to company share of share share per $X.XX increasing per a we core share $X.XX year to range of $X.XX $X.XX per FFO our our are of previous full guidance range Finally, from per of XXXX share.

by the supported Our guidance is range assumptions. updated following new

we $XX to growth X.X% $XX.X from our assumptions rest guidance a detailed NOI XQ $XX to million range million a X.X% X% The to range $XX from our anticipate for information previous XXXX of unchanged on of from year Same-property are full and page supplemental G&A, to to of million previous XX package. range range of X.X%, from our million.

activities market this include not the guidance or have announced, that nor other transactions does calculating costs any we cost our eliminate impact that when that metric. note of typically acquisition not Please capital been yet or

That any that, questions. will to open the Operator? we line completes prepared With our remarks. take

Thank you. you. Instructions] [Operator Thank

comes question America proceed Merrill question. with of your the line first Feldman Our Bank of Please Jamie from Lynch. with

start, Great. there we think the just about guess I talk any you prior rate or been anything Can what in how looking Thank you. at retention about? particularly XX%. about to quarter we were versus to should that your move-outs quarters, it’s should be thinking large down in

end the It’s the Jamie. the just quarter, but to might your Hi, this any of in was bounces a as blocking Nice seems somewhere and fairly it averaging of was from recall, quarter Howard. There range weren’t of as you larger voice. past XX%. typically the bunch usual. to year quarter typical. hear tackling No, around And move-out. really retention at It

of push some when that we substantially higher influence our part has quite actually capture strategy don’t actually has to so out our repositioning the always spaces rents from retention. And forget, been an of can our work, tenants of on

all good indication because the all, forced of vacate. what’s So, not portfolio some these a it’s happening of of in probably actually within

I am sorry, on mute. was I

Are you there?

was on mute. Yeah. I

Oh!

I great question had though. a

to going repositioning shows in zero. just supplemental it was that actually into expiring was placed I the say So leases and

were move-outs? say that move-outs of wouldn’t of actual forced So these most instead

Michael. expires It’s Hey, It’s into a when Yeah. tenant going not Jamie. necessarily they about really are repositioning.

not probably of the was the that capturing So activity. essence entire really

saw they an space it’s than at the to of didn’t and a to space. than just tenant rate. often And that of it’s opportunity not, much we a little not, maybe not a repositioning, higher carpet or stay, re-tenant more because doesn’t But more doesn’t remarketing often want require fluff the necessarily when because up renew, paint, just

I more you gives So, clarity. think, that a probably

added, about important, also very at And to and for just look telling you Michael to absorbing sign. nail -- and take quarter, I we that’s the And -- what levels flat, absorption it. is that what that drives if we that Jamie, in we number also renewing, coffin solidifies it is the you are talking was add that the not very just gives kind are it Q nails of Howard just think a that absorption while the absorption the occupancy were are, but where

to to for six page. repositioning that capture higher we And pushed the months and out Yeah. a on be of also, rents special. down Jamie, a of certain tenants hit not land all spaces those the of minimum Space has size

I XX,XXX think it’s about feet right now.

are lot So that work the the of just and doing page. really repositioning we doesn’t at looking repo capture a only at value

I I high clearly your then, demand. And mean, Okay. in markets are guess, bigger picture,

have seen We rates. cap on pressure downward

your kind help sounds become stabilizing comfort this mid-five, it through low kind how the on pricing of what of doing mid-fives. has are to you aggressive talk us markets? lot guys, continue you plan, investment of in guys You kind a you just like like Can given of gives strategically in to

Jamie. Sure,

that pricing, acquisitions of and think about important transactions, talk been into are we year our reported comments, which marketed pricing to you on the that’s as when and what directly about XX% you this trades market the lightly translates gets our I into than stated marketed have transactions and in bulk whatnot. better think, And I through First, market off-market talking cash yields. realize of it’s about

of we that focus and substantially our able to And marketed a is I opportunities continue than generate business are key higher the to value-add to yields transactions. able to catalyze think lot that are

in nation. our some we best deliver than to substantially And the when the stabilized time, to industrial it will market combine better yields time to is, us market And in also, you marketed the buying from mandate see opportunities. altogether

value And throughout our that time. our maybe a create we we product that that place there over and have that portfolio assets in a know believe for continually portfolio opportunities, do in slightly capitalizing lower stabilized multi-tenant, transitions yields which to is is opportunities so on that we than lot are creates also value-add portfoliowe of our because our

