Rexford Industrial Realty (REXR) 19 Oct 232023 Q3 Earnings call transcript

Greetings, and welcome to Rexford Industrial Realty Inc.

Third Quarter 2023 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce David Lanzer, General Counsel. you. Thank

begin. may You

for Industrial's you Earnings Quarter Conference Call. joining thank Third Rexford XXXX We

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

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

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

filings. more about SEC XX-K risk and please factors, our information review For these other

no update to statements the assumes forward-looking Industrial Rexford future. obligation in any

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

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

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

to the turn call I Now over Michael.

followed Call. to provide Quarter with then Thank and a Rexford Industrial's operational related and provide you, Third Laura results. remarks, financial Howard, performance welcome, to color will David, more I'll begin everyone, additional market by detail Earnings our who and few some will

initiatives. across thank prior of GAAP occupancy basis Pool begin strong year. the share Property substantial basis, Average grew our and I'd generated by a driven per team our share XX.X%, year investments on the of on and XX%, quarter well our the XX% to To by completed growth exceptional of a a for FFO flow with, same cash strong as value spreads delivering as leasing XX% over Rexford from our by XX%, cash prior to like creation quarter, Compared grew all team FFO per

market occupancy Southern continues levels our resilience occupancy to within XXXX immediately hovering the demand to demonstrate California with the markets preceding roughly XX%, equating pandemic. around market infill Tenant industrial

high-quality and our market normalizing in as providing to prime reflected the healthy operating continue demand As to our submarkets, our we regard pandemic. With to continue unprecedented expected, within during Rexford strong the we from growth growth we experience rent tenant portfolio, see experienced diverse locations metrics.

uncertain, over conditions situated remain embedded realizable growth economic existing assuming with our today's next portfolio, XX% years, positioned. within X general cash The Although is the remains NOI Rexford an currently rents. company estimated well

largest that from redevelopment Our FFO creation growth of which NOI mine in-place per grow layer repositioning portfolio continue derives are for and as levels strong driver to opportunities, work, we delivering of our new share and our investments, value in incremental as we we accretion.

repositioning supply, their and forward, performance believe share post-pandemic Looking Rexford's we towards further to and entrepreneurial growth. will per FFO equilibrium levels the asset investing markets nationwide programs our as of differentiate normalize enable management, and company value-add

term, the drive will industrial also of strongest demand favorable to that over fundamentals Southern We tenant believe continue the associated infill markets in supply-demand California major our any market with near nation. dynamics the the

while opportunities favorable balance ability remain the which supporting net we low to accretive times focused our also the to value, on Further maintaining to may as grade, outlook, provides XX.X% at positioning company during sheet upon Rexford's ending debt arise. enterprise Rexford they capitalize the protect quarter both uncertain investment total investment leverage

I'd again efforts differentiate once team market-leading that that, acknowledge With continue performance. your our to for Rexford's like to Rexford

to pleasure And now over it's my hand call to Howard. the

demand superior, portfolio creation value strong today. and for to high-quality third Rexford and Michael, of execution infill demonstrate conditions, virtually incurable initiatives. a concluded market us joining with continues with you, long-term a results, driven supply-demand Southern everyone, California regard to With by imbalance. fundamentals you, Thank the thank quarter

nation. million Southern X.X%, lowest feet net vacancy in square continues quarter, absorption. vacancy at According markets to the California CBRE, infill positive in The with to the Southern infill market the X.X California third outperform of experienced

increase average basis Southern California points XX U.S. nation's infill be XX sequential for basis an markets. lower Also, compared major of favorably to the to risk for increase substantially supply A point continues other to vacancy major the other compares markets.

traffic increase months. resolution activity, dock and the track past most may second Long contract reflecting with L.A. Beach the also port normalization towards of a recent volumes the month-over-month workers Core following be the highest in on XX% the XX

While in and contrast, the a Gulf Coast activity. experienced ports in East decrease

Turning to portfolio. Rexford the

infill favorable continues position quarter to Third California market. performance demonstrate Southern our within the

the XXX sustained Our points team feet square absorption and driving executed net our lease activity, functional positive portfolio. highly basis demand X.X of million for of highlighting

