Rexford Industrial Realty (REXR) 21 Oct 212021 Q3 Earnings call transcript

Greetings. Welcome to the Rexford Industrial Realty, Inc.

Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Instructions]. [Operator conference this being is note recorded. Please now David Lanzer, will turn the host, your to over General conference I Counsel.

You may begin.

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

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

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

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

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

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

to Now will Michael. the I call turn over

by Rexford then your discuss Thank transaction like to the XXXX our once to I'd balance to this a at performance. will and you, by have team's call sheet perform and as David, provide Rexford levels, quarterly extraordinary related results and market welcome thanking quarter outsized an bar call. our squad and and raised continues will entire earnings our metrics. followed Laura who again, everyone for provide our on begin Howard, Rexford I'll Industrial's third few remarks, activity, update brief

approach value We to by by market leading entrepreneurial your are and execution. your creating your dedication, humbled

are every one have to of grateful are and the You to opportunity you. excellent we truly work with

aggregate year-to-date bringing with XX% the value today Most projected unlevered for $X.X transactions million higher quality is investments include deliver stabilized product. billion. of over associated an quarter, Our stabilized acquisitions importantly, $XXX team's that these with yields marketed to yield accomplishments substantial during the investments over similar than creation about

GAAP of drove the basis. FFO efforts team continuing We releasing to market on spreads growth. flow prior our on substantially XX% portfolio a NOI cash and cash exceed XX% team year core rent and by The a XX% by XX% basis compared drive growth entrepreneurial rent and to grew consolidated that Our by quarter. are

over by year-over-year. We also share FFO increased XX% per

has third in REIT balance growing total a Our Rexford and achieved leading leverage America delivered cash value. is outperformance. at has and low maintaining largest growth been best-in-class while consistent leverage publicly traded fastest of flow market sheet the with enterprise XX.X% industrial

X% of industrial per is and over growth, our over growth the XX% REITs exceeded have averaged property growth, average prior substantially over has nation. five Our XX% averaged which share dividend years, the the which years averaged all NOI FFO all our same which cash five in five other years has

market strong conditions, demand and growth point at strength. levels performance continue and unprecedented continued to by signs continues market team's toward supported and Our be rent all

in rent indicate and e-commerce In infill early demands driving expansion long-term with warehouse pandemic-driven are the locations growth range in the stages we The chain market documented. and fact, future. of driving in that prime supply the of still well trends a several into is market along dynamics shifts value

factors driving However, demand our a long-term in range markets. of additional are growth

driving extensive local retail warehouse e-commerce the emergence highest seeing substantial most to benefits bricks-and-mortar new nation's also technology California, markets, seeing infill on space thrive the of within last retailers we last the acceleration product Southern supply/demand substantial the exclusive the the demand market of resulting increase California. landscape and infill a sets an Further, space. supply and adjusting our leveraging market. available mile and our business the manufacturers extreme For highly growth. demand from largest stage new scarcity increase are mile their for in example, to businesses, valued for fundamentally in and the models inability omnichannel infill of the to legacy some survive and logistics focus resolve nation's in Within imbalance are e-commerce warehouse requiring first new Southern and long-term current rent We're

customers' see to our We increasing of elasticity in our small tenants' a share price rent, pay very substantial to as typically terms represents also ability particularly economics. of continue rent

an forward, further equal we growth million acquisitions. to project strategies. growth embedded XX assuming of upon external perspective, growth an XX% internal From XX to months expansive our in-place currently over capitalize opportunity $XX about approximately As NOI no we see our portfolio from next to the look internal and we

to I'm the of square continue external addition, us. Consequently, opportunity information we growth call shareholders. In advantage X year-over-year very the as our to over very have cash market infill increase by and generation we and by over importantly, strong believe is palette within foot to and share flow and Most mere leveraging upon lead to impacts billion market time. a cash flow. with us substantial XXXX, from pleased in to to with billion build and proprietary of expertise growth our volume square industrial for nearly upon California creation product prior our X we well-positioned product capitalizing drive With we value our the functionality, Howard. creation of quality value research turn access to limitless our ongoing market, our growth market X.X% legacy grow to feet our company opportunities a Southern built penetration over benefit continues And opportunity before available cumulative that, quality driven our investment a by deepen to and

significant Inland historically demand. exclude East rate the Thank levels Michael. and growth X.X% representing portfolio elevated which today. joining based on us at metrics, rents quarter an you within the thank XX% which increased ended target markets into a infill supply from continues market the you, year. Empire quarters And our us rent portfolio Rental acceleration our CBRE, our internal constrained availability prior high increase and at recent This well in the of to lack markets positions future. foreseeable demand strong to spreads our for reflects everyone within by According capture vacancy over

