Rexford Industrial Realty (REXR) 22 Jul 212021 Q2 Earnings call transcript

Greetings. Welcome to the Rexford Industrial Realty Second Quarter 2021 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. At this time, I'd like to turn the conference over to David Lanzer, General Counsel. Mr. begin. now may you Lanzer,

We thank Quarter Rexford Second us for Earnings Conference joining XXXX for Call. Industrial you

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

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

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

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

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

Now, to the call turn Michael. I over

then with Industrial's brief you, I'll results. welcome Today, XXXX overview, transaction begin and markets our Thank Earnings discuss and Howard Call. Quarter Second our financial and Rexford to will activity cover will a Laura

then open will We the call questions. for your

on averaging a basis. a an produced stabilized perspective, at second basis closed leasing levels, XX% $XXX We in operational our quarter. X.X million feet to GAAP XX% the acquisitions. cash spreads continued portfolio. through team new And results on continued occupancy and Our from exceptional deliver million extraordinary a XX.X% in Re-leasing of robust square

and our of and per core FFO result, year-over-year XX% produced external a growth on internal basis. share a growth strong XX% As

California we industry a secular at the the driven tenant reopening. continued half range high Industrial enter of the sectors. historically wide shows strong growth demand year, across remains second growth economy robust levels, and of As by

in new these e-commerce distribution locations. acceleration ongoing supply still to of which that the early market technology-enabled growth. and growing addition, last shifts Further, long-term point, our are From in believe are need infill businesses we chain the is stages the In and in driving we are strategies. shifts, intensifying e-commerce expected vantage mile emerging for drive

is we portfolio spreads our to of Our in share rental properties represent rate of represents a norm. as positioned ability acceleration, obtaining our small typically the contractual annual our rate historical particularly locations tenants. a On generally well of rental and price we rent for are economics, as elasticity our historic favorable rent X% mission-critical to degree customers' see growth. of drive above very increasingly rent terms top continue And increases

For rental and increases than high X%. example, X% second half quarter's as annual above contractual more rate achieved leasing of activity the as

our Rexford high-quality deepen California. strategic we customers penetration, benefits and our to the opportunities Southern As operating access platform and of more our relationships our proprietary scale market expanding infill harvesting we within investment are with

and cash We margins company's growth. our as NOI flow increase leverage operating expect to also we the sector-leading see continue to

growth Looking months, XX we XX internal including million approximately equal in-place an acquisitions. embedded not our forward, additional XX% $XX next to over from NOI within the project portfolio growth perspective, to

in quality China large external substantial rank largest industrial To put target and United we near-term accepted and or pleased of market size. is entire Southern beyond infill We is only the The opportunity as our contract the fourth growth exceptionally the over our market market offers. share. in as are perspective, would also world, into States, X.X% this Japan with new California of behind million under our our grow current and investments with $XXX growth prospects magnitude

to prior our nation's highest also X with to the and market is XXXX, which of expansive create flow fragmented value demand an market of locations. functionality enhancing XX% about by cash square to the highly translates industrial Our built billion opportunity foot

as Rexford as team's sector. over most team Finally, speaks as our acknowledge to with turn to entire team pleased the And the performance high-performing yourselves the I'm prove continue dedicated you and for like Howard. in to very and thank itself, our to that, call we'd

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

outstanding, feet signed infill cash For respectively and leasing the quarter, second quality GAAP leases. markets. quarter, in of X.X the we leases our on renewal XX% on Across XX% respectively and Rexford's of square and our XX%, high the XX%, the and was of strength of performance leases reflecting and portfolio nearly achieved spreads new the million

increased We unprecedented year. at continue prior our market on within Based portfolio to see by rents portfolio XX.X% our the accelerating levels. rental over internal metrics, rates

Looking company well an the perspective. growth is internal positioned forward, from

which rates our half Empire target submarkets. X.X% CBRE, Remarkably, to exclude low at within as in Our availability feet million square the year weighted infill quarter leases California of rents infill to driven market with XX%. larger no portfolio markets, historical East, essentially X.X% cash for Mark-to-market markets, mark-to-market have X.X lows. consolidated of ended at through estimated over XX%. some Inland our estimated all-time vacancy. the vacancy for and supply average as is the the land end With the the our X% of ended According below constraints of Southern the is vacancy quarter at expiring

