Rexford Industrial Realty (REXR) 20 Apr 222022 Q1 Earnings call transcript

00:05 Greetings, and welcome to the Rexford Industrial Realty First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. 00:27 I would now like to turn the call over to David Lanzer, General Counsel. you. Thank

begin. may You

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

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

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

information risk to in this financial information Rexford about Industrial For the any encourage call more filings. XX-K addition, certain represents obligation no in these And update you our to XX:XX on review measures. assumes SEC presented forward-looking we financial other non-GAAP and statements factors, future.

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

some will XXXX fastest-growing provide quarter that you, and then last continues strongest Thank I'll historic activity, to performing REIT. new and We call. start metrics strengthen even extraordinary earnings nation's update hope will itself provide tenant Rexford quarter industrial remarks our David, are discuss an and guidance. demand you we financial continues Howard, the first on the well. year, who levels. XX:XX differentiate and the first our exceptional your transaction demonstrates As as performance to beyond Industrial year's thank our XX:XX joining you, followed for Laura Rexford our and families by everyone, brief

nation feet square at market located the XX% occupancy, over infill with largest full ending Our same pool, strongest Southern XX California the portfolio at of the performing million markets, world. portfolio within the over XXX% quarter industrial industrial now the occupancy. property is essentially comprises and in fourth property, Our market XX:XX our in industrial

an seeing range Demand overall substantially across are exceptionally below deep We tenant well market demand X%. diverse supply of tracking and exceeds at sectors. vacancy with

future. our to tailwinds. in is will value this In foreseeable into Southern continue to infill to expect and an of due supply-demand lack continues accretive imbalance, extreme feature We market inability cash drive to differentiate incurable growth creation a to the our addition increase believe exceptional we model flow backdrop, within excess California experience of to well developable XX:XX us markets entrepreneurial land. position business that to an secular key supply This

of a basis Our basis. spreads team Leasing were external and XX:XX GAAP internal XX% value. cash are a growth a is on for quarter XX% executing on strategies tremendous full a that range on and unlocking the

lightly flow marketed higher below rates. and market $XX forward, rents market internal stabilized, NOI look well as to net incremental next a of annualized projects our the NOI our project within we very On XX:XX we we acquired our positioned to Core growth by or of by And repositioning through acquisitions, incremental $XX $XX which and acquisitions, from and NOI million, assets embedded million quarter, or contributed transactions. an no as portfolio are assuming our approximately to XX% grow perspective, XX%. $XXX XX% growth of recent grew full we million As includes incremental cash continue to value. FFO redevelopment and million From of predominantly team we external NOI million the over XX-months, grew in-place sourced year-to-date further of roll off-market compared income front, prior-year the $XXX growth operating

As currently XX% the sheet under estimated we contract an entire we the now have quarter In pipeline low our approach dividend pipeline fuel $XXX to acquisitions the cash rates dedication, of portfolio over an and strong on extensive or net To over with these positioned our entire XX% quarter we now, extraordinary have performance, call company's million net enterprise investments accepted thank to additional our last the addition, a a closing on mark-to-market year. I'm balance of our to XX:XX turn Howard. is XX.X% and And And represented XX:XX XX% of best-in-class for growth, passion rental favorably your to fact, basis comprising a our are transactions. basis. debt beyond originations In offer, at with compared a that, pleased great to leverage and value. we'd first reflection extensive a effective Rexford company. team at entrepreneurial for XX:XX like growing to very increase, on

average supply-constrained portfolio well continuing tenant the value-add of to Due for ongoing XXXX markets to feet X.X buildings CBRE, vacancy, markets. within square land, first totaling lease of X% expirations external of completed X.X% coming our you, a increasing and and growth, the us you, basis. feet portfolio in Southern positioning of on Thank cash is XX:XX for of acres high Rexford's on X.X% in effective quarter on yield acquisitions we internal XX% Based markets vacancy our our we capture rents on joining $XXX to rent year. our a aggregate, today. thank the demand, sourced through strong XX:XX across incredibly X.X generate for total were million for estimated to fundamentals market our our According strong continue deep reflecting perform Michael, were at with Year-to-date, decreased Rexford of year availability XX% our cost. on remaining marketed XX% markets. everyone, quarter see near-term space now of or investments. below at relationships. XX:XX the California XX by ongoing square representing initial the stabilized of quarter, market XX:XX In an basis the infill results, to began and and us and The quality yield acquisitions processes transactions unlevered acres XX% infill the to our XX outstanding through unlevered acquisitions first an portfolio over acquired off-market end XX to proprietary net Approximately mark-to-market XX% Regarding spreads prior X.X%, million, growing including lack research-driven redevelopment. lightly weighted million estimated infill acquisitions comparable consolidated strong over the accelerate, metrics, of quarters.

