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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
 
FORM 8-K  
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 31, 2018
 
REXFORD INDUSTRIAL REALTY, INC.
(Exact name of registrant as specified in its charter) 
 
 
Maryland
 
001-36008
 
46-2024407
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 

11620 Wilshire Boulevard, Suite 1000, Los Angeles, California
 
90025
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (310) 966-1680

N/A
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 
 






ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 31, 2018, Rexford Industrial Realty, Inc. (“Rexford Industrial”) issued a press release announcing its earnings for the quarter ended June 30, 2018, and distributed certain supplemental financial information. On July 31, 2018, Rexford Industrial also posted the supplemental financial information on its website located at www.rexfordindustrial.com.  Copies of the press release and supplemental financial information are furnished herewith as Exhibits 99.1 and 99.2, respectively.
The information included in this Current Report on Form 8-K under this Item 2.02 (including Exhibits 99.1 and 99.2 hereto) are being “furnished” and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of the Exchange Act, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 7.01 REGULATION FD DISCLOSURE  
As discussed in Item 2.02 above, Rexford Industrial issued a press release announcing its earnings for the quarter ended June 30, 2018 and distributed certain supplemental information. On July 31, 2018, Rexford Industrial also posted the supplemental financial information on its website located at www.rexfordindustrial.com.  
The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 and 99.2 hereto) is being “furnished” and shall not be deemed to be “filed” for the purposes of the Exchange Act, or otherwise subject to the liabilities of the Exchange Act, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 and 99.2 hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)    Exhibits.
 
Exhibit
Number
  
Description
99.1
 
Press Release Dated July 31, 2018
 
 
 
99.2
 
Second Quarter 2018 Supplemental Financial Report






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Rexford Industrial Realty, Inc.
July 31, 2018
 
/s/ Michael S. Frankel
 
Michael S. Frankel
Co-Chief Executive Officer
(Principal Executive Officer)
 
 
 
Rexford Industrial Realty, Inc.
July 31, 2018
 
/s/ Howard Schwimmer
 
Howard Schwimmer
Co-Chief Executive Officer
(Principal Executive Officer)






EXHIBIT INDEX

Exhibit
Number
  
Description
99.1
  
 
 
 
99.2
  



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

 394447935_rexrlogoa39.jpg

REXFORD INDUSTRIAL ANNOUNCES SECOND QUARTER 2018 FINANCIAL RESULTS

- Net Income of $0.06 per Diluted Share for Second Quarter 2018 -
- Second Quarter 2018 Core FFO of $22.9 million, Up 44.0% Compared to Second Quarter 2017 -
- Second Quarter 2018 Core FFO of $0.27 per Diluted Share, Up 17.4% Compared to Second Quarter 2017 -
- Same Property Portfolio NOI Up 10.5% Compared to Second Quarter 2017 -
- Consolidated Portfolio NOI Up 44.5% Compared to Second Quarter 2017 -
- Stabilized Same Property Portfolio Occupancy of 98.4% -
- 35.5% GAAP and 23.9% Cash Releasing Spreads -


Los Angeles, California - July 31, 2018 - Rexford Industrial Realty, Inc. (the “Company” or “Rexford Industrial”) (NYSE: REXR), a real estate investment trust (“REIT”) that specializes in acquiring, owning and operating industrial properties located in Southern California infill markets, today announced financial results for the second quarter of 2018.