In for Annual leases market for embedded to X.X%, comparable observed to executed demonstrating tenants' buildings. Rexford X% functional the pay X% mission-critical year-over-year quarter-over-quarter. driven highly market decline portfolio steps locations. impacted regard rents, principally increased to we sequential by growth the product rent and larger was Interestingly, their rent in our X% a to increasing decline quality our ability by rent

$X.X closed our We transactions $XXX activity approximately quarter. to Turning activity the investment billion. million total investment X in to for bringing year-to-date a of

X.X%, investment initial projected unlevered X% of on Our cost. an of a generates yield third collectively yield total quarter stabilized

the In addition, of under in X.X% customer a $XXX includes closing yield. investments the Gabriel Valley an San or offer. accretive transaction closing of to that highly accepted million subject contract have initial the investments has approximately conditions. submarket of we This pipeline, imminent imminent aggregate currently pipeline This million of is including $XXX

in an within square robust feet on X to of million total internal deliver aggregate and million value value-add initiatives, yield XX projected $XXX cost are growth expected or next With projects representing the These an regard X.X%, redevelopments estimated have creation. months. repositioning to our approximately unlevered process to of we start of

Rexford dedication strong entrepreneurial another to their quarter. like on for team I'd and delivering Lastly, our for thank

discuss turn over now to financial call results. our to the Laura will I

our Rexford Thank team. incredible you and you, Howard, thank to

to and differentiate Rexford. focus Your continues exceptional value performance creation

over growth driven of GAAP the In core on third FFO and share X.X% NOI quarter, year cash a basis. grew on XX% quarter, per by same-property X.X% a the basis prior

GAAP basis, a respectively. and and leasing Third spreads cash and quarter leasing year-to-date outperformed XX% XX% are projections spreads on

future. for growth cash portfolio is internal NOI The positioned the significant into foreseeable

for representing projected years, are redevelopment, growth, $XX portfolio quarter and quarter of the rent the total and X contribute of Just $XX incremental million. our another contribute repositioning an third to incremental considering closed embedded today of fourth driver Annual to largest acquisitions in are the X.X% million. NOI. projected And $XX million contribute steps next value-add

is net addition, estimated XX% $XX representing portfolio effective the incremental next In years. mark-to-market at X the million over of NOI

share net incremental look million of contribution per $X.XX we further As FFO equal equates XX% FFO to out, of to NOI share the the portfolio total $XXX conversion of growth. effect per or of mark-to-market growth

funding strategy and our to Now sheet. balance

and that Our focus and near- drive long-term NAV and remains on investments growth. external accretion internal

allocation investments to driving today's date our in approach our continue investments, that of We of capital. substantially inclusive as reflected higher accretion highly to are rigorous cost demonstrate capital than a selective year higher to prior

accretive assess fund opportunities, dispositions. to external We capital sources including will internal growth continue and to

sustained business our on maintaining strategy fortress Our balance focus the positions value-driven current environment. a capitalize sheet to in on us

debt-to-EBITDA is and on At and liquidity of net cash of $X.X $XX end, approximately hand, includes billion quarter $XXX full for X.Xx our have million revolver availability billion. This of $X forward we settlement. remaining on million equity

Turning to guidance.

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

sheet No represents our related guidance included not of range Please XX% Gabriel range activities acquisitions, note earnings imminent balance that closing the are guidance yet the includes additional Howard year-over-year that San dispositions Our range. Valley closed revised growth our or in the have mentioned. guidance at midpoint. transaction, updated

to at XXXX on ranges basis. have and to a a projected our Our compared unchanged prior tightened property guidance, on XX% GAAP same growth we NOI X.XX% to to cash GAAP remains basis, the our X% cash and midpoint and X.XX%

by for year occupancy the guidance. cash include projected to in and leasing are at approximately at compared the GAAP increase XX.XX%, higher-than-expected XXX XX% assumptions to same leasing XX% respectively, property our now projected be spreads XX% our midpoint midpoint, XX%, prior to the full third quarter executed same-property and year Average points be spreads. unchanged of basis is to full guidance an to driven Other