first currently towards investments we of XXX,XXX which to future, over contract, million we XX:XX have Looking are conditions. subject $XXX square new a During or the the under closing stabilized quarter, customary LOI yield at about foot stabilized X.X% market double this the stabilized assets yield market. as similar property redevelopment in yield unlevered on a creation today's is cost, quality value total substantial or representing

Although of mind to increase rent initiatives. team excess of in XX:XX construction to accretive well costs in a The impacts. of continue are internal is top inflationary growth broad range growth on see executing

years. expected and over that, on investment of projected representing about turn total value over $XXX I'm the $X incremental to next redevelopment deliver Laura. call investment in These approximately two projects now start to return underway value billion And add for to projected incremental are X.X%, pleased over million creation. have projects estimated are of the aggregate with to total an We XX:XX

XX:XX you, Thank Howard.

the COVID-related same and normalized over were quarters year-over-year, same the GAAP XX% equal the Additionally, for cash enabled with on the on cash a the us Average strong core prior average, spreads. to basis. leases renewal executed quarter. First X.X% combined to embedded leasing NOI four results FFO performance compared GAAP first first internal driven X.X end occupancy balance averaged XX:XX at At when basis, a leasing XX:XX on growth basis per and exceptional quarter grow and XXX by quarter a executed low rent X record prior was to and ending share to growth XX.X%. XX.X% annual our in and on gains strong was on accretive steps by to was basis sector embedded repayments. target. our up a This external our $X.XX growth at our XX% activities. XX.X% X.X% spreads And occupancy with sheet property property basis over increased to X% in the debt-to-EBITDA below times XX.X% the new markets per to times net year XX% quarter, Moving times, continued on share. This of quarter a X.X XX:XX prior points capital

to liquidity per settled price in common of stock transactions end XX:XX to our positions at leverage the X.X on We strategy through At cycle. a on opportunistically share. we sheet maintain first forward continue points average balance execute the investment that During shares $XX.XX and of $XXX grade to cash, the a us proceeds our availability an capital revolving basis markets strategic low sold the all including At ATM forward $XXX million sales of million shares guidance. end, with our to remaining million. associated million sale this of net $XX $XXX credit XX:XX $XXX our quarter's from sales on of approximately common full-year facility. issuing first turning for X.X million of Now, quarter ATM last million, was stock agreement million settlement and for quarter quarter, quarter, we through ATM the of quarter execute our

range to $X.XX guidance $X.XX range our per of $X.XX. share to are previous our We core increasing $X.XX FFO from to

earnings Our the midpoint. growth XX% guidance revised represents at year-over-year

to growth a to to We GAAP supplemental up is not of NOI same the include the property midpoint. approximately reminder, same to range GAAP projected growth on XX leasing XX:XX XX%, activities X%, basis package. on of points detailing XX.XX%, be average that X.XX%, XX:XX XX%. closed. of property at increase repayments, points cash include projected growth midpoint. been is a roll X.XX%. acquisitions, normalized have basis include X.XX% COVID-related XX.XX% balance basis of have X% midpoint. and leasing property for few our increased related a our or of Same the the be Cash approximately basis has now not XX NOI also a to occupancy an Assumptions spreads driving spreads same XX A points at revised at property X.XX% provided guidance growth guidance increased basis sheet forward to our As When to NOI highlights cash on drivers does dispositions

of note our for prior our projections. in million points Our percent the XX:XX strength $XX projection Finally, overall guidance as XXXX. of points property The guidance, the million line a prior incremental XX to for the is debt growth revenue XX we the driven compared expense after is base. full-year, by now be of as acquisitions is same NOI approximately $XXX initiated our closed from to with in that projected tenant bad in basis basis I'll

Our includes G&A be we net also now now revised incremental your by projected $XX XX:XX repositioning to and prior the levels $XX million million redevelopment are range increasing expense Operator? and and from expenses million and of remarks, acquisitions approximately our This XX:XX properties interest prepared occupancy completes guidance year and is to rental be $X million our to driven NOI in $XX Lastly, higher to million. $XX of welcome questions. projected rates.

XX:XX Thank you.

