Rexford Industrial Realty (REXR) 8 May 202020 Q1 Earnings call transcript

Greetings, and welcome to the Rexford Industrial Realty, Inc.

First Quarter 2020 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Swett with ICR. Thank you.

begin. may You

for XXXX you for Industrial’s Rexford We Conference joining Call. Quarter Earnings First thank us

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

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

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

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

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

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

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

turn I’ll Michael. over the to call Now

during these a families healthy coping quarter impacts COVID-XX. times. by you, first earnings with, call, Industrial’s begin the colleagues, this from and To and our summary some I’ll begin everyone quarter followed behalf are with of results challenging well that brief welcome and operating friends of first hope call. Rexford our on to entire perspective your XXXX on team, Thank we Rexford on

transaction and and on cover activity, outlook. Howard details sheet our follow our will balance more Adeel results, then repositioning and will financial with

for your We questions. will call then open the

saw we exceptional quarter Our the first performance XXXX. trends continued in

increase $X.XX. core and FFO core FFO generated by per share a company’s $XX.X increased to We million XX% share of in XX% to

a by X.X% same-property X.X% and basis. cash GAAP stabilized by Our grew basis NOI a on on

same-property stabilized XXX We for square We our signed achieved XX% occupancy leases X.X in million portfolio. feet. also

GAAP on on basis spreads and a leasing basis. a were XX.X% XX.X% Our cash

is volume $XXX quarter a investment and We million, the year-to-date approximately during XX-property $XXX first portfolio for million. acquired

market quarter we a first it materially California target In not have COVID-XX, today. begin backdrop Southern as results by I’ll our with impacted our see infill years, markets industrial were Although of operating about description brief also high a accelerating XX%, diminishing Market at Southern supply-demand causing rent and been in supply, persistent been has infill single-digit imbalance. at high historically with growth California. growth at occupancy recent limited sustained

While many e-commerce incremental demand we and substantial as to distribution-oriented such are businesses tenants, facing challenges, driven see by other Amazon, among continue others.

sectors and industries health and their other space to of from supply range medical businesses and addition, growing level as in face staples the of economy with last-mile care as feeling space a wide available In management. supply. pressure the include inventory reconfigure demand These market consumer lowest electric of products, the a vehicle continue the nation’s industry, pharmaceutical, sectors presence chain they well as need to to increase their food exploration,

base diverse to consider gets. experience from also shows impacts infill the essential California as it tenant crisis, As stable within tenant California. clearly the COVID-XX we through resilient and try understand and within fundamentals infill as confirmed that the about is underlying Southern and data Southern as is our downturns demand prior the strong, Historical it to

might resilient larger be tenants. tenants a smaller than expect one global on to While scale, more

located demonstrated big been base that However, markets. tenant it noninfill large markets in has our the outperformed infill box, have

is mere our historical basis noninfill with, infill markets. To in great performed how as points. during to the XXX XXX increased by of While compared this very begin tenants picture. consider infill a Southern during to may way the seem markets recession, our data example, a vacancy counterintuitive, located large It within by to prior tenant California base in instructive paints downturns clear we believe

doubled, Empire While in the market tripled worse. tenant in the Inland Eastern large vacancy or

SoCal infill high is a our first, We tenants limiting supply-demand of barriers believe product, is scarcity persistent to supply to resilience two due available extreme it imbalance. exceptionally the factors: key greater and due of the

Additionally, generally represent their helpful from to It great locations Southern resilient and for tenants businesses consider our similar the as within nature to or such may mission-critical of and how spaces livelihood. California. that the today’s our these support their required infill crisis, by impact downturns, is may be crisis is financial entrepreneurial driven recovery also prior how different fact the that

when essentially with, did not no begin at have we of today stopped, infill that was the business e-commerce the in To and Recession, flows sector other have magnitude Southern onset spared. the early drivers We growth growth still within in XXXX Great order of California.

reenter not In addition, able is today. and the shutdown. great the any is tenant occupied post-COVID lack tenants there financing they needed to for was give a space In of XXXX by up a fuel Southern risk be Today’s not potential by with the contrast as growth. highly market our recovery are today, infill California, Further, demand through comparable crisis crisis financial and driven to as government-mandated as within to in a particularly were XXXX economy they our that markets they space, may extent constrained the health-related bank recovers.

