Rexford Industrial Realty (REXR) 17 Oct 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rexford Industrial Realty Inc.

Third Quarter 2024 Earnings Conference Call.

[Operator Instructions] And I would now like to turn the conference over to David Lanzer, General Counsel.

begin. may You

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

to distributed to by investor In close, press management's as our the addition release defined today's rexfordindustrial.com. On may a Investor section call, package contain website the statements at we and yesterday laws. supplemental and questions in federal an answers securities presentation remarks Relations on your posted market after forward-looking

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

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

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

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

turn to the over Michael. call I Now

you, I'd and our team Industrial's by Thank strong another few for and outstanding followed Third begin begin with everyone, Call. thank thank for a remarks, joining you, Howard To work delivering Laura. Quarter like David, to Earnings with, Rexford I'll your Rexford quarter.

business election by base X.X% related portfolio demonstrate has general the quarter that prior of Our by Southern economy. With nation's global our compared team to period. With generated uncertainty of to first infill to resiliency, diverse regard unrest, of our quarter, XX.X% outlook, the occupancy which presidential by year share the since continued the the driven our to and largest tenant a of an market on our at XXXX, stable FFO continue brings per consolidated uncertain to to driven to and levels in and conditions, year economic mission-critical the X.X% fueled growth California for infill regional increase population X regional most compared prior the continues FFO grow share decision-making. stabilized weigh each end, year per and to nature consumption year markets locations, remains increased months

Southern market leasing our reflects taking superior longer some long-term fundamentals, Although make industrial to demand continues California tenant demonstrate activity to infill decisions. current tenants

and Southern Looking remains growth. economic and share supply property value rent of growth currently growth net high forward, backdrop of X environment indication, as our years. our the driven functional cash project markets, political realizable embedded positions XX% we and volume in-place California internal for Rexford our favorable portfolio infill embedded our assuming well rent over stabilize, the value-add asset the our per accretive importantly, growth, enhancements FFO believe portfolio. properties By inherently industrial for within substantial growth and by about portfolio within market driving NOI market the our we the way favorable of positioned demand zero future Most repositioning next quality

to turn pleased And with the this, call very over to I'm Howard.

today. the feet us Rexford infill net points positive to the positioned relative to favorably to of of XXX,XXX solid creation basis basis be XX results, testament of The equal Michael, you, operating ended market's market. executed to model. million XX a according you CBRE. continues joining X.X We square overall positive feet absorption, absorption overall value outperforming net to portfolio leases, square negative driving points, quarter and for business thank Rexford third Thank the all with our

with projections. showed spreads at the cash our quarter respectively, Leasing XX% basis, a and on and in continued net XX% line strength quarter effective in prior

executed our embedded steps averaged rent X.X%. in annual Additionally, leases

have product growth reflecting rent markets. of year-over-year, quarters year-to-date. With the extreme continued comparable seen normalization lease project, market taking steps over following line rents, pandemic we Rexford rent up repositioning approximately averaged highly the the with to X.X% infill the portfolio X%, within DuPont in down for our foot during the of rents and functional prior Excluding market square sequentially XX% XXX,XXX regard X.X% to in aggregate

Rexford's activity. investment to Turning

of generating the an During we and transaction. yield stabilized to X.X% million investments of these projected on unlevered $XX and an aggregate, yield total XXX,XXX cost. In we quarter, square initial comprising closed subsequent end, investment completed feet $XX million additional through a X.X% quarter off-market investments of are an

currently we accepted investments under customary forward, or conditions. have million are contract of to Looking approximately subject offer, which $XXX closing

Moving to our capital recycling program.

million, bringing $XX generating During property, year-to-date a disposition we average the activity X IRR. weighted disposed XX.X% of unlevered quarter, of

In million ] closing negotiating will addition, customary which dispositions, subject $XX are we of conditions. on be over to [

projects yield rent and quarter, totaling a stabilized commenced These redevelopment feet, total X.X% yield. stabilized yield X representing square XXX,XXX of stabilized square in total which the third Inland quarter investment have X $XXX stabilized average $XX a we a approximately to XXX,XXX investment stabilized property an weighted projects X.X%. Year-to-date, quarter, Empire million. at our on achieved total the and subsequent repositioning leased we square which XXX,XXX DuPont West, of also achieved unlevered we across the on During million. In weighted X.X% unlevered projects foot average of investment feet, end

to continue your like our drive that for entrepreneurial success. efforts to I'd thank Importantly, Rexford's team Rexford