is consistent flow very cash and we create moderated having short more value. have have deliver to growth stabilized driving very are periods to maybe but transitions, more when maybe growth, a for transitions when on those through consistent, it’s vacant continuing product of some we And flow nice period cash time to space that

the economy correction great a future, a be see also could to there It’s any at extent edge point general or today. against signs in the we don’t the some although

place of that much we some we So product, help stabilized value-add as really do of well a our Does answer of a for blend portfolio as your find can as product. frankly, that as question? see in the

that for then, occupancy it think quarter. same-store seen level That like, your I last keep drivers lower have Can key at similar next has moderation basis where And a spreads quarterly are? and just you we where thinking guess, a Sure. helpful. just you. either go about on is the are certainly Thank talk what you we year, just about maybe about on a rate, as leasing me, based growth is could or this to

Yeah. Jamie, will first with full think, we how And our guidance all, of for the drive year. I thanks I for question. start the

Our for might that a right, what year like and into the full lease on takes basis. a the it’s role full based GAAP guidance quarter-over-quarter look year, consideration on

we started said at having first and QX. the QX beginning in the the expressions to was we coming lot that, of So, knew going with year, be guidance when there of a

to QX between guidance, matter fairly had quarters. our we we that out of a was QX, the of role fact, spread XX% when take two in going and the As stated launched about first place

so. you was kind XX% back same for that slice of the if or And about it pool,

this the in back the place here essentially part in took QX QX QX. and role seeing are lot you on that of what of that’s was So a

of benefit the So it. you didn’t see full

back the said, in you to see in quarters and are But should quarter QX going next pace up. for to the pick that that few being we did XXXX year. releasing benefit the spreads the point. going That’s to your the Now,

guidance, in GAAP spreads the will to guidance. more of the We leases ability and have leading in seen new cash at leases the to will quarters, lease ultimately future off renew but releasing trajectory terms our provide naturally pay the releasing we that and spreads XXXX

are very about we optimistic So that.

saw just the what rolling the are was more in of quarter, leases how it that. So simply and nothing you than product

little during bit, to the during over quarter Jamie, a of the third month the just that occurred quarter. think I And, to I mean, half the renewals add of

And quarter considering very terms pretty impactful for company the for so of that’s heavy that the in already expirations pool. the was the top and annual same-store

the And if and you it to weighted have quarter with expiration a quarters. on in middle think, I even you just that, pretty renewal we it you average the see to be delivering normalizes would meaning of in were if weighted through last timeframe, normalize for average several take been the what terms consistent

just a were number? terms Okay. Great. guys to what look And reported same-store cash versus GAAP. If in of in guys clarify, you GAAP number, to always your talk of -- would you think like terms that we

same-store was Well, reported. the I number think cash

So those what certainly I cyclical are think that you are and seeing expiring. is a leases

trend, matching I a also spreads what seeing. the which re-leasing of that’s So are think kind is

expiring seeing you So cash higher. rents are the are

what you So seeing I essentially. that’s think are

terms that’s thing guidance, naturally a think, I I have I think GAAP I -- basis, we our the on continue one think, we to provide done. of guidance, think, in

are are and pointing you re-leasing themselves seeing think you to rents what and aligning are trend, I pretty consistently. the they cash a are nicely they spreads So seeing expiring

have in XX and quarters quarters, XXs tracked quarters, the low high the spreads, now the very side or we on cash our XXs they the in in side. the re-leasing XX eight and been On and consistent XX GAAP

a asking basis, was what Right. these the that between cash I GAAP, does and delta NOI, on same-store look days? like No. same-store

product Well, the a I Jamie, are I think, think, of rolling. leases that is how

bet at years take I were ago. direction. of think to they couple look can I flip the a a other if you

probably so higher, here. are I little what the that’s seeing GAAP was a think I that you think

portfolio, had product from a now equal, being trend come how naturally, years kind place. can the see else And simply That’s if similar of you takes you product three a a roll up all for to similar in-place of years four if now.

think in that. are I that’s all seeing you

XXXX early seen the So we I think is the direction, in on trend other GAAP ‘XX and the higher. have go

that’s think all you seeing. So I are

or able is opinion, I think, obviously, a leases my that of what it’s leg the the of But the more are number see. that tenure. their cash I to on last is, cycle last GAAP the is, in be think simply leg normalized is to their

Okay. All you. right. Thank

next Our with line Manny Korchman from proceed Please of question. comes Citigroup. your with question

lack in those hurt assets they does am Hey, pipeline. widespread helps because might rents growth, But can institutional institutional acquisition one markets the owner lag everyone. pushing push of -- ownership owners -- your be it rate less are I does wondering that just rental certainly do pushing? of they your versus sophisticated they private

say Manny. we Howard. Hi, It’s buy from non-institutional only Well, wouldn’t I owners.