Second Quarter 2018 Financial and Operational Highlights:
Net income attributable to common stockholders of $0.06 per diluted share for the quarter ended June 30, 2018, compared to $0.26 per diluted share last year.
Company share of Core FFO increased 44.0% year-over-year to $22.9 million for the quarter ended June 30, 2018.
Company share of Core FFO per diluted share increased 17.4% year-over-year to $0.27 per diluted share for the quarter ended June 30, 2018.
Total second quarter rental revenues of $51.6 million, which represents an increase of 41.7% year-over-year. Consolidated Portfolio Net Operating Income (NOI) of $38.8 million, which represents an increase of 44.5% year-over-year.
Same Property Portfolio NOI increased 10.5% in the second quarter of 2018 compared to the second quarter of 2017, driven by a 9.3% increase in Same Property Portfolio total rental revenue and a 5.6% increase in Same Property Portfolio operating expenses. Same Property Portfolio Cash NOI increased 9.9% compared to the second quarter of 2017.
Stabilized Same Property Portfolio NOI increased 7.7% in the second quarter of 2018 compared to the second quarter of 2017.
Stabilized Same Property Portfolio Cash NOI increased 9.5% compared to the second quarter of 2017.
Signed new and renewal leases totaling 843,493 rentable square feet. Rental rates on new and renewal leases were 35.5% higher than prior rents on a GAAP basis and 23.9% higher on a cash basis.
Stabilized Same Property Portfolio occupancy was 98.4%, which represents an increase of 210 basis points year-over-year. Same Property Portfolio occupancy, inclusive of assets in value-add repositioning, was 96.0%, which represents an increase of 380 basis points year-over-year.
At June 30, 2018, the consolidated portfolio, including repositioning assets, was 95.6% leased and 95.2% occupied, which represents an increase in occupancy of 380 basis points year-over-year. At June 30, 2018, the consolidated portfolio, excluding repositioning assets aggregating approximately 0.6 million rentable square feet, was 98.3% leased and 98.1% occupied.




During the second quarter of 2018, the Company acquired 13 industrial properties for a total purchase price of $274.8 million.
During the second quarter of 2018, the Company sold two industrial properties for an aggregate sales price of $10.8 million.

“We are very pleased with our team’s strong second quarter results. We grew our Core FFO by 44% in the second quarter, and by 17.4% on a per share basis, which was partially driven by a 10.5% increase in Same Property NOI. Our GAAP and cash releasing spreads remain extremely strong at 35.5% and 23.9%, respectively, as we continue to benefit from growing tenant demand driven by a robust regional economy, by the dramatic growth in e-commerce and by the need for shorter last-mile delivery time-frames,” stated Michael Frankel and Howard Schwimmer, Co-Chief Executive Officers of the Company. “We also grew our consolidated portfolio with $327 million of high quality industrial property acquisitions completed year-to-date as we continue to execute our unique, value-driven business model as a local sharp-shooter consolidating a premier industrial property portfolio in infill Southern California, the nation's largest and highest-demand industrial market.”

Financial Results:

The Company reported net income attributable to common stockholders of $5.2 million, or $0.06 per diluted share, for the three months ended June 30, 2018, as compared to net income attributable to common stockholders of $17.8 million, or $0.26 per diluted share, for the three months ended June 30, 2017. Net income for the three months ended June 30, 2018 includes $1.6 million of gains on sale of real estate, as compared to $16.6 million for the three months ended June 30, 2017.

The Company reported net income attributable to common stockholders of $17.4 million, or $0.21 per diluted share, for the six months ended June 30, 2018, as compared to net income attributable to common stockholders of $22.0 million, or $0.33 per diluted share, for the six months ended June 30, 2017. Net income for the six months ended June 30, 2018, includes $11.6 million of gains on sale of real estate, as compared to $19.2 million for the six months ended June 30, 2017.

The Company reported Company share of Core FFO of $22.9 million, or $0.27 per diluted share of common stock, for the three months ended June 30, 2018, as compared to Company share of Core FFO of $15.9 million, or $0.23 per diluted share of common stock, for the three months ended June 30, 2017. Adjusting for non-core expenses ($37,000 reported during the second quarter of 2018 and $20,000 reported during the second quarter of 2017), Company share of FFO was $22.8 million, or $0.27 per diluted share of common stock, for the three months ended June 30, 2018, as compared to Company share of FFO of $15.9 million, or $0.23 per diluted share of common stock, for the three months ended June 30, 2017.

The Company reported Company share of Core FFO of $44.3 million, or $0.54 per diluted share of common stock, for the six months ended June 30, 2018, as compared to Company share of Core FFO of $31.0 million, or $0.46 per diluted share of common stock, for the six months ended June 30, 2017. Adjusting for non-core expenses ($46,000 reported during the six months of 2018 and $0.4 million reported during the six months of 2017), Company share of FFO was $44.3 million, or $0.54 per diluted share of common stock, for the six months ended June 30, 2018, as compared to Company share of FFO of $30.6 million, or $0.45 per diluted share of common stock, for the six months ended June 30, 2017.

