Rexford Industrial Realty (REXR) 20 Apr 232023 Q1 Earnings call transcript

Greetings! And welcome to Rexford Industrial Realty Inc., First Quarter 2023 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.

to call like Lanzer, to now Counsel. General would turn over the David I you. Thank

begin. may You

We joining you call. thank for earnings quarter conference XXXX Rexford Industrial’s first

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

as remarks Securities Laws. Federal management’s call, your today’s by answers to questions defined may On and contain forward-looking statements

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

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

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

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

Rexford Clark. questions. They we make and call Executive Schwimmer; will call hosted Co-Chief open Howard and remarks, your conference Officers, will Laura with Frankel is Chief Officer, the then together by Industrial’s some prepared Financial Michael Today’s for

the Michael. Now, will over turn I call to

you, brief results Thank call. with discuss Laura, financial to begin will Rexford to guidance. discuss will I XXXX everyone a first who welcome quarter Howard operations, Industrial’s followed earnings will our our by I'd and introduction. David. like

and of our reflect approach strong quarter first Property Our results the California Market. to the creating Industrial entrepreneurial Southern value strength infill

XX% growth. a by first internal and the NOI accretive increase XX% full in driven by to share quarter, grew by core year enabled consolidated quarter, For Rexford and and X%, increased per earnings the FFO external by strong FFO, we prior or compared

cash leasing a lease a were Los the and spreads fixed leasing if activity cash spreads legacy XX% our XX% lease option, we Angeles, feet GAAP on Interestingly, achieving a who renewal robust of quarter, exclude XX% basis of completed a X.X on a a on We exercise square the and basis. of million XX% basis their X% GAAP one County basis. on on during with

leases which the in-place on basis of four for increase just with a lease is market weighted basis, years. The throughout contribute effective estimated our is share, FFO core XX% an to term $X.XX a equal alone to XX% mark-to-market rents, today's net assuming cash portfolio remaining full XX% and average projected a of per entire on incremental under

our addition, of In investments the $XXX team for completed million quarter.

occupancy the the Tenant in into strongest California, historically the and incurable demand with virtually within Southern market a remain infill future. industrial levels market at imbalance nation supply/demand high continuing foreseeable

business. two we operational to facets of favorably within the believe our with, functional From product best our mandate to locations within is key is an To positioned most driven and our out-compete submarkets. markets, Rexford the begin by perspective, our own

due value-add proactive functionality. portfolio Our our work superior economic and through to our to outperform repositioning positions cycles quality

higher portfolio Rexford’s quality the majority Based of built upon is the the to performance product square to of relative our our markets, today, prior continue infill and portfolio of product billion includes makes feet over outperform up vast which X our quality to expected XXXX. lower experience that

as delivery regional of short XPL demand strength terms as and in capability. be new see continues e-commerce sectors to not California, the incremental penetrated We're from consumption electric sector to national under the tenant substantial aerospace and nation's vehicle the range demand and also be a and that in seeing name prevalent continue of we from Southern may market few. to to other a Secondarily, largest timeframe from markets, omni-channel food base,

requirements through feet feet outreach over infill to California. indication, are By teams requirements million program. customer our of that This of our X million on over proprietary our proactively Southern within way leasing are square leasing Rexford includes XX and of active solutions square customer tenant tracking strategic engagement

of million lease acquisitions. XX%, in-place assets, our at substantial market forward, below realize as we rents, incremental look the to deeply NOI our leases and XX contribution next embedded equal market over internal from NOI NOI estimated we growth recent contributions up to repositioning higher have we $XXX As months, an roll incremental

and our proprietary growth access external deep, our activity, our advantage to infill market. is and shooter leveraging investment sharp team to California Southern regard With the

We are market a capitalizing competition buyer in and current investment superior diminished levels upon of seen the well yields strongest over to that are dynamics decade. achieve we've

a future flow is cash value periods. activity into very investing Our positioning growth net Rexford asset favorable and for

capitalize balance XX.X% to affording internal the best-in-class while external to company total we uncertainty, net accretive to to highly and Moving against us a growth structure, our about the leverage maintain enterprise economic positioning capital continue ability sheet value, upon fortress-like, at protect to opportunities.

thank Above work apart. to team your business set all our dedication Rexford our continue great for and tremendous we else, that

now, over is hand my to the And call Howard. to it pleasure

Thank want past our superior quarter. portfolio Rexford this Michael, and the quality complement of everyone and I our for functionality you, a for year joining us thank the their and strong strength delivering markets. testament to today. to you results, of team Rexford our excellent performance also the began

Vacancy Southern continues the realized California historically regard we approximately year-over-year rent XX.X% according CBRE. X.X% rent levels at to Rexford's quarter, across to for at growth. portfolio, our In market infill markets low growth within