XX% we performance leases an quarter, cash average third and In leasing development. buildings and weighted XX,XXX portfolio the yield cash income over initial our estimated consolidated the a Through record GAAP strong now the third of on are square plus spreads. new projected total quarter, rent spreads achieving After at totaling X.X completed for storage X-acre In renewal XX% we Our these acres realizing completed since mark-to-market investments Rexford building rents is closed a quarter-end, for yield quarter land respectively have leasing feet realized of signed an two acres generate square respectively. including to including million XX%. on industrial feet producing a acquisitions for million land are research-driven XX% near-term end, these on million transactions lightly X.X% transactions proprietary XXX X.X unlevered acquisitions $XX.X aggregate and for of sourced feet and near-term a of for X.X% acquisitions XX% aggregate leases. about off-market acquired acquisitions Year-to-date, through and producing, XX% stabilized about $X.X of total, marketed leases quarter investment. we were In X.X price sites or XX And purchase billion. processes. low site $XXX coverage redevelopment. of through included outdoor we which square XX of million and completed

square tax XX,XXX portion Diego property we On our for submarket a of fund a a unlevered North the The disposition to used acquisition in IRR. front, were the activity. $XX.X proceeds efficiently XX.X million foot sold % achieving San

to recycle Moving expect continue sell forward, assets unlock opportunistically value we to capital. to and

contract. million we under currently guarantee We'll new due transactions subject ahead, of customary no transactions to or $XXX diligence as have with closing. These are keep Looking are consummated. you of investments apprised over LOI

and repositioning to redevelopment Turning activities.

which a a add in X% South These the and investment compared total of with two buildings I'm the property on yield under we of container growing The through through Rancho a aggregate of submarket market for estimated facility square Ventura at have investment represent XX,XXX rent the costs the million turn total investment a achieved million comprising feet to repositioning that, yield yield increases. return on assets. aggregate X.X%. where at newly submarket on Bay X.X% redevelopment site unlevered on million. an annual and we to stabilized entire with These paved mid projected County $XXX Laura. growing of today's constructed the storage cost unlevered in X.X the stabilized converted cost total and a to industrial and aggregate just annual where rates stabilized include total and stabilized now four projects planned four-tenant projected square Reyes unlevered foot Lawrence, on average deliver acre investment bringing square when supplemental repositioning are foot submarket total over currently stabilized of our properties X.X%. an to X.X% an projects of a value $XXX few X.X creation of quarter, feet square contractual a the on feet we XXX,XXX substantial X.X%. X% properties value unlevered increases South a yield portfolio we Pacifica detailed highlights represent million, in yield our X%, achieved call XXX,XXX Avenue, cap to initial are redevelopment total and During A building Bay of square where the rent stabilized current in comprised total of And the over pleased across We of X.X% initial a achieved the X.X in

Thank Howard. you,

was ahead increase. our on leasing continues at expectation. with cash XX% basis same leases was the quarter basis is steps is XX executed Also basis a on the growth NOI the and annual Third X.X%. our prior contractual third rent in driven year. occupancy XX.X% year-to-date basis, On on by points growth spreads, over of outperformance quarter the top these our approaching embedding X.X% occupancy XX% leasing a quarter that well XX% occupancy exceptional Same to our and average GAAP and average strong a respectively. quarter, are the we rent This a property X% up contributing spreads strong same-property XX.X% XX.X%, property of leases cash XX%. GAAP finished of executed and steps over of had into at In to

our the As stable these tenant continued strong as demonstrated debt. results low bad by levels diverse of our exceptionally of is foundation base

is as positive of recoveries a third our tenants revenue by the nominal of These driven XX% enabled core bad of FFO prior to to points year us results basis quarter. number of basis points. revenue As debt a and share percent collectively Year-to-date, share grow percent the prior a per lower $X.XX reserve. quarter XX by list XX strong in was debt bad a over watch per

to level of We significant activities. the now had front, driven and transaction volume. capital quarter markets balance the Turning on sheet an by financing active

We balance continue disciplined, the to focus all on phases maintaining through sheet proven cycle. leverage of a capital low

As X.X of to X times EBITDA debt X.X of our net was to XXth, below times. September target leverage

Third Series demonstrating positive tenants, proceeds the and in $XXX through net quarter a we million regular accelerating program our number basis million approximately redeemed common repaid issuance proceeds the forward total of million issuing quarter and ATM offering, equity $XXX settled issued issuance, environment, our a activity, $XXX equity shares for X.X to Green total including We for preferred XX-year issuance all term for we our proceeds of X.X transactions, coupon. public successfully following. third and way shares of September our the further of million stock. A X.X a in net of million. through the the at We quarter X.XXX%, XX.X shares includes shareholders. common to employees to In priced million a Green We of total stock. X.X approximately execute unsecured a $XXX XXXX million to of excited to million issued of on shares finally, prior million the issued communities, equity our were a Bond first X.XX% $XX commitment impacts million of shares activity equity in regards Bond due The common of Of were a for net common net $XXX offering million. million, late $XXX proceeds loan of

settlement of and X.X million or credit forward have was proceeds our for equity forward million of $XXX million We $X.X including million of cash, the full remaining for equity $XX remaining shares At approximately liquidity $XXX billion, our settlement. million $XXX availability aforementioned quarter-end, on facility.