And XX found basis our reflecting be our basis health line expected to below per XX a tenant revenue in points, our roll can including share continued points, and updates the approximately guidance package. revised guidance forward our percent FFO the historical Further of be is lastly, as guidance debt of average base. in range bad supplemental with prior of a of

through reach net to part continued XXXX. to ESGi as Rexford's of target to by greenhouse emissions commitment value comprehensive approach, a gas we creating Finally, zero our are announce excited

well As as near-term reduction targets.

emission substantial differentiated are on Our and a through business were validated our SBTi testament targets focus by model. internal our to value driving

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

Thank time, session. [Operator question-and-answer we'll you. and this be gentlemen, conducting Instructions]. a Ladies at

America. first Bank line comes Camille of Our from question with Bonnel of the

economic today's What was ago? quarter? talk which outlook you by than turned expect any to different particular to absorption, very you the Can continue? And in X market this submarket. given this change is driven trend feel months Do it net positive

was voice. large of Camille. Hi, absorption was, for neatly It's There responsible absorption. in the a an think, that your Inland Empire-West Nice I submarket amount uptick Howard. to hear in

Hi, about experience points. mentioned, Camille. increase XXX Howard about the portfolio market about portfolio our well. It's talk an change I'll That of little feet. Laura. as absorption represents basis bit our a did but XXX,XXX in square

every we've Importantly, our our demonstrating portfolio really within been absorption and the certainly market, this differentiation portfolio discussing. positive the the which quarter market we've in year, of experienced outpacing

Greater in saw into markets, Orange i.e. LA, terms if absorption County San you select In from dive of every of Diego. we we -- markets one actually the our absorption, and positive

it like And tracking? What your factors in And some were redevelopment looks leasing influencing pushed program out. were how stabilization is date the of your this? pipeline the

that, take Camille. I'll

a construction drivers process, there. continued pushes timing to there's around has of terms timing. and in terms So of permitting of and impact One couple which repositioning redevelopment, is in approval the

around lease-up. more other certainly timing returning to our It's The normalized of is levels.

timing redevelopment months. lease-up pre-COVID, completion historically about of back X look you If upon was

few with significantly we friendly forward, But demand. look that timing more which is During levels, we area. around given sub X-month years, we levels be will currently pre-COVID the as believe, the saw compressed that consistent pretty of last timing,

expiration And the finally, changes in well cumulative stable? please portfolio your drivers lease the behind schedule contribution. the as in driven the changes can overall One expiration remain hasn't in you changes lease schedule by through the mark-to-market relatively proposition. It's FFO as walk

question. the contribute to Camille. think important I through it's And Hi, Great to components various mark-to-market. walk that

is communicated going going be mark-to-market that cash a number convert mark-to-market FFO and to by flow. the of able excited past, driven the certainly and capture we're to factors. we've to into to First, that's But decline, be the as in and

driven the embedded to mark-to-market has first quarter, XXXX, XX%. is grown was if really look to we market recognize today able since you that rent back and rents significant we're The market substantial saw most by that the incredible that the fourth growth

-- those rent growth going mark-to-market mark-to-market market and unless market, decline. the convert at we as in is the continued FFO levels. So convert flow cash the same to

and signing into conversion we're mark-to-market that of the that mark-to-market Second, by impacted is the leases FFO.

so of represents conversion square GAAP incremental executed And alone, you leasing we've spread. an look X X.X of on impressive spread, year-to-date, annualized an leasing, X, $XX XX% mark-to-market million XX% spreads, if quarters. of The million just [ ] NOI this year feet cash

the the certainly real out in component mark-to-market last not properties that The the it that impacted pool. move has moves around of and

we is stabilized now represented into mark-to-market removed or example, property the For property that move repositioning pool, an that accretive gets from creation when and yields. a redevelopment, value

can as Today, and into to move was Acquisitions generating yields. X part pool about our X.X% that also in have are and properties this mark-to-market points redevelopment. mark impact and our repositioning out for XXX redevelopments impact. we and market of repositions basis quarter, an in are And stabilized of certainly for the moved

question next from Kim the line BMO. Our of with John comes

you. Thank

could absorption, and redevelopment. portfolio On in into the I over the your financial positive, net overall seeing or think does I the was in markets. of rising on overall it but net [indiscernible] the put you absorption that your comment you're uncertainty last some are weeks, wondering the that spaces just rate market the if stats you environment interest demand market few your or in in from given

joining for answer call. much Michael, the today. And pleased I'm so Thanks us and to Hi. this is

quarter. the few I haven't change regard weeks, seen we think the what much to we're reporting really relative last for to with