One rents of said, do. our either push largest was are to don’t institutional from transactions seller, they we this being that and as as an able year hard

on these is of a trying to mind market owners buildings which heart do. we in -- the But really to off we of keeping long-term. Most transactions lot what tenants sell find we times, gets the are for people keep in nonprofessional

not their Rexford properties, able tend achieve ahead when to are modernize the push avoid look whereas private owners investing space. easiest and is and property, do at the to rent the that we for to they on what we rents market really value buy a so you to into go we way unlock the does And a these capital and

to. They just interested squeezing out consistent versus also you flow cash don’t a don’t lot last the rents. and to people due length So, is their are are rent. need nickel those push it of they in ownership of more they correct, a really And of property of a these

we It’s hear very as way, the both sellers owners, we and it’s and Manny, owners, to When talk private camps. interesting And from Michael. there. out well as by sellers institutional

mean but they also pushing doesn’t instances are just where are they rents, rents. because their institutional pushing Some

for tremendous creates that So us. opportunity

which owner rent of Rexford’s today. that our the mandate, of market And much space. is growth behaviors to down lack and availability day, about when is well. in or of the the that really, going I today so availability are how Not drill at really just you are That’s create really functional in operate And we portfolio each things deliver not the to of end able we It’s outcompete. driver most product and the submarket think when in. the to

But even you when importantly are corrections. we outcompete the market see That’s even plateaus quality point recession, more further to some at future as in flight during the to see to the when really able we or the I going and we think, be frankly. that’s did when great

leases getting Thanks. up assume timing talked in excess of that expect And few lot assets would they terms about more you What be of to before in sort fill sounds that your you markets look are or of in projects? the those you up? remarks would ground had that. they a a have given you going where should are speculative inventory nature tight and of land, to I are in on And you done just build ground we

them assets in one tear are one of None I we transactions to -- have buildings, we third of a off. that are up. we quarter the all be building really are ground Actually, being going been to may -- mentioned, -- we the the modernized the piece did going that

about vehicles all goods for getting requires and movement parking and that to consumer, containers. reason the are product the of we it’s why, there’s more and finding our what And the really closer markets, -- in

of So marketplace. of created to can finding driving frankly used in that most value we demand excess have the this that an are deliver there’s are just be sites that amount the for land the extraordinary being tenants

So a there. build here we building and

things the ground. land. only of few if not in you a got have have about come to about it’s We markets, excess some out But infill the are development,

guys. Thanks,

next of with Fargo. comes your Blaine from Wells Please with Heck question. question line Our proceed

out Good Thanks. morning there.

have properties been not capital especially stabilizing? redeveloped, taking redeveloping of expanding and of you the markets, or you done renovated a disposition an some your issue for the guys have your know high that given job maybe just core have I on you So some properties considered that and good program profits guys access to But whatsoever. buildings guys is in such cost of

It’s Blaine. your Thanks so Michael. for Hey, question. much

On Boulevard in little of that we bit disposed of disposition also example our operating Aand the to in more so management-intensive, nature, cash contributes a harvest is great flow. to announced recently multi-tenant that able on an where asset a Valley that, a more we was margin one were also sense.

continually at frankly, But we for continuous value a create we some -- prune do portfolio, capital. where in on basis, look recycling might look where at incremental and and our

do are that. So going you to see us

similar I think underwrite in a but have in continue that. fashion the se, acceleration that wouldn’t we or to so. anymore do than I done in prior we year per

the going at look you if tremendous And growth there’s forward, portfolio a amount of internal to be harvested.

or an the so through think year to as indication. just below end XX% about market, estimate expirations be next our we I of

profile mean, of the in-place NOI having And the as quarter, asset, embedded NOI I the end of interesting. company if the growth the at we of quarter. in at today you assuming look pretty portfolio at we or growth buy didn’t the the looked another about end XX.X% of

the component two the the And that components biggest biggest of -- repositioning. starts with

many continue from legacy indication sometimes how a just time where expire to come from for space, couldn’t will because years. So that’s come some -- to to as time, we to able value had do repositionings tenant don’t we acquisitions had the over a going are we of repositionings A we to get these assets. new great acquisitions. to only to lot in And create

of biggest spreads, second over next million reposition of NOI leasing is of from comes way, half we the that XX value a very of incrementally incremental contribution intend so leasing growth and portfolio $XX.X embedded component about, months the been about The to $XX.X doing, it’s indicative what we just by the estimate that or of million NOI of some frankly, generates conservative and leasing spreads, and unlock. spreads the of so have using in

and the So Board by the across way. that’s --

forward. makes going question? lot portfolio excited pretty that to are prune we it we create it as a the answer Does ability in But and well. as So our help more your sense about will continue value