be compared and The banking recovery as within could cycle. this remains base prior more there the tenant and working to faster intact robust reason be cycle provide as to capital believe demand to recovers. our system able may Consequently, that

did average from also market. believe quality noninfill the infill submarket, our by takeaway our the team great within tenant our large intensity passive infill our to within estate a our are key financial is at outperformed product that enables crisis us two, outperformed the real reasons was but whereas is otherwise markets, twofold. one, neighboring We product majority competing than outcompete that executing entrepreneurial Number higher Another our on market vast within Rexford an Number level not owners. controlled portfolio which we tenants. are of for market, of outcompete helps us typical only

current of the update provide I our on portfolio an tenants. status Now would and to like

feet from just tenants X,XXX is million industry with about over portfolio and over Our every imaginable. of in-place business exceptionally diverse, XX type square comprising

Our comprise only aggregate tenants base XX ABR. rent of top our XX.X% or

nation’s markets and highest prime Southern infill largest, logistics portfolio California, valued the XXX% located market. in highly with Our demand last-mile most is

XX% our tenants been several their business. Approximately activity with leasing of years the e-commerce has part citing an of over integral as prior

square tenants comprising feet, skews Our who to extensive have tenants our towards ABR occupying greater of half About ABR with tenants is also than by larger tend driven square almost ABR operating of over history. XX,XXX occupying XX,XXX feet. XX% and

to continue current be regard portfolio, our leasing renewals busy with within to With leases. very and new activity we

represent which continue tenant are our some exceed to favorable or far, numbers of continue in spreads. In we very a leasing nominal concessions. generally to So increase budgeted terms seeing cases, hit rental we rates, in

our to and However, from is Recession. the another facet different that also of there’s the here may be in Great California crisis state unique

many step a the have put rent further to COVID-XX on While commercial states local enabling is until our significant tenants by impacted unilaterally moratoriums have order evictions, municipalities by gone California defer lifted.

a paying rent prospects. or currently not or their our be paying not of measure in long-term health Therefore, tenants may markets,

pay proactive on the to strength Some tenants say testament to fair to these seems of that mandates our basis their circumstances, pay despite unique exercising securing continue short-term and is a current electing repayment rents. the of market. tenants a a ability to also It necessary. government to deferment taken as rent number that tenants not we’ve these of rent agreements strong with defer our approach very merely newfound light In are government-mandated

So relief representing into April have far, rent tenants ABR XX.X% entered paid rent a either of or short-term agreement.

rent. ABR for On over of agreements this executed two did who be plan XXXX. generally at months these entered have basis, XX% not have rent. tenants this to April of a group, be advantage of ability unilaterally repayment pay to to representing their Tenants April The repaid representing one rent XX% a newfound we time. balance of rent ABR have Many during and relief have rent cash collected into may base taking base X% about of government-mandated of April not not paid of short-term defer

local proactive forward, we help government take through will our exceptionally our to to to challenging impacts working of rents. enabling tenants mandate, mitigating As period with work while them we this defer approach the tenants move an continue

to ever tenant good that Southern As the remain cycle, Despite sustainability. us deferral located through will emerging have deferrals we our not believe strongest we balance result, fundamentals volume in experience sheet and of the to to of feel challenges, as manage near than experience leverage is low tenant may to and repaid nation, opportunities fully this greater we that Rexford. on team, have of informs such reason California The stronger that not within be these short-term term, and the in strong to and Southern We any industrial very demand through the focus data at compared portfolios deferral the a believe indicator recovery. emerge a and California. fortunate news rent underlying a is we infill are strategy, capitalize historical rent market within currently

Our construction value-add remains and through busy, team value repositioning very creating work. renovation our

ages exceptionally investment tenant accretive in e-commerce, to new to expansion last-mile the an and platform of sheet as continue types originations With facility. demand, our acceleration to the which adoption team pursue opportunities. e-commerce as proprietary benefit also and well all by This goods we increasing of also distributed post-COVID acceleration balance our by is Our from is businesses to leverage low adjusting see regard busy, growth we an through as forcing is consumers of also of range importance dynamics. distribution

to our Most the the like of exceptional strive and as the team support your collaboration, ourselves return, team to execution platform. they our we demonstrating differentiate strength we’d we work of proactively in remotely. importantly, acknowledge way In for level Rexford

to challenges, early providing apparent it as help families children children faced responded young on at example, home with For them expenses. to subsidies added families cover cash by that quickly became care with child we

implemented the fully rapid and employees new training online learning We the opportunity of a staff. onboarding advancement have and for digital environment, providing of also current

by commerce, business important longer-term jobs and urban those more Lastly, largely substantial of into which occurs opportunity benefits welfare communities. thriving that for than improving a are repositioning delivers now and and infill local provides investment ever work to we communities, believe centers that social in property and underserved social under-resourced industrial increased our