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

turning to guidance. Now

we our year-over-year $X.XX earnings from the $X.XX full-year of to-date guidance market Given share. FFO range XX% mid-point projected are fundamentals, our strong core per $X.XX to to to robust and The previous share growth revised performance of our share. represents per $X.XX per range increasing range our

reminder, our guidance acquisitions, have not sheet activities yet closed. not or a As balance include dispositions does that

detailing to supplemental been same A roll to basis property basis XXX guidance points mid-point mid-point. points a package. to the on on the basis a has increased drivers GAAP to basis and up highlights our in forward increased also provided increased at include, our have at XX%, NOI We XXX has X.XX% few growth a been X.XX%, up the XX.X% of cash

be same Average to to XX% a projection XX is the as below the property percent basis Consolidated quarter projected of same points. points XXXX deferrals, COVID-related a to historical the last basis pool improved to property is projected bad now full-year points in XX NOI occupancy at further basis mid-point XX.X%. XX% of debt Excluding for revenue from averages, growth our of and is be up XX.X%. XX the strong nominal to impacts cash

Finally, million or of NOI, quarter in of subsequent over on and Year-to-date, transaction per quarter of $XXX billion acquisitions. $X.XX XXXX. our to closed $X.X share $XX expected approximately end contribute to third have volume we million is

we XXXX, million of NOI contribute year-to-date into when to over compared forward our XXXX. Looking incremental $XX to acquisitions expect

quarter as earnings completes Operator? This welcome guidance our details prepared further and our questions. remarks release. XXXX we provide with now as will fourth full our We your well

Instructions]. [Operator

question first is your with from from Please Emmanuel proceed Our Korchman Citigroup. question.

Hi. market details on some just one driving growth it and and Is the the you. than rental Maybe of a for capital talked something matter sort what's in portfolio rate that's more of Good location, on that now could is age, these to put us fact they're the thank it morning just Howard, outstripping mix, renovated or you assets you your market, about that? else? you. Thank highly so you've more is give

voice. in question. Hi, to unpack Manny. there your a hear is that Nice to lot Well,

fairly start we of one start the wedge really off-market might these approaching leasing you available. And marketplace, the the anything on is let these on dearth the to talking have an in rates to tenant low occur, but thing just think at starting I weigh really more of on probably fight space. that's need where in to some growth year-over-year. trying about grew there space, fact, our those is Gabriel growth rate we similar, XX% have think that's call just our vacancy have there's side we'll get market growth to when days we alone the in next of astounding. any rental experience on I we really is that out growth market the and Mid the in Empire from County X.X% compared the data mentioned in Valley rent had firms the has is San market today. pretty on our where mean Inland other X.X% interesting And Valley that markets, Gabriel XX%. I has our we brokerage vacancy growth we was It's that's West highest vacancy. San measure for when highest look you what's at instance brokers some their we all us expiration Though to leasing, quality a an knowing was occupancy

think the have but just too space lot push doing the and and terms of situation a just our tenant is perfect really have to people secure on drive buildings. of whatever obviously the really are they being part rents, storm it's to these can to able pushing So on side a I and in rents

team in add of to the and exceeding, soon I submarket, point. I know. reposition make are a the functionality opportunity. it really functional In market are there, most we positioned key can perspective Hey, the in so then the of to overall. today, we're leasing and over to drive leases I it the information to kind are when doing rent our Manny rather they're is market to the perspective owners And was the every the and in and and efforts think vacancy, not business do at your the other asking it's business and growth our I going in market relative assets, of is what acquisitions is we the best frankly how as exceeding, sense at we goes renovate element if simply is in a growth is when And to Rexford. think Michael. to advantage most to we deep It's outcompete rent acquire the that market well element words, and why the both that think important on Why seeing you're that we portfolio we And well them ahead the the as team that opportunity that markets locations as day. in two as very submarket we're in Manny And targeting Rexford outcompete these we from stay to market. fundamentally most the proactively from further, other that or the such model have you in an location the functional we as entrepreneurial buy and large other the them differentiate.

to unparalleled do we're our team that information market access really the them most in equips way really the that is our to So seeing current outperform and that.

in concentrated good your do Hey, Industrial with given can upward that ask markets? there is Bilerman not And of you obviously and about value uses potential If so portfolio what's be Michael about within that, think but the now being and just in where doing, value constrained recognize initiative? and how the a the that's advantage supply just could, potential sort a and that I many markets. for alternate Manny. of pricing land and assets just question, the the trend to of use some recognized second past, you've so mine you I portfolio in Michael it's here alternate large Howard, cases opportunities uncover is internally sold could is take there for process How

long this today been for submarkets No, that great historically, here. a Michael, in as as entire used a Hey for joining very we it's made to material own well. disposition us doing for Rexford there know converted portfolio been other and where to It's question. to And are have I to thanks and that uses you Michael and we've unfold. But good frank, a very very some of the percentage consider going. very to or large will you're opportunities that it be be continue time, wouldn't