Yeah. you increases talked any about I of I on rent guys drivers? on bumps you That do how quarters think the just and spreads you are this at And given of or Have on maybe pushback become ago each Thanks. seen leases. annual kind about on then that X% growth, the Thanks, point seeing annual Michael. guys of high push rent you think you those helps. a expiration, how and norm following those those to rent some escalators? guys seeing guess, on starting few more up of in balancing were

It This selected our -- to in rent, to are we because maximize Yeah. want is pushing are but we ability going X% think, we up the a give I for the X%, initial increase. us not instances Howard.

in some the in I are them, of we instances to just it get are and as market fundamentals selectively well So place now. on the Other say really the trying landlords but common it market. able wouldn’t it its depends

that our low it push large vacancy are do a X% push. and markets that we helpful. on it’s infill really But the little very going to trying about tightest that’s to have with harder more you selective bit when be markets, like the pockets to have in Obviously, we easier quite vacancy are

guys. Thanks, helpful. Very

comes proceed question Please line John next question. Our of from Stifel. your the with Guinee with

John. everyone. Joab is on Hi. This Dempsey the line Good afternoon for

those Fernando parcel you, detail could lots the how unencumbered about now a Could Valley open should it and purchased one developed footage that in think you question for the be potential square how this looks quarter. lots? just like have you many you we San on had Just land

park That the really out. fee parcel in something term of it million an Hi. buy and foot Valley opportunity we a parking ground long to This Howard. operate is San business market Yeah. square had the was lot that just part on. Fernando X.X was operating We lease that is interest was

return interestingly rent X.X% that purchase that about cost the to up in-place were XX to X% on kick going equated the the rent paying, was months. within And of but next in we to return, price terms

an opportunity control just really it and So project. was us operating to costs that for to

a new build, have varying markets land in XXX,XXX land The you the our phases opportunities. of substantial for foot But entitlement. pipeline parcels very right have other range at infill to have development, as As we square we somewhere of as is bank. far don’t limited ability which product, do now probably, know the have we in that

to couple in about We next start are quarter. things the of a actually

buy difficult yeah, is at expensive occasionally, we a you for look product very infill is typically lease very when in land, to on to find it deliver and basis. And construction the opportunities but costs markets land and

that us able be we sometimes that substantially a together work. find we price So for really, to those will can and market is below it’s put numbers land

But buy of Sometimes add footage. challenged the at the we is square that very that terms in excess the most has site are the little a we for able opportunities. to the that land is that land undervalued market part

Thank you so Okay. Perfect. much.

Our next your question with comes Okusanya line from of the question. Tayo Please Mizuho. with proceed

afternoon, everyone. Yes. Good

have guys very again curious Just in the returns regards just tight side. acquisition and incremental you to cap using given rates a side leverage acquisition the to thoughts just on of low question juice be around leverage, a to your kind pretty continue again, that

good It’s very Hi, and a Michael. Tayo. you That’s question are Yeah. right.

at We maintained appropriate we cycle. have very for company general particularly the in time leverage in profile that’s very and a deliberately low think this the

really returns a the I part through have we said, business And leverage. not medium-term really or of near-term That’s as strategy you increased as -- or for it Rexford. engineer a thinking model don’t current to, higher

that’s a in we to returns increased needing and can at share where I increase exceptional leverage. without you growth are deliver think is performing those And FFO what Rexford model through way sector-leading per an looking business FFO

And of luxurious position owners, time, in our we everybody, Rexford that, all are all to very on low be think a simply be we that’s that. happy shareholders to company. going capitalizing leverage over and the profile are of And with

of kind further the of think, going going earlier at Got you you. the And will say, Jamie’s deal, of the take year a like of NOI to kind that digits, I at quarter? was It from make digits, kind a three the to to for X.X% when low-single take kind of if looking I that heard again quarter, of suggest fourth I were drivers correctly kind first fourth seems and back of kind a the when same-store sure to high quarters number. what’s of indeed this of just guidance on, again it look year, look I the same-store to the and then decelerate I wanted growth I question NOI further in was quarter, accelerate. the the decelerating deceleration and kind at high-double it just in X.X%, -- isn’t in still

is Hi, Tayo. This Adeel.

