Rexford Industrial Realty (REXR) 22 Jul 202020 Q2 Earnings call transcript

We thank you for joining us for Rexford Industrial's Second Quarter 2020 Earnings Conference Call.

In addition to the press release distributed yesterday after market close, we posted a supplemental package in the Investor Relations section on our website at www.rexfordindustrial.com. On today's call, management's remarks and answers to your questions contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today.

For more information about these risk factors, we encourage you to review our 10-K and other SEC filings. obligation any no the statements assumes future. Industrial to forward-looking update in Rexford

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

an open Executive investors. Today's Our GAAP call is non-GAAP supplemental and Rexford conference measures explanation Industrial's by and Co-Chief financial to earnings will and the such Michael then General Counsel, of useful package are our Howard Khan; Adeel and and questions. your Schwimmer, hosted Frankel for why remarks Lanzer. call together make Officers, release reconciliation They Officer, we prepared with will Chief present Financial some David

Now turn call Michael. I will over to the

you, and call. earnings Thank XXXX to welcome second quarter Industrial's Rexford

First, brief Howard will your times. our second very and we financial results, as results. challenging today and summary quarter sheet follow everyone I'll operating outlook. our cover on during well Adeel us more begin with these will of colleagues, with Today, and hope our a as friends, activity, transaction that joining then families remain balance well details

then extreme imbalance as The California market's supply highest challenges pandemic. will remark resilience driving the your by the questions. humbled are nation. demand, our market, infill construction. imbalance industrial through no of where from market in path property new differentiate means industrial there's the this the resolve call the open the by continues despite exceptional of lowest for Southern the developable demand supply to also to work to we demand quarter, performance unprecedented market land supply scarcity strong team the that second Rexford's our We With is and must presented COVID-XX regard the at We strength

Southern value to on creating we California. the remain of within many reasons choose One focused infill

FFO performance XX% to core the speaks itself, X.X% Our share by million share company's We following. to of team's increase $XX.X and in and core per a $X.XX. FFO by generated increased highlighted quarterly for

GAAP on Property grew basis. by Same NOI X.X% Stabilized a Our

in X.X%, by during We short-term XXX quarter. Cash X Property second NOI months. deferrals, Same averaging X Stabilized which Stabilized feet decreased to leases million rent occupancy by Portfolio. was Our square the Property our XX.X% Same driven X.X achieved for signed We

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

reflects entrepreneurial the our infill Our our markets leasing and strength team's fundamental of focus. performance intense

quarter, second the reentered infill experienced pent-up market its dramatic many as tenant California continues were demand shutdown half as lifted quarter. During the restrictions a Southern our of in through notable e-commerce the We demand growth. acceleration government-mandated and

Overall quarter to by XX% and also to rent unilaterally regard California. During with billings and cash over some $XXX X worked relief for properties to bring approximately collections completed of agreements. took quarter. X tenant whom advantage ability to in of the proactively COVID the subsequent year-to-date of were just accounted collections defer for impacted we were acquisitions XX% of investment of our quarter, the million we rent collections, represented government-mandated about quarter, whom billings their simply for through Cash for million. end, acquired some volume to With and $XX tenants, than more

cash leaving off agreements deferment, our to under only billings close tenant XX% COVID so has was agreements, monthly collected quarter. quarter cash very cycle, of billings XX.X% the that equaled most already collections during about XX%. a in tenants strong X which this particularly X.X% X far. with burned of numbers tenant cash on to under pleased rent June the the at see are covered collection of at non relief July to covered average, on impressive, given July's months, point collection in trend July. cash relief a off, tracking are a or with We not end Further, for deferment the start, month very is collections positive Of to typical

we quarter. July, In at the to addition, total about equity issuance deferment sheet tenants of With million XX%. are during activity, of approximately collections agreements, a regard covered balance already not the relief for completed or cash of under $XXX

maintain the leverage, debt completing quarter to fortress-like to of sheet equaled X.Xx enterprise XX.X% net low leverage a continue with which about total value. balance to We debt EBITDA,

move offensively, upon the favorable to opportunities are to also internal in believe billion drive ended both and We emerging defensively well well external liquidity quarter value. position with to as we weather $X uncertainty very of as upwards very to a access liquidity capitalize positioned of as We growth shareholder we COVID-related forward.

and member, and acknowledge to team remotely drive Finally, challenges. each I'd COVID-related company Rexford yourselves and distinguish of deserves fully like to worked moment each has and professional diligently the of thank additional thanks prove despite our continue despite take you best whom a range team Rexford one teammates, the to so Tremendous our in performance to There's as all to a personal our mention. of special who business. person to working

the Adeel the Khan, expressed to chapter exceptional partnership his and for to service know, of in been personally, had company On his professional I'd team, and for contributions desire true new to privilege with Adeel you like a and CFO, thank As entire his work our dedication. behalf Adeel. career. It's a pursue our to