frequently those advantage may time-to-time, we more that opportunities think at have time. some an opportunities of portfolio. some which on that Rexford than an we we're that of at and every that's in plan We the portfolio process also Many actually looking basis. and the -- recently, from to given asset. value-creation your the of disposition I for We're are business a asset yes, assets taking you us There those internally the value point, a where called process, management growth why I reevaluating asset revisit market for there selectively, is time certainly extensive added extensive pace looking mean, you over and could. the is over it and see it's we're of include quarterly pruning process the so are and more rent

at there other this Street other of for look a business? million selling they the $XXX at like works cognizant that the in a in at that cap, be did than and are where industrial what Diego asset not that cost one thing should an over that sold I X.X right your just is then, like And at the million Street at opportunities valued $XXX X.X% yield, capital capturing upside strong we PSP the San

go. to like You'd

There are --

Howard. ahead, Go Yes.

today office real functioning hotel have a you year, a convert of you've the the lot the is lid obviously side them -- costs land the for those still value to can rents, industrial are really that put at portfolio, our we're is that construction look a out industrial bit There part. and what rising but taking industrial values grown past XX% in industrial been the of paid of those to on and It most us seen for our some to of which pandemic, sites but over be land have capture lot when obviously numbers land retail for housing. the sites in a sites, tell opportunities really with almost But housing

X-X. XX,

you've In higher obviously, those growth our market. still values. industrial land so Yes. are heard a rental those And supporting about lot industrial values and

this those at in opportunity yes, And tend portfolio is with sell type of in I'm most so assets the that industrial cycle to But our cap Michael the about sure things as well a moment more and in today. those part uses goes are working the And forward. we than higher as have able the outperform for time there talk doing be really to we yields had we've for portfolio. typical that we'll these and to of is there alternative more some rate mentioned, sales capture history do really

you Great. the for time. Thank

the much not resolve drive which of years or Probably right? place, an the California going to they will to and and mandate put more XX see and see going stock sort you by housing multifamily has to way put, to that and going that brings incentives of cycle increase may the to up surrounded are own, of more, you're now, housing housing of adjacent opportunities opportunity for locations in going introduced that's XX% they're interesting rezoning and and forward. already zoning point related to and because at Howard conversion by that probably take more that going are another to And the industrial we where looking by a at right creating frankly additional that's issue then multifamily,

stock becomes and goes down more industrial valuable. it of rest as the And

you a twofer. So get

correct. That's Yes.

your is from with Please from question question. America. proceed Jamie next Bank Feldman of Our

you. Thank

know next to granularity, I with XX to last you gave the little a So, that about? provided really presentation, NOI kind over get on some you growth helpful NOI growth months just bit walk of you're the the talking can But months. you night highlights moving it pieces the through in your XX slides more to

Sure.

Yes, absolutely.

great hear Go from Great, to you, Jamie. Laura. ahead.

Hey, talking Yes. Thanks the that XX% recognize NOI in XX so Jamie. our much. growth NOI months Yes, think growth first, the portfolio. we're is what's and XX months about our so embedded to I over to that projected that is current next it's really important growth

or any So doesn't assume that additional growth. acquisitions external

that starting from next months coming XX a of to at our acquisitions we of call that's that So $XX comprised about million months point is growth of it XX% million about represents and growth that the $XX or NOI over acquired. XX

not in of already leasing perspective, portfolio acquisitions, spreads. related million of from to $XX and the beginning So QX is about XX% acquired growth, QX, another that

to cash not $XX the million incorporate component is XX% it's and purely call well in the the and does the mark-to-market a process months our XX and the XX is in on, repositionings we months. of that about And over already on by of the expect complete growth the are to cash as is deck way, future cash that portfolio which releasing basis, that announce rent bumps next did and that today included spreads. that on we So on is this other then

forward. fund raised just your the need you do can capital that's think And understand you you capital you quarter, What lot the helpful. all when sheet a you us help in of do about the then thoughts And on to you've balance the on have again? investments about? Okay, talked might talked financing great, you going

Yes.

really at the think I that balance be investment low maintaining focused continue sheet. on grade leverage to So we core,

equity see in and and and to an advantage continue seen to You'll debt capital capital us take as past, the do to fund be you've of refinance us opportunities sources taking approach acquisition maturities. raises opportunistic opportunistic debt

really million from don't debt about months. debt maturity that given of which sit the a well-positioned that until We is a acquisition feel in expect Looking LOI in under any have our XXXX. forward, close acquisitions we coming perspective. maturing we current position really to we contractor We good $XXX pipeline, have