came and in that QX. place renewing was or when big doing good latter us took in about of quarter. QX Michael out, same-store talking as that, the of was byproduct QX, a of in with in that job a the to going part terms getting that pointed a quarter new expirations in accelerating a roll the is Obviously, of in benefit it So space, from tenants lot I

full will. So necessarily impact but benefit QX the QX didn’t from

to what of is terms in year-over-year saw certainly better the So in look QX. going terms QX you of same-store in

again, Now beneficial pretty a terms our of QX a are new great and I building to great basis. on we is point future spreads everybody a in cash going the base, in which But to doing NOI get job quarter a GAAP still roll. be quarters. to Ultimately, re-leasing all ability heavy to

earlier… So, that’s what I meant

you. Got

when that. of … a [inaudible] it’s said because just I

wide portfolio a fairly the of same-store Okay. stabilized That total more about then a that we of the just lot a you have become in for about -- XXXX? in Clearly, historical be gap, repositioning. XX.X% XXXX the looking for driver in to close we growth is XX%. the which sense. of one this makes earnings is again more gap meaningful start large and and to And looking be for occupancy end, my assets at Is from portfolio what the really should should because it’s that

Well, perspective, multi-tenant It’s think, operate Tayo. to we put single-tenant buildings I buildings. it in and Hi, Howard.

about I projects. XX% think today are we multi-tenant

term single have the shorter tenants. typically projects lease some bit of than those a So little

substantially is it’s up would you vary, occupancy quarter-over-quarter, encourage encourage occupancy And to think, overall that. really, I of and we to in the portfolio pushing going but underwrite people think I so higher. terms that the gaining underwrite And to don’t is more overall would we in line portfolio. with how

you. Got

on And occupancy Tayo, consolidated data current obviously, one bounce that add, point our acquisitions will the based year. around in I the will

Yeah.

of about of was driver interesting an that’s piece. about year acquisitions million year square our that XXXX our This called because XXX,XXX be efforts repositioning a feet on repositioning is $XX are key going to and

meaningful that’s driver earnings future is factor than the to a to a and same-store is also that to point, overall going contributing for the in very absolutely, yeah, stabilized the So, occupancy your lower way consolidated be why little occupancy.

Got you. you. Thank Helpful.

Thank you.

line Green of comes with the Please question. Street Frankel Our proceed from with your Eric next Advisors. question

Thank much. you very

time there a that’s quality long you out of reflecting larger the lot in of just of high talking up buildings values. more maybe that transcript worth that a a earlier land actually a enough not not come values the activities portfolio a reader, couple scale your pipeline or years maybe you, older caller, redevelopment ever redevelopment product ago there’s for bought you escalating portfolio? again time vintage questions -- few redevelopment with and there First and full about Is doing land it’s on shadow call. Had marked in this the larger just you

to first-time expirations great have appreciate and question that’s we consider Howard. It’s at that performing a a new And going and ahead there’s achieved building. We our expiring. single-tenant full-on building of we look in here. repositioning each Hi, the Welcome, a what be a a some caller. to is construct redevelopment That’s work redevelopment and Eric. find being more typically we you versus bit time yield

we tight I thinking new here things such there’s a few of versus new, there, a there. heights the are because The the ahead about you are are forth. of there may you But so the and and and is go clear build of when said, space. that, functionality, the asking That some demand buildings market a functionality, redevelopment and lack so and probably think, question still is

the C important but infill out that’s instance, non-infill as if you those probably could markets, in aren’t infill -- to a are the you markets, building B a in where market, the an factors going in there. like for have it’s a quality A East, basic or be Inland a And that Empire building as necessarily

So to of differently. the in dynamics these profile. our returns the we But that are markets function still superior achieve very demand able because said,

Got you.

to seen cap intense opportunities, just activity of the source more you lot question this a lower in be couple think you investment off-market guys really canvassing But last rates you trend marketed lightly even is quarters? marketed, see for any intensive just of rates regarding, over than transactions direction cap marketed for deals you kind efforts. obviously, highly Next even have kind of have year, have do the

the product one-offs, cap cap some transactions, part, Well, within think we Southern of generalize bit. certainly bit buildings, have California, a on the single we portfolios I larger all And of the But obviously, those hard these seen for seen most a transact. in, tighten certainly the some larger it’s cap to rates have rates that’s come see rates… we