Turning aggregate quarter off-market acquired methods. or of were to our Year-to-date, $XXX external including XX% investments marketed XX of end, transactions lightly million. we've research-driven purchase acquisitions through transactions, price through sourcing these an growth. for since enabled completed proprietary closed

included completed at initial we sites XX and X.X%. value-add For investments came XX% of to an Half cash with storage plus of initial outdoor yield which coverage land redevelopment. acquisitions, are meaningful flow feet estimated future of weighted with the of for the quarter, flow. low acres in second of XXX,XXX little remaining buildings, no XX inbound cash our acquisitions average The square

near-term stabilized After end, growth completed we XX on acres stabilized aggregate aggregate a generate of for projected producing pre-leased acquisitions investment Our X land on total an at investment $XX.X a X.X% comprising anticipated of to total outdoor time yield with with yield and second thereafter. income industrial quarter quarter X.X% thereafter. combined storage million, vacant growth over investments with are covered projected site

forward, Looking which contract of due or million accepted under of close customary are investments guarantee projected over the the transactions These offer, new no of year. to are subject closing. $XXX half to during diligence with second are

updates as completed. will We provide are transactions

totaling building Turning we investment unlevered aggregate XX,XXX a of of an where to initial and feet achieved submarket, renovation properties XXX,XXX the Arthur during X.X% in Inland on included of construction yield a foot These Street, we innovative Empire Mid-County yield an and quarter, lease-up business of stabilized where lease-up on total of is initial We incredible stabilized merge, the The our stabilized West, redevelopment model square achieving Rexford's activities. X the markets. in cost square an foot strength achieved merge and unlevered the square X%. on and of X.X%. representative industrial the the complex total yield of XX-unit XXX,XXX cost a

to of and rate rates months the over to unmet and rents time, cap on approximately rates return experienced X%, with supplemental and aggregate up spaces acres an substantial XX,XXX total compared have to At this of X projects position square Our that, lease-up. of today's X.X XX,XXX was dynamic without that our below marketed current square in market. current deliver and of And vision in across by X.X spaces. asking XX% significant planned X in call which these, creation estimated create we from redevelopment portfolio. driving feet value-add over encompass the we warehouse so investment million feet to outdoor tenants storage I'm competition are rental substantial buildings foot projects our turn to product million value pleased sites, Of has square and market been the growth over X% now Rental detailed of to are tenant modern representing Laura. to delivering satisfy the demand

Thank you, strong our with begin around I'll and Howard. results. today financial operating details

a and same-property year. a prior XX as portfolio points a basis at stabilized in to on basis negative performance. by ahead was average was positive XX.X% basis XXX basis, XX% trailing XX% points driven strong Leasing NOI expectations our up of growth year, XXX pool quarter over XX.X%. is spreads up revenue a on debt the last basis Compared are cash to of a on occupancy GAAP and same-property basis to XX-months quarter a the compared GAAP of percent second points bad the in Second

quarter deferral last of a for As XX.X% although NOI cash comparison. impacting these X.X% a this in second same-property NOI bulk quarter year, of and granted reminder, in year-over-year our robust positively growth was the quarter's the the were cash nominal, same-property Adjusting year-to-date. short-term impacts, agreement,

quarter and revenue XX.X% respectively. collections points share reserves XX% for percent revenue to basis collections enabled FFO grow a continues and core to points base year-to-date. per as continue the pre-pandemic to collectively contractual quarter These per at levels second debt Rent strong billings of extraordinarily $X.XX us and Our well. tenant with results by basis XX were of of share. nominal XX perform XX.X%, Bad a at year-to-date

financing our Turning to now activities. balance sheet and

investment maintain We a which sheet, supports our continue internal and opportunistic to low activities. external best-in-class leverage balance

was XX, to enterprise with value X.Xx, June debt to XX%. target below debt EBITDA of of net X.Xx, Xx net at our to As leverage

proceeds forward number In the of markets a completed we During expected accretive for executed of a million. gross capital transactions. $XXX.X we quarter, May, offering equity

a approximately on basis through savings basis to repriced of We ATM spread unsecured also reducing our XX of annual by $XX.X over equity In the the we forward million June, loan, term LIBOR, issued equating million program. interest $XXX,XXX. $XXX points