Laura exceptionally new act have very are CFO a is follow, on Adeel hard September pleased X. starting to Clark, our to Although as we

sure know are with to And who pleased experience, of call can I'm that, her her Howard. you over our those fortunate have you to Laura I'm team. the turn REIT very how from appreciate join to prior we For

and you, for you, Thank today. thank Michael, joining everyone, us

demonstrated quarter, increased during for vacancy second Rexford's industrial rates While the California infill Southern portfolio resiliency. market the

a Our the vacancy, and positive shutdowns, continue growth infill the quarter the of a and overall, a achieved and the impact vacancy ended quality which markets to market at asking markets second our Despite Rexford X.X% Stabilized testament than Portfolio X.X% focus. team's portfolio lower to support Low the is management Same rate Property of market up pervasive a COVID-XX on fundamentals. associated the rents supply/demand according market saw our leasing as rental imbalance with Rexford strong past of to weighted to social COVID-XX each demand most the distancing quarter, space moved submarkets. requirements, in on activity vacant over Due quarters. Rexford over of leasing completing volume to focused to deliver steady space the largest CBRE. X XX our we our new past through quality most increase second months continues functional average and basis the is

leasing outperformed rental XX.X%, result pre-COVID work, GAAP of strong a of As achieving respectively. resulted or cash spreads exceeding our spreads, in rates XX.X% team's we we believe our hard market, and the blended and budgeted meeting which

our wait Of the expiring XX of tenants X strong and released we've We expirations buildings moved at size, the square are now to leased we the active total by see made top year or renewed negotiations. more not progress XX% repositioning, or start XXXX even taking lease in and an have footage and approach. XXXX including a for additional halfway the with year expirations, through on currently XX% with renewed XX% than many have

Let additional price X.X to me now $XX.X acquisitions turn we land of second properties totaling approximately of million. to acres end, the for acquisitions. our Post of XXX,XXX aggregate X We purchase during Avenue of rentable for X of Adding fully X.X%, quarter an and scheduled occupied buildings completed quarter development value, buildings. portfolio. initial increases. $XX.X through feet acquired at in Vernon acres $XX.X April, XX,XXX has will yield of X LA's square annual feet consists land sale-leaseback an Valley which The the which million In with we million. San grow acquired rent Gabriel submarket of square

in X.X $XX.X building Also land feet approximately West X is with yield projected reference yard. on $X.X on basis on note, April, for acre initial which for to the building the acquired at of portfolio at a million. $X.X land In South an million. of May, in X.X long-term the yield vacant are our here Diego below market XXX,XXX to Drive, transactions a we yield purchase final in As subsequent at property market. $XX X.X contains Knott yields to a up, foot a June, project estimated we acres light construct in XX% X%. acres the of loading is I the basis. which of acquired we intend stabilized the Also property Avenue X.X%. on we acres on land The positions submarket X at extensive acquired XXX,XXX submarket, buildings the After Way, leased market improvements, leased of Avenue in submarket of LA's rents May, fully dock-high for stabilized is submarket, Orange located of million. of X.X Rexford The office, that buildings of for below feet of clear a our County Brady $XXX,XXX. rent County structures are Bay to building parcel projected Orange is feet Production on the be The land million. leased the and and release expanding rents San Rexford XX acres large X.X%. an lease industrial repositioning dock-high of acquired for stabilized June, XX% height. single-tenant single-tenant Street a Flotilla which for In is logistics un-levered The be property for Central Street square a square consists be and building containing QX XX,XXX industrial XX,XXX Sandhill X.X%. lease at After acquired at expiration, property consists Central in square consists square secured totaling existing manufacturing fully XX-foot and repositioning demolish yield Also XXX,XXX renew the land submarket, LA estimated and features in near-term loading new and high-image feet intend projected the single-tenant North We the square or to XX% Eastpark in

feet submarket occupied industrial a Fleetwood of Carson on portfolio rents of square the projected South to Avenue Boulevard, industrial Finally, The property square Streets, LA is in of fully in acquired square-foot a upon acres LA for Valley be Empire the in buildings leased land $XX.X leaseback, for contain a acres on yield land. of to we constructed at submarket, property and and end, market. stabilized initial San stabilization. expect the located After reposition Fernando estimated bring company XX,XXX million. million. After Also X.X acres July, of a short-term After building projects Avalon acquired X Rexford yield for quarter, in and the The $XX X.X% yield we million. intends of buildings, July, the X%. total repositioning, over a XX% stabilized contains to X XXX,XXX West Bay Penrose, state-of-the-art building The quarter South below we the the feet to submarket acquired on Slover property to XXX,XXX newly $XX.X located X.X% are X.X%. Inland X.X a X.X in