Laura. that, pleased to I'm the over with to And call turn

Howard. you, Thank

X.X% share quarter growth and $X.XX, was net expectations. basis X.X% FFO in line net a effective and and a basis X.X% on at year with NOI on was line Same-property the results growth on per also in year-to-date basis. a property X.X% Third bringing with cash growth cash X.X%, prior respectively, were projections effective NOI quarter. to representing over same

related a last bad level impact renewals associated taxes effective related offset an same-property contribution rent growth, to XXX-basis-point by XXX impact base driven NOI utility XX-basis-point few the property was basis a positive from net rent year, of from growth associated including primarily XX-basis-point recoveries seasonal primarily quarter with with elevated and an timing straight-line by lower Third items, of early a to debt. points higher expenses and

While of impacting reserve bad third balance healthy to long-term in the the quarter comp. In X.Xx. net was the near current of was a quarter points prior the quarter positive to included of X our leverage a target sheet, XX XXXX regard revenue, EBITDA range debt to basis debt of the X.Xx, reversal

approximately under quarter In facility. revolving of hand quarter $XX March end, settled and equity and subsequent billion, of the currently million have for remaining our credit settlement. forward total, During in million liquidity offering $XXX cash to equity million our proceeds including million available and to we outstanding have forward $XXX $XXX we on of $X.X related net

extension near-term options. have debt We no mid-XXXX, maturities until assuming

range and guidance XX.XX% the previous X.XX% has the of to at of of been compared increased per prior both reduced midpoint. at growth average to expectations: to respectively, $X.XX share now expectations, range of not XX $X.XX, Turning XXXX our to within of by growth XX%. same-property to XX.X% NOI cash closed. XXXX First, includes guidance the guidance range year-over-year that yet that related and to on basis following low the X.X% X% a X.XX% points occupancy X% to high growth our NOI Note net per the XX.X% our our and not effective to FFO has range basis, midpoint. the same-property Drivers at does representing include guidance. share funding acquisitions, earnings end is future dispositions XXXX $X.XX or

be in move-outs to prior We with by now commencement quarter known lease guidance, our projected impacted of units the fourth occupancy a included early on that expect to commence few vacant in combined are timing XXXX.

a XX% net on with leasing in the forecast Second, prior effective basis. line full XX% and at quarter's spreads cash year on a basis

X.XX months largely the third Third, months, concessions driven with approximately for signed longer up of duration quarter. from year X the leases by full X.X in

year-to-date in historical XX-basis-point averages. revenue Finally, in with bad percentage debt and line a as of the area,

sold filing same Mission updated XXX,XXX We the bankruptcy. their the feet November. property the NOI projected Flooring, will of end at out the also move property, LL includes Boulevard business after recently vacate anticipate building Our our of growth for square tenant at guidance occupying who

However, currently plan, are redevelopment entitlement in we for process. the original our

to our total NOI of of is share on activity, to range a relatively from in the $X.XX from incremental million of space share being acquisition share an our increased XX% an line projections, the per approximately is unchanged. G&A per also contribution vacate $XX The the components positive is repositioning NOI plus our XXX% rate million estimated per due in contribution guidance impact nominal occupancy of non-same current approximately related large market. Other incremental higher-than-expected include $XXX prior While outsized with contribution occupancy, and of impact portfolio. rental year $X.XX which represents pool, redevelopments this full our portfolio and FFO below to has property

portfolio no assuming the and cash of of million Looking current growth further we in have the represents subsequent forward, market X an NOI to place we and today's NOI embedded annualized within in internal $XX incremental estimated portfolio market redevelopments, this million rates, captured the incremental cash in quarter of end. next XX% XXX acquisitions Note from quarter years. and rent approximately of in steps mark-to-market, embedded quarter, third in that million realizing $XX X.X% over million includes as the NOI from from the closed from we million roll XX% million averaging $X and over NOI. portfolio, X rents points next Together, annual $XXX repositionings to current acquisitions basis growth $XX of $XX mark-to-market the cash rents years,

FFO forward, X-year will timing report provide beginning share conditions, like focusing dynamic we to earnings in as the we challenges environment per going the quarter at current the of when the and be spoke guidance would well inherent will on market we February. early outlook of inflections, Based the of which forecasting we on annual touch fourth I about our market year. on the Finally, quickly as

over call thank Rexford want Before I team. turn recognize questions, and our the your I for to

and Rexford. Operator? the all daily drive We to excellence. pursuit success Thank are passion of you you by inspired your do of for