Our session. will Korchman question with Instructions] We [Operator questions. proceed of now your Manny line from Citi. question-and-answer comes with the be conducting Please a first

everyone. Hey, XX:XX

can't and just the that the that as national And in the dealing are puzzle? have sort rate that bigger growth, so pricing tenants it your becomes Is of given maybe amount tenants Just massive locations of specifically, cost the estate can? maybe with in they the rental that they a as of how much pressure? real sub-markets are push inflationary market piece

in here. I'd Thank by just Manny, much that we and you consumption, Michael. largest our demand XX:XX today. the those of a it's tenants, Again, country have of for is zone consumption joining driven so from the vast Hey, reminder tenants majority regional us the

greater XX targets take the so your to example have XX:XX model are small larger target, an actually centers, their their by national infill of Southern stores as to increasing points box to years, very So even e-commerce capability they're footprint deliver opposed forced and a stores, And really strategy. population their big on -- push in actually change fundamentally over footprint of diametrically that five, of tenants establish activity, throughout business the an closer last as small California. the to opening their and just support well warehousing warehouses smaller need network among the business in end presence And to previous distribution. of that

that of model, order in national business, can driver I never regard as today. to there has it in saw just most industries, they're we're a talk did experiencing we a deep levels. have need is whether or what these XX:XX this by are for long incremental we've I on business new in It's They last industry afford a execute the And drivers, to going California we Southern those about to by a take infill of business, to question XX:XX can of space business And to walk they -- mentioned diversity businesses are have mean, what we're achieve the intensity in environment before. a think they to about So smaller But lot it's absorbing housing emerging remarks, your prepared their option, order seeing circumstances. so the over spaces. a year, Southern ago, a over range business legacy increasing them. or beyond out California, could many execute business been expensive differentiates through demand sectors, of large that XX%. mandate And well operating a is the that I to They infill in that really and that. for move doing this my And region key frankly, don't and same with And literally are seen even have these they set California. today rates, talk historic can't they seeing. all operating increase of has And level and decades. the many, rental have companies stock years XX-years tenant don't so now on their time because demand of a what the we that to

have we're the be trajectory, we with which the demand used now already. and trades, impacts seeing to from cyclical a so building And more XX-year

increase us. for a cannot a So remember, here we unique time really, market have supply. it's And that

actually lose average continue to on will We supply year-over-year.

Howard, So, we put The and offers space. hear Manny, there's literally ones now comment and All one they of a setting the XX:XX nice voice. more other unpriced. to multitude rents right This with generally, the We the this tenants competing on is are market. the space, your each are that. in tenants out had are our is pressing

of and works it's point, to Michael's them are spaces how in pricing their businesses determining them take So the and want for really to essential these they are they terms them badly what to space.

on, all the Howard, what acquisition versus XX:XX type while few component I terms pipeline, Thank And in in any last you you of buying is or the for you've the then asset over have change detail. the there value-add been mix quarters? or

pleased marketplace. Well, purchased acres value-add it's half volume about redevelopment, transactions. we're quality This past in the varies. We XX near-term we're and it seeing but what had to quarter-to-quarter, vary of that quarter, was going And opportunity XX:XX the type we pretty with quarter-to-quarter. of for still the

some realized to question, Southern XX:XX dramatic interesting about responding it's Michael Manny, you the how have we rental tenants are to really in I and it's come like I'd original infill your when back national ask interesting. rates the again. increase to California, because data

industrial to directly as will national be XX,XXX our more compare of compare for spaces. you to the larger feet comparable you own national their typically tenant, would If that REITs, sizes. our have base if their REITs, smaller the of for compared that a square look larger XX:XX tenants, more terms which industrial our instance, portfolios, on to at spreads, than leasing our more in REITs your nation, in Rexford's size, over And is average which space metric who tenant tend comparable more to national across national in other the is spaces

XX% spreads quarter higher a spaces comparable REITs, the experiencing the to that's are full an build spread, it's spaces up time more your were an have that's often. instance, Our as have don't they will that leasing I roll they spreads leasing leasing so the XX:XX hear, and and reason for our longer-term The REITs. the indication the And national that leasing have question you don't leases, in to industrial option. larger so portfolio they're to that more from tend spread simply, a to national larger They think for the And mark-to-market. because adjusting. frankly,

we're spread. that leasing higher so our And seeing in reflected

XX:XX all. Thanks

you. Thank XX:XX

Feldman from questions. Bank Please your next with proceed comes Our Jamie of question the line America. with of

there? XX:XX higher you are Thank rates. Great. you. in the or hear change about kind you're changed and We buyers, of want returns? I maybe returns with in about mentioned your capital thinking -- your about talk markets, investments? you back up of, the pricing debt rethinking yields what how is know firm but certainly on of you your how is required How going had cost do what's And and unlevered in your thinking kind stabilized,

feedback XX:XX Jamie, All you to it's Laura. right. Laura. hear Jamie, have some it's today. We'll Great here.

now? hear me You

Yes, XX:XX sounds good.

XX:XX Okay. Great.