LA the indicated central During comprised infill the Rexford of adsorption quality way lower Angeles negative in dysfunctional principally the By lower portfolio DBRE functionality market quarter quality Rexford Los during example, in was the driven by had CBRE the the indicated saw Southern portfolio largely quarter, market, adsorption absorption. outperform the by Central of buildings vacated California for which while lower net product. the Interestingly, we overall market quarter. and negative is contrast positive

footage and market overall Rexford's experienced well for below a historically in reduction basis expertise to contrast, to portfolio These activity our information square to increase sub-lease again, XX low last and quality advantage. the in the outperform average over portfolio, level key quarter, basis ability XX higher our reflect years. points point leading of indicators four due of an occupied indicated sub-lease in a stark Rexford's activity CBRE Additionally, operating

internal comprised expirations, on of and XXXX basis cash annual over on incremental XX% below rolled of is a with This leases. we've of contractual on NOI at XX% million steps contributions the million NOI next are months estimated as from plus lease-up incremental of $XX As the with of And Michael and XX we XX% mentioned, rent over generated NOI XXXX weighted $XX from to NOI mark-to-market leases growth. a average and XX projects incremental our million next positioned market net-effective deliver embedded basis, $XX months. redeveloping repositioning projected a

NOI of incremental closed acquisitions $XX from Lastly, million year-to-date.

Year-to-date opportunities, now generating $XXX strategy cost. X% including to and investment projected an a yield enable to of substantial activity million, cash proven the industrial the of total continued data-driven two investment growth, initial and is Our stabilize yield electively on extraordinary methods closed subsequent real-estate quarter-end. driving flow acquisitions unlevered execution X.X% transactions

of acquisitions through these Over off-market were lightly transactions. or marketed XX% sourced

or In equated addition, pipeline contract exposed transactions to our investments initial under closing Furthermore, on about yield which of These one aggregate offer generate we stabilized total X% growing customary $XXX for unlevered a of IRR an X.X%, yield conditions. $XX property highly to projected cost. are million, are XX.X%. is with million an accepted forthcoming to unlevered subject of

of assuming $X.X next feet process an unlevered or further estimated XX an of we approximately of X.X investment in nearly market spend creation, with investment aggregate yield X.X%, value-add the to billion, total remaining $XXX redevelopments on and projected of projected representing a within start of total months million. Finally, rents million at incremental a repositioning have growth. $XXX to projected value and These million rent deliver today's investments are no square

financial results. over to the to discuss Now, Laura call I'm our to turn pleased

Howard. you, Thank

a strong were results quarter spreads occupancy and quarter ending XX.X% on occupancy on expectations. both property and for the a first in-line Our for NOI X.X% same and Same were ahead lower Average XX% driven GAAP higher basis basis, cash and growth quarter with concessions. by expectations. the and was of property rent

In reflected steps annual and power Strong continues X%. annual in executed contractual our be embedded leases steps the rent quarter, in to tenant demand leases. our pricing were rent in landlord executed the contractual

mentioned, continued largely the and to at XXXX. fixed steps steps and rent in-line now increase rent for X.X% annual the are our annual were Excluding option legacy Michael portfolio total with contractual Notably average X.X%. renewal

bad debt percentage the continued revenue. outperforming strong tenant our credit levels demonstrated a base XX of of of as revenue points, was bad percentage In by or debt low basis The quarter, as of diverse is drove year first investment and expectations the points. basis growth below per the quarter combined accretive quarter. guidance our average This prior of historical XX core share over strong well our FFO operating with performance, a X%

capitalize to leverage proven maintain continue on accretive that positions balance low to through enabling and both on our to us Rexford opportunity externally, growth cycles. economic business internally sheet We model execute uniquely fortress our

sales a public capital the in access forward $XXX sources. Xx of quarter of was net for At below to common completed X.Xx, equity debt total EBITDA settled in and accretive a bond issuing equity debt X.Xx. due $XXX notes quarter gross and stock million our million to senior associated unsecured offering XX.X XXXX. with end, regular of demonstrated we proceeds, we In shares X% target range way and We million of to

rate through a quarter In our series remaining swap debt transactions. the we fixed also floating of

liquidity result, At billion, million XXX% fixed. billion had our under encompassing of As of and a $XXX our of quarter cash-on-hand $X $X.XX availability now end revolver. full we debt total is

approximately capacity program. of ATM have remaining also We under our $X.X billion

our to $X.XX of previous XXXX guidance share, Turning increasing $X.XX. range guidance, are per we our to core to FFO from $X.XX range $X.X to