[Operator question of BMO Capital Instructions] Markets. John the And with your line Kim comes from first

the pushing versus the tenants a theme. I in like levels rent lot economy What election? the else would upcoming higher are slow of -- about cost the ask wanted inventory like is automation of seems another decision uncertainty that the Or of to common you and It today. a or to tenants something you making attribute in reason? talking you're having or it's back it your holding are on to terms this

I industry around of macro No, really that for factors uncertainty sector, some and sort John, as today. to the general think really I levels tenant really Interest more or much not well. of and us it's seeing it's joining Michael, impacts driven the you are driven by short-term economy. driven elevated remain unrest election. an uncertainty by uncertainty globally, of by economic in geopolitical part rates And the decision-making around the we're think the still predominantly by company, necessarily concerns thank or specific so their

and consumption year. performance think that -- lot we're line is will at in Regional I interest tenants. staying hoped businesses certainty activity, making, rates Southern be of beginning it's maybe decisions third make remained the around of set leasing our slow decision folks kind this, our think sure to important this typical had but get a stable, of into more put. And essentially at the tenants this in And in of point there'd it's their the and the note Q strength or seeing, I with team frankly, guidance underlying seeing our also we're strong time. And in reflects California. really I'm growing later,

of we're big decision-making really seeing terms in not the surprises tenant respect. any again, So in that in base

by driven predominantly really to a as factors And continue macro regard that those to think see demand. backdrop I we factors. with favorable sense, macro stabilize, in So

Okay. signed quarter, a And on $XX.XX at basis. then this it you on your GAAP rents that was

the year on market trying It be is presented? more and indicative third up How will So current it versus and And down to suggest would XXXX around you the figure this declining that I you quarter, also, of of that XXXX? year. how what the signing true of think rents than that for mark-to-market you into of the in rents expirations? it's the rents we're remainder rent indicative X.X% or kind signed bounced is the out

Yes. really on to with it more question. I'll mix And The that in rents is pass of leases. differential about I'll start. little more for the a of rest the Laura detail your

question. your for thanks John,

terms as from spreads our spreads year unchanged look When of a quarter. a effective terms on and said and XX% our effective is basis on net In effective third basis true. the net XX% fourth at leasing. That for net imply a It last into -- the of and the expectations cash quarter. XX% spreads does cash XX% about example of Michael it's of mix full an we in guidance is

that XX%. can You our with right and see our quarter at in in third line expectations spreads came XX%

spreads into we to we did So generate as expecting -- this we quarter, we are look into quarter. similar look the fourth as that

more driving is smaller term. really, And near that what's our mark-to-market the spaces,

average, So years. was X,XXX on an term I X.X square think is the average feet, size average

you do in supplement? your have And in $XX.XX It's rent expirations. presumably XXXX the the expiring than lower

Yes, call. the we can follow with after up you

your the of America. And with line question next comes of Spector Jeff from Bank

that. is whether took the your hearing is space. much on main reason One you difference, a decisions. I we said of key were it's tenants mentioned your why result tenant Tenants heard in the too follow-up from And key first think There your reason call. from making is markets. what peers John's question difference, there from I excess what maybe a at space. our conference some of you a slower Michael, our broker we don't size, mean, are

So that another -- Or and accidently a making that here? clear that is you off? you are difference reason left just is

joining thanks so Jeff, much for us.

see that less driver a It's we of big box than the think I a do driver. as that product. for probably

And so hear emphasizing much. you us probably as don't it's why

We interest tenants, we're we more hear our see seeing a delay just and to by for of continue very space, our properties in utility at to high continue decision-making.

the hear the dynamics you market. that's do I within us big our compared infill think the way in as for for So smaller big not our base probably different box that to do a are you markets why and market, the emphasizing box bit tenant

market stays flat here. assume from mark-to-market And That is would you XX%. also said rent then, the Michael,

I think market are but on least a comment, stabilizing? providing you little at you're bit I can provide more saying you Are XX%. that rent market now, feel forecast guess, that rents color not the you do

bit? XX% the the I'm you our think little to Can question not is a sure. I a clarify embedded reference NOI growth.