So different. trend there that's incrementally line really no

functional negative I'll just the analyzed to absorption We've market. overall usually throughout that the and metrics. market, year, then add a higher negative contributed what net that is consistent. those Only been And it's XX% higher deep be about type dive building really to contributed deem of taken to kind the the to absorption the every would in in pretty market we buildings And communicating overall buildings. around we've of quality, and absorption that that's been

compete So absorption said of Rexford. terms with XX% negative doesn't product market hitting net the throughout another year, way, the directly of a in that's the

and And certainly differentiation that, the each to throughout the trend our to our portfolio so is has this, like results I speaks mentioned, and of really driving and the of metrics this results. helped year certainly quarter that

you Okay. I this that quarter. signed noticed the lease term

or are all, the A, your Part of First lease... leasing on but commenced? stats signed That's

It's signed.

lease The and it where terms Okay. to compared X.X, historically. years renewals, which on were X.X has low seems been

commentary get Just some wanted on that. to

Yes, John, that. I can take

lease revenue bit XX driven weighted year while several or giving start. Our those average in construction months And were was by less us this little for term that shorter. positioning those ability the deals was we're It and in advance of repositioning a to capture redevelopments, shorter-term were signed term.

term to So going would at or shorter is you or forward characterize that least nature? aberration going be

during impact a by quarter. there lease the really was Yes, X I average think larger -- had X about were this weighted driven to that deals on it

mark-to-market And which Okay. you reduction XX% to The XX. on X% one disclosure the one clarified. Page on XX%, just from final

outer the wondering forward, have the X%, the you are from years, including change. And down that full it's rental why quarter. Going last not projections the X% market I'm

I you in has to certainly can look think see about perspective. have there -- the various by of provide think you that mark-to-market the important across year first disclosure mark-to-market think it's a But impacts. years. a there disclosure all, it's from I you'll comments change are varied calculation the important the on few Because that the and rounding we as

given by And changing. year so in driven really of included pool that's leases constantly that's the any that's

the we're to properties moving the acquisitions, that redevelopment. we're the by That's repositioning and doing, leasing driven activity

cash that new NOI XXX% reflected and leasing just example, a of that that lease way in 'XX, if now we the new expired mark-to-market, third lease is of a spread So our have a lease, I'd you executed quarter and we by captured in we at executed flow. say

-- now expiration that XXXX zero. resets say a is That X-year lease the that, mark-to-market in had reflected the that at Let's lease our mark-to-market term. market and rent market to

you these of a various pool because mark-to-market by the driven constant see impacts across different will changes factors, that of within So are a years from perspective. number

it. Got

Okay.

forward, be So X% to it quarter, per this But happened year. year-by-year. could change that change a just going

drove XX you at this X,XXX this for the were the those changes. Yes. -- closer look that mentioned I mean points. if quarter, just basis to mark-to-market XX And and actually factors change I

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

the equity you but on bit you're a your equity you So has million the to be $XXX than little cost it market under you contract. capacity and touched but on this acquisition in all $XXX with forward getting has continue prepared higher is on of active the on million, much remarks, been have line, But a lower rate little at increased.

how could of little can bit about funding a about And proceeds? you're more So just pace that how the talk thinking disposition future additional acquisitions? acquisitions driven by for much you of be

today. us joining for jump as thanks Blaine, I'll well. in here Hi,

on be is a how to capital. deploy going growth we accretion As be we've focus continues to and driving NAV it through mentioned significant and

so deployment yielding about yields that very repositioning internal includes for when you accretive today investments, that our and redevelopments are our Rexford, think X.X%. at So capital

you you are Our pipeline the external investments million, if stabilized mentioned the X.X%. deals today, include $XXX that