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

a our of detailing found dispositions range As in have the reminder, a does closed, include can role acquisitions, that not and or related our revised forward activities sheet not guidance balance supplementals. be drivers

performance been Key and basis, cash highlights increase growth X.X% strong to has the midpoint, XX.XX% X.XX% by the to in property same quarter. XX.X X.X% GAAP a a on basis of point driven include increased to a our NOI on basis

We XX of to continue bad XX% XX.X% debt average of to revenue year-end and to points million GAAP previous XX%. to occupancy since spreads projected closed XX%; to about XX% approximately XX% NOI. incremental percentage our of of leasing spreads basis guidance and contribute same leasing are as property of of XX%, $XX Acquisitions of a occupancy project cash

of Lastly, pool. repositioning issuance include lease-up and associated outside in our timing with quarter, the components Same the also of Property impact of equity guidance and our our

thank for for Finally, and that Rexford future to I team our want success. dedicated positions your commitment Rexford passion

today all us welcome joining we and questions. you now Operator. for Thank your

you. Thank Instructions]. [Operator

proceed Please Bank America. line of with Our first questions your from come with questions. Bonnel Camille of the

changing what have Hello! first the mark-to-market in a would depending the activity Could been particular acquisition? the you comment done portfolio or leasing quarter. on quarter be your could investment Understand mark-to-market excluding on

Laura. so Camille, Hey today. Thanks joining its us much for

or in think of that nodes moving remove the would rent from is better within acquisitions in I market redevelopment. continued because pool sequentially is and our reposition mark-to-market, in property our to same changes actually growth mark-to-market discussed, the reflected or property that market property expansion same barometer our such the you as the

of XX% an and our in to mark-to-market, XXXX. second same the has So property four over that actually increased past by four increase basis of XX% terms from is our quarters mark-to-market property same ago quarter quarters in the points, XXX

we're leases in So rolled spreads importantly, net market continued even the this at a four to same same mark-to-market we've over market on past growth experiencing, XX% property the effective reflects pool as basis quarters. that property

and that your with the that driven respect immediate properties number impact creation which the near-to-intermediate we pool. redevelopment that higher the around in In question a And you back including impact outsized acquisition ability points, percentage quarter mix in cash to change, within of These a basis about us factors substantial growth our discussed, that sale lease and certainly properties to term. was unlock of XXX flow value through the mentioned. was overall certainly provide mark-to-market of that the by change,

rent a properties a change in not forecast market year XX% about the at unchanged reflection and pool. spreads, But our market It's in to infill I our portfolio market, growth to think mark-to-market full and the change properties for those as overall of market is conditions California, rolling the importantly, reflection Southern just well as the certainly at rolling is higher changing. of

appreciate there. My I quarter notably this high. were was, color question the second acquisitions all

and better the about and thinking clarity tracking, get of we year? the be this might around Given how should this pricing expectations the throughout we pipeline year you're rest cadence magnitude

million. guidance in year. really on the call, NOI buy quarter amount. we if back Thanks any dollar think Its much you on What's was we we $XXX goal first is plan opportunity the interesting though and our you the had, about the $XXX think it on that to or Howard. aren't give of the how said of Camille. We really focused of year-to-date contract to versus about a We're terms mentioned able on closing through remainder acquisitions million now necessarily I under

that on much been different some there's took what just opportunities in quite we've volume is type needs very in timeline. working of the longer And deals while finding of that come and are there's quickly, that of emerging close. just disruption we out gestation for terms a there's to and so we're but What a predict market there just in us that happen that or will lot deals can't those when the very,

hearing would older just locations you study demand speak Central appreciated. finally, CBRE been lower tenants imports competitive likes for into coast to Any on net Empire still case ports, Phoenix. positive this the stock of Can the that to regarding and the And Inland in rising to absorption west occupancy, affordable more cost combination due be inventory? has shifting Understand. thoughts more on broadly for is LA. We've been whether trending more

Hey us its Thanks for Michael. much so today. Camille, joining

seeing we're generally to otherwise. or factors you really an think whether the described, impact it's related not I imports that

to and set. frankly, type continue I representative positive through competitive see think and that And of net so comparable absorption competitive we Rexford, to dynamics product is Rexford our in portfolio results you the see the of that demand

and impacts our so externalities flows, base serving from by seen changes in disproportionally And even the trade ports consumption, throughout is with slow-downs we've impacted associated the market tenant and – shut-downs. inherently know prior remember, like where less and years regional you so

see and within tenant in We didn't portfolio. infill Southern any not really change demand California in certainly our discernible

nature just to really factors. these of remember to external So tenant the relation in the important of it's some think I

Thank you for my taking question.