said that's one mark-to-market today's rent. I Sorry, slides. market is your beginning, assume you of on the thought the I It's at on XX%. based -- And that's

know you if And stabilizing so rents didn't market implying finally are I think product? like you for your were

the within The is next embedded is NOI our Laura. this Jeff, XX% years. referencing X the you're that portfolio over growth

acquisitions our embedded have growth of as quarter. We million repositionings about redevelopments, in and the we rent as well from embedded steps NOI $XXX closed mark-to-market, the

in that. leases make? coming appreciate that last, current then I want on the redevs, comments I some of and Any on the is Okay. Any quarters. redevs see coming confirm, my just lease-up to online And could I on signed? the expectations you lease

we've in we Jeff, repositions. a making of it's Well, terms of That obviously, in commented time in Howard. reasonable activity the frames we've already and amounts the seeing on timeline said, of the the we've for adjustments decision on being little and made seen are slower past. some lease-up than space, redevelopment

related and about were of related being things leasing. to X pushed half on really out, construction some Just pushed and we months and those it out average, is delays of to it half

made of fairly the in in of But we're why comments Michael part optimistic overall, of transactions the activity turning into decisions But lot XXXX. signed activity a I'd of that of some really, terms reasons there, the the year early is the of slower. into latter and and are there terms into echo some out some

And your next Citi. Craig line from comes of Mailman the question with

given high Just a X% saying DuPont I projects of in you've coming X.X% kind know of want elongated then start underway rents the How moderating going are pipeline soon are about more was mean, is one-off? yields X.X% kind or kind the to range, to that been returns here. costs should construction or a relative I frames? trend X%? where the we that guys sort going to time -- back that you Or and the have circle of but higher of stabilizing returns and redevelopments lease-up on are of where think maybe you to to was that redevelopment guys stabilized.

Craig, it's Howard.

projected softest the of terms the certainly can oversupply prior yields. refer of But of market in data recall been supplemental XXX,XXX some terms of our had the Inland that feet in the specific segments Empire property has from to of because comments, one that property You property, product. West as the the that of in all of you by

you the markets, product it. that -- say, because when rents probably, isn't so let just there declined amount the kind of the And even for around that rents all most of look of vacancy

more really a stabilized that's on terms of So one-off of in the that yields there particular see asset. you

I the this because Right. roll question I yield I was the just was I unlevered asked -- [ Yes. deck. really redevelopment. the oath No, see ] know predicated the that X-year forward you quarter primarily guys this on X% in

that you I are pull XX% get pulling it? it the And the feels I continuing talk at if about think reason so trying feel you just was bit about that like XX% to a that and more to gave good quickly had little about. redevs, here start to expectations. you Could pretty your it talked was return you for to you after just decision guidance guys

it's Since the excited of think dynamics and we're it term. long we when within initial the looking on was Yes, very of set the really portfolio, the been back positioned the based continued the the economic timing very, forecast, the beginning function year, and we're a substantial Craig, well to outlook that and generate then, look at you uncertainty. at growth there at purely to are I we that has When time. growth because near over market embedded about

the within And this the growth. provide on XQ When those executing prudent better significant we'll aside expectations -- have XXXX is to forecast report for when focused portfolio. us push the embedded So on visibility, focus we growth we earnings. believe that that and time. it's at our we We're really

Okay. That's fair.

didn't you get that that, assume [ doing we to $XX.XX just as on stage should or be last LL at a you ]? that's to you long lease hoped anticipate on there? stage Flooring, had through down redevelopment. entitlement until clarification a to guys I as Just the start planning it redev you Do that know Or short-term going

market Craig. our point on the Yes, It's in able at put see we'll income short-term I and not that space. some we in mean, it anticipated this certainly if get were guidance. to

then And one maybe last just Okay. one.

know do good still particularly of what guys is on hearing amount you're on buying always you I you year? what's are some kind don't how seeing markets. return capital buy pipeline? add, deploy. guys relative gateway the a How opportunities are we're And value the cost of good guys raised maybe down -- stabilize, acquisition in in You cash earlier stabilized yields are of coming you do to this equity at feel acquisitions, you the the to

again, so that any because on is to they to pipeline. as much near are company you now, about Michael thanks And we're only we excited it's our substantial -- that pipeline to today. -- Thanks here. they're that well have again term. cost the in us joining in which opportunities might average, Craig, our term the we reason The impacts long accretion to, our of believe deliver to relative mean and would as going accretive steady-state for capital

shareholders, portfolio flowing and to are the average. value believe accretive to that substantially to to near buy paid mean higher But doesn't yield. in buying, to and that get to a general, to but with, create time in the both term to going expect with vacant us opportunities asset, not general, that time, we're assets much on for we from going going average, cash you're we're see long stabilized in continue on It might going we be

line Yulico And Scotiabank. your Nicholas from the next of with comes question

occupancy to in same-store I go change just wanted guidance. the to back

that was just an terms you guidance? tenant how about, of in the talked big the of you quantify that on can occupancy impact out same-store So move

Yes.

of points. basis reduce In our same-store by terms guidance, did the we midpoint occupancy about XX

-- reduced [indiscernible] basis XX about So and we points.

early rent of That's drivers. pushed In vacant projected on about X half 'XX. terms of units, the drivers, commencement the drivers, the out commencement into timing we

decisions projected overall pushed given and Just time, bit tenants overall little negotiations a where that timing. delaying we the are out taking leasing leasing dynamics, leasing more are

for I'll have XX on on do largest really about note account those the X change, we majority the the units. units that of of that activity

of XQ. is function in to So and a XQ it's about then more expecting Flooring And be not XX points. of basis LL that commencement

Yes. Okay.