And to call to turn Howard. over that, with very I’m the pleased

to market joining vacancy continue and Southern the during support California Thanks, first Michael, so remained very and today. April. far thank imbalance in rental demand March strong with you, The everyone, that growth supply for us industrial and a quarter infill low

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

is We to strong good is addressing leasing second Nearly and generate spreads in XXXX square Rexford’s expiring half of lease progress into quarter. footage made our the top continue expirations have XX% our available this, repositioning. by or remaining re-leased or is size. of scheduled with in value-add re-leasing for XX% for And And active XX negotiation. renewed, already renewal XX% leases the

we electronic further deploying to current environment, adapt access are post-COVID the adjustments lock making we virtual activity touring boxes. and by As leasing through to enable and

Southern to estimated properties, XX square tenants through XXX,XXX have California of four debt. to portfolio In of totaling acquired markets industrial including below Year-to-date aggregate. feet $XXX seven the acquisitions. March, adding acquired and April, consists to is XX% Turning million infill buildings multi-tenant The at within the assumed a we million, square rent $XXX be for portfolio. leased projects company’s XX-building single-tenant portfolio, industrial of we to located and feet market approximately in XXX,XXX three core XX%

portfolio’s the lowest vacancy the of XX% Approximately market, in L.A. region’s is value

Inland L.A. at which Mid-Counties, within the South West. QX X.X% with Empire remainder vacancy, ended and locations prime in Orange County Bay, infill

acquisition structured UPREIT a The of combination was and units. cash creatively through

We yield we about Projected of feet XX,XXX is unlevered acres stabilized enhancements, million. X%. and unlevered of for X.X% grow $XX.X consists through space a of total the with yield April, land of value-add acquired square below-market increasing of combination on cost initial building vacant Vernon which Avenue, completing rents. In to expect leasing X

sale-leaseback was X.X%, increases. The long-term rent property land unlevered provides at growing with value. develop purchased low yield annual facility. distribution a new lease flow triple-net coverage favorable The through is opportunity as cash to the future initial a The

start progress California, and development With repositioning program, later respect business X.X development the feet continue essential to and in state with in repositioning to on currently million considered We we have value-add another our XXXX of is square feet into current pipeline. XXX,XXX to in construction an XXXX. square our planned or

highly inspection However, municipalities occupied and delays. as of market our consummate low deliver these may timing utilizing current to or construction an ability to we these attractive are locations. impact vacancy commencement permitting completion Yet there on project comfort leasing infill online provides experience for as markets, many to activity sometimes be infill projects

Park. our the aggregate Conejo occupancy X.X%. completed of two and XXX% We Spectrum newly During a and the quarter, of bringing leased Business other achieving square-foot At square-foot constructed two spaces projects. full project XXX,XXX stabilized XX,XXX XX,XXX square-foot demising we unlevered return to and lease-up building an

a our the on We that for replenishment with building and achieved XX,XXX demising Center. also an leases omni-channel completed two Business at return leasing square-foot executed of space and San are We e-commerce tenants Fernando using unlevered cost. total X% and

acquisitions, new completion or regard have These due With customary to of of to $XXX contract. diligence currently of we subject investments are LOI under and million acquisitions closing conditions. satisfaction

will provide We to variety out buyers from market completed. opportunities are details differentiates investment of as transact In for our the attractive us environment, ability many current reasons. on transactions more new that the other proven of are a

execute facilitating an team growth the to ability an with local our Our continue strategies. focus advantage, on is due including ground, our to entire trusted consultants diligence our sharpshooter

balance have opportunities the may low as from industrial puts of looking a We leverage catalyst to strong pipeline a that a real capitalize very arise. on provide they may acquisitions assets. us and unlock their for liquidity current sheet position market in sellers estate to maintained certain remain Rexford’s strong

remain remain we that given with capital ensuring environment. evolving navigate we a will rapidly our to prudent ready Still, uncertainty, continued allocation,

now the over I’ll to call turn Adeel.

our operating Thank Beginning you, with Howard. results.