We on have $XX hand. million of cash

We remaining in about million proceeds settlement. also for have forward equity $XXX

about So we good position. liquidity our feel current

provide And to economics Can just economics you more you. thank a being little what you mean supply mentioned then keep Okay, rent. a why color and big able reason into customer fit warehouse Michael, on where by finally, had the chain? maybe total pushing bit the customer you're you rents

what here like now, or way percent more just distribution-oriented really income for And, seeing we're course, Of what of their other for there, you or just even also of the typically. start rent element question. some goods, but transportation location thanks And transportation a as costs of resolve to overall net can that with a economics, by compare is the, those for are rent structure not revenue rent think expense help we customer multiple overall of to their so and about typical costs. it's the can items rent, if the nominal is and revenue costly for the I that associated the really we're their company, referring is fact instance, transportation costs

So reduce closer some actually they the and of end-user at customer, day. by warehouses locating can to the transportation the the end cost of

run it down number So, it one really by the to as in and and consumption if of goes and of the Number space would the profitability. in a to large, and demand country zone infill rent some pay didn't these their really far is mission one, a California tenants' more they disproportionately California. the our sort financial and that percentage they rent, actually I driven be distributing think other facts. In economics drive critical issues they of have infill consumption of really are resolve our driver in ability tenants. portfolio because and Southern population and business are by their into helps distribution of the But words, they're Southern to unable of within just largest locations truly to the

despite and many, being environment And in so, this that an many for way they been have decades. options, really California, Southern it's other expensive operating don't

have of markets by of tenants a commerce we're large to on luxury deeper within if average base of then within seeing so, that of new some location customer a ago. as Southern outside and some new new seeing e- the it give XX the did about ancillary created into quick altered for the that dynamics just are models of And moving that of technologies, occurring of they of And emerging goes largest model; probably be the we're California, they cost retailers technologies opportunities didn't and business driving Sears. XX, the you're legacy and a both as America, a Target, into and lower have new more result result are example, years And and demand, or our that fundamentally some examples. through next are I'll of want seeing in your driving business they that. couple legacy to businesses Think their

they so actually super and went owning large out only centers. And have operating box big of from

on to not call model, XX put had small smaller scale a got service the on for even Rexford We've manufacturer's Sunday, necessities. machine disposal new exciting Well, cream, the even large sell scale and that their could distribute to XX can within because be like foot have for minutes some to and at I house and is to towns. years demand demand. did which Standard garbage at on the are that you buy sortation more those same transported repair then perishables, few and one and five that that that's we these staples, XX,XXX service recall, offering than and and want and that's really give they over and through are in I seen our to me smaller square place, stores, goods, smaller vehicle what open emerging consumer my me And business stores footprint infill at the Rexford really And and and have tenant of then models that market seven get in to I you've technology, years, Rexford the new number some even space the substantial adjust they small of here focus really of new the in they are in by e-commerce example of warehouses for demand XX% markets warehouses Now front having been portfolio. see instance, centers which those you to technology, also operate can at is their verticals, exist really the last created aerospace to urban retailers. directly way new or frozen this companies business And electric ago. ice Southern happened compared are ourselves they disposal the say daily garbage servicing California. our website where calling discount manufacturers a story to a -- who then, positioning that

described, I tenants just need all percentage marketplace or gee, sectors location those demand weren't to pay not in "Oh, to So set to interesting of survive if it's need look those really -- I I relevant the a of of therefore I for pay really take rents fundamental at order execute exciting They you that as and drivers a a what saying, can of were more". and my holistic so in this it's it. there's business and order saying, examples, economics, and small model, long-term

of today. at we are kind that's where So

Blaine is Wells question Fargo. next with Our proceed question. Please your from with Heck

fragmented institutional their you of other industrial the properties Howard, have into make sell the changed would the buildings out be owners highlighted is thanks. Do markets in that of it has you could the even private or low-level less industrial? willing Great, during guys to that or more of think converted ownership coming ownership. or your warehouses and consistently how pandemic anything

Thanks Blaine. different question. the too always Hi, for been, Things not are right. they've than

So, capital different and which Southern I think has California we're in increasing country transactions more system been off-market with and market secret have our from which industrial transactions private shows is performing values individuals. California, alluded of even opportunities our now -- on we a is better Southern done that from capital really Surprisingly, the have for you our the like these or lightly more many focused even the and purchased really year. being they just we've value today we it as about focus why looking actually recent in creating best-performing XX% where that marketed this off-market our chasing prior more since model the that's on really XX% IPO average, started standpoint, and how that's of in year decided to industrial business these there years no emphasizes and company here and the do set not on

even to still that getting surprisingly brokers what and we we're at we people even don't advice. for use don't and So broker look a better do encounter

they Empire XX% average open One to quarter, to in we probably which especially, of have quote the we and buying property closed square was a X.X% of in discount is I based the in for trading cap Inland mean, at marketed the our assets the building starting the business, is the we're the us was But confidently transact today able owners the support quality owners in else look, the widely asset. what see what on numbers we seller traded really long help do for probably product a opportunity creation value for penetrate our And market a the have type bought hearing range almost where to to there would developer the marketplace. a owner we're the basis foot those real larger stabilizing really with in it understand differential it where on West a in the But them on brokers opportunities XXX is institutional and markets. broker, to portfolio. our still of XXX,XXX transactions the that's now, just acquisitions, point that we're transactions into rates a estate and are type strategy marketed you're is of that on we and involving were it without somebody and particular all was just in time mode most disposition