So yes, up that. just on following

the leasing is anything not and a into piece delayed next So commence just it until there's delayed there's all that there's year. XXXX, being that's not -- space, for lease It's going sort like next speculative sounds occupancy specifically being year? to leased of the places to for and that leasing

of based trading today. and the Yes. our we and activity place It's terms in just paper the in on commencements have that expectations we're

your Baird. question And of Nick with the next comes line from Thillman

XXXX But terms, like kind schedule, on of we looking of you've converted be of to that of would wanted should tenants at more you so kind larger that kind is think on dynamics maybe your spreads? leasing how the of should dynamic? view I kind some shorter mix the mark-to-market kind touch just term. out greater on Laura, we like smaller that that laid having as that, that Or of leases already about lease

I'm report speak look year when put certainly to quarter to guidance. we spread at or providing our time not XXXX yes, forward and more and fourth earnings guidance expectations next going this around for more -- spreads out XXXX to in point Yes.

important our mark-to-market XX% portfolio is today effective net to a XX% I and at, provided it's look as think the mark-to-market have strong we well. cash at

of sort this going that capture half -- like? of are NOI then more pivoting of repositioning to kind Is kind we of weighted is back flow it And forecast? into Or much this half bucket, we of of how sort redevelopment a loaded back of through 'XX? the expecting could

product the that pipeline? of the delivered the entirety are specifically Are we've asking we -- you about or

what's this kind guys particularly -- dates, of in percentage we the 'XX, like to I what those to pushed thinking continue kind modeling, to 'XX? of still 'XX? roll be is out some of Or for give forward, it guess, your kind on XXXX of you asking more know that is that laid sounds but I'm like flow upside like of internal logical going like I stabilization are through, see

mean, look, every stabilization timing provide Yes. the for our I pipeline. we property within

see some into -- you'll 'XX, impacts we're going and 'XX So 'XX. to

just you So XX market the way sway last in to those dates one confident have anything pretty dynamics or days other? stabilization or you're on in shifted make the

look, the we we some made of did timing. to mean, update why I that the that's Yes.

And so our seeing our that's today, what view and market in we're projections current stabilization incorporated that's in around dates. the

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

attributes of dispositions guess extent of are I the forward that thinking what down you dispositions the $XX find the the pulling today million about, incremental you you're I finalizing? are And how have you place? that versus to that acquisitions, in guess,

really Mike, comfortable speak are the We're usually, to we the that a because But are not I'll larger dispositions. of think moment. circling do I amount looking we product at and as these of -- we happen. is Well, it's reporting this Howard. more at

more about we're other So But plus million that be year-to-date as working giving the and transactions. to information we'd think the more we're various $XX on. be I that you having excited close $XX million comfortable we

Okay.

sorry, Laura. And

around Mike, Yes. of in answer -- a how fund. funding. uses question pipeline of variety mean to we're a I part we've about the which we have I'll got thinking your second

We pipeline $XXX of about acquisitions a have of million.

and remainder through this million about of have also of million spend year next and well. year additional $XX redevelopment as $XXX the We repositioning about to

it. Got

a And quick maybe last one. Okay.

San parts? basis of moving points, And of there some any terms the XXX I sequential think decline you about and during Ventura. Diego the in of quarter, color had occupancy

XX,XXX square properties move-outs, of San about larger Diego in number a feet. X particular, to property really There It's were feet. square XX,XXX Yes. roughly about XX,XXX in average

And XX% it Ventura, we re-lease feet, at was about we expect to square spread. One X of properties, still In a a those at actually square San XX% at XX% averaging feet, Diego spread. one, large about spread. XX,XXX around release cash a about -- had about other already in expect those XX,XXX made cash has up the X to cash move-outs, of driven by released