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

company’s $XX.X ended for million was XX, core the share XXXX. months March the million FFO $XX.X three to For three compared March XXXX, as ended months XX, of

the core a of increase per a was quarter. This compares representing $X.XX quarter in FFO On an first Stabilized diluted share, increase year-over-year. $XX.X basis, company’s per NOI same-property X.X%. share share $XX.X in for XXXX, fully with the XX% of was million same million

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

balance our activity. Turning on to sheet and financing

management team, many a through we cycles. have been As

all belief long-standing in low balance a now. advantage Our market sheet is that conditions, leverage especially flexible, is an

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

term and our our in were three also capacity XXXX. recast $XXX years added to from able date February We $XXX maturity expand We credit facility total February. to of million million bringing to

we approximately XXX,XXX million assumed X% as availability Finally, end $XXX $XXX part OP million units, under $XXX $XXX had At of preferred quarter, million newly convertible ATM and units loans. facility redeemable the issued X.X our mortgage of approximately full acquisition, first the program. our available credit million of on approximately $XX.X cumulative we OP approximately expanded issued portfolio and million of secured cash, the million

the our debt-to-EBITDA in maturities until position We and regard a payable XXXX. record on With quarter XX, have May common to per we debt June X.Xx. liquidity a of stock very second XXXX, remain our Board to a no and of with on of cash declared net July XXXX, strong XXXX, for dividend, share of XX, ratio unitholders X, $X.XXX of Directors on dividend XXXX

guidance. it to Finally, I’ll our turn

share of on that Given share. our on is today. the impact on note we as call. of within local based expect allowing tenants $X.XX our guidance market $X.XX company our knowledge now its as tenants as of range per general and achieve COVID-XX FFO this updating Please conditions, deferred regulations well to are rents, to of guidance this impact We core

supported guidance factors. several is Our by

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

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

equity full For G&A, we including a from anticipate $XX to about year million, noncash $XX range $XX.X million in million compensation.

in does guidance any acquisitions, the our dispositions announced. capital just have not for or which been As not other transactions, past, assumption include

costs, the or completes metric. not include in Operator? open With does FFO That questions. any typically take costs core line remarks. we for to that, our this prepared that calculating guidance our acquisition Also, exclude the we’ll

with line question. question first Jamie the Please with comes [Operator from of Instructions] America. your of Our proceed Feldman Bank

of so what tenant Great. going can being real who what credit risk, more with rent you’re a have more paid that to whether talk about thinking here kind just people tie out, I about you’re start kind understand we in for can to guess seems just of tenants Thank opportunistic? asked rent abatement be and concern to over get and you. you how is maybe the

Jamie, it’s Adeel. the Thanks question. for

look to we to the what numbers, March you quarters very and is terms our one think to carry. rate collections important at take and our is in that we AR compare compare reporting address before numbers note a and AR of typically that that historical balance of for us March if credit I thing the

fact think – to I that’s a we really on had tenant base. focus important risk from haven’t very these credit point any us for because

few tenants our that the in course over portfolio have of well. years, last they very curated the performing been right, we’ve So

So there from issue perspective. that been has really no

So really to to I the right, are do need performing. prior stock think of this how pandemic, this company tenants we going was doing these into and take what

a concern world the So normally. a starts basis there to from really on go-forward operate perspective terms once of my in isn’t

of the not that I’m credit it expand the in answered So if sure risk, question terms further. have

But mind, way it won’t so kind that back make whose is In your everyone springs to it? able of changes I tenants – view, your It to and kind a good COVID-XX about guess, of right there’s Is to think no outlook through. point. in with be the normal?

dealing present are with are right? us right the it currently all I available to think we and facts think now. I depends, that

focus XX-Q what’s place in year right, that all that we’re work – certainly QX ahead tenants and do further or the time our the really earnings us right? as the the receive of with release, evaluating we’re latter Obviously, of put request in in focusing course to and on in. with of the terms trying terms we’re the of we exactly I over need have takes horizon. ramp-up been So when our factoring terms of of what in think part month, these in we to we’re outlined of them

going of my terms concern in there rethink isn’t really for right there isn’t these really go-forward But – to opinion, tenants any in need me behave. issues – now, their how

These of one conservatism analysis on what could of the what we their they’re and that to have to come could that we any business. our are and go tenants back. for level about potentially these ability thing in in of of that bit the because And tenant the anything context just put a look see have looking to we a did no that terms be in done terms analysis that not and forward at we see reserves, from of to in tenants go could QX otherwise us Now their terms of reached out tenant-specific we aside terms exposures of the talked really in potentially in has tenants bottoms-up a just general reserves, ability stated beyond.