preferred million revolving Finally, $XXX position. total we At we approximately our bolstering million $XX $XXX unsecured A million hand, for redemption our million million, our availability facility. the $XXX of further credit Series capacity borrowing cumulative to liquidity, quarter by remaining on we liquidity a strong our quarter coupon settlement announced end, million billion of equity X.XXX%. and increased of credit $X.X a facility Subsequent had the on of approximately on redeemable end, including of stock to of proceeds full $XXX cash forward carrying $XX

maturities and under have million also approximately until $XXX We available no ATM XXXX. our program debt

guidance. to turning Now,

strong $X.XX guidance, X.XX% detailing X.XX% up of our supplemental on improved XXX guidance notice the increase basis and a our expectations same-property in from activities basis the coming to XX.XX%. or of the range subsequent core revenue. yet growth. midpoint our previous acquisitions basis NOI driven NOI occurred. XXX per basis and our expense not full occupancy to to share full be performance bad the stabilized midpoint is Average has quarter FFO and XX.XX% range $X.XX increased share. include redemption incremental quarter of Note forward to XX%, now already per preferred be a We has A up is revised remainder XX as that the plus at year growth occurring guidance $X.XX disposition cash preferred following: to related the in aforementioned ahead of our a notable closed been projection to midpoint in include redemption projects The is of at year. historical date. related from basis the a points from Consistent sheet include year-over-year included for roll and XX% percent to the the the to our $X.XX guidance balance to per projected that $X.XX not to same-property and represents midpoint to date increasing drivers on repositioning and have to by $X.XX XX that at points of per Other pool basis the basis practice, of in the is range in closed our in to for averages with Highlights does redevelopment share expected share year $X.XX are share acquisitions, included the contribution projected August. during is end, given to to GAAP debt prior near points expectations, Consolidated by X% XXX package. revenue from points the of per points

our we our like ESG Rexford significant your Before for report, In continued welcome quarter environmental, deliver April, Rexford as completes practices another and reinventing questions, prepared of to our Rexford's and within issued demonstrating I Social we property team. Governance our differentiated value-add now remarks, This positions highlight second California's model annual core ESG is and Environmental, your dynamic questions. infill uniquely welcome the industrial Southern business economic social to market purpose, would commitment and we to disclosure. Rexford's accomplishment at benefits. of leading Operator?

Thank [Operator from first you. comes Blaine Our Wells of the Instructions] Heck question line Fargo. with

start One probably for Laura to out.

recover effect you missed rents into same-store XXXX. way a turned on and for conservative But at the you this accounted benefit those you of this their We results, same-store how tailwind might NOI we repayments, You the that the in appreciate those also year's headwind results cash guys as cash collections rents. around guidance? from deferred full those much were quantify obviously as cash to cash pretty has be NOI and contributing added disclosure in quarter's deferred repayments year look but can XXXX

us much Yes. joining for today. Blaine, thanks so

So well and quarter-to-date our in as year-to-date and the the -- terms of our year-to-date NOI cash guidance. as same-property

So on number. a -- in impacted our impact XX% mentioned, XQ, deferrals you -- as reported COVID-related did

same-property we we a that recorded if strong to reported. would NOI and So XX.X% been X.X% to cash XX.X% year-to-date, that and those XX% exclude COVID-related have deferrals, the that compares compared we

point basis guidance. cash year, For spread points about COVID-related and basis our growth NOI between XXX the the deferrals represent full same-property XXX of

is deferrals, So COVID-related the excluding X.X% to in guidance those X.X% cash range. NOI same-property our

second the those markets you or are of the operator two, of That guys operators just a bit Can talk require maybe your newly Howard you trucking see and emissions added in Number rent you type of foreshadowing either picture what's offset regulation you common of me, more do expenses And growth of Inland number the one-off little is guys in in their a any regulatory rules of for Empire a And that Great. pollution? one, markets? the rules a is question helpful. of proposed or the types then do environment, this the big kind think question across especially light for about very expecting to country? Michael. hampering future