Sorry about that.

we're how thinking about of forward. moving cost and raises capital capital how of terms In we're about our at thinking looking

think and continue take to a very deploy how going I to capital to raises we approach opportunistic see you're us capital.

our the We capital cycle, much enabled view, business it of approach to we allows all on redevelopment, fund can sheet and we rent us attractive balance opportunities. equity, because our execute a all of built and in Our note us focus certainly repositioning, in below-market point don't take capital that do debt advantage because important I We it's portfolio points to including at think into we've longer-term cost sources, time. of that capital a investment creation opportunities through that's across that. value a to a to activities. take all of the XX:XX embedded

of of and basket FFO. when as our you goods invest process yield pipeline, that at we redevelopment how so projected the So you achieve think for a if investments. acquisitions example, XX:XX that about end our look invest, increase recent growth range and our an a overall repositioning and And really yields in earnings we

projected XXXX, are on If at projected that the what's in If five basket look of to the up years stabilize. those stabilize occurring which next over goods and we ahead X.X%. for the in we yield the at years, you look they look X.X% stabilization example, stabilized going to is yield in

inflation, even us above-market accretion of really substantial the yields, drive face to and FFO NAV think given and time. over interest increasing I positions that rates So in these

Jamie, And to XX:XX just I add maybe that.

with rates. have you've happening in that growth cap interest I in Somewhere shorter lease longer-term maybe duration portfolio sensitivity a those question, bid affecting some on because for that, investments to to maybe rates and them, rates in the cap starting are rates seen lease think, seen perhaps, because some we've but expirations, out yet, product. less about just the itself, and your sensitive. showing hear but buyers of rent Not are rates of in the change what's interest rate of is less interest our there's point market And interest up that that we cap to them there's

place So to leased market. an longer-term to we see on the to going reset opportunity something is the properties will be in market first the without

Michael. I it's frankly again hey, for -- XX:XX think, Thanks Well, today. Jamie, joining us

seen from long-term I this strong for and over the inflationary before kind markets, phase we've California. start starts low to to tertiary to not the people in tertiary rates, these today, supply/demand due that of recession, markets, that's prior that many we the vaporize. down in think Whereas, down, XX:XX around might over we've interest of, Southern our here it factors very the continue those points to And Southern see in And as what drive chase what even disproportionately same market up fundamentally in in cycles today. the where Southern we've experience. the during of they back be, we we rates pressures, They rates, cap cycles, time, and more to pressures respects. impacts of they movie California secondary secondary so simply markets start supply/demand seen this long doing those tertiary because time, that infill we've markets a and when those prior in go in dramatically. go sort inflection come cycle stabilizes, are curve those risk whatever these prior seen to don't Except market infill than the dramatically California, cap see fairly cycle, expansion secondary what been and trumps cycles cap trumps see rate

demand chains ships you of We've XX:XX supply expect profile do a worse, I'm color. or number outside little I tenants what what it of supply get like risk better? are saying they needing see what actually if the as changed that lot decline get for of Thank seems LA meaningfully. just has terms improve? can there's think in a of seen but Port that the to curious, know are bit starting do we or waiting start obviously you a we to of chains

businesses XX:XX the ports. Vessels quarter first but XX if the port XX% demand versus chains the quarter ever the we'll than to about waiting Southern are we XXXX impact see March, dock still up from to start I at in in they're on see the the think the And are supply seen California in increasing frankly, frankly. efficiently, question for consistent above to backlog was start other volumes with And February, is, think more up XX% XX functioning best first year-to-date. tenants we've system short import improve, answer record. down decrease levels. our And your I to to no

about increasing that's we safety stock thing, don't and underlying And performing XX:XX so at sort forget, occupancy. that have And market really, demand. more already talk people all it's full of fundamental about but a

vacancy. are below well X% markets Our

compete actually even us. that half vacancy stated you're If of and locational down Rexford to with buildings, less competes drill basis, to into or vacant or you the off functional how probably looking those which -- a vacant on at with determine actually were the buildings many -- than

but enabling in just more their We demand service no And it means to is increasing that really we our run see efficiently terms their see inventories tenants tenants the -- they orders, businesses the our now. can because replenish ports actually congestion really they so tenants what of plans to we reduced in way to have of for. operate the of letup backlog

Okay. XX:XX Thank you.