general we the basis full has basis general XX guidance effectively So we’ve initial a an increased also changed. been the tenant-specific So a had guidance FFO guidance, prior XXX our and you’re That’s guidance in has reserve, of right? for the virtue saw and taken the what not beginning of the point year. – by guidance, us create estimate. points that seeing that now approach our the year, same-store to FFO In change you at about reserve,

point So uptick. basis there’s XXX

release What just looking tenants tenants that thinking and deferral the requested. – terms these calculus we tenants the to net granted at can little agreements have have using paying the and to So we exposure this the done the or have again, waterfall The talked that in what are analysis we a But is been collateral have that about. through build reserves where of appropriately. analysis we’re certainly this bit. truly

a think to way, do length the By businesses bit. have opening including California little closed I thank for is going uncertainty said, retail some Michael. What’s of with previously economy to with the there. a and started the has that you already the do this. it’s up some And this want to And timing, to question. businesses I to interesting others. governor a have obviously, there’s of as of going a and elaborate Adeel that the lot is lot restricted, is lot just time the remained was Jamie,

And and there. So maybe popular really what’s there’s smaller be some regard assumptions might there some this interesting to out to cause contrary I with tenants. for optimism think is

a tenants. ago. that retail, over bankruptcies well footprint. And almost zero week, which have reading I’m with Yet country. We’ve had a They’re X,XXX in those numerous biased all companies every started bankruptcies or We national even are bankruptcies. about years towards is the national global trend

not And regard so telling at data, our least that again, us to of level the with that seeing we’re is portfolio, tenant distress.

yet is And distress larger actually. coming companies, tenant the from

tenant-by-tenant? And about guess assumption that Or a of more up is as Okay. of a end I that you then basis could what That’s blanket up? it grounds think is kind the of helpful. XXX points,

Yes.

the didn’t through XXX Jamie, in payment. great the math, clearly tenants terms behavior of took – tenants is April into of of of that the a we request even a have the walk points, basis consideration entire as kind pool pattern so I So and in

deferral We because in factored down have a important that then of So a at be relief sort mix. really, effectively agreement. the out requests received look that we And the months, is those in received that the all relief their were have starts the their AR XX and XXX we that then took period should but they some remaining of in only not tenants factoring because QX. coming you

of exposure that tenants, have we and executed our left true are what tenants see analysis this XXX yet. of is as the don’t agreement the what’s really into effectively factor to an remaining there So that all from

we what But the applied higher, a in So are entire general the of strength that’s to once percentages that totality should put. reserve reserve conjunction with of where that year. that you’re come pool the point calculated, the currently in applied What a entire of XXX is specific to pool of that revenue you’re has rate. percentage revenue coming basis up company reserve cost And stream looked we blended up of right? is exposure. was with terms tenants company And the with those then seeing to the

the And Jamie, be out kind business. when of or it the our do was our we to way, announcement. sense that too much would of makes plus before precise, also governor essential latest just stay by under would analysis guidelines under because tenants as this loosening it’s our try be based to would but just bottoms-up made of figure the tenant the on our not were his yesterday. And still we able in to just to found of considered base minus, how be they in did of XX% tenants before be or a XX% business allowed And tenants,

to percentage loosened has greater restrictions, have tenants of that operate. be governor the able we’ll our that Now we’ll a up

of and do sort numbers these make So correlate some sense.

I all detail. Okay. the appreciate

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

Good morning Thanks. there. out Great.

yet? seen direction guess guys target seen I motivated things. sellers you as any Have potential selling the in dispose more any the your foreselling of highly Have side of or in notable profile even properties change So the to want I crisis markets? looking to maybe you to result change of a of transaction

too on go of making sale-leaseback we and sellers, their very of this that people and has better what We with be what group and we terms to able in on our been are. We been more expect increase we’re business of back to some many they’ll companies And that might a us at put has sell. ahead things offers, team look research going difficult get toward seen our lot revenue streams Howard. those business, haven’t respect. up expect short in their point, period terms really looks busy although any amount for think evaluate we that This it’s time. writing willingness dialoguing – businesses LOIs. to once pick to a And only focus dramatic of what have is at point, in for will It’s like, of Blaine, a that in not we pain. little

their So respect years. seen that it on is still reserves to takes recession, past people timing months, in to estate. in real generally as many hanging have we’ve But such not

six months of to a down little that three probably – we the expect to bit. road, selling picking aspect start more So up

And professionals Blaine, estate through it’s in levels And today, except few we might an of the real keep coming estate with built XXXX capital their rents. in our lot forbid, cash require predominance here the private sale-leasebacks, some Michael. of million X of to where mantra is, type let just of to tenants more feet of these of value deal billion their ownership in seller properties, God sale-leaseback. the before I should have never closed The be square deal markets issues investment. lower ability to was $XX.X in weeks and that over write our an a a Vernon provided mom-and-pop dysfunction the having and a check there’s flow for we and kind ago, monetize example And addition a nonreal the the is

is So points are the seeing increase and that we substantial lot seen an for today ever in these we’ve I any also say exceeds out putting LOIs And greatly before. decision volume would period of potential a we’re private of owners.