you. Thank

from BNP Paribas. questions. come your Crossett line Our proceed Please questions of next the Nate with with

if quarter it I on quarter correctly, but and Hey! deals, think heard Maybe sure was Thanks last for X.X% I on one this taking was the and steps not question. I said it embedded pricing you I'm think new X.X%. rent

is, getting with customers like? kind of on have question on you what And reached ceiling you my So Are that? the pushback those escalations? lease the conversations are more

so I’d – joining say us hey Thanks for much so Nate! today.

in rent as it’s step at by just the the buying in that impacted its If In steps rent that's in prepared our was that the terms excluded and option deal, X% X.X%. deals remarks, portfolio have up Overall and new fixed of I new X%. look quarter, X.X%. that we was mentioned the a is renewal you on

have those rent steps range X.X% market as an X% so where strengths like a we back X.X%, place, the from as the And perspective. really we're that settling that of say in that at which know, perspective, landlord we high-leasing the you looking I that in our new certainly pricing line we’re rent from XXXX, I And the signed continued well seeing in that averaged think is spreads well. of embedded and to feels that's in you're – out as power reflection step a it

balance know X.X% you of that then Okay, to are for the And range then past. on below that's in tolerance debt your XXXX X% about about take the think maturity? should given What's year? to how this guys just levels leverage the how thinking helpful. also, addressing leverage of more here? one, are kind And you've you we the maybe You

business growth us to want low it enables opportunities. the opportunistic area maintain we're for range protects in to about below us sheet. balance net one through level, from Nate, because to perfectly leverage and of a EBITDA us operating at think low continue the focus is we debt Yeah X.Xx continuing of this that terms be future to day balance to the When number leverage because Xx for end sheet, maintain we cycles, a all perspective, leverage, fine it to

going going low going sources leverage. that we look going a we're opportunities, accretive we're on about how at to execute to at know look fund when think So we're maintaining that to you of on forward, us with to allow – and those focus capital attractive

XXXX. XXXX up extend the of that's year of so $XXX In term loan we primarily have has two to do to terms options, the effectively one that million that debt a ability made maturity,

Okay, thank you.

welcome. You’re

you. Thank

of is question come questions. from the Please your next Mailman with proceed with Citi. Our line Craig

to Hey point the detail the bit in XXX question to component little maybe point about the Laura, just more up basis decline? just mark-to-market, a circle basis with decline earlier could you everyone! XXX that on give the

Yeah, correct. absolutely Thanks joining today. for us

on to in So of a basis points pieces XXX the we impact roll cash growth XXX is the that steps from significant I market the point our drag of basis a average in at from portfolio. X.X%. leasing decline, as about activity the spreads, rent prepare the XXX point another basis, – embedded it now XX% and impact negative from XX% GAAP quarter contractual mentioned basis, the basis then within on remarks a

rent So is where to apartment rent the which the grow portfolio, the within the base and [ph] growth, base continues great.

get So that, change portfolio then mix that into the that I and rolling from we that from of mentioned point have by mostly don't a the impact a layer place leases quarter we in properties few more that closed that driven that XXX earlier. a impact so And and from XXX basis growth, the point sale lease that that's mark-to-market. impact backs acquisitions in had outpaced in basis

that saw rent quarter And market growth we the the is X%. offset in then positive that lastly, sequential of the to about

of kind of that percentage about think however Kind think that you strip your that magnitude where it? leasebacks bring down the estimate. you that much to were developments of you piece you is out; book portfolio if look the to your of of overall want at what's or maybe would when maybe mark-to-market these do how the – ultimately how road, what positive the the So, if we are value sale of portfolio carry think

quarter, throughout are points but basis other another in to there couple acquisitions developments you with hundred deals say the of past the the gotten base yet? Let’s start still in is rent's just on that haven't

it's think I question. Craig, good Yeah a

thing latest the ways it. the about, two embedded, to connected there's think I about think to

we that can the acquisitions, of back over the and the terms we're has go XX% strip out, is think mark-to-market quarters those in you noise all seeing has ago. same of same property XX% past the of from and I four mark-to-market that about I to mix properties that from quarters to talked property upped if which four increased

rent of market strength that's of I really the market and a think today. So the indication good growth the

I within the components embedded focus on think that. and of component growth the to the is portfolio important the other

of is internal growth within mark-to-market So only the one component growth, internal the embedded portfolio.