you. Thank XX:XX

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

that Laura, cash this out are Is Good with to any But Thanks. this cadence year. hit XX.X% due earlier? slowdown? Can year about there's to we've morning Great. you talk the quarter? midpoint a year, there expect? NOI as expense off specific in just at there guys of on that talked remainder Or we should XX:XX a you same-store all the And guidance the quarter. the great NOI on there. the big a in deceleration drop to slowdown behind off start is about your other obviously meaningful implied of growth then, drivers same-store for are

cadence much deceleration your rest and The Blaine, same thanks to our projecting almost so occupancy XX:XX is on of assumptions. today. all -- that the the actually we're for property questions Yes, growth tied year actual the through the

quarter So as our was growth first cash you the is and X.XX%. at midpoint same XX.X% our guidance property mentioned, in growth property the and cash for

deceleration. When you increased XXXX. QX. look the it occupancy So to occupancy XXXX, -- points XXX to XX:XX our assumptions, of has imply QX really that So and does compared to at you do cadence from our if basis with average some

and grew quarter the in occurring. happening XXXX XX.X% first the opposite over by XX% in is fourth What's to quarter. the So

reverse. the So in occupancy assumes our average XXXX,

at QX assumes decline QX. at and starting basis levels roughly is to occupancy from XXX XX.X% point today average So

comps and primary the impacting impact the year-over-year what's really the that's deceleration. So to

that drive just specific it lower specific any to XX:XX there? follow on push Or lower? to Great. up can guys That's as us are Or move-outs retention anything that, helpful. that occupancy guys is are anticipating you rates? on you that's you large point kind of And going to there

Blaine, XX:XX Yes, that's question. a great

did So for we're over that our high timing XX.X%. XX.X%. prudent very by One, sitting levels our driven market expirations. two-fold. mentioned, feel midpoint drivers to prior of really this will of in I year our occupancy the The XX strong, although that the time, current increased average occupancy at I I'd our are points assumptions our currently note But continue say is and is occupancy, guidance. we given the basis at really like as be our really fundamentals that, very of forecast

heavily our half our those are back-end XX% of of the the year. So Actually, expirations fourth XX% are occur to expirations in very the weighted in second of quarter.

think occupancy visibility about to today update getting when is but the think which certainly for weighted I impact in we on to XX:XX those it's we substantial capitalizing second to leases, and start those have gives our as year expiring just the into those we'll more I higher visibility around spaces we back-end early So continue assumptions, the pretty expirations. rents. that the think some into able roll creation, opportunity us are really direct to we market value because

up leasing about have we projecting spreads So we're about XXX,XXX XX%. square feet where spaces of is

creation, does little of to occupancy value that's a come downtime. going drive in the it so with substantial near-term but to form And impact

will bucket we really lower got quarter, trajectory Great. of market helpful. your out growth expiring And Howard, XX:XX Michael and the as expectation of can been very strong. for That's to about be you've each has in-place that that year? coming rents or move then the you Obviously, guys older, rent throughout talk switching but mark-to-market

do you progress about throughout as So think two how those influencing and each year? portfolio mark-to-market balancing the other overall the dynamics out we

portfolio the the is, just the into here. we'll every reality the XX:XX a continue quarter, we QX the space mark-to-market tremendous as increase Michael no of on QX to And from mentioned market, there's right? in saw market So earlier. mark So

So pressure to there's growth for tremendous rent continue. a market It's really interesting.

portfolio. literally -- I had our think If space in XX,XXX only the quarter, you XXX at of looked of square vacant end we the feet

on tenants, conscientious space. it's that really retaining we So are more to we're don't side. with new have much tenants and So the doing lease their the XX:XX about even renewals very of

all we've if or about led time, latter holding been And some you calling part to off us they are next them the about calling the early. a bit year. the year renew they're So of wanting have expirations at

still there. just pressure there's out So tremendous

to well marketplace continued growth So in it see in strong as entire the feels probably set well. quite like portfolio our and up market rent we're

much Michael. it's so for Blaine, And joining again XX:XX today. Thanks

great we're a almost seen think I of all well. leading bumps the leases, that are we've our indicator and contractually rent structuring into also acceleration nice there as a

-- We For average had the during first the X.X% every terms. year those contractual for rent annual rent were booked I'm rent example, are throughout sorry, occur the And spreads X% lease spread rent our QX bumps quarter. that annual spreads quarter. actually on

are great indicator So things going that's maybe where of I the leading a think in near-term.

everyone. XX:XX Very helpful. Thanks,

XX:XX Thank you.

comes with Connor question of your with Berenberg. Please questions. the Siversky from line next Our proceed

XX:XX Thanks me. the for the question Inland Really Curious Hi, everybody. just one Empire. on me having call. on for