of purposes, occupancy, current more? all guys maybe in know Yes, at given I respect lot would a looking past, in your that guys with building the pursue to for And makes has access preserve gain just bit kind a helpful. changed the guys that instances activity, very a the of for strategy certain in little tenants to of Are order you sense. then redevelopment renovation strategy you That’s you renewing not to circumstances? to

basis. we on make Well, a those case-by-case decisions

you of repositioning not in decide repositioning, into the we at rates. look waiting anything that increase pretty in when has versus if into change any to do repositioning. a we’re put In been to market rent something been put already terms there not And market today, in-place rental had Generally, big the there’s planned.

the you market they rates, if little of to more. a in gone down. in So asking up terms probably They, moved fact, look not have

our and leasing transactions still strong at that leasing achieving late all look you If April, through spreads we’re March we’re spreads. completing very and

this involve no we should on a into at of in tenant. thoughts move that be talked on something But back really, throw And there’s why really not some part about go-forward that holding point, decisions street. looking we to basis to we that of of indication to for typical the on being that that think those repositioning. said, terms I you our we’re decision people going is So today

So see a is their that decision or their deferred and stream. versus that’s severely revenue occupancy even we to us we continuing why support we repo an if have make to that not a lot pay rent impacted able business easier, back we rent if be we if may going something push into inclination maintain think the anything, the in tenant to

Thanks guys. it. Got

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

you’re you. the at a about $XX Thank I you accessed – you – that Adeel, think Great. share. said ATM for

quarter Michael, still the high sell now, fourth right can is access year? shares $XX. or compare numbers model you Howard that at You ATM, XXs? it third guys And around I the of think, assume the an to last How trading, those safe, do if are but the to works and

Yes.

you QX averages XXXX, QX just question. the you by $XX.XX. quarter, shares actually asked issued for we example, thanks for I’ll at question. since the John, give So

at So XXXX $XX. year-over-year, if you just look QX was were to at

and correlation QX there’s there. little XXXX, QX, $XX.XX; $XX.XX. bit So was a QX $XX.XX; of XXXX

that think is get time. point think any I stock point, note the overly we is or I the don’t important given equity spot the the of value at to relevant here focused But on which in very

Our of stock We $XX, What model and that decision, terms kind for That’s in trading And that focus NAV of was medium-term what to we drive really terms high as to that with that how kind does does right? the FFO, in right? in give lift and how short to going we focus even do is as capital what right? it? of utilization? try on buying to are of

when ahead going we position, QX at in issued in was support deal what of And us did we saw equity that different we $XX.XX, no XXXX to right? parameters the were that’s QX. that that So than clearly

been the side spot this are the as to what So any nature to in cost and do given those to as time. at we’ve on accretive we tried the decisions But doing, ahead is get too long point and fixated create that side on us not us accordingly. the FFO make NAV of opportunities which focused allow we’ll

try or down take to I I trading that we’re it. stock for sake answered the mean, to know For good bad. a lot if just don’t question, the going high, not for whole just is the if of

add I’ll that, And to John.

LOI more products mentioned million forward, of form are or And actually and to with those of them under page contract. some have the – half transactions value we on add, had component some Going of to we repositioning will heavy them. $XXX than of move several value-add immediately

create to still market in opportunities the us there So for many value. are

between split And then process roll and how question, and XX a thoughts out? that will on that and November second shake now any

was Howard first had what deep maybe XX/XX/XXXX, the like know. going terms that shake the out. question, a I the think at last and beginning then this And that then we at part followed in dive would just of then this about portfolio it taxes particular would $X.XX in and that $X could I if uptick thing the look and a We, to into real was of expenses the like impact recovered. time, of at year Mike to million of But point the $X was to from thing be using year, and million analysis, our to did feel we answer if what pass there estate it’s as did in-place that numbers opine don’t right? pass, how I’ll was we in

which would is fully that that X-year thing disclosed thing also was that note before there one this is was important we at The to important deployed. be time, that lag

of to lease loss in recoveries ability correct of the some we have those terms structure. of So would

So that also could be $X.XX mitigated.

think property that because, out. of years. we’ve three three I think changed the materially benefit been our last I So But so accumulated to the math to fact this much the again, base two from that four more juncture, has think generally I at over don’t only has importantly, months

don’t is different. I calculus to going So think the be any

company political mean, can’t relatively really And is our with Generally to to speculate. insulated. the impact that. the respect environment, agree with I we

Okay. Thank you.