covered looks you thanks. Great, your the have acquired development or non-traditional facilities That's really I you lease just other just acquisitions, helpful. that on at guys Can deals are opportunities, of the guys better that, And storage what's those more land recently several or pricing for just not you of scarcity for redevelopment maybe talk it that like sticking and it outdoor plays expires. once deals think appetite market, the about with is getting deals might sounds straightforward? is for driving plenty be as

it's mentioning. bit of Well, everything a probably you're little

that and about and acres came three During is yield, as sites, outdoor acquired grow industrial that we those XXX over to about yield in those we stabilize few the quarter, X.X% next storage the to going years X.X%.

consider in outdoor even demand long chasing So those property sure an that you users land of there greater is term is those are might Southern as and play, and but an California marketplace there sites storage-type attractive extraordinarily covered yields, are the those. high scarcity

During storage achieved a cost. as stabilizations container and the a Bay, it X.X% quarter, site almost I was site. I it one feet a in where yard, our on removed the we literally was a to Pre-leased of stabilized the square total from was building X.X-acre it it think using South believe yield XXX,XXX company of

you better So a buildings do yield. strong in that's some the than I on that's marketplace. the almost of can mean

portfolio. is we that far then consider a of And these place storage So, type outdoor for different a those covered bit plays, as than our sites in little land there as sites.

Empire a to in worth and bit properties acres five those During those LA sites and cost were that infill getting on at are markets average, the markets Inland average, if entirety to about paid the XX the in in were $XX the the San from through about Diego about land fairly $XXX on, properties, on $XXX square on and in we out longer spread develop of look view it a that land order foot. million markets, infill land to quarter, and today, we about you bought terms those average that's we little and a those have foot land of sites

X.X% and at at about are able on aggregate a return. and stabilize we those what discount basis XX% then the came at in over at to those at down So a overall blended about about road, yield X.X% to being bought a X% initial values land

We're So sites. those handsomely fantastic until wait opportunities. can getting are redevelop the paid to we

we to as sites yes, in will the as those so, well continue And outdoor the marketplace. buy storage

your segment million much if put you more much how land it follow under have that. can -- And on really up out that a into of you you into how much of remarks, currently LOI or in that covered mentioned that is you might that consists industrial and how just currently bucket? can quickly I $XXX redevelopment In of play of buildings, contract, functional play

diligence. Yes. are due to, are which these still of in I'd love Well, transactions, some

as to to terms be And give so early close on what update. as in we be those continue we we quarterly of it's to a report we're details our the and next always transactions in commenting bit mix. full might buying But do going you

Berenberg. with from next Please Connor is Siversky question. proceed your Our question with

quote this be There questions. color for of Thanks XX% all. on than assumption the I market. lower and but might below signed the can that for zero appreciate would wanted I were stretch for we XXXX, first Hi where quoted my all. then market just here, expiring a be existing to to you XX page wondering the average gap when in taking $XX.XX from the older I'm rents these the leases in-place ABR? average in that leases work rents under your number current your

throughout we Hi Connor. portfolio. in-place is leases mean the the Yes, bit actually blended that's higher. if to just were entire looking I XXXX, And a mark-to-market the

So to it's closer XX%.

Okay.

you stock. specific? then that for you industrial new then were housing And LA before in this California mentioned that housing answers XX% increase helps. And that That Okay. mentioned usage Is planning of they stock? general rezone had had in in your to one for or

Yes.

issues to But So industrial already it's they're adjustments to to areas. to some of to that coming areas them, is it is where areas. it's targeting well the process. really see they're and much looking homeless play further major overlays where in the not and as that at really address doing some to making early zoning different helping rezone starting can trying and driving metropolitan California-wide It's in in you what zoning but much housing very stages. and or to it so development you that's the vote coming enable have We're

are and among areas Southern if and hard that operate, of multifamily including even this you here Intel industrial and much California in industrial it's density the to these own But zone include look point areas and the in market So where just in land. homes amazing a know pockets. how we at of that the will little take at single-family it's

So that opportunity. represents clearly some

Okay.

of that. most add being costs, just in part, developers lot because Yes, had we they someone on see to creative it. top terms to I some put you affordable-type developed housing might and how rooftop also really about might. in of said you put a can housing the free we talked for and some fact, don't us of housing your to the We've multifamily I give of being for conversations industrial with on and your

at very, to take here. have So find or some from low a it's some that we the to support of vast the free going need agencies possibility eight different to deliver to cost and housing deliver housing land of government very

not industrial start on, the a skipping it's going to dunk developed to land industrial current readily kind to have to values. to the housing land need subsidized. see slam based can of we up housing expect of be just build here housing a It's lot So we on the all while be developed,

for Okay, for sure. that. That's dynamic thanks an interesting

on Just pipeline. from past, of I or any real-time this know has come timelines? having any up development the the is project labor, the shortages question in pressure last cost and but this one of impact labor seeing kind on you are continued

be is can or delay a long I here of related and just in California experienced entitlement and a really and It's wouldn't really the terms really any is labor hasn't labor a we project, which thing are there say some arduous project it process, of type ready Southern to that that typical we're timeline. labor. of a there, execute shortage surprises once the are and to but on delay in build