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

it be XX build growth? guess, the impact planned this the about may talk portfolio? repositioning expect push the I on you long-term are tenants Just other out AB markets? how rent redevelopments better any effect of And about the on thinking restrictions? there projects to side, given you Could actually of to all that not Can into build? in your of that you then other increased aspects or net are possible result

for it's as home, really addressing that high is AB to dealing buildings projects feet Howard. buffer of this start to most Maybe setback less that, benefit really schools, are Blaine, but XX product cetera. parks, impactful And larger, more requirements others, certainly et near changes state-level Really with logistics the level such just and to that zones. uses viewed as saying, primarily sensitive it's below impact by XXX,XXX -- and nominal zoning some.

of to question, does out in does our all east. a any boxed portfolio big buildings add to going building. As that's because and more right now just unless projects your be repositioning. are going the present, to terms or Rexford, part should you're far at say, impact we in possibly for of markets square renovating initial as of these XX% of for value I really, And latter part seen in the the us your the no to have our size pipeline. There's impacts our more but the create for million larger really the no occurrence of of to question foot challenges throughout material And the than risk mostly it repositioning XX rare impacts

Great.

call on driven the in on when to which occupancy as on seems occupancy up the guess headwinds. decrease of I timing earlier space, by I vacant been Just have think you that and into same-store you following the mainly commencements look being than mentioned a move delayed how more see and forward? same-store properties then same-store expected, And we pool, bit we NOI same-store comps of could influence into occupancy out as do I of look XXXX? little the that you as also how movement guess and at

Blaine, and report we quarter guidance growth look great when question, providing same-property forward NOI a fourth to that's earnings. we and

same-store the is Flooring guess, I That's remain enough. LL in pool? one. asset the Fair to the big going

good good Okay. That's a -- a that's yes, question.

regulation I'll this with a -- terms in buildings municipality. a We've actually to in XXX% LL We're color give short-term Flooring of Flooring, this to and can't in LL excited given at replicated below that process here. had is we of executed bit -- lease redevelopment. the we little be We're really this market. a property, is deliver place a particular very more the In just market a rent was been in the And that entitlements. currently this that's

So it's a value. long-term great create opportunity to

the to XXX% of below-market rent. the have obviously, market rent, NOI it's an but lower the below outpace necessarily on because occupancy, not impact rent, because, importantly, on And going

So being all is said, a it redevelopment. that

will moving property so it same likely the year. And I'm most we into be sorry... next pool

helpful. yes, great. a your on just appetite. on acquisition Okay, then some questions the That's follow-up that's of And

about you're You of cost state capital just guys accretion Can is? value I you any of cost deals? color us evaluating the talked steady what's guess, when where give that or capital. steady-state on input that from creation

average capital. how our from is I'll Thanks here. are accretive Well, disclose to Blaine, joining you that perceive that acquisition activity but great We our for on cost don't of tell today. we today's expectations cost again of us, Michael you hear to capital, our

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

set of of mentioned and I wondering, whatever reduced stabilized maybe a whether theoretical, points today? see set given sort full has And us that the acquire wondering to the why. maybe it's basis higher. we it XXX, just last sort to [ the you acquire the pipeline guess Like then -- you'll opportunity opportunity you best like just yield for same is this size or sort and for maybe it's the going ] could you'd to develop of market just I'm conditions? X time, TAM at maybe time I'm of a XXX that get what's

Vikram, within square much flow flow you business X cash opportunities so these opportunity, pretty them substantially market today. to having and thank to that replete to feet higher take value billion really for X unique share. legacy on opportunities of us ability with square billion lot it Southern is prior appreciate with assets, We mostly it. I over by joining XXXX product feet see level cash built in-place a a infill shifted. to Rexford's with a don't predicated of per almost the buying California, of model nominal investment create of

And that market opportunity continues.

direct exceedingly acquire. improving with going having I more, and frankly. we investment acquire I scrutinize this that, conservative caution fact, time. think And where said, heightened do, and going respect much to we a over market access certainly we're addressable our is to opportunities to That and as be when our market of we how we're terms opportunity have In that been environment in our careful think always judicious, is

it's the but think we think of same and driver key I Rexford phases governing the cycle, terms I is to the posture opportunities So going pace acquire. we're on And the in the shareholders. only which at take respect very for all in that of it focus we best

you know the was I X-year guide. fair. a guess Cal you on I has Coast for more of been while. dynamic, West That's I or bit challenged but kind give decision a take So to could the hoping mentioned market color away the

some more the pull like in specifically changed for you color the to -- what could you what last X guide? give So months

tenants. I'll less our overall X economy where that at out about of really Laura's where just day, good comments we're our California, X, years about external goes, in at the it's that value decision-making the the to earlier. Southern just industrial in may asset end impact, class. creating go briefly And good factors estate real for add prognosticating We're

it's us, to found providing tenant transparency base. business history annual the into the a guidance and I focus more have think provide at of more we to we the And just hand, where have we that so for visibility on prudent

infill really not concerns California long-term about our any reflect Southern does market. it And

very In you think occupancy healthy, markets. to our is bad frankly, favorable our the but fact, predominantly be high for I continues the backdrop very metrics the see, business cetera. in exceedingly health of all portfolio is our levels, et low debt, that And

estate. really tenant the base. really focusing do concerns the which about market It's we doesn't it is more So our creating on or in value reflect about real best, what