Hey Blaine, to Thanks today. joining. it's for you Great Michael. hear

taxing to trucking So And tenants, minimize we XX,XXX to and that emissions, base in furthermore, in landlords. indirect about impacted. a not least for Incidentally, to tenant from our building number and It's way, would targeting tenants. they're numerous sense by the embedded one, be the least qualify tenants operating X,XXX-plus is it's tax But at warehouses, questions you the our in within out use trying there. inside that be into the emissions that the use basically have feet an feet. trucking actually square it's indirect operators Rexford, at the tax, XXX,XXX square have of potentially for warehouses, XX

for we a square So really impact for record, could maximum the there's those about having tenants said, the think no be to That Rexford. $X tax been foot.

ways that the However, costs. there can are many mitigate tenants

efficiency, programs within instance, property operations. the For various within by their energy and instituting

the And per be foot themselves so that the potential we expect square the tenants of per will tax. able to year substantially mitigate $X

cost So product. the given within to markets, we the as tenants impact forward really our scarcity see don't rate of being see an certainly we our growth don't absolute to material, rental and extreme

question next comes line Our with Manny the Citi. of from Korchman

when the rental up could they've And reason also you there schedule projects yields the the rental put sub, forma based driven think out redevelopment just that's that's the are Was pro at looking an place or assume us of have up. of that, stabilize? Just rents about once those that where deliver by yields you are where jumped idea those in or bunch you you in or that hoping Thanks. confirm rate projects I rates yields? how those significantly. Is could where just growth. on now the be gone give

Howard. Yes. it's Manny, Hi,

million stabilized will of plan leased during million in a in square quite X and We feet that's and future When based a some on be quarter. current million forward-looking there's or adjust -- projects of square reported a far see yields, third the either feet pre-leased market about And the there quarter-to-quarter, look of repositioning of on next some those adjust rents on few and have of being happened interesting. you them page, already and terms as that do be is about X.XX -- the that quarter in once So as page. it's don't those the lot and at they're repo -- we in the we today. those where will X even

all anything think I I there? miss got your I Did questions.

then that buying maybe guess, the land of of, just I was they're you have lot you looking deals have covered at I pipeline or coming, been think a And guys that. No, plays given versus the pipeline of is of of made the them. your traditional covered, up types how rents getting than much stuff? more of those better you're on logistics or But deals warehouse

zone are a of Without roughen into after because and bit put covered little getting some years not an San present to quarter of may bit industrial data it about substantial few has of that detail these one but reporting one starting do point a for in some flow. lot going previous we're office buying on see that probably also We out at been providing uptick deal The close, much on focus into little there's markets yield. plays. of some low-rise on improvements land, might in Diego in transactions a that closed That development we those, identified be X.X% we're We've of a some waiting too these it deal land a our opportunities thing of basically road. [Indiscernible]. on end I some or burn off, bought structures may is, the in cash we the of some the we to of in

And so those at pretty land value. buying attractive basically opportunities we're are them

starting so few And well. to report of see those as us a you'll

of Baird. Our Rogers Dave next with question line is coming from the

I'll Maybe Howard. start with

were you color coming you're the versus from. the and front, on finished that past second into more is quarter in given any, the quarter, where first the you've XXXX? lease how the in if Curious where the you seeing changes on diversity some leasing On kind of

the e-commerce uses we're our entertainment medical, type diversity But biotech, I beverage and abundant an in properties. into transactions, furniture, leasing, restaurant even XPLs. sort that. just did Obviously, materials, lease, was of more some in leases type Well, supply. quarter, of looking seeing I'd construction that are the last are if coming home mean, at improvement, anything, say food we There

we're name industry any product. And a the You and in one really supporting in lucky showing markets diversified it, just not the leasing country lot activity. most be one of it's our reliant on up to the in that's of

for Thanks Howard. that,

tenants. guess, I and what's front leasing to remarks percentage maybe think, I I curious your that return was is was And transactions of prepared with that existing I more customers Michael, purchase with front, tenants the more of the customers? your existing comment the I doing and visits that some as in well? or existing guess, doing with you more with was made with regarding around on one curious regard sale-leaseback or have, customers and you doing customers

appreciate no, are tenant uptick in expansions question. I seeing And Dave, the we portfolio. the an existing within

scale So it's a think the that's in encouraging. very our function market. I But of also

our was leveraging as given there our But in naturally, the of should And So the the a the was taking created market. we that emerging And year customer market. approach, identify capability. mandate also our referring new pandemic. much during we to scale establishment an last research, the market example I is tenant We to, be scale the demand our expect increase in market through solutions own division proactive would to I that our fundamentally, more share, and scale, Rexford think what in a increase. is to of our