we in Mid Avenue on through under LA repositioning, July, XXX,XXX a $X.X The have progress X.X%. million. add another square currently and We value feet QX The including With COVID-XX projected Greenstone in our in acquisitions. consists XXXX Consistent nominal square acquired to square submarket Finally, up near-term containing continued acres. to closing with trucking the under feet represent million And currently, have container lease-up. continue these as the we with and repositioning yield we believe stabilized program, And related strong well start beyond, LOI strong deep projects and permitting their to respect our and and look the space, $XX XXX,XXX or facility to ground XXX,XXX of and most limited note development, inspections. we some of half in product property be expected believe These for feet for to of of is with projects pipeline, County feet second single-tenant we a from are functioned due we will little very relatively acquisitions to X.X locations to of delays due of square and projects equally pipeline within customary the positioned satisfaction new subject these demand mission, submarkets are ahead completion under investments we vacant of functional diligence availability modern have our competition opportunities. XXXX contract. conditions. XX,XXX best

more provide completed. as We details transactions will are

over I Adeel, tireless Adeel. your only turn Rexford's all Finally, your endeavors. wish pleasure Michael's now you, call you been I'll It's Thank on toward working to with and the future growth. over best for a you the the years, comments. echo to work past

Thank you, results. Beginning operating Howard. our with

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

X as of million the representing NOI per increase a ended For for diluted in second company same $X.XX $XX.X XXXX, was X months On $XX.X FFO the per Property a compares share year-over-year. million the quarter, XXXX, of million core was million Stabilized XX, share company ended basis, June with months compared Same XXXX. quarter the June fully share X.X%. to was which for $XX.X core X.X% increase $XX FFO share, an of in XX,

Property in increase decreased Same cash due while increased year-over-year, NOI Stabilized same was NOI deferrals by Our by property X.X% On same property expenses a Same Property mainly revenue, X.X%. Stabilized by X% rental related to COVID-XX. driven a to rent operating basis,

now and Turning to financing balance our sheet activities.

full share, purposes. resulted general we to future of approximately second quarter, sheet of proceeds weighted net quarter, $XX.XX these advantage program development secondary corporate for We under a price cash, X.X had maintaining approximately during the common of of of million $XXX million our for $XXX the per to At availability In per the of in of which Rexford. $XXX fund credit proceeds offering the million of a average redevelopment with deducting and that continue $XX.XX issued Also balance $X.X $XXX.X capital discount, will underwriting believe after ample available and program. available approximately competitive low proceeds at raised and We common diverse completed used net stock XXX,XXX to shares a second May, we liquidity underwritten million $XXX ATM end acquisitions our be an array is on a stock Rexford million million. and the at levered sources ATM million through approximately share. facility our we of shares

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

Finally, turn I'll to guidance.

as as the Please our conditions has tenants, on of guidance regulations we're Given is of well COVID-XX maintaining impact defer as guidance our as market our tenants today. follows. our local note, knowledge based on general this rent, impacted allowing

FFO We expect per of to range achieve the core company share $X.XX $X.XX of share. within to

Our supported factors. several guidance is by

to year-end expect Property Same We range XX% Stabilized XX%. Occupancy a within of

XXXX footage X.X% note Please square properties NOI the expect XXX year growth pool our XX.X aggregate achieve Stabilized comprises for Stabilized of consolidated to Property Property June Same We with Same an of for feet, XX% of of XX, portfolio X.X%. to that XXXX. as our square million representing approximately

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

FFO our past, other other from transactions, the core which that metric. capital exclude assumptions include would not not does have guidance for guidance any in typically been calculating for or or As dispositions include costs announced. Also, our yet this does acquisition not acquisitions, costs

past which time, for to the X I'm exceptional. as these has take team over by we the XXX%, for grown Before is the Q&A, steps. In grateful truly just truly years. Howard portfolio to thank Michael support I'd and Rexford like entire I start their next that

investors has Operator? Finally, and a take getting you With we'll been to open all it the pleasure well. to our of questions. know line that, as any to analysts,

Instructions]. [Operator

Our Bank of first Lynch. of line Jamie the Feldman of Merrill America questions come from

you wish the you, been we best. a working also it's pleasure with Adeel,

NOI So lot going there's how basis. report I on a guess, are to on it a of and already seems same-store confusion like cash it companies

they yesterday included higher I not that reported did think reported deferred kind So treat rent, it same but And number, a their can in talk of and about you quarter. guys X.X%. but -- much you minus Prologis they

methodology? same same-store us what analysis, done that also out? your why had NOI hadn't pushed us if have you you talk would tell can this been if you it through you So And maybe used