So our year at investments they stabilized by capital, initial driven higher and accretion driving our accretive. yields. are more today did that's They're cost and today our higher last of than even

capital to [ and those embedded to of in to to as capital over the are dispositions going well sources we're investments Director forward, continue As relation rates about ]. debt of the as we solving in and contribute long-term growth assess today hurdle equity think going of to going the which sources we're and

believe our that of realize value-creation capital. in great that We to will terms dispositions, grow there the on, a net and be In there can asset executed assets the is higher-yielding opportunity efforts another we've potential specifically, that source value. of we overall redeploy and

So a close. they dispositions properties the today, of pursuing on provide currently as number we'll we're those updates actively and in market,

Okay. Great.

think can that. of funds cap on follow-up talk think the can between Just stabilized cap dispose about assets those at which Do of use stabilized a you and you invest you that? rates you to the rates? Can spread the kind you

say was that the be Blaine, in capital. going assets Michael. to is they'd it's such to disposing highly our No, accretive suffice of that, Hi, I just we're because we say reason recycling believe

close it's disclose spreads speculate. Otherwise, transactions. we'll so And kind those when tough disposition those just to we of

Okay. Fair today. you portfolio demand across enough. hoping And the little could are the on tenant creating maybe tenants And bit touch can then you lastly, I that most talk was and a industry? your size about

economic see market. the in products, reflected what despite incremental interesting the sectors. those demand in we industry, Sure. a in generally industry, the of seeing pretty It's from during food pretty from terms overall quarter And concerns is lot activity in consumer beverage Demand the broad-based. we're the demand leasing of economy,

the We towards a continue contributor as vehicle to market electric see very strong demand.

We driven continue e-commerce they're whether to see distribution or companies, XPLs.

in change to nonetheless, the e-commerce general. And your distribution XPL incredible healthy Obviously, for the in during It's for pandemic. a very to saw growth here XPL the all they to continue the the survival demand market in see market, from demand we retailers stay. omnichannel in traditional players But and retailers. given path is shipping

points see from out build who capability, requiring out to their continue omnichannel And to all-time building -- so distribution we of traditional closer warehouses to distribution. are their retailers end continue demand

So pretty broad-based drivers, great actually, see. which is demand to

question Mailman comes the from Citigroup. next Craig line of from Our

Joseph where comments. have how I with the maybe of market terms the in just hoping you Nick much and they Craig, stand following process? quantify disposition is could here was It up you on to out

given many give don't so close to or so the year. Hi, any we that transactions factors similar not acquisition joining side whether a Nick. of we That or acquisition it's are acquisition on certain us There guidance. volume activity. today. much our quarter And for in Thanks to contribute

the the have Similarly, so factors although whether on mansional [ a many that with range front, they in actively are process, in what properties potential as frame. when disposition ] disposition time there's lower we and into that candidates close of and play

you'll hope kind are to give that just we we announce we that be ready actually guidance, So but when of closings. pleased

acquisition appreciate I guess on talked guidance, obviously Yes. No, necessarily but not looking you the for that. think I I pipeline.

Just fall of of we on, broad just recognize pipeline. So Are be? of similar a we that things comment million? kind $XXX can range a could $XXX Are at talking out where dispositions million? the least, hoping in or talking

reason pipeline for can't visibility more Again, with control predict acquisitions a there our buyer disposition on regard arguably, we're prospective because just a how are control we because is close. in on give there may buyer the we in the front, are behave our fewer things things the may and the or

that don't kind of But don't I guidance. we of So just and benefit not kind find apologize. just -- big giving we a give that in just guidance,

on question dispositions. All And the just other then right. one

mentioned leased these number? harvesting for would mark-to-market of it should expect You that recently? more portfolio? the Or impact been some the maybe value, Or assets on impact have have that any we existing on maybe that an not are

we're consistent our value the we to notion harvesting material. with creation, Well, be that the terribly wouldn't expect impact

It's Craig with here Nick.

of what kind and talk just of of future follow upside to yield wanted Gabriel Is more and this helpful. acquisition. to on color that the you would Can nature this asset that just be a redevelopment? leaseback there close San is Is the about almost sale X%. be? of up could any the Just The

Howard. Hi, Craig. It's

it all much close, any we'll wait to it's you really team provide competition. amazing transaction because we frankly, full We're then until of tell about going negotiate an be and details. to other love to was without, able to that and I'd our off-market happy While

one Okay. just And last one.