Our with Mike line JPMorgan. of next question comes Mueller from the

assumption much your down or conviction Adeel, think guess, that I about actually or going up there’s first, XXX I decline to you’re blind up of and Hi. basis that have year-end from to And see points? XX. a guess, occupancy XXX assumes point you target XXX is end just where you you evidence like XXX basis March how pretty occupancy

Yes.

ending story. you of what occupancy thing sometimes I guide about occupancy, that I tell year telling that NOI in the We the one occupancy, a the you. right, terms on that disconnect which is whole can is caution think don’t is average where that an occupancy it’s a versus people doesn’t the truly have always

to when little I they’re when that tenant I happen getting we maybe the the blind to we NOI I and potentially I assumption? what most to from some bit more but perspective. think we’re certainly lot a have So disconnect there’s think for of get it where So not there’s six think disconnect, a part, a that’s is right? do granularity a back there. expiring we So I that’s out months, we a forth, translatable right? Is definitely guide, think think sometimes what on it’s why can XX/XX/XXXX, think

this April. analysis together of some are put So early in

the as and transparency different. that’s granularity no course that think improves – progresses, I as So time and

quite with operating presumptions some tenant been I especially our base. those for along time, think we’ve

seen larger that happens. in those. leases XXXX you’ve to last we’ve us the care that tenants do of how behavior that’s seen expiring of just terms were year I is a that’s it taken which of think leases, did one June lot But leases, I certainly a in you’ve We of note, think important pattern right? thing and

on sooner do up leases tenants. come visibility they opposed more think certain medium-sized because pattern certainly seeing you’re to So smaller some those I as a lot and you a have

you little So I think a factor. that’s of unknown bit where have

Got it.

about I having tenants stimulus having either they’re on what with the the And you accessing the the funds? or the they’re then success are ground from Okay. hearing issues guess,

stimulus Mike, we’re terms funds rent in with is it’s Howard. discussions in requested their tenants had of handling to relief. happening how that really We terms what don’t know of access

in We’re difficult extra really with suggesting, obviously, that gone it’s where on they step do but We’ve those. to providing access obtain for information the the them, And us their to tenants some that we had the banking system were to that the track obtaining and being able in came stating in and have they success applied be really approved. pursue withdrew requests funds. later to people them, had

seeing to the going So else we’re the what they But pay be to terms in on buildings. to activity vacant is relates it as rent. were ground, of happening able more

We’re to isn’t of moving have expecting buildings renewing tenants anything they another at, out move been because be to tenant that happening. really we out thought might going were looking

So pushing renewals vacant – activity it’s a on more lot yes, it’s our up making space. some so, of and there’s

vacant as tell have know, in down. to when it. renovate, do you We’re we practically is they’ll But the space, although seeing a we touring, talk you touring whenever our brokers is modernize approach, you market, substantially reasonable amount of in that

typically, space to this, the times So the in available quality. and we generally best is flight have in like submarkets of each a quality there

that’s now of in seeing And had own vacant some space. of a And in in that portfolio lot success of the terms weeks. of doing on we’re so our we’ve in the going leasing the negotiation past even

to add a for wanted good Thanks bit on this question. I hear it’s you. little topic. just to your from Michael,

a As here that a through local Southern range we of very unilaterally government-sponsored repaid. loans local situation – municipalities, mentioned, have to have that have government who to tenants these Howard unique we in that these the anecdotally ability given and have the their have tenants don’t available But we funds are accessed be defer California rent. the seen do have

by do have been rent. they don’t to believe it. have to have all is So defer prove can they They they to impacted indicate unilaterally they that and they’ve claim, just COVID

just it for wouldn’t that mind, know give maybe easiest little in many our And General in but fact, helpful, solution. here really I differentiating be tenants, factor you first So David because California. became, overview might a the if is counsel, it a if don’t Lanzer, maybe

Sure. in survey up terms it for the with local Thanks, thing place Mike, that and across as and Yes, where governor orders country the order here as cities a that is, California rent terms eviction in their come California we’ve what different states makes done doing the other the had in own question. to basically moratorium. is of a an said deferment of municipality can are

been the very the And so is granular markets, our we’ve deferment level municipality we’ve like, time periods like. at a in what repayment within tracking do periods what at dialed look time and look what doing

top business, unilateral tenants to our it’s – have been understand something rights. we’ve points the that to of. these that unique very that’s And so And do tried hard very on we’ve leverage but we much know what