our and already exciting that are that's yet -- the or who tenant tenants are California. about We're tenants so just or talking within more frankly. with or Southern single Rexford lot an of longer of results, of And they're that space now a no new XX tremendous a we're discussions XX infill the lease. of expansion company, strategic development companies to tenant, we're a an that spaces much existing tenants proactive one whether needs and in a We're some not for tenant tenants. is seeing And range is and where and an market, existing becoming whose within a

expansive. demand time terribly coming, in it to building industry. is exciting And I mean, it's Howard for mean, where that perspective. the from I Howard's of And a us mentioned really terms that so truly is comments

growth as housing in In I by have California, increase industry take think XX%, in the And putting data of literally done something business a legacy the of out long-term and range gets that just to the We're project, long-term something at alone. sector done basis. are one building electric a that of on some year. one or whereas within example. cyclical And the years. stock that for mandate to are drive looking gets or not didn't there not municipalities compete seasonal They're that weren't more a the businesses enabling very That's a a that Amazon. enabling effectively currently and -- that's of that development. they're might years X have in there going and Think municipality-by-municipality our more to That's a demand X vehicle thought that incentives a historically, we new pipeline as be technologies local emerging our exist, with space about almost. market. They're also ago, substantial of emergence even X demand businesses amount looking in markets. retailers

say at early we for So it's stages the exciting environment for driving I infill dynamic for spaces I ourselves last as value portfolio. right of for early, our seeing these market mile that are I the an right just now very and because really would enhanced incredibly really company think, And is and mentioned, the shifts now. the distribution our

that. add X.X leasing million did We a of of little feet expansions to square existing I'll X/X about Dave, feet. XXX,XXX were And tenants, square that bit new more of just and

process where really as So it well. not think, bring with to smooths needs, new somebody tenant. identifying a the already job our doing, I the we in know trying and working a of superb and we're We're their tenants really transaction existing really portfolio

benefit sides transactions. to lease both of So it's these really a

we we little also, rather if a of the been what related space. need lack drivers to a NOI need to re-tenant when or growth, one are we're outsized range probably think we downtime, And the will, that, of go to you able to extensions spaces rent, have keep I that on stay a in the the than of a stay our existing slated and tenant not literally seeing so repositioning. the renew repositioning of the of yields us pay to could but that And to has kind or space the go redevelopment market leases in high our such tenant were into they of into tenant just was those and compelled

sense So tenants. that demand how just tenants you is, new gives in-place just a from and for the both dramatic

Our Bank comes question next from of the line America. of with Jamie Feldman

I you things the question we provide with I guess, the so more first bit back. is just maybe on coming see changed mass little could a just if color have know may how reopening far.

the Just what's how And we about we kind changed? has think changed? your ahead? how do return, in How be should you of has as think business about fluctuations thinking the demand

I Well, -- Howard. ahead, go a it's think very

some every I'll out in commentary start of just it earnings what Hopefully, fact just Demand the and talking came the are terms There's about just the that in demand back we and on in through competing outstanding. is put tenants demand. unchartered space is then to turn there. our territory we of Michael. over

not So and but demand that amount done marketplace the of continues. improved COVID has anything in the

we to demand. now at an in we're market what's was offers going new happening really the are impact have Orange County, rents talking already tenant and People today, our X early a with people above the in lease to So a we mind. who's on all not on of it. on one some space have well mass put competing, we going talk I seeing and had that with projected the to the vacate bit of it's about that requirements, Even to decided leasing going to

and space terms that -- in just is And that's we're dynamic I starting is demand the rents? so highs market. in no strong is assets rent setting I when deal growth not on to new described and because even So leasing the literally there's our progressed in demand side incremental on -- each price just market so in that lease-up of the why project that there's that

it's financial was of the thing that strong debt speaks health one and reserves, results reflected a our by base. our that and is our and its of by those couple bad Jamie, list evidenced is Laura. tenants I'll well certainly lower They're performing certainly driven One really watch collections. the and of and to add in decline factors, tenant as our in

now at sitting nearly and are sitting XX% well. pre-COVID levels of extremely as levels certainly at occupancy high Our collections

resulted lower all number in list this lower So watch reserves, of tenants.