maybe Could year. the XQ, now the with to in expectation it expiration. Are your where Tireco closer is guys prospects the building leaseback the the bought beginning they sale bought the staying? And about largest tenant it's them tenant in when definitely back you the guys on that today in talk you You that just XXXX versus of of out? mark-to-market

Craig. Hi,

have time, of terms specifically. And conversations, XXXX. based we our on intentions constant of those specifically, and In in Tireco communication no with at in vacating Tireco this and are currently they tenants

they to And Okay. have stay? options

have They options. they do,

Okay. Perfect.

are fixed options And those they options have stay. -- that to

And they in perpetuity? led just to X% annually,

X%.

Okay. Thank you. X%? Great.

from Scotiabank. comes Greg line Our of next with McGinniss question the

repositioning/redevelopment. dig there. portfolio Hi, that that a moving into Is asset, lack on another on provide Laura, just hoping clarifying you have comparable a that from X% disclosure. We're new to so the mark-to-market upside? of vacates I impact quarter-to-quarter rent question vacant or to can't

greater than why about before, or thinking repositioned that is would properties be need it XX%, came redevelop if previously anyways? And why potential down those mark-to-market which to was

X can that things. separate it's be those Well, --

set So point, on to But on side to this a vacate the rent. your redevelopment, comparable, a a not be different can yes, obviously the there's repositioning, properties. comparable of

as mark repositioning back redevelopment properties and are able market. then out they So we plan, the execute the of move to to get and on

Right. that rent mark-to-market repositioning? saying the is so, But assumed on on contingent Is those the I'm growth, properties.

properties those that For specifically? the that question repositioning? The repo are your moving is pipeline, repositioning and into

to trying achieving requirement just XX% basically I'm the Yes. like CapEx on mark-to-market.

not is -- they are not. that No,

typical like there for thinking mark-to-market? beyond there we is be then should And additional any that spend the second-generation TIs, about Okay. achieving is

the capital spend. just No. -- repositioning. It property our is in in TI the pool. typical recurring It a XX%, mark-to-market your in not be leasing commission, capital pool it's that in is would calculation that probably If in

then to coverage. are ignorant does How here, positive question my the basis And new occupancy? impact for be Great. apologies points Okay. an but might XXX absorption net what of reported the we

pool? of specifically.... What the or property portfolio In overall the same terms

portfolio. overall The

changing you basis but net So if it's have of basis points positive quarter-over-quarter, points occupancy XX XXX absorption.

figure to delta out it's is the have there absorption. occupancy positive and where the how impacting to actually trying Just

the of through can with Yes, and I walk offline. components that. be maybe that can. Greg, it'd better I you take you

of W. comes line with Thillman question Baird. the Robert from next Nick Our

I economics. duration. like shorter little touch seem a lease bit to on just does wanted It

with or if you're more free TI rent more seeing leasing? like given this associated curious Just being any is your

so Thanks much for us. joining

this rent was quarter, X.X months. free concessions, terms our In free rent of actually

in experienced So the quarter. prior than what lower we've

average. line line in in X X our quarter with are with That's our guidance Year-to-date prior month. and concessions

overall terms So we increase we seen year-to-date, in material back haven't a concessions. look of really as

have months back that. Looking to about prior to we be continue years, concessions X.XX so averaged of inside

around Your TI. material question Yes, no, question any is TI change in terms of haven't we your seen TI. around

And to leasing helpful, related Laura. question spreads. just just then That's another GAAP maybe

been acquirers You big last to guys over X years. the have X

looking GAAP you're are including you're quoting the seeing the you made quarter-by-quarter? leases GAAP flowing guys spreads when through is of when leasing at Just So FFO going which spreads, actually of adjustment fair to to to quoting value be we're when kind those going forward?