Jamie, absolutely thanks which same-store IPO since it has has been guys, with been a and guys working been question the for terms negative the at the $X.X you and cash reported And us question. in was have million. The the pleasure of you with here NOI, fantastic. yes,

the presented in same-store there would about so, of which was X.X% as and of And positive is normal the cash of the like report million we million The which equate to a year-over-year. table release, you agreements to concessions the it's growth I a question, construct reported think part prudent second or to at $X.X exactly in of contract. it was reporting. that component do, but concession, These was earnings the in the $XXX,XXX, $X.X thing of deferrals. plus or a the at amendment about are roughly these which our If to look and NOI arrangements such that, that XX% acceleration to that, the the lease just and as And short-term leases. document deferrals amendments was are most just within your

what you're seeing XXXX. NOI which are in the higher to half anticipate latter in going back. back see these go as and be September, of cash mostly Naturally, the And deferred And are built due be so we the October that's the in year, they're built -- because to reporting. concessions going the to you back

and you're of our was accounting and that's So what seeing from numbers. on perspective, straightforward the it the simple,

think your some can having actual collection, ABR XX.X% the the or Okay. rent of you you rent? base gave the -- talk And annual But tenants deferrals about that XX.X% are as numbers That's of relief then contributing guys agreements you helpful. of in and what of release about some in tenants your have we the agreements. terms about

the seeing just and, is compared with of take in deposit could question. good to That's feet, data XX, of on of course, X number the that investor June relief, ADR. variables, XXXX, different magnitude that's which presented that applications. what But which square lease that we count the total which have security you give in the was presented, only the community, simply analyst -- what Yes. terms and in ABR table, magnitude, when a if that of $X.X look Jamie, you're terms there. the been includes as of again, the And data, community we million, about see to X.X% the of requests was

take deferrals, only and the If ABR the back concessions as and further the that of X/XX. focus of that's X.X% only on you

number the just small and of comparison request yes, in that So the terms presented a was very of is but a the perspective, cross-section give just portfolio, terms from relief of the was the number that in in to total size. release

in improving think percentage are pull Okay. collections see That's I things your for seeing guess that you take do is payments what increase, terms why maybe us rent the pull you even back of of talk or you actually you a periods Can rents you cases more California well? deferral burns rent And through -- think rent is helpful. me. rent about about percentage And back when then maybe do your in just increase think b, risk last as actually process? terms and the a, of, you've maybe step maybe the or closures. But just do PPP as thought how when How rent collections? increase. ahead off? rent you seen end back, Or and

Jamie, you your again today. it's question, to Michael. Thanks great connect and for with

truly locations. financial COVID, are truly to this these getting further a businesses box average, These have hurt by great -- tenants two ground, operate municipalities unilaterally the a tenant the obviously, looking rid of on crisis to that, These not the spaces have the in b, we've are many given So And seen what the businesses. related these They to by in them. the base, location. many them like the chain supply to replaceable infill logistics cycles, for a companies local frankly, global mission-critical and is we're the of seeing through strength big at testament businesses, I can't given locations ability factors including rationalizing so and and logistics not prior of to that is on that are really rent. these truly afford it the terms are agree a, of

able today, not believe Southern them the although is believe And give that do is space of market And the the they to the to COVID. they comparable so not that some reflecting those And the do generally tight reasons permanent. on with of business up be there be COVID a likelihood reenter some post markets. That's to California. extent that have they are view they may they hurting, exclusively focus how anything are real chosen also are markets their They they have a to currently we the our many may have. infill in frankly, space

the our frankly, base. taken seem in so through it's our prior on PPP are counterintuitive. patterns with tenant similar And from But It we've of over consumption perspective these And to we've tenant historical regard as might consistent observations the a based dive PPP it, component cycles. seen decades. the deep with pretty

greater You have tenant loans and than base request that PPP map we our against we have didn't can our was of that tenants was relief. of by XX% And tenant even track And found went the pretty who received it's interesting. into -- money PPP to base tenants about what that rent XX% that $XXX,XXX. name loans received who

of amount be monthly of rent seem tenant difficulty the it in base, just PPP their that tenants that the to PPP The base of amount by took loans. And those equals are into so does in about loans of our rent. tenants the terms X% paying coming having aggregate PPP reflective not

again, not number. impactful an So

indicator in are free we pay if companies governments not are tenant's been to pay not rational the rent. market that loans that. so our But of ability offering clearly think advantage in taking or And look, that, has of an it the

the of long the resilience full have commercial Naturally, through To medium been our and extent impacts to rates said, expect true here here with term. the on to of the COVID certainly level July. in see businesses we're That what Southern predict really as are renewed, predict extent having there impacts those our we on I can't we are respect trends these PPP tenant shutdowns. to quarter similar continue that seeing loans dramatically they things so improved And and to is half But And as and the over second a our the expire the we can't to ongoing through and/or base California. increase. of infill think hospitalization business tenants.

Our next line from come question of is the Korchman Emmanuel of Citi.