Okay. questions. just X numbers And one, then last

fourth of And or Just your is I volumes of where #X? for #X, sense the all like or quarter across the leasing of may of give given just the rent the spreads you even parts sublet, portfolio you already West are mind trending? giving what So us do you you sort should us say, have percent can sublet given think near-term just a done probably that quarter, the the Cal, high Coast first

sure. Yes, Vikram, it's Howard.

feet, In really Rich XX which occupied quarter. subleasing came line quarter of terms last our of portfolio I'd projection was in subleasing, terms in XX comparable basis down. this of with basis our It to of say, points our And was 'XX? points more, -- the of about overall square past to where amount actually, quarter is equivalent incurring X

amount to that, numbers the our portfolio square That's declined. But on for of that product feet, at also market actively end sublease the down was quarter that's X.X million was in X.X square million put second the feet. to the now around of some and

in subleasing is of indication the what's good always So happening a changes market. and

at those in that's, market in. when coming the numbers moment, you think spot see start I so the And a bright

to that then really expectations. And point, this quarter-to-date line in seeing in coming our with regards leasing at in, spreads we're

Our net guidance area XQ. the area cash implies in XX% for spreads and effective XX%

from question with Khanal And next your comes ISI. Samir Evercore of line the

Inland bottoming down market Are even my Empire. is saw there? Howard, when seeing an you But you bad bit The or still sort sequentially. X%. West think as improvement getting we around are a question improvements about prior guess about I less mean the here? some you around I at look from certainly, of stabilizing quarter you of was the

is Well, the our XX,XXX the feet. space product average market, size size in

which than space under, the of decline terms a have the above down terms looks it about feet. it's well in is decline. the like more of square say, slowed of actually, today, I'd XXX,XXX of there portfolio, is happening product XX,XXX differently some in Inland throughout rent we size market. performing the the it's that in XX, And seeing feet the much of broader larger rent and and in you're lot Empire, So where And above spaces any

say, So and the see of terms in portfolio of size square it's XX,XXX-ish really feet boding lies. the in how we where well, our market I'd average

just you sort green the Cal, kind but start at are start seeing seen maybe mean, sequentially, away I market any of you from rents if or the mean at market you broader you've look Empire, step market that growth to shoots rent Inland Southern down. sort And in them this I where of point say of come to bottom?

is stabilize the As about like to least to of at kind of that in less and starting or bad? we any seeing starting there us feel to XXXX, think you're green sort shoots make rise market get is

because and and yes, detail saw Samir, what provide can quarter dependent size. around performance is from a a maybe submarket I we market some it more little bit really size in on the

look segments, square terms in strength. our we We market relative In exhibited XX,XXX compared rents in Gabriel you declines in smallest the Valley, County the San decline to spaces under saw are terms market of feet. feet of at over declines less St. the quarter, in Orange in Fernando When and the Diego third in XX,XXX size smaller the Spaces saw the accelerated Valley. mid-counties those rent square San markets.

don't and at in really continue we the And tenant expectations lock that and bumps space add today very health. one that we're through And behaviors, signing tenant lease that look rent behaviors, in way. see the very portfolio of high fact, annualized terms any thing good contractual material Samir, in last I green in tenants we activity tenant our leading indicators would we're they executing. to in leasing shoots. the are think terms overall shedding just in bumps and quarter And I of Tenant and

are average X activity, locking to to I X% when for next expect And space, rent. They escalators lock to see in expect stay the they X, annual in They rent years, in continue the X.X% pay space, for the need in they we on them leasing telling it's they're X, tenants us X, more essential space. the that to the business. their the value think