Yes, that would leases. be acquired included in the

Our Green next question of from line comes the Street. Tibone Vince with

quarter move implies basis a XX a quarter conservatism known some guidance fourth Occupancy to out there, point Can levels. in drop or just about discuss just the whether in the it's forecasting? compared third you drivers

Vince. for us joining Thanks today. Hi,

In our guidance guidance, same year property terms mentioned, full for you is the as of our occupancy yes, XX.XX%.

guidance did we -- a about the basis tighten range XX That points. the decline our the fourth quarter, occupancy occupancy to midpoint. So implies in guidance

the largely also guidance are and implied basis decline of reminder, factored by and into in the in half light more we a down year, prior bit performing some XX about downtime our some prior that guidance. of where spaces points a our driven a second as Just moderate repo, --

them our pre-watchlist, we our a on our about to into point was a is XX the several integration had the moved acquisition through They this merger. tenant for went have an we was We've just there, space that that color range of quarters guidance, now. a that basis updated back had year. challenges midpoint. pre-watchlist their got a some impact earlier of in That tenant, business on and that guidance the that from New little who a from

the that back of quarter. at did we so And get the space end

some Panama Canal activity industrial in have from any port could benefit backups, agreement the or side worse. -- these some the and then has finalized And Great. interest so since seen the of been gotten or pickup other you that labor Have of tenant factors? porting

occurring in Yes, It's base that pleased really the we're mainly here Keep increase in activity. tenant serving to Southern really is in California. Vince. consumption our Howard. see Hi, the port mind

we ports So that that shutdowns, impact on in in a base more But focus really from and port through cycles, connected global slowdown haven't the seen really et super-regional of or portfolio. is terms cetera, tenant the we trade. are

So California Western certainly, services some out buildings through of Southern you'll a that revenue port Eastern so volumes. Inland There's that's the Empire the see forth ancillary lot absolutely, of even the a typically and in and generated larger benefit. throughout from

So it's go-forward in those increase and to recovery. volumes nice see terms trend some it's hopefully, really that of a further

Great. And since the up if I more. months get the to in on changed few past could be rates and maybe view curious substantially have your transaction one market the I'd debt how secured over squeeze moved pretty treasury here.

I'll Vince, Hi, take the that market. transaction around

seeing continue has flowing into California market. that see we're the or market say, We to into And entrants Southern capital been, an X. And over I'd industrial. interestingly, new incremental change quarter the past

that in continues the of seen transactions be interest about and availability There to only capital occurring points. materially, maybe can and rates XX cap rates really in certainly basis market that challenging. certainly you've moved an yes, about although, up increase So haven't be

properties -- stabilization. to for to Buyers taking on even are still are some get mark-to-market accepting lower that cap and waiting time rates have

there's about County to the the new over a North transaction, going that So recently just in market And Orange was entrant an initial above cap X%. from buyer a market property X that that of little rate County, Mid was now, and traded million perspective. a years X.X%, $XX from stabilizing a

be continues to be interest the market. capital continues to into the with there So increase flowing rates, there in even

JPMorgan. Mueller line from comes with question of next Mike Our the

pipeline wondering, on what that today? that about I quick on and you're you new to was a Just overall you're achieving can in-place talk the expecting yields yield one. repositioning on acquisitions the starts compared

vary. Howard. it's yields Mike, Those Hi,

bought acquisition we're that that market, above that of moving. legacy yield the substantially others might are lower a yield, a them rate have peak X.X% at that stabilized might there's of the Some that higher, stabilized we have of while bit have

asset we've when able in-place that to the in of do targets X where a to rents yields and that. quite to with actually that also road get to in we got construction we'd place then So we've going down But stabilized bought stabilize. examples of can higher recently in and terms years to buy, very strong few entitle absolutely maybe We've X, we're seeking. those those properties even we're get the had of we're look again, top of have assets on anything rates start to stabilized reset the terms

selective. of we're been as as than far that And back some assets, a definitely X or is it So in really years looking strategy year would ago. different bringing have these

Michael, new in reposition just to and Mike, process, feet about X properties. projects a XXX,XXX redevelopment Hi, representing added pipeline bit square little there. We or more color of current

On aggregate stabilized X.X%. -- the yield those yield investments, is the

coming in the and actually repositioning, yield a bit redevelopment the pipeline. everything for above So aggregate

of Our comes question with line Vikram Mizuho. next from the Malhotra

quick Just X ones.

of be X% So just math mark-to-market, the of of I assume sort the and a by on I that there changes variability by like forward, XXX lot would your market run had rent negative the all, first point to if impact. size for growth a XXX, basis

kind larger the sense give you said us also of impact? that given So it ranges was were of boxes, a can what you just to