due impacted by paying and COVID. were even amounts those reopening before -- in back And under The other we're seeing really in certainly those in well and that place. tenants moratoriums had market I they're tenants the performing, now think as the thing the is of demand base health the remain more tenant that with were are that the now industries to with we've that out required were as well speaks doing they're the that that still maybe

I of new say strategy time, with from of some heard hence seeing think important seeing letting their And we're flexible what time. scenarios, tremendous least, percent from to we're not add I the frankly, safe important And ability if to than people home. home, as the more just are work with work the most issue opting some return of at even we to that flexibility think pressure sometimes all their that their significant people is comp. -- and recruit I is one we've mean, for experimenting its a Jamie. also employers, briefly, I'll to been just version a employers respect of office who've

to going And to things the be is the and homes are maybe at think at will to or comes and that a substantial some further open the distribute market the stay least post-COVID, little just here need maybe so that really I market acknowledging structurally acknowledge with everything to levels. up that, goods opposed different to bit as offices as things

-- Are maybe new are interesting in considering that there you an submarkets you're point. that That's wouldn't you past? the

Well, industrial the our zone the the country. regional the consumption by country. It's population country. It's the largest largest in largest market the in market far of is in

know the market. you and LA, XX% Orange then we average where activity -- really don't here, is of on County and our we Ontario probably So Greater focus

So we dig just within become to as focus at to better I do same continue we think you're what our deeper going and see just the markets.

really Okay. had price talk of very like, provides And that percentage then, customer what does you Can little economics, Michael, you basis, which a bit share? a elasticity. the good share small a small more that about, rent's from commented look

we pure And does Yes. the all be your rent is economics. reason don't business your business. on cargo specific higher a slightly it moving and you're distribution for really is depending substantially And in of then because of the boxes expense and may give just overall example, out type or and percentage a you're percentages vary doing if

are most in estimate the costs, exceedingly average. that's scenario, goods However, expense branded typically, own well substantially other cost very varies well percentage companies, even their X% the product the end to spectrum, the people the of -- small, the about small under in company Then being overall I under a costs widely. on higher. their structure talk that think if distributed you of are go their to Their it made market. of aggregate, you warehousing for of that's distribution the economics, probably transportation But got

the you just context, is back astounding. we're empirically, why X%. XX rental about have, that's last market more instance, in And acceleration for had around think of of for think level short going if on rate out rental putting specifically. there think I growth context, years, I industrial about longer our of average, And a percentages the So rate careful the markets historical nothing

Some a little years, below.

supply lack we're think is driven just the I and catch-up, years, cure. by of you degree, catch-up Some extreme And cannot to slightly great and ahead. playing being a

You mass of in markets, owners we and have level really cannot are showing institutional tenants our critical of in material pushing any fatigue of the are proactive a market add this supply not any And the motivated point. at Rexford price. of indication sort like on who

there that the empirical So we data we're I to expense our and that the pretty having and ahead. whatnot, and tenants think on between robust knowledge runway experience structures have seems a be seeing and

having, talked you were vehicles avenue the about up just to prior as electric then an And Okay. conversation of you growth. following

that within and think prepare strategic or tenants portfolio can portfolio, on that's thinking be about be to Or think about that might should you you have transition it your be there'll advantage that how about think you that what that? your Do a means? we CapEx As what material do you how front? for maybe and doing your

generic Rexford's space. Well, finish is focus low industrial business on to model

very use. to so low in typically, to manufacturing, CapEx CapEx a foot look heavy if years. on And you the developing not we're or numbers, or through per heavy we through -- solving type investing and basis they're square at our When TIs,

all you It's -- very vehicles with entire battery at a that And will, of of ecosystem, early the industry. the is a an assembly. if vehicle we're entire from industry looking the electric components. It's real part growing is I distribution the of business that stage. It's comes material mean, it model. so the not the storage and that's vehicle themselves. our business It's everything assembly from And electric the components.

we I manufacturing type sort uses. you see think answer of no, driven that or what would sort of is CapEx consider auto being so by the And heavy short don't