And it to at shoots, some you so I of look but the think there look at behaviors. tenant have probably green are holistically

question And of Anderson from Wedbush. with line your the Richard next comes

there just rent market perhaps comment So of linearity a or on changes. lack the

out behaviors they're in quarter. X.X% some see where something quarter, You The if pretty sort of just is when where mentioned this down on over happens headed? What declining, a the tenant map X% could good of all like a trying Or then mind, we're stop exercise the again? be number next this we psychological figure your that place? quarter. X.X% Like sign and down this that's mean linear again exercise it's was in getting based to I first the year-over-year I wondered,

for much Richard, it's joining so Michael. today. you us Thank

describe should much we increase incredible declines, was, normalization the to that that the X% as pandemic the it, tenant -- rent we're tried to some plus/minus think in I be expect some see behaviors so, quarter-over-quarter. acceleration on X%, years observing sequentially normalization. we last moderate which the based normalization X.X And should as that for have saw following and rents we the frankly, during or X%,

based on might in the gains You to certain but see really quarter-over-quarter, not continue see. some dramatic expect anything tenant even submarkets behaviors to we

say. see that sort hard we very inflection just to point. in predict more to of having ends kick finally And and it's rent growth strongly, been It's when that that difficult we to and our comfortable continues strong, really health the do we're Tenant rent portends backdrop market a favorable well said, in very be it's portfolio that for extremely with growth. backdrop. But think

start exactly predict to to when inflection. hard Just see that you

Okay. Fair enough.

in And get redeveloping projects market how so from where think market you that next haircutting to you rents. minus minus about you to how wherever I'm a you it curious just that to and movement Are and when go X% to repositioning make pencil? dynamic, comfortable expect even redevelopment rents with the the may X.X% you project it underwrite more is relative be? down here, that

aren't minus way, the to to clarify minus X% will X.X%, X% minus comparison, those X% minus Minus year-over-year whereas X.X% would change. that just sequential the be or a By apples-to-apples. then and plus a be

do... So we

this on current at in how on minus I'm you of applies -- was I'm in redevelopments question it rate, basis. an perhaps No, this quarter see unless still the any first it that's think wrong, I that, X% the apples-to-apples reading environment? under right, I year I but believe wrong. down But

So opportunity rents where and a think And where on close they're given really we we for we today take are granular where and take a space, a do bottoms-up and approach and we are at rents into take redevelopments bottoms-up look consideration we trending. take approach. the

for What it Okay. well might Do irrespective have a have more number you I how if what occupancy? I And apologies tenants? wrong. wrong. space that's space from that, your and of a very -- competing utilization about on need have with that read

backdrop it's high And among very see contributes the again, I spaces mentioned we fundamentals. and about less I as to tenants within see continue our more we that portfolio. that earlier, to think their utilization we decision-making about that our think in favorably

utilization we again, the very to so portfolio. continue see favorable within levels of And

hire? Okay. Last question, status of the CFO

super That's We're in a soon progress, we're with as and all and shareholders let super question. know as great making have definitive excited answer, that the progress we for excited but you going great we're the and to respect. company a

of line with Lynch your question Barclays. from And Brendan the next comes

tenants how watch the On more LL currently list? many list? broadly, are Flooring, on are on where they watch And the

watch did Where so hit list. our are the they watch it it list, was bankruptcy, a on

be very throughout the with consistent we've the of seen it year. list, watch terms what overall In to continues

be We have points projecting the list continue industry for points on no to trends tenants basis concentration. full Year-to-date, year. and the of changes less in XX XX in watch terms I'll very basis healthy. mean bad up low, really levels note our XX I we're and very than that then debt

you what on then think too much you're -- and the Great. about And the want disposing million dispositions, should but assets? sold we the you That's helpful. how year-to-date when have don't be of $XX of discuss the we could you I characteristics about assets how know think prioritizing to that can speak coming,

forward. on And I projects, transacted versus building going multi-tenant Yes, a Howard. XX,XXX, on the sale type we was projected on just our equivalent that small was to for some that team change attractive. most much we growth -- light renovation. think XX,XXX the for Brendan, that there've management-intensive were been It's rate we projecting the The rent the not did our very and and cap very part, that

on low the in was it Xs believe a I market rental rate.

achieving to the where intensive of that or management do there typically not more capital up assets the coming creation any be that more opportunity just can seeing we'd sometimes that might really value with it to going like there's they're or avoid some produce on an no margin we So are incremental there's to we're asset, have because needs value.

now our turn I closing that management for call the back will question-and-answer concludes session. to And remarks.

to everybody Board Directors, the and for of happy quarter. quarter, a you Well, rest next we'd of we'd like our We thank like to of the company us -- holidays, on we look and behalf joining wish forward great today. reconnecting to

We today's And thank gentlemen, you call. concludes for your this ladies and participation.

You disconnect. may now