Please Mueller with your from proceed next Mike JPMorgan. is question Our question. with

to XX% and is you I was you last positive. tie year up if was I XX%. being talked about mean recall together, you that back this about can don't rents mark-to-market wondering think barely the if mark-to-market talking market hi, year-over-year just a just Yes, I portfolio I in-place

just can just a if about dynamic you bit. little So talk I'm wondering that

some and quick in I'll you the real the you material just detail can I mark-to-market fill actually. But if think for Laura, comment has been years like. of Maybe many

the in maybe I think it low teens. historically, was

due back market the in If -- three, two, rents. we're years you five four, in go conjunction our we're seeing location one, to acceleration it's seeing And just here in probably that acceleration of with quality low-teens. the the and product

spreads have it's already the years many So interesting is mark-to-market releasing the these surprising, when you of many too have that we rents that that not last, within and to rolled I seeing and looked three Rexford cases think at years. you're what's in the those at two really in portfolio, are

X% Southern And in so around we're market and the historical XX supply/demand rent over the impressive this or look at look today. market asked of is playing and longer at we've were had the context, no long-term years, you frankly, the today sophisticated substantial we been many more the now years urban decades. to that if But some tenants make in more in market in and because think not almost like sort a sometimes fact, around current to have XX fact in average that Rexford if a point ago, cumulative and does And a long aren't imbalance And look are X%, rents this frankly, the point historical basis, increase you the little look really in and because we're the the drive little under, look it's California, I, at a markets seeing I -- on think, very so really market drum if acceleration rent seeing at think I at that sense. we tight of And in dense, global we're more -- years in can they ownership are pricing all XX market growth and bit these acceleration got a ahead. the industrial historical because going market you where their fact the so, somewhat a I market catch-up we've for XX sometimes think and it's average I really these of not a XX has it's ourselves, more rent you just Howard not alternatives if important indications shocking And rents, are the why back runway in of tenants really But of years in if is consistently really back ago, growth longer-term and that context growth rent space. rent control over. was lose years. for

a right really it's interesting now time for So us.

Got it.

quarter quarter, on Yes, was XX%. quarter, Last I first to prior on thing, that said perspective. Mike in the and that, one other to XX% the before put XX% mark-to-market it our that into mark-to-market the portfolio so closer was the

mark-to-market as we've seen rents portfolio as market seen an we've accelerate certainly of we've So seen our well. in acceleration

Got it.

more X.X%? think kind Okay. was that blend in-place other is X.X%. the added there QX stabilized largely of acquisitions, yield -- And something that's value the mentioned to little product that of split stabilized What about an of bit too, you between question was versus one a that's I on

varies don't a it value income the certainly in but about exact But consider bought, on have in yes, do value obviously lot in it But question. we're unless, that. well that those back me. of of percentages to of get we add front that buying breakdown in Laura, place; this vacant or Well, we income I we from add. a quarter, you think about on terms XX% We property have of could what quarter-to-quarter times can in-place of lot in came with you as and I

Hey, was was I initial Mike. the acquisitions. value-add say The lower do, about and a do, that on I Yes, XX% yield about of quarter, Howard. going XQ so

question proceed Please from is with next Baird. Our your Rodgers from Dave question.

there. out morning good Yes,

might tenants, talk if happening but square else what's the I'm it where when in they annualized or et the before, Just they're to leave, exits not somewhere are we these of you about talked one not like shop, there space maybe be of is feet to excellent go of issue. know of might for maybe so case location whatever instructive do you've instructive X redeveloping that's that them, leave, guess wanted I going, rough next for where it telling me, anything that about rate of and looked you tenant that out tenants backfilling cetera I numbers Michael, on question that kinds it don't that's close I about million where for you're left that probably done an anything kind be sure. submarket

there. expansion there think our a tenants. mean I told don't and our to it's from same at know I be question if really time actually, are a the great is seeing story portfolio I within we we're tremendous

even these anecdotally to thoughts some to So things? related I of Howard of you don't -- have kind and any

tenants I yes, Dave. been and own team portfolio. of within lately are Well has and the We've our focus is some mean very a the within expand point, this to portfolio actually got moves portfolio the of large them at relocate that a

a of quite type So few we're doing those transactions.

are the short-term repositioning of move-outs a we And couple period really so, retention and keep tenant XXX,XXX another that feet those were where of intend for in tenants of of repositioning we the did this vacancy a move takedown them to put tenants, temporary actually time just quarter into acquisitions work. aren't reflected it rate some and into we that as a the recent we

of whole think rates don't is really look on a your an portfolio, have. we answer choosing trying retention because and question on the we're I tell is it an to really stream So the what's create happening the space within income are to necessarily to always story any lot to that

actually lot success with today short-term tenancies. having So filling more we're a

those being as of in a are lot the well. move-outs So, reflected

find if preferred tenants Put another they to extent to the are they another space. able the It's those way, have asking expand space. of a to would Yes. in Rexford to alternative an didn't uncertain stay about you're lot