I what market a the think that's proper. it be valve development looks moment, county? that before Noticing an you to that are new overflow guys a was at noted point to low of in is case, willing overflow project you'd call mean, any if vacancy pre-leased it done is not enter the completion? virtually the the where that we exceedingly somewhat or next identify the have any maybe I work and valve rate whether like LA access last in at for

there's is to Inland West. or Empire Howard. speaking Empire really XX:XX Well, the unlimited you're overflow don't East, buy We really we're because that operate valve continuing land Inland focused which that of Hi, it's in East. Connor, in just head almost

CBRE West, that there. the was over Inland stats if Arizona, needed vacancy to can the you to. According vacancy Empire the the X.X%. But market build yes, You at astounding in in

on market XX:XX that beyond capacity, year-over-year highest their almost full right? the Coincidentally, stats, had is the at essentially, XX%. as well rent growth So

able that's We're we'll actually a Western us market have any now the literally, even building, doing in match couple have the of where Inland market, tenants vacating, Empire. is the acquisitions in we'll to yes, during our buying infill Empire now time. a we a of coming of a brokers we are We've instances of even that And had the and ahead to that So Inland space real time, vacant recently. terms building escrow. pre-lease

of tight markets sub everything the performing infill tightest X%. well. all it's is the but look, are So Really exceptionally market,

further always in just relief really of East a is going really, So option. terms the they're

point of a apologies just then clarification And if that. and missed for Thanks it. I Got this XX:XX before.

your -- contracted, you acquisitions? in rate mean rising more if this wondering you million how equity to speaking, $XXX under backdrop, the or debt the LOI these seek weight. all does equity I'm on the Given and to I Specifically at fund use calculus change

Connor, very change no, doesn't I of before, Hey, approach. look cost focused time. the redevelopments, positioned on recent And and as given And face at mentioned When and X.X%, in investing we're pushing rates pipeline our you we're the we're and our our even as point not XX:XX it yields. capital repositions which above-market process yields increasing in our in of inflation, stabilized well at and a X.X%. on acquisitions

XX:XX there. Okay. I'll leave Thank it you. Noted,

XX:XX Thank you.

you. Thank XX:XX

of comes Please with questions. with Mike the JPMorgan. line Mueller next Our proceed question from your

redevelopment more that what's the guess, a acquisitions yield, XX:XX that? out? a we mean, repositioning overall your to so about ties for tenant the or get stabilized about bit incremental that incremental to commitment a an that? to $XXX get I think little end Or I to capital I half is how of And roll Yes, kind mean first or kind going million significant quarter, it value-add. of for hi. should half comment of X.X% there that just And to in was about ballpark up pipeline in mark I guess in of is it is timing way that the there? the pages think there? to Does were ultimately

and to Laura of part some next income three the achieving great the there product redevelopment, and flow two acres interim. term time lot it wait out page the take may is vacant or we're better capital. respond a that about with expirations. XX:XX these But XX to years the those near year. of might to those three Three day sites of It low we're But but onto for There place page. repositioning the have show Hi, to I'll will of the so. like XX cap Value-add longer Howard. takes a of maybe range. one had Mike, necessarily it's actually them. two for to points push think, talk refer were some doesn't mean few probably those land to sites in -- what XX:XX get repo yields that transactions I some in on But those with to redevelop up were, the where or in to going came nice months mid in or and as a cash the actually take were covered bit our in and inbound X we it on it

those cash developments. time flows timeline the strong the to and very So for of have of and planning plenty hold

So not or up to yes, it's going the six in next repositioning the months so. all show page on no,

spend you that in and it's they're equally Thank much I each XX:XX so But We it's And look we us rates it's thinking buying. We important, the have Howard those spend you're the arguably 'XX a Rexford Howard model the starting But weighted we're by average executing truly for well. in cap know than each certainly ourselves because you before on assets Michael. is, today's business -- you million And at this what unlevered know turn starts, vice-versa. confuse yields interesting all today. X.X% Mike, total for represented of think joining mean if often we're for that and do that a projects is market. about cylinders, the other solving we acquisitions I talk around sell that other. almost the total that's $XXX year, seeing I think that the yield. market for we to more double could repositioning stabilized

the So activity a the portfolio. throughout in amount of embedded tremendous value creation

XX:XX Got it.

XX:XX I'll add to Mike, one thing that. more

stabilized. around terms asked question -- average kind you In of of a

this X- X-year for to be tends area the in -- acquisition. to Your

was That Okay. it. Thank XX:XX you.