Yeah.

on of … don’t the on to from fact all and push that really unless rents over find basis. our you we what are to we comparative are Board talking arbitrage lot a lease the a about a acquisition what buy a in and the we rents. valued newer building able But fully tend people with are is

the of So depending market, the where rate property below on could on lower are or cap rents a be terms in higher.

it little try So sort just comparisons. find put those a and one that into to we it’s and pot really make harder of all

compression. But more seen million on deals, have stuff. that these -- I -- in general, larger is $XX $XX rate cap any million the It’s the haven’t Rexford we substantive transactions typical buying, to

Got you. Thanks.

rates positively or to negatively you? wildfire in see a sort urban it’s or you have California. obviously, it’s whatever question, insurance standpoint, though how tough human final talk that southern some might the about business one in of your are or brewing of Just impact terms Can that

Yeah. Hey, Eric.

not yet and But obviously, we the haven’t impact that rates going so for whatnot. other next been seen events our California. in There actually much fires to wind to country rates, throughout related are year. Southern We the historically much had larger any been to real insurance bigger has insurance impact

so far. that So seen haven’t we

hit have could actual on markets. that fortunate. in which tenants been displaced of have haven’t an We potential seen industrial areas the of impact any really our really We terms way. in that And

they do for really I topography, seen think an more are on less with and to as these is haven’t instance fuel that surrounded markets, also fires has Rexford something by infill the focused either. we impact it so so because for

just earlier and the part second Eric, of Michael’s and thought answer. the to question and

I risk great have for discussions with discussed insurance is the we a their the our Rexford As considered profile. when carriers,

is terms in lot just and of so what all and the of seeing hurricanes the of the worldwide world terms and tornadoes in and capacity and a on so forth. And issues time it’s calamities

for definitely it’s the see carriers. So us. when and profile contributing portfolio, because But across impacts a the anything increases just not of necessarily our and capacity risk we better re world how it we general

you Much the context. Thank Right. appreciate Great. it. for

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

Hey. Hi, guys.

running. been power follow-up any maybe that the question slightly Just outages on had a on which different been properties it that approach, to last you have the a preventative is, as impacted utilities these relates have those? by Have

Howard. It’s Chris. Hi,

We haven’t are all California. of in these Northern of heard and most outages anything

but we impacted any heard haven’t yet been there’s that’s some of of discussion California, anything some Southern buildings. our outages, power

I insurance that’s then requirement tenants am a BI your assuming lease? have that for And

Yeah.

third quarter. I capital the in then, to And markets step back, a guess, just Okay. taking decisioning wanted understand the activity

offering a did did on execution bond well. you XX-year private as preferred placement and You nice a the

there length between in So seems given a two pretty those cost be payback out pretty -- of to two of the and period bond, the healthy the the XX-year of was spread there. the sort far

the quarter? curious mix you why kind you to Just during chose did as of the

Hey, Chris. It’s Michael.

question the our great diverse grow tools quarter at array of balanced is a a think structure the preferred. that’s to of And the to our have disposal I company. and to a is which about have capital goal, indicative

one, common though day is to it place to little cash per that structure. of But for day preferreds FFO provide does our there in even share hit accretive we free one. a and bit We it’s a capital on actually think a flow think the

the a to on have excess, company, yield well when compare fact are terms captive you to those of you for equity that a return about generating forever as because particularly, growth that return. in investors we Rexford what been the And type X.XXX% common in the if a multiples think in of preferred of and

above right to benefit a to on how the our are of done us X.XXX in giving prior and make type that Also have tremendous to was of growth. terms analysis us and investments impact that’s the really it’s given able So we to common everything portfolio and preferreds a adding common. really, we the are value

is there place they are a one. believe in common day we that So portfolio. for accretive preferreds the think actually We

and I our because -- cash more a understand FFO those believe current requirement And very and capital are us term that would of to short-term I your a may equity, permanent flow. a tend your our question no a repayment preferred horizon. horizon They and is, the the the think view view for as I view is, but lot folks on preferred as diminishing But fixed longer longer share, term per coupon. got they the

So capital think particular and for in a nice the company for on very attractive there’s do structure. place we it our

Thank all Great. today. had you. That’s I

quarter. wish wonderful a forward this and look season With us would months. to everyone. thank to everybody we in We Thank holiday for like right. you we joining All that, everybody reconnecting about three

teleconference. and Ladies today’s this gentlemen, does conclude

time. this You at your wonderful for day. your may Thank you lines disconnect a participation have and