– actually security still municipalities we’ve so interest. for late fees some or And allow of deposits or

use leverage so points. And those we

individual rent, lose. to terms paid or each lease they analyze have we option if of they as going that tenant understand some have in haven’t they we they’re granular with their concession, future lose full particular that very have get also might We tenant of might to the they sort a levers a

base. what that’s dealt how local handle so how in and of this terms And we’ve has to each order affected tenant done with our

color. Got for it. the Thanks

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

on appreciate we���re afternoon. environment – the your not I good the Hey, changed was working in. I just I you’re just whether of curious and any given pipeline guess that or assumptions Howard, have color as the with. underwriting to

we certainly have underwriting. yes, adjusted Chris, our

this at to We’re point. conservative looking be very

of assumed in we’re gone course, looking returns bit. longer lease-up And stabilized time some have we’ve no well. yields the terms assumptions. assumed of We’ve cap a initially rent of the some frames. And we’ve somewhat in exit little of up leasing our growth So for rates as adjusted

a just of And sort question. then more great. just operational Okay,

of April it tenants current on relates any time. in tenant you’re get coming either in what you any forward, ability March are or to had or sort that seeing to impact scheduled you seeing from move-ins the environment your to sort of As

asking? you’re what that Is time? on space their Into

that you space their time into to Move on the space. their into scheduled. were Yes, degree had

exact that running. it’s I because go can building was was, we that get business was a done there you’re space they concern exactly Orange just in this lease wanted was lot renovation vacant as as that occurring work reason in did bit possible – earlier, we to Well, on there’s mentioned referring tenant for that We and in make a can of and concern to. their nowhere XX,XXX-foot sure the something the just up a work get leasing as And And do, our and people not the they space occupying to movement. Yes. of vacant a County. to building have what the that of had most is a so fast

space had literally to so had that we the And comfortable. some we if they other rent don’t give want little them other we’ll on creative had in. get to move to a able being We of temporarily, market them space, in to pulled out space building deliver be their got to told because they up existing us for how on they’re prior we the the them

in are looking terms is the away. in them move-in great a they they need fulfill have concern actually why of it we ready. much is on getting a we a have market, that’s and people put And vacant right to generally that that so question, those So requirement of emphasis who spaces

given Howard in April. note, was we square a feet just XX,XXX while I was And talking, moved

operating. clearly, we’re So

That’s Great. I Appreciate Thank it. had. all you.

the line question. Our proceed Next Manny comes from of your question Please Citi. with Korchman with

I Are more remarks on isn’t there any that their at small space that way resilience types market about only it the spaces, appreciate a you if I that the everyone. resiliency risk you isn’t those tenant. the is see question think of spaces from or risk? or Hi, only is, location. the you than Or their Michael, different Southern of outside couple in but guess single one of sort your of California of space satellite at less customer? with sort a of tenants sort are location the of do

a us they a Thanks your history, I really sustainable over And presence for tenants. what our tells can that factor. differentiating joining resilient from less aren’t not that we’ve data question. Well, I Those is tell explain fact, Manny, think I’ll to, market in you because they today. they learned and not sec. have and the doesn’t in are a have past thanks that us in the for years less that’s those – or – less

market. rates market and name XX% By higher measure, more the expensive is Our over most operating is any Operating expensive higher. our everything are cost, in far. utilities, rental by environment taxation, you it,

you if frankly, XX left ago. didn’t So or decades market, have be to ago probably in our years you

here they on in the stand-alone by the far. population, have in fact, consumption And efficient they distribute manner is in countries need largest largest It’d of be an into world, the to because largest regional basis. reason to product the a zone be of country the in one the

based learned is another what here company locations it’s over mission-critical markets these so or be their is that that the sole and in other based has they’re could in even company or whether whether a we’ve locations, And are market. location time

that’s told really think has what our us. the experience what I and data

the thinking on then would would to, new the second. in about And of for were you’ve caught all you a and payments sort be pay up? lines that all rent to they time Great. cash when sort coming just when of If the deferrals start agreed

XXXX. a or September of in in We in but back of Yes, payments deferral finish early Manny. start three I up that leases handful effectively XXXX, and up would to XXXX. be would them months say paying XX% of into have extended within majority two the cash caught only

Adeel. Thanks,

closing will session. to does question-and-answer our for now it back conclude turn I This remarks. management

behalf you health stay thank environment today. forward best health we’re we stay wish again, us hope to solid. and is in of communities Rexford for want all on of of the And to healthy. you operating looking that to joining three again, And about well, I months. and Industrial, And the Well, the well we our reconnecting want and

your does conclude you that teleconference. participation. Thank for Ladies and gentlemen, today’s

and your this disconnect at may day. wonderful lines You have a time,