So projecting over million the are next and rent NOI, $XX and about fully in of million growth, deliver mark-to-market of the currently the $XXX $XX from $XX months million we're that's that NOI or includes in XX repositioning then process will and then pipeline, and contribution that and by steps. of million about redevelopments another

got we’ve So – think focus mark-to-market. important the that not I a of embedded our important components it's really it's on growth, to the all just

and on mark-to-market I that's the point No, picture. a from more just guess one bigger fair. just

just of that should XXX, XXX the XXX this net would a what that because as it every this just we right, through here, about you rent basis XXX losing in that have mean, you So basically losing? of realizing given the level, know mark-to-market basis kind peak, been market I unless exclude said be thinking of growths reaccelerate we your quarter way off, basis if you we that realization acquisition the leasing. be points points guys mark-to-market, beyond from kind that should of point just about the have fall guys XX% quarter

a Yes question. Craig, it's good

the obviously XX% expect We of but our provided to net for a to XX% embedded year on where go to significant basis XX% projecting guidance within spreads around we we've leasing got rent and time, this effective steps XX%. have not for over growth mark-to-market

will portfolio do we continue So that on to impact we are have overall – expect leases roll going to to mark-to-market. market to the an and

of case mean, and million rate. are I'm trend clearly the Just through. study a out you you you could curious helpful, what concern Empire they how was And some its think reports Inland been you've close off you that way curious, you'll that Is quarter. went done with of a on the run with because of to then given broker just fall a has guys growing give that? some a – the of Are just the of – we of did in any there I of allied there. give in sort leasing first end? kind there maybe X.X post-quarter April-to-data the consistent kind what us April or updated separately,

Craig. April. really again slowdown from March Well, in see a actually of little a into picked as of maybe did We things the disruption, I'll some headed in jump here the up we market banking bit but in

vacant. the that So our on of we Rents have underwritten. above most cases in are negotiating a lot that really of we've activity many rents we’re all spaces are

seeing So market's we about really right now. great the at the and feel where we're activity

you. Thank Great!

Thank you.

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

Good the prepared feet in morning. in Michael, requirement about of your thanks. remarks, Great, million tracking XX talked market. you square

You of what's into tracking you're the average and what at of just market historical during put in demand maybe amount the it peak typically pandemic? was that the the requirements context,

so you I much question. Thank the Blaine! joining us appreciate for today. Hey

was of the mid pandemic, is of probably a not similar and intense during representative very and far that the very time. probably off. little context, stages in sort market is historical market, this this an frenzied healthy Yes, that It later we're levels. regards we’re but seeing in this during levels more the probably exceptional to arguably a pandemic, is the strong at Certainly of into time, going

amount that into not market. million think I that talk over the about the tracking, a window is But we're particularly available market when in is players engagement infill is this to is X the focused square a know lot activity to all the I That And the that in of the of market. Rexford, and driven, result proactive is proprietary to you approach that California. feet Southern Rexford our importantly,

having it’s relationships in sure addition the At market know demand, mandated with conversations Rexford You in a you We are tenants our in front levels are or tenants. they of best and dedicated they know our the of department leasing are whether and team. perspective whether making to emerging them we call separate or engaged having tenant all solely that and solutions who are a the currently we team, team. potential with customer have

tracking, we just when market necessarily to than very about what's not in better the Nobody talk a has of sort of participants, that's think so And Southern we available that's infill all aspect I important do. California work. and information

We’re transactions I consummating market, a more with on activity than and really average combined sort and window results know think productive lease into through a that lease, do a new you're lease you that the seeing frankly. or unique two outreach day into we business renewal, every the flow of have

Howard the of kind marketplace. highlighted our from remarks, differentiated know in prepared you As

it what XX% hit last Great! the in to about in rest Thanks was whether that gives first year-over-year confidence like indicates year-over-year the expecting tougher XX.X%, quarter, anything whether think in rent Also, number for – presentation comps which noticed acceleration first Michael. just you in your some nuanced that, growth first the you're target. we quarter or of year the you from year there year that that? I talk be obviously around was anything Can and

we're think call was – we a Howard as But few market, Howard. Howard it more I had Talk] just on similar it noted I'll comfort, the calming and briefly, a a we detail. – continue [Cross things saw maybe in ago, that's for just us can we're Go going think up maybe Howard effect the you comment then activity Well latter actually I'll and to Talk] turn the a just what pause. the comment I to ahead part But with Well, I call during seeing to then I and that QX, of pick wouldn't know slight over briefly minutes in with [Cross it's based some gives QX. more any and detail. Howard… current seeing what again, and

you. Thank it. covered You

me, a for The the and talk leasing great. could can at how one ports portfolio your you about right, for perspective? potential All maybe the from affect last strike that

we've on dock what's there, The workers briefly have happening negotiations activity contentious the the before. Just been this with seen port you periods. in and prior know port

You we slowdowns prior in in our downs discernible to impact port, saw and the XXXX any know XXXX, we've shut at and experience demand. never our even seen tenant

resolved not businesses our that hopefully expect term, we're businesses directly you the in seeing but the as do the with dock consumers. indirectly be tenant or any we to local our regional are impact Remember, know with near to to negotiation disproportionately directly through base. will regard or So serving workers consumption tenants

flows distribution. we disruptions in the more to of port on sorts regional big changes at focused to impact These demonstrated super markets or never really that trade and our are inflow are going the impact box had trade But markets.