Maybe follow-up question. on first a Jamie's PPP

think, did I I to an of analysis rent. get who constructs guess unless misheard I on you, relief. loans the received of PPP, you forgiveness Michael, to you if you and about that -- did for part the ask think you pay used get actually

away, that more be salaries PPP that and of be are the for me, worried pay to PPP rent? To PPP used you for PPP if So be money? able of some rent guys there meant because kind that got they to will it's using counterintuitive because won't to was the were say goes tenants asked that relief

thanks that's No, question. and today. for with connecting us Thanks, Yes. a Manny, good

number any So that that one, money on of full can In they PPP have a other they x and not on spend to dollars can the receive money, rent. still payroll and in can loan. of PPP that get and other things required spend words, their they're amount business

money expense in the structure from number rent. is it's on of business; for And tenants and to their exceedingly required of not it their PPP small portion is use that rent was speaking tenants. these what we're generally an seeing small these a they're furthermore, aggregate in received two, portion So

think that to But based so So the don't it's change. again, seen data the far date. to that on materially we impactful Again, seen to based data tenants we've our really could that date. on we've

agreements. guess, clarification deferral then I answers, And he in call, 'XX those on the by getting into of you or talked that most 'XX. of one about think Earlier Adeel's the X average said in of end the to on But months. a X then I for back,

X X agreement? when I mean you what to am what in -- do of say you deferral months missing of So terms

X This basically, a an And at a is where or we've is essentially is lease we're David Lanzer Rexford. those deferring what describing out with tenant amendment worked agreements deal this arrangement, or period. X when the months look they deferral And whole. then with the lays a component have we average. all out And the agreements rent repayment also in that on

as And and periods fourth Does most this those be calendar quarter year. or before, was question? during that to of noted paid answer so of the third repaid your going repayment are

David. does, It

we're higher the So with longer an April, deferrals. we're average the about June to were was about naturally in collections, May Is August and when tenants you're that again, I be on you that's were It guess on phone looking guys should October, September no July, because basis, to and at those the the talking conversations it? and really just happening. that because deferred when way right think those

today, expectation things front agreements as other and extended we Well, in like. as impacts place, that orders in looks what based that's COVID. being on different Obviously, what can on is far But to that deferral have we our be. the what based have would it today in and front what us of are related us happen of

Adeel. Manny, this is

question to answer. Just -- on expand David's

the back June of at May that was right? talked was it you mentioning also shows just the the these that at kind pattern, latter are little, you May, the right? half the essentially is to were very be the then in table, if was April July that relief and of anything, and terms of look almost As was heaviest half granted. this about in [indiscernible]. David year. David rebuilt just the deferrals being point So the are that exactly going that is to And all,

XQ those a then, imply you about same-store should mean NOI we're May my that collect would but growth, your if Can benefit that of that. the on in last you thinking assume maybe just I in latter as help been that, XQ Adeel, and point question, then would two? that have year, take April the NOI doesn't same-store me cash guidance months collected and for

Absolutely.

guidance Our normalize stuff. not So of GAAP is cash, supposed to GAAP, that on right? based all is

on GAAP. guidance the So is

why that's to You Jamie same-store impact. you question what when If exactly supposed GAAP doing the behavior. do right? our because cash QX is it's earlier, supposed noticed that our didn't to right, numbers, And see the is asked normalize

QX consistent. to So supposed certainly those is number. expect go QX a NOI QX into the and NOI in your in. going when these higher But are and consistent saw QX factored it's these deferrals. gap impacted because you even you build to was because Is point, see as to back, deferrals through we stay deferrals QX to cash normalize cash

wanted GAAP cash clear versus I yes, absolutely perspective. on is from based NOI NOI So was to sure and the GAAP. for But that make guidance that it

Our the Heck Wells next from Blaine question of of comes line Fargo.

Great.

Can at markets. looking since has investment an And how quarter you thus guys if an your I seen any you're on July. first about to Is or just valuation? has forced pipeline indication at changed, all, So have you mean, that selling? acquisition in-place cap talk call. the clearly, sales in movement far rates see seen have starting in uptick the activity you any

Blaine, it's Howard.

address me question. Let the

the being square transactions year. product LOIs having already. through $XX written rather amount We've call and worth We've $XX We post of and all that of the or earlier, to quite But did LOIs is quarter how half few little under point we did quarter year We of of announced your quarter So the is of under robust yes, last very on the contract. million strong. don't during a we're subsequent obviously had feet think million that reflects the think pipeline I -- more XX end. million closed million we're over LOI pipeline amount conversations writing. than our really a we I the $XX

did I entirety, this year, XXX. where XXX we've a about year in think there we over last little written LOIs

So harvest either of now to next is going be really that type transactions. planting been this what has some we're lot or year. to we're a into able A that seeds lot doing on later focus year sale-leaseback of

seen those. of You've start us some closing

didn't is The about strong. those. had now. Some of about space of vacates about, leased. them largest say is talk one leasing we the had a we had, the of forced of occurring our the quarter. and thinking talked And very the I what we lot vacates quarters during being leased talk we we -- right the selling even the really, any during wouldn't there's terms strongest market X just really we strength we of What the not pipeline in quarter, contains about impacts. of PPP But X But market, still new didn't

in ever some is other So bit type there. There's more fact, to the seen are you to Are market industrial some between seeing in that come Class well more towards on people focused that a occur starting fully doing going see than coming we've when shifts industrial, of obviously looking type categories leased to A bit transact more we've a isn't pretty industrial darn them now even of the, world. sub-X% over to the capital some call in unusual so it, market. about And We're lot more I'll with modern starting And compression buildings we're of of what's probably product seen. think garnering on core or rate that now side. those to the offers happening a there's cap compression be to transactions.