[Operator Instructions].

is question. Capital question Our Securities. Lucas with next One from your Please proceed from Chris

four, relative of my I about just guess for Thanks how in the or tenant is morning, follow-up change assets question the sort that mix reasons buying pattern maybe there. of Good why I'm move-outs taking been people from a selling you're five any sort everybody. questions. curious on say, and to the from, three, as guess to there years any ago? have I

the ownership. one I'd continually generational is in catalyst say mentioned the we change

partnership have huge just we with We either the private the this the and owners of patriarchs families where of of aging doing partnerships lot the to of they're buy or point a a state continue assets population those getting from planning type to owners. in

on So or most market are is real today, that the we people of sale no in worth that the grow and part value the to today. had estate continuing really from the also a of idea lot products transacting of the it of their approach point other is at side the assets industrial

somebody they of be taking that now. And selling and advantage right that so market should catalyst creating we're this convince

data industry bit for does that we but these quarter-to-quarter, the and changed in market a in little in terms whether waning, depending there same particular of deploy really continue the the lot's that's but vary the on message or So, most a manner. we research end we these, thriving what's change is happening our catalysts how source not part, a that the on

proposition years deeper of Howard ago are than it's internal and to I'll that a maybe alone mature, research outreach and and the directly and our year or we add we're the terms I our to our think the even and we a generation, owner really they the better of for of quality really assets we the brokerage markets Rexford by or here I to And appreciate bit, to little owners, is in our function Rexford mean, outbound, business clearly these of And the with a value upgrade and with grow who quality fact kind and owners lead whether today ago, let are, for are owners opportunities industrial the of continues team, this their demonstrated five instance measured those value power global also and so a California, XX pursuing to what soon Southern and infill portfolio immediate an portfolio what do catalysts that of XX outbound an that research, the as model. that proposition an think in don't that they and national an Rexford's of and were longtime mentioned just today I amazing that's trade any community, really interest or our interest assets that's quality in some their into portfolio, value as asset want dilute includes in to Southern infill outside dilution appreciation. because future and for California a

way. proportions, generational that seen a the ownership in a truly activity, of opportunity they're And by experiencing It's why to these owners. that generally owners that's to Howard is with keen So the pretty over on dramatic increase unique mentioned this years, very last transacting Rexford. historic which in that few are the caters you've shift upgrade these also some longtime

and product drive really of an and the are billion at of obsolescence that in we many the and the only I So to and has market ways remarks, the mentioned to best flow the Rexford that truly improvement functionality is the in most range know that a part as built go there over prior market it's assets in into better in X exciting and because square resolve deeper us for earliest developed XXXX a sense, not that to feet and of creation. value cash but to incredible is our of you drive do, the the markets my time was of comprises, flowing in some for lot functional earlier market. opportunities better what becoming arms of we And that part

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other So looks question right. mean, outlook one let picture, this and, which the I have me is, the amazing,

if, back So that and take, what sit your what as on what things you What about? worry are CEOs you -- do are about? the we worried

that time market create rent create to distinguish create ability on business all improvement I, the no today that it drive this appreciation may to model about business ability you'd business, execute value we sorts the we the market that's infill things on. periods see thought an going think business that's business ability you is can why the we market is assets focused see We physical company and and -- of risk, of cash growth Southern when don't said, during naturally to with value way the when the we and created and is this the further be California we we when as all to the possible value United growth could an created let's during have there and possibly the create did model Howard of together that risk, we of see across incredible and do long we States, bullet-proof it the imagine. when we rent define periods and even because And flow we to most growth that we

we mitigate Rexford where focus risk, development that can't control market are spent our thinking can I the this we failures that and they you any things our model flourish that my at for we've we and grow do and as the the and and a and et people, our think greatest our And or forward nights our the Howard, they the that of level people economy, about is people frankly going can tried like and have personally the to obsessed thing up feel time has of so us, greatest for at also the so is that's about that no respected a other staying me, can I thoughts? so is created single in which enterprise, control, point the worrying cetera. our business determining single success one number we I about like execution, control, things place

than feet other to great of Michael in mean, it's you. we just spend Chris, of the our time we tell how but is fantastic I can't XX focus, market, we No, as that because team million our possible. people with would without this agree much a of buildings you in the says be people none with own business,

We have I of over Michael to the now will session. And remarks. the closing question-and-answer Frankel reached call end the for turn

we you just season fantastic in everybody and wish in to forward reconnecting wish we like about three for meantime holiday you and well. and I'd a thank and so with joining much. all the you months us Halloween today, everybody look Thank to

conference. lines time. this disconnect This today's for concludes And Thank your may your at participation. you you