XX:XX you. Thank

Please proceed line Our Baird. from with Dave next questions. with comes your question the of Rodgers

Michael, recent to Yes, one closings OP Howard, XX:XX the about cash. out morning versus on two of acquisition good and talked couple there. units In pipeline ask questions, we quarters, last the wanted acquisitions. of

out been like, and Is playing seems take talk function maybe It transaction is mix? but maybe discussion. of mix. say, money a more seller of cash, that's did seller it our of just on like in but color about let's maybe unique a a this that the function go, do of some the quarter one how looks it's bulk you So kind although as price, seller a that just

part of Howard. our Sure. acquisition it's Hi, David, XX:XX UPREIT program. The an is important

have assets owned sellers assets in They for our our We invest years. comfortable our UPREIT. in contributing with understand are partnership into their to working extraordinarily through operating market many that by Rexford market, and they're

turn many to do need tight XX:XX in and acquisitions. markets of XXXX. The as then from ahead, And this It's even XXXX, And was very right as plays exchange a start obviously, frankly, that they past It's conversations UPREIT a lot quarter, close just with the cash And -- most times eliminate the they're operating UPREIT-type And have find lot today, a really to with we are will tend of because UPREITs, the even there's -- level, so from that people It vary, they them capital, a of management look so a of some smaller many and into are an and of of sell to of people as amount so a that sell more conversations activity. into a conversations also, to we properties. it's happening kind difficult that's federal in lot trying interested people going very intensive. property. UPREITs. quarter-to-quarter.

build UPREIT hour, even in asking we we out. So to some might us UPREIT looking the doesn't them lot work the do in an of XXth a they're rather XXXX XXXX, if find they're an for people. flexibility allow to that Even if

growing huge into it's of owners opportunity terms for and aging going of us our market acquisitions. So a that's the component is feeding that, a really The in forward.

direct from in market growth a because I'll increasing we're external bit pretty opportunity that to for Michael. perspective, both it's quality the an volume Dave, XX:XX and just dramatically little Rexford. add addressable really seeing

it addressable driven that our the factors. up direct the briefly ownership. every of mean for multiple is aging And is Now the goes year, in substantially single linearly one, increasing doesn't this overall means really but Howard that out legacy number it opportunity that reason mentioned, And volume acquisition quality. market by

we're peel passage shift drivers the one by during you transaction assets that flow middle the and favorable over time, replace can the they value monetizing layers, a And predominantly, into are transition transition the receiving today, which UPREIT to generation core the these drill Southern this half California, the the back of square owners owned who either and the of We way infill feet by from era. values or next. -- the actually is build activity cash question, kind XX:XX the they're next. assets of the just from given through transaction were to an another getting if pretty activity, historical what generation two in of to one of a to historical in cash of flow single the are way frankly, or properties from where is driver otherwise. core down or of through redeploying X of XXXX, have and these the this billion one your And private in before built And post-war long-time market bought almost aggregated properties greatest assets their the Rexford

combine time a so when been. simply ever with we're and markets unique than that deeper you that in the we've it's fact And the

grew here. Our I up team Howard is and equipped. better

Our families grew up here.

And a you our very, record that reason So no at wouldn't private Rexford, today deep. just go look seller very track the then consider UPREIT. REITs of there's absolutely an

those So fortunate, benefiting and we're all we're would very really say, I from factors.

the XX:XX slightly question color but I appreciate estate around obscure, second My real more maybe in that. on California. is taxes

where start any come in in takes seeing taxes a on reinstitute last are facing bought burden time building You've there in you of I and obviously you where your and guys here that. it wondering should before lease. tax bills slippage can probably short-term those couple until to kind the something coming the as some leases tenant. version are get a lot happen? really if just Does more that to about I'm think the a in tenant the of of enough guess, that's in years, you the institutionalized we that just not years you're basis. reassessed Or Is that's

decades Southern call In California, a of standard modified very passed you leases a over standardized. to most lease all we the net are Michael properties -- on that to property used was gross or And that a developed industrial buy there's through find AIR that tenants. and lease, landlords here. lease. it, many it's was say lease I'd whether XX:XX for they in be tax most unsophisticated lease, And these mentioning provide that that all increases let's

very but the increases, that's stumble sale Now our underwriting, that but across tenant a negotiated that. and That's for in of so terms we're stopping have -- a that rare. rare might building we occasionally, tax very into

XX:XX those recovery and seen from I'll have -- collection taxes. of collections not impact tenant perspective just add increased we rate now, a and And an that Yes. Dave,

then XX:XX Laura, Got helpful. And last, for you. That's you.

mentioned On the same-store that would be expenses, quarter you last this had year. they elevated

expect added around. of quarter? kind to that Should personnel the in to sequentially we You of increase? is kind loaded first for that Or some all continue

XX:XX Yes. Good question. Thanks, Dave.

that been expenses last in Our guidance. expense of negative no there full-year guidance, net recoveries, as included quarter, talked from basis a we has about impact point XXX overall change and

related non-recoverable full-year, Just related in operating really reminder, expenses the an as overhead occupancy couple increase the of related a for second to that to was assumptions related to things. was was cost. to and impact One a