Is XX% conditions, correct, I'm get that I mark-to-market roll sort forward, your it being the of I if all XX% by if And year-end 'XX? to assuming to current fair?

portfolio the mark-to-market the rent current projected rents of we a further by assuming market the net actually next growth. over disclosure provided around no terms several effective years, In and year,

of I quarter, that the next end it's by so the XX%. by of XX% it's think XXXX, So XXXX, end

The -- components, redevelopment lot can right, that. there's opportunities. there's they that impact reminder, executing, that and about a a as we're repositioning as different leases talked of earlier, Now

today, a So mark-to-market. but the we're we acquisitions effective portfolio projected would portfolio net the current and XXXX, that where it of at on based sits be XX% acquiring end

to -- I'm that just that still the flow clarify growth, made, X% projections change forward that market say, XXX-point just I you But just if Okay. hard to to rent like have get through in, still the it's 'XX. such

wondering I'm X% the of sort rent in growth. market negative So that variability to

obviously by straight because rents There's not some line across change in is driven variability. market -- portfolio. that's the the And

in end I market the there's of before, size many the of besides in durability there's the that So are driving terms other as basis. in run. change of But mark-to-market terms submarkets, factors mentioned durability there's

enough. embedded acquisition I the exploration. tenant, just Fair you clarify, highly Can renewals? you Okay. to only follow-up I'm that what the like you there 'XX, step then it sort Tireco is or And is a of renew? it ask going seems renewal have think automatic your And they're on Or because I just wondering said lease? in on for just down. largest likely a

Yes. to the renew fixed Yes, X%. lease, option that's extend a option option an at they have their to and

get that option impacting back. not the that were mark-to-market capturing we're in would be at if So XXXX is X% mark-to-market space because to what that our and embedded we

-- as down today, just roll roll if or a is stands And up that nothing sorry, it a changes?

your In were get terms that of if we or to would space back, that down? question? Is roll up the

getting guess you're you're the X%. not I mark-to-market saying the of Yes. full because

roll would It correct. That's up.

up. roll would It

Okay.

that is up It would today. roll below base market

Instructions]. [Operator

Our of next question comes from Nate BNP. line Crossett with the

bit A last quarters. quick one of on a just up recurring quite It's CapEx. couple the

recurring know of CapEx into there forward Just going wanted I to you for kind that. can the we then for maybe just G&A, that know also year maybe unpack if the can significant unpack is? think And what guidance expenditures? implies And XQ. you a ramp maybe should anything Is

so Hi, Nate, questions for your thanks much today.

in take such hotter that conditions painting. exterior weather of related by work CapEx, to largely especially second and the dryer of as exterior third So seasonality into for really it's quarter driven work the and quarter, we some exterior recurring of advantage roof the within terms some do

capital So expenditures that higher. our really drove third quarter

with would As quarter quarters. prior fourth line forward, to look in we we expect more be

to I'll your note operating increase significant in question G&A, do And this really in around continue first the G&A synergies. We to realize XXXX. is

for a to prior revenue Our that year. as the expected percentage to compares in G&A the is XX.X% and year be full X.X%, of

true-up, is the quarter, primarily terms driver the of really related equity noncash performance-based that's to compensation. fourth to and In related equity

So equity is realized to that noncash perform unless levels. elevated Rexford compensation continuing is not at

So driver fourth the that's the quarter. in primary

was disclosed sorry That's it I Okay. if last contracts, what versus, quarter I remember you can't helpful. or missed escalation say, it, lease but then quarter? at this on And it if new not,

Yes.

to quarter in our [indiscernible] the is second past then ] our X the of embedded this X%. was rent were and X.X%. quarter, steps the And embedded prior the signed on quarter, year-to-date we've actually quarters, [ the rent executed This And X.X%. compared first highest steps rent they leases X that

I'd back queue. like call the in for questions further remarks. to no the are closing There hand management to

like today, behalf next for reconnecting look of thank to company, everybody quarter. the much. joining so forward us we'd we entire and you On to Thank

teleconference. Ladies does today's conclude and this gentlemen, your Thank you participation. for

You your at this day. lines may disconnect time, have and a wonderful