Great. Thank you all.

Thank you.

your Please come questions next Baird. proceed Our with questions. from the line Thillman Nick of with

high leasing a the what's renew, usual seems but out leaving? XX% touching for little Hey! bit, morning on pretty doesn't on generally, retention the maybe there. Good that Maybe reason

picture trying the market? Is of or of credit out Just it they space rents? priced quality? to the a expansion getting Are kind get of

of that We Vernon. had quality was in of other talking vacates. growing; those data kind know, in I A XXX,XXX-foot lot a were about one are There's it's are some are on low-clear, driving them Nick, of Orange Howard. lot there. There them to the of of looking relocating was real moved larger Hi there reason where was one they building you at County and not that some of space. and vacates some inferior amount

very around it markets out of the markets. of the really movement is a and lot So moving little

Southern that's businesses years Michael and didn't anyone be left require has California occurring, to them as the that know in mentioned, the their market You where have most there. frankly the of ago, on the are here focused didn't be there market tenants many to consumption

you also and we questions, in pre-COVID. Hey low levels the our know continue and of very of something your what quality that expectations below per seen to see Nick, terms below credit certainly we've

coming basis that's averages lower certainly pre-COVID. basis points than points of about quarter historical This at XX in XX and

be tenant continues strong Our stability. to exhibits base very and

represents we’re monitoring currently list six list watch ADR that over the watch our We over that, only tenants have around years. numbers that the lowest past on put the several X,XXX tenants. currently to of percentage Just of

to out tenant of very our continuing we're So base. strong see performance

And or and helpful. very in types seen more then bit in of to little turning the back of quarter. sale That's lease assets have maybe versus that you’ve mentioned maybe value-adds the a core any acquisition sort shift, pipeline, this there more you

So just more anything mix or today. shifted other that segments all interesting has at than

first probably quarter lot did, I think a acquisitions of XX% the in some component. almost we the had value-add

we of in year-to-date very what about X.X% little are place. the inbound X%. didn't projected yields interesting of with The Although very, on acquisitions have stabilization what’s thought is year-to-date income

so we we've strong place opportunities sort flow more in in at than market to the those have buy focusing And looking been of today moment. of the for cash and so assets opportunities have type and

That's for me, it thanks.

Thank you.

the Please is Capital Markets. BMO coming Our question next from proceed questions. with with of line your John Kim

Thank you. Good morning.

markets For potentially if in was are various you? South that you there near-shoring, attractive continues, reasons your Cal wondering that on-shoring pick-up markets. impacts there been or to outside look And a think trend of has and this I how

base, to serving an near-shoring today. or Hi may impact. to a John! Thank you again to regard an And We there not expect on-shoring, see tenant so trend impact but disproportionately they we're much don't with really our for seeing yeah, joining be are consumption. because

tenants’ really thing which a probably where net-net. see So they with our is so the goods for concerned are that, we generally from, come less good don't

And think This currently market the not markets. we on strongest really believe most share have We looking is We a country. we X% focused the the in create market Southern near California. no, in infill we're where value. we're that other can at

square over mentioned have before our here X in billion in remarks, own built backyard. for think feet XXXX we right I instance prepared I my

for front a pallet to in we So value Rexford. of limitless creation management come of nearly teams have us, probably at many

no, So we're and the not other on looking really don't markets. have we view

Okay.

quarter Your this this this year? see should were quarters. this we unusually go quarter low costs back sign the if just is and wondering of compared or to prior just is market tenant later the trend it to improvement low I'm

new for leasing material activity and have for did of I been of low. actually trend a quarters continue. Hey this TI's. volume not past this think low a and just in – quarter that fair terms several John, quarter's a had versus we really We the change expect renewal to They've unreasonably seen

you. Thank it. Got

Questions your come Please of from with Vince line with Tibone proceed questions. Street. the Green

you Could capital view bit implied you're It's doing low the your more back than you’re rates while normal complicated at you discuss of morning. cap a Good given initial fours. Hi! yield, five cost lease just in low how today? sale

NOI there. obviously So big that's mark-to-market today's on a there's and

these acquisitions the think you know first you're quarter? were about how just some of equity you So attractiveness the making, in of talk do you making as