I think incremental is being can back back question fleets. to, a the about we that and original how that part rules electrifying their some Jamie, tenants those terms to also for and ATM subjected in while our deal of of mitigate the costs prepare of buildings, how they're market,

providing are points And so just buildings, we the to We're bring exterior allowing buildings that going existing electricity adding more to power the the from to to different the exterior electric they buildings. we're or conduits in vehicles. new to need on buildings, yard of as components today, future are in construct that when of renovate areas people heavier the and the those places going we're that some those functionality away building supply charging buildings need for that for further they power those to

And great country. because largest point Howard makes, market that's that distribution we're the a in remember, the

the in more year miles far. market any other by country have truck We per than

expect for market vehicle in demand that this to the you'd other emerging like for So no terms space industry. benefit of the electric market

line coming Our is next of Advisors. question Green Tibone from Street the Vince with

I Laura side. on bad the debt a for have follow-up

more XXX it year-to-date, XX than you're in half. the about probably applying You basis bad to but points or full closer basis to revenue of mentioned year points expecting be was basis points XX debt second

on the could for best reason the normalized way the for debt all the in think provide little maybe bad half? Just color about a the jump was back what's hoping And once you portfolio to the noise COVID-related passes?

is question. the expense our XX consolidated imply bad us for at does forecast year basis XXX as the a Hey revenue, basis points about and Yes, bad full debt of year joining that total the and in of you Vince, portfolio second for mentioned, Thanks half the points. debt great today.

debt that half predict with ongoing to So half any place. in are come the quarter, we've of and that quarter-to-quarter, difficult second assumption what excluded bad year. assumption recoveries moratoriums the experienced to recoveries from It's in through second in that of similar but we is pandemic second could our that reserves assumes levels especially of what the the the are

line that earlier. ex recoveries that about I So XXX in basis the talked points reserves with is those

Got And we're it. That's -- as of think is starting bad like helpful. probably some XXX the 'XX to about basis debt? for of cadence beyond, like assumption decent really forward, just points a revenue and Just then going

expenses area. in were Yes, the point XX pre-COVID, debt we bad basis

as averages. down expect that So move -- of would through more this back kind with through year that tick in historical line and levels should are getting we we COVID, to

switching your the equity forward you when rationale Got gears. issuing doing need offerings Can and helpful. versus discuss me, for it. more through thought equity just One it? process That's for just ATM you

Yes.

we to that the and depends equity -- have certainly Really So a forward it we're gives ability on issuing like in the really us to match timing of on -- well. issue basis the it of ATM the those on -- forward really as needs. front we capital a basis, better us I the actually the timing fund. needs actually to ability

our of use proceeds use those with in pipeline. the acquisition -- proceeds Our capital the with

take -- take to really approach look always we a to we opportunistic and So capital raises.

So and $XXX to pipeline, near-term equity is taking advantage million of point. attractive which at capital our debt this fund sources

-- we low that the So it are And really investment-grade sheet. on in leverage focused another that. that toolkit to allows us tool maintaining that's really do balance

trying sounds of funding you're Like your in lock basically of to cost that acquisitions, lock of and to that want XXX just like just capital, fair? basic fair? you're for it that is cost under is you in So contract capital now,

-- forever, to Yes. at right? when an point going about time over a necessarily focus So we're I value we the asset asset, in at long an purchasing about and pricing the the buy going we we hold when think it not we create mean we're think because we're know -- term. to

that years assets and to So growth and NAV years drive many -- us over going accretion are owning -- the over the give those positive of that many, asset.

focused So that's funding not focused on activity, the in near-term more but pipeline. on the that pricing, as activity that

from is JPMorgan. the of question Mike Next with line Mueller

a down Series earmarked further at I quick Series they just picking A. preferred the at -- the C picking have not the what some maybe A or for trigger the for looking on point Why the B of question are was the road? or and

pretty And today. us for coupon date. joining on relative A XX, has that us that's The for other Series cost X.XXX%. high Mike, today. A of call it's callable Yes. Thanks coupon is The to the Series first capital a August available is Laura.

capital. A that take beneficial point, to this So thought it -- given the we that at out was Series cost of

become couple at preferreds, are years. over this callable not In those other terms They of callable of the our next point.

closing our for I completes call question-and-answer to will back session. turn management now remarks. That the

and behalf forward to and everybody joining look support at us quarter. want Rexford, you you and the Thank to team your reconnecting we company, the next families and interest of thank your for today. On we and entire wish well. for all, in are

conference. today's concludes This

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