out. into aware reflect is, that we move-outs I conservatism do those then and in guess And pretty the should year, seem helpful. half you of? of a both pointed meaningful bankruptcies the just to as the of That's they second question, the guidance Or forecasts? second question built actual maybe tenant just deceleration occupancy about my Manny on imply think guidance, or known Great. up following guys how are same-store level

thanks the for Blaine, question.

that and quarter. So And any we guidance the going what data really built looking the early number fairly relationship last has the we naturally, pool terms experience, of on particular seeing our we of and in world which the was pandemic time and in that were still was think world the the can into -- is the QX has rents, secure terms that we the quarter, of of that I quarter yes, our this in considering deal disruption guidance of in terms what in terms the optimism seen, terms we've the half uptick set, on really which cases, knew and deal some point be potentially higher is it. right? of FFO. same of what were which to reiterate And terms been was when with that next we're in at July certainly reported. obviously, that tenants terms deposit we experiencing right, And reported And the in last which some required in what dislocation experiencing. to in of a the was it's track to were on you've period applications, the as the year. release July, was this the think dealt designed And were in half consistent it we the with able to And why And of I to there's in guidance, the very And And terms limited, did we cases. with a exactly that put I I seen. some you've seen in with it hopefully based at were actually, deferrals well, left. what has being mean, how was out been of higher in really of us to guidance, get planned some think lot days. QX agreements total played going address agreements that back release of still had still back these reduce that few in that's we But of that with to reserves we right,

just level the the and that more. maintain to guidance still like felt until of we reserves bit a we accurate little So know are

in No reserves the discussions in guidance that's essentially terms they looking pattern. with it. at were terms just think are So tenant the general of reserves, the that deal that and the within specific you're were seeing what books of collection placed more of on yes, to trends I the

general half year. So to potential could a issues down the it any the in address that pike, with of the reserve come latter was especially just

Adeel, good the and with years over future. for Okay, you all working your Great help. thanks great. And the luck with in everything

Appreciate Blaine. Thanks, it.

next come Mueller of Mike JPMorgan. is of from Our line question the

great you. Adeel, same thing. with It's been working

In terms any think way? question, make in versus you differently stabilized the the acquisitions backdrop does differently value-add of about

that I'll Mike, Howard. it's take one.

There's alluded actually. right just the It's now. to, there. a I shortage, out exceptionally a quality strong is As product market

over vacancy the past the quarter. rate while So up the went market in

quality, you I'll LA vacancy rate great of went but If you I building. the a market, greater was due very and XXX some that, point building another X.X infill up, really good which vacating down, square-foot is in XX very the tenant example X market. just a give it drill case in to about poor quality majority to a million on the site development that increase market basis about think lease, The was half a anybody points is and poor and basis vacated temporarily for rent wants

So XX that if only you increased vacancy market. the points two factor really out, rates those about in basis

the strong. exceptionally is So market

projected feel rents. we rents comfortable in and rents to our the that able we're our and market exceed market pre-COVID the And that at so look And pretty achieve been hitting leasing, about our ability when really, are to we've activities forecast. you

now. cases exceeding we're in them right fact, In many

there. us it in happening terms has of really So comfort a out what's lot to of

of this what all last number alone. prior mentioned really all set and add infill greater ago. what already we the approach versus the square is quarter even will acquisitions, And in exceeds any years X just dramatically we the of is to And And that's those billion California Mike, hard a getting we we've have look generation, X year the will mix degree year, are stabilized as Rexford. a number owned today to was substantially a opportunities but of a tremendous feet function quality targeted And of this about by realized as compared to the dramatically exceeds owners. what estate for improving research these saying I Southern dysfunction they, one real volume LOIs think an by think they? great are did in voice what question. predict I It's are of I your the we degree we're and lead so over really year-to-date, we've are deferred Howard is over in or passive, at the that are maintenance. do, that deep opportunity we able Because I opportunity That on X not period, or that in to It's assets to -- focus mining. it's your know, value-add year hear don't what year. or got what reminder. we today. which be Michael. pallet passive And and And nonprofessional large,

And And year, which to more excited so more opportunity year to to versus going value of the hard forward. degree percentage comes next predict. to this we be stabilized create about the the couldn't or value-add play into

Mike. And Yes.

years in-place on as at the similar to so actually market if well. you lightly post on Let more XX% have we've me to just higher in XX.X%. our one add which rents substantially done, stabilized This these year, we're seen we've including were acquisitions the far forth. And this about transactions year, or comment are yields year, XX%. doing quarter close of is about all average those what prior acquisitions we're projected been And and what I think below last look to acquisitions marketed, very then so which off-market than finally,

them. on yes, upside Michael's value-add in there's comment, just And side. we've probably when value-add really provides in the core what plus and less the a great of seen predict in the they're to year-to-year. quarter-to-quarter So interesting, little we terms Than can't core versus there's transactions. or on just quarter the And

sort estate stay for decades those tenants Mike, really defer to some today, of to in lot tenants what that. of we their put are and had too, this want haven't market, where issues owners real their address is who needs rent the are the of or just passive having because or a seeing these

opportunities, in on investment turmoil in our value-add works sometimes generating favor side. the regard to attractive in general, particularly market the the So with

Our line of America Feldman, Bank Jamie next of Merrill Lynch. question the has from come

all You set. I'm know Thank what, you.