Hey question. Vince, your thanks for

NAV We to will long-term selective been to continue and to opportunities extremely cash accretive are drive on be have be, and growth. going we focused flow continue will and that

the that's our of cost we've discussed on in a capital capital view As how past, decisions our and take we're we today. making long-term allocation

yields basis. Our which to and valuation account talking attractive higher remains stabilized very you the X% when a take we’re into that today, on

invest, accretive we that for to of or cost capital You dollar earnings core at today's to know every more investment. is compared that XX% our investment XXXX FFO even higher

to are the substantially which So said today we're higher today's solving than overcoming another we're cost of more and yields driving accretions. higher way, capital more that

color. I'm to IRR fixed basis. expecting an curious you Are on guys for type what unlevered IRR helpful share just kind are you're deal? of on unlevered maybe kind you solving stabilized That's that of what the able

cash cash we're for the post flow Laura mainly that at a on We the of the look as accretiveness as generating we're acquisitions. and mentioned, these But IRRs flow focused on investments. of guide some the

who some sale a so. next attractive can of of of it. tighter more users case, the crisis I'm a you of that's the curious if these the make another got or think think were them, transaction kind of sale data banking back the activity. a availability then few acquisition you for the one just Okay, lease for direct the results back back any of growing kind pie part if sale back sale lease and maybe lease and lease if to over on is And quarters me

be timing predict when past. hard seen would forward Well, quarter we're capital a with, but very people going more well more had this if transactions. source just working volume the done they obviously really it can't of others. we've sales in the attractive it's than of could sales but be predict that increasing some what be It always lease more We what back lease to in happen, of the we've to or line could backs

Okay, great. you. Thank

you. Thank

coming next from is question your with Our the [inaudible], line Please proceed of questions.

give I'm you Hi! vacancy of first terms starting versus years last go you're color bit to just maybe or in packages? you of or market that portfolio Good the assuming change forward well. see, the was when afternoon. rents some thoughts like dispersion even that's on much of Can say own peers questions. anecdotes just on Maybe just maybe dispersion sort that a as referenced, the Thanks more or so much a two TI can of everything maybe we for widen and taking versus your how the very doing us one,

maybe a performance Maybe dispersion in its [ph], so much differentiation. of then I'll to operational bit down and for the Michael. little drill bit can Vikram dispersion Thank you little is joining the Hey and talk our a reflecting Laura today. us or Howard how

peers And your or our all the roll so. think to per was I XX% is, of or it related interesting our of in years around XX%. peers how over been up have Rexford his between about prior our differentiation you issue, growth a five if last the to question portfolio on FFO does dispersion generated part compared first this what's performance, periods? share to, day and your CAGR call And the question

to to Because for have a per the your I So growth that XX% share FFO years point is investors pretty know, think and peers. compared Rexford helpful peer the for direct around as five set the you we've business last result generated been of model. greater the all

Rexford's So been very differentiated. has performance

And started much there XX I rent more ability and the market side virtually today. than value was odd ago, think when the growth our years on no assets Rexford, it down creation is themselves. focus to business this some it we and is expensive really And comes and capital

we knew we've level in the had to at years. that value had And tailwinds create the without business we XX great be five able the last to so a have or property to

that's we're the physical and sets And repositioning, apart able intrinsic the and and value creation assets truly volume really to that do Rexford so that differentiator. it's the at which that

I see still and we little healthy pandemic. during as demand have acceleration think all tailwinds in don't may that is be we will the saw move crazy forward, normalized as a We the and the saw, we trends bit that the in I very diminished the for markets. that demand markets everybody, we think

big, I the differentiation have, increase value differentiation our that's work with add is that it I think may peers going the we're we takeaway. the to Rexford's and as available not continue think may the because widen. to key so

I think to that And hopefully Vikram. up if and a I in it want into the great open it's it of dive more part answered level. to question you Howard or operational components first of the Laura

California the still than market into as perspective, portfolio overall past infill just for more differentiated. more we market in couple the that a thanks market your around of terms add From in years, color our growth Vikram, XX% rent market joining us. I'll bit of did. the the growth Even portfolio a were increased comment frenzy in performance. Southern rent our little is relative

diving And Central Central into growth then XX% of market the was portfolio rent as dynamics, rent different XXXX example. In of to XXXX and LA market into different Rexford’s kind XX%. some markets, LA was period growth these market an just the for

bifurcation been because which see higher and expect. product you expand differentiation So and of Rexford's we our high there would bifurcation a of functionality as that, portfolio that we're quality, starting mentioned, has and to