So was the what full-year. QX our impact, net XXX we're recoveries of lower expense look actually when basis for points, at so you than assuming

recovery we in would were that line on or expenses there obviously, the the a increase for seeing higher with occupancy earlier that what's to And So talked is of assumptions. imply our decline would then happened recoveries occupancy through in -- in and that the the last this and actually expectations. it's directly year, a year an so about and is your year, bit. the your last increase an declines, run occupancy higher driving about our And really rest quarters, that And recoveries, rate as call rates. XX:XX we is I tied in impact what talked

having is the reverse opposite this happening year that impact there. so of And we're the kind

FFO having at at note midpoint, and this the from accelerate that strong think no change but it's expense impact we're And expectations. midpoint important with I earnings in expenses guidance same-property everything in from year, is will tracking through growth our again and of even standpoint X.XX% is overall the our to with to of this an projecting line that growth we're So the the perspective. at XX% guidance, still expense very the impact an and rest our increase

XX:XX Very helpful. Thank you.

you. Thank XX:XX

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

XX:XX Hey, morning everybody. good

I could. couple a ones, if of quick Just

to term several for it's something more on little quarters? renewal fundamental Or than there than Just bit it's that the that's shorter the the lease length been. Is mix relates past as related? it a been behind is really strategy why shorter

those It's over XX:XX were short-term four net you circumstantial. norm if And just of renewals. out, really our are goes There about to two just it leases back that years.

it on XX:XX Okay. little here you that, impact, the Thanks guess a more. for to Michael. I I then And think Michael, bit sort this. relates it of touched just as looks

and if that really market? portfolio touch as moved that the how rents the opportunity relates of impacted you on opportunity redevelopment dynamics and that's maybe all changed in it market based the there higher the move have existing sort on to And that. sort could Has set? significant your at accelerated, As within of

embedded two at market additional set at rental costs, expanding basis all a we on rates, in growth internal point opportunity do have that yes, years really -- and inward of meaning where we to portfolio, a property as on one And What every is then the but on without in rental rest. construction there's look and based acceleration real even demand, quarter, time, One it in opportunities as our tenant we the in question. internal the questions front, try the there. would now well is true. realities reposition given rates two as to sense, our the penciled portfolio, may and sort have ago. think not quite And every I the recently may make that XX:XX external a it month or time, it's to Every formal contributing more others externally, growth. determine

for market rental a terms is unlock we continuing do in opportunity well. of And to the us growth believe very the rates that internally so exciting of value and as

the tend owners. operate sellers focus opposed of When occupancy I'll aging Michael their add properties, rents. XX:XX to comment, they just one And property pushing the mentioned as more that to they on Chris, earlier, set more

in-place rent the below buying spread and those between mark-to-market of is and type unusual There's assets the It's not enormous. So in rents XX% something see place. reporting. us to on a market

to growing is So Michael's that opportunity widens. that gap as comment set

that buy are current unlock value-add just asset opportunity and beyond to quality like work of even assets further the that rental in some huge the buildings well even today So value to the market for the for rates there's to place a do state. the in us incremental to the

Is that. for you're for last of then development it you there the a Thank relates some of sort as that to have -- Okay. do percentage just a or metrics -- enterprise me scale. question you have value of using willing development XX:XX redevelopment comfortable And sort to there as you're how redevelopment marked in to sort some to put profile internally that much play? you're with? of of maintain a you risk Is that the limit as -- max amount guys sort

like or that that the managing an assets a risk this the incremental of building simple It's value one or cognizant business are I capital of built we and building around retail. creation and structure is required, Yes, Howard property relatively multifamily respect. office reasons these industrial And in not industrial are even XX:XX structures. that

not to reposition and finish, model. and capital roof a really high spending very and low really of And nominal activity. tilt-up It's the that's it's generic office are a typically, concrete walls building incremental percentage drive have to the structure. business beauty We of we build-out, the finish,

you'll the the grow we of to be to So as to company into think relative future. see continue company continue the value enterprise that I relatively nominal the

Thank XX:XX appreciate time. you. I the

There the now over comments. questions back I turn call at closing this like you. Frankel Michael Thank further no time. would are any to XX:XX to for

so for everybody forward us we're the you world. healthy, We and today interest hope to XX:XX your look well and Thank across to stays peace much. I'd reconnecting support just We of for months. want company. three and in everybody joining thank the certainly hoping and about

We conclude teleconference. your XX:XX appreciate participation. This today's does

lines rest of You your Enjoy disconnect this may day. at the time. your