One Securities. question next of Lucas the from Chris Our of comes line Capital

increased XXXX probability with of the owners property Any gains, have I questions, future to kind sensitive given are the both negative how, that capital as two follow-ups. might of at tax-free thoughts just I of changes if conversations kind of and your include guess higher there? to moving the all, strategy? Howard, sort potentially tax taxes exchange curious any

It's a little early.

a consequences of I are people think of a terms of the long-term in people lot too converse loss XXXX I it. in fresh of the selling. little is digested of that some And the markets focused owners. extraordinarily they are tax that have or information But said, think with on that potential we estate real to

And so are starting our escalate. to UPREIT a of lot conversations

are do an But grow could if There's XXXX. in an Keep whether a so a And certainly the we same manner changed us UPREIT. the ownership. But create fragmented or of UPREIT just a portfolio have for in bit aged. lot of be would really opportunities completely it mind, to market not, more quite the to through of our so ability majority partnerships institutional them are a markets forth. owners. mom-and-pops -- And unclear of smaller the in the the as and ownership

frankly, transition opportunity, generations properties. so And greatest those one of through of our of sources the is

just of how step-up operate of there's and properties to hands an into so many before understanding Sometimes next-generation a estates get because the in trying not basis, the industrial to settle their forth. there's the they but patriarchy times,

So of amount conversations right now. those an we're increasing having

the news too of in the seen but early So the to on the related days. tell past tax just you've side to few some announcements

note thanks here end on is end, billings question that the Adeel, collected XX.X% either you -- to of which so were my a one for in-place relief loose second then up for Howard. And just an maybe there's there's Okay, agreement. tie -- quarter, or XX

agreement X.X% So uncollected for in no relief of and place. that

late? collectible just How Is about through Or that therefore revenue? not roughly. that flowing and not are that you treat $X.X guys it's the getting deemed results? So and but -- million? collected guys is $X.X quarter's therefore, How you did million that

absolutely. And Yes.

as heard you good a up bring It's And So AR. that is perspective on balance an sheet actually, that from help math collectible. my is reporting about or that much are our should work the reserve that and back year, look the so using like, overall calculus So we deemed you the should doubtful reserves, my of that talked of on what AR us the right? more right? point in if sitting kind into backwards data becomes half more set is to potential the terms terms this the to and of in of earlier way And as fair it's I very work, numbers, and what within the accounting numbers that's in That about side talked collectability the the reserve. I our is yes, reserve. it's but just

and NOIs -- So the GAAP definitely in cash X the it's so the yes, so NOIs. reported

Our next of question Eric has Frankel come from Advisors. Street the line of Green

a in versus best California with in industrial in obviously ports are the first the just years local this place, Adeel, subdued, But work Southern efforts. more and several the struggled bit demand My change related the is driver of question future. seen consumption big over to, and obviously, thanks demand down of in to based your been that fact Rexford year-to-date roughly last last reduction luck great related is quite they've much activity, over better to has a think I port after e-commerce in XX% just imports the been on really year, the industrial trade. years. year. any you and Have have

Are hear that Michael, one? can't you. we you answering

frankly, tenant Eric, our it's a Michael, infill for joining strong between sorry. And really and We correlation, thanks the see us port much today. so don't traffic changes demand.

is see global with to transshipment are going a the more big that on you're focused think distribution. what tenants box I and correlation greater

base. regional drivers And over of and goods the focused these markets, Inland be Empire today, we within California would driven like of driver today are the very southern as are the stronger reasons consumption consumption-driven more, in -- infill one many our last mile and regionally. in major and probably markets. actually certainly, infill XX demand market, And as the you that Eastern in imported transshipment over markets much our on other consumed mentioned, again, stay again, tenant and that XX% that's that's So

having correlated difficulty to And so weakness, where micro it's that we greater getting industries restarted. more a see are

props related For to entertainment not that, industry, or much like do so supplying with things instance, traffic. the infrastructure for port content,

kind based past what just percentage of more over cases And Understood. are COVID so health California government the that then based activity, restricting of on or any just again kind or to the your what business month rise businesses the and in and guidelines? there of portfolio close them, the in health had Okay. on

Yes. even And did March shutdown. about and were our that considered when It's there on business, we of total still or amidst tenants -- interesting. our back back estimated base XX% I dive We then essential the shutdown. a efforts, the was so think, deep complete in, tenant

really And put just terms tenants. in see these today of really business place really the so for more recovered, impact sort the the operate. lighter in being more we services to goods companies the of It's with don't back about have not that demand have of allowed about declined Irrespective government. imposed just even for some fundamental It's restrictions an or technically, restrictions creating right? though realities, by the and they're problems

makes That Okay. sense.