Okay, And to helpful. just I is. follow-up guess that's a that

your do sort more others your partly competitive vacancy of partly you're TIs, set incentives granular shares being gain you sub-market, competitive. Maybe your remains expect your a more If of normalization, stable, this garner share, as and you're, you of you when the higher because sub-market, economy. more this more anticipating more of to vacancy. because as within meaning see bifurcation, more Could just peer become said market, just even

instance You if low pre-pandemic exceptionally plus or period, vacancy to and concessions minus. compare for market where know, want the you was around X% were

any to normalized that considering a whatnot market, and we to a not generally speaking, concessions material, and dramatic terms in So availability. if would we're then expect be change see of

see rest, into near-term world And see the in frankly and level that future in all seeing or we're given a the banking of the the comfort expectation activity dramatic on that and whatnot. based the have don't today, think we don't the the of terms market we I and uncertainty concessions and the issues foreseeable we

you. Thank great. Okay,

industrial. one add low-finish We I’ll on to Vikram. piece that other focus

costs anyway our costs. So TIs, can the is TIs large. change product a terms type small when change the of so significant? where flex even with relatively frictional in of in Tenants this in spaces rather not those move that the So and market, aren't low very R&D relatively or be there and out is is

Thank sense. makes It you.

you. Thank

you. Thank

from Our proceed J.P. Morgan. Michael with of your line the questions. next Please with Mueller question comes

about quick Sorry Yeah just one. hi, that. a

of I in process ones, what’s the there as but are through list most range, going mean the in redevelopment On you the and seven average? the that what's are pipeline, the the some planned of are where attributes like and yield have go the some to lower I notably projects of projects of stabilized in six yields mid-Xs are in what some or than that guess the and on the high-Xs

Hi built different. those those Most when were of Howard. year Mike! some It's a of market there's hear right. The were Nice And little a is purchased seeing probably a plus COVID of into the numbers. difference your voice. to redevelopment out yields the ago bit real timing, conservatism you're bit now information, coming projects of that

costs. updating in projections quarter-to-quarter increases costs market incidentally our and and based cost moderating. recently we we changes construction to Not down, construction you built rents, necessarily the in see were know You'll some construction on that on the based did but costs us adjustments in make coming

driving little Last were about in going increasing year about too. growth, down XX% this starting to bit terms year and and look XX% it to there cost of might like XX% we're moderate forward that's a

frankly. that have positive in a yields some those manner So an of on could also impact

Got it.

you. Thank it. was that Okay,

you. Thank

the of from Please Craig your comes with with proceed questions. line question next Citi. Mailman Our

just for clarify. Thanks guys! to Laura, back want to I follow-up. circle Hey taking just quick, the real

think puts the point but kind the quarter from takes rents. XXX estimate kept growth sequential market intact, impact and a market mentioned the changes when you the basis went XX% had I you on in the of guys in of through the you mark-to-market, change

color to lower or growth at, a get just – points basis trying I'm XXX market would the – are able to because value it extrapolate XX%, like be extrapolate would that should rent we that into seem to the these than you out be with could keeping given get there how it some Any reports kind would on comfortable that maybe or you XX% great. of there. some broker maybe the give how stay you color and just of us

Craig Thanks absolutely. question. your for Yeah,

that In growth terms that rent projections. growth and XX.X%. of about It's XX% we're our market at our growth that assess close number saw of sequential to year-over-year that we X% continuing pretty to consistent forecast, with

– on the rent lot year-to-date the growth forecast, important activity and discuss strong it's we've to call. this maybe portfolio. And been and we based talked a within about on market the all has our and forecast its And get to current first we market that our generate of in how

has Occupancy steady our held portfolio. in

overall to within steps the we've was continue achieve be our quarters, spreads, second continue to five rent quarter strong so portfolio. above high indications retention demand we at are see underwriting, continue seen highest levels favorable, to this that We that in

for that certainly, that's our first the forecast goes into full the overall So that's year. factor

goes is about on call. advantage that that into The informational second factor it our the ongoing we talked

leasing and has feet tracking, feet – X then square Our so that is and really the about tenant that's square X us our Rexford, million tenant is proprietary the the California to solution a diversity talked the regional deep tracking customer Southern see and that we're demand. outreach, continuing we're to tenant to market, our We our market, million within into requirements that on actually infill dive of wide demand proprietary grown. the team

and So to including that that how with I we those persistent think year. and comfortable get projection markets and for how overall the ongoing we of our all forecast is balance get great within the factors, full supply infill demand

around rounding bit you're little there's a sounds up XX%, it. it But like to that a bit little

for XX%. year Well, full with we are forecast providing the a but comfortable that not on we're quarterly the basis,

for great. Okay, Thank you color. the

are to comments. you. now the management at further I'd like time. hand any call for back Thank closing to this There no questions over

about wish for everybody We Industrial period joining next to and and in you thank to Thank today. Rexford like a the your families you healthy three three months we so over reconnecting happy, months. We'd forward look much.

does Thank you. We This appreciate your conclude today's participation. teleconference.

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