For the three months ended June 30, 2018, the Company’s Same Property Portfolio NOI increased 10.5% compared to the second quarter of 2017, driven by a 9.3% increase in Same Property Portfolio total rental revenue and a 5.6% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 9.9% compared to the second quarter of 2017. Stabilized Same Property Portfolio NOI increased 7.7% in the second quarter of 2018 compared to the second quarter of 2017 and Stabilized Same Property Portfolio Cash NOI increased 9.5% in the second quarter of 2018 compared to the second quarter of 2017.






Operating Results:

During the second quarter of 2018, the Company signed 128 new and renewal leases totaling 843,493 rentable square feet. Average rental rates on comparable new and renewal leases were up 35.5% on a GAAP basis and up 23.9% on a cash basis. The Company signed 61 new leases for 300,591 rentable square feet, with GAAP rents up 28.3% compared to the prior in-place leases. The Company signed 67 renewal leases for 542,902 rentable square feet, with GAAP rents up 37.5% compared to the prior in-place leases. For the 61 new leases, cash rents increased 19.2%, and for the 67 renewal leases, cash rents were up 25.2%, compared to the ending cash rents for the prior leases.

The Company has included in a supplemental information package the detailed results and operating statistics that reflect the activities of the Company for the three months ended June 30, 2018. See below for information regarding the supplemental information package. 

Transaction Activity:

In the second quarter 2018, the Company completed 13 acquisitions, for an aggregate purchase price of $274.8 million, as detailed below. Additionally, the Company sold two properties for $10.8 million.

In April 2018, the Company acquired 4039 Calle Platino, a 100% leased multi-tenant industrial building containing 143,274 square feet on 9.5 acres of land, located in the San Diego–North County submarket, for $20.0 million or approximately $140 per square foot.

In April 2018, the Company acquired 851 Lawrence Drive, a vacant industrial building containing 49,976 square feet on 4.9 acres of land located in the Ventura submarket, for $6.6 million or approximately $132 per square foot.

In April 2018, the Company acquired 1581 North Main Street, a 100% leased single-tenant industrial property containing 39,661 square feet on 1.8 acres of land, located in the Orange County–North submarket, for $7.2 million or approximately $180 per square foot.

In April 2018, the Company acquired 600-664 Twin Oaks Valley Road, two 100% leased industrial buildings containing 96,993 square feet on 4.9 acres of land, located in the San Diego–North County submarket, for $14.0 million or $144 per square foot.

In April 2018, the Company acquired 1580 West Carson Street, a vacant industrial building containing 43,787 square feet on 2.52 acres of land, located in the Los Angeles–South Bay submarket, for $7.5 million or $171 per square foot.

In May 2018, the Company acquired 1190 East Stanford Court, a 100% leased single-tenant industrial building containing 34,494 square feet on 1.46 acres of land, located in the Orange County–North submarket, for $6.1 million or $176 per square foot.

In May 2018, the Company acquired 5300 Sheila Street, a 100% leased industrial building containing 695,120 square feet on 35.83 acres of land, located in the Los Angeles–Central submarket, for $121.0 million or $174 per square foot.

In May 2018, the Company acquired 15777 Gateway Circle, a 100% leased single-tenant industrial building containing 37,592 square feet on 1.46 acres of land, located in the Orange County–Airport submarket, for $8.1 million or $214 per square foot.

In May 2018, the Company acquired 1998 Surveyor Avenue, an under-construction single-tenant industrial building located in the Ventura submarket, for $10.2 million (comprised of $5.8 million paid at closing and the assumption of the seller’s fixed-price construction contracts with $4.4 million of remaining costs) or $182 per square foot. At completion, the property will contain 56,306 square feet on 2.98 acres of land.

In May 2018, the Company acquired 3100 Fujita Street, a 100% leased single-tenant industrial building containing 91,516 square feet on 3.77 acres of land, located in the Los