Just touched this. Howard, upon final I guess you question.

You the day. in vacancy of were rise the talking cause this in the rate. about L.A. market The

classify? happening Just geographically, and leasing correlated submarkets -- the in what's markets. guys with is obviously, Southern difference California, you But any other within more then generally, to the and there activity it's between market

probably that would and follow spread the market follows the the the of area. concentrations fairly leasing, the submarkets not. at the say we portfolio half throughout mean, out of during of size transpired No, terms terms our the if I I in in it own look greater LA of in being what quarter was the we half percentages were different

those Greater So Ventura would more of of in obviously let's is County, say, within submarkets we had transactions LA smallest submarkets. had have really in the the each we than which

think June. is very the XX% our skyrocketed going as third up. hope X/X through a of came our then has what's was And world and quarter, know into I how really now didn't interesting of sudden, to leasing the activity you and end that team all And quarter exceptionally continued markets was just demand occurred look new well. the busy. back, I in quarter, so over at for the we roaring our activity So the if

these the of markets terms that on. occurring and quite in in with markets So it's pleased infra we're the of activity, we're really focused all

next is come the of of Rodriguez Our question line from of Elvis America. Bank

defer sort eased on with level, are questions. municipality coming of More how -- way the the conversations macro a are along have Just municipality on rent? couple expectation they that start what March the of follow-up and they'll can to tenants rhetoric they're actually when versus paying you think them rent the allowing to and those do Any tenants back to push and April? in you saw share you start

seen Elvis, allow more to modify this XXX longer no companies a allow longer no can order they you traded the respect did no their publicly pay county, companies to with to defer where they you not rent, lightening Los employees, multinational important than and longer rent. if have them well They orders a Angeles. really, city significantly. changes answer few in have the is we the David. as There The County is the Thanks up for been Los of haven't on Angeles as that question.

those those positive steps of lot with So in then been suit a right have other some the followed in counties modifications. cities and direction

as of both LA, away the and the However, timing governor as order end question, then the far County going until the to those your orders statewide of response of of extended September, City LA, the followed the quickly suit. in

So certain incentives incidents allow are to we collections order. afforded that deferral more paying points still the But us as leverage when orders our provisions to might use options be working out allowances tenant been back And agreements of leases noted abatement. proactive would have we've reflect and have in and think any using not was rent granted our are in if very they're by beneficial leverage really we've They out and as in in tenant that lost lease our than terms rent the I claw our almost were been all of work company such past, previous the that place. lose to rent. tenant a those upfront otherwise that under signed, the renewal initially as

would that better come really we've otherwise allowed. have the to out than So what used orders leverage

Southern otherwise have to been the XX that So to would California. in monitor allowed. orders what able us we're continuing exceed we've those But affect

the just my Great. And all for one over you, maybe then thank final And years. one help for Adeel more, Adeel.

of going come the Or is historically, thinking cash points or the this cash have where Do basis the cash the So NOI will of on guided the that over be about should you saying to deferral XXX sort end always where collections number. GAAP number change that's how anything same-store the year? in that XXX to we or at year? about

think Elvis, the Yes. as cash. of appreciate we had points. I points At GAAP basis the it's at spreads on higher beginning guided year, basis And to this boards about than kind the about XXX the well. XXX the junction,

that's that's factored about would for So said fact thing it basis showed QX on they once itself full on not had though for all our that stays later year. done, the it And XXX even if worth saying, in I still and you mentioning and should XXX higher what with about basis little other we're accurate, right? in year, par the but higher, think comes So bit, points just it's a deferral, the where X.X, full if that it higher. if showed points the normalize it just be the if right, we guidance be would year, disclosed the is

happen payments deferrals, will that of the because it, XQ 'XX? the call Is of Great. in, some of

No. I don't think so.

partial we're a also, the that it's right, on. think product I putting of reserves is

as latter the you're half are talked that not So going year. potentially putting about, impact, to hopefully if reserves in obviously, of I the

but decrease also why the seeing for in are decrease store, some the So same you cash side. only not NOI you're guidance on some seeing on that's GAAP

just it's byproduct it's a So -- that. of

XXXX, little, not but of majority in back get of I any, coming to think the XXXX. are very are them paid deferrals back post if going

have the session. remarks. over now the to call for back any closing reached of will I We question-and-answer turn management end the

and we and And just hope we you everybody stay thank and to in we're regard of you everybody X going again months. the you to on joining reconnecting for for about to partnership, years to today. And also we'd next many Well, look healthy, safe call, forward quarter the like a service thank Adeel to with heartfelt and Adeel. us miss

out. Adeel

everybody. Thanks,

This conclude does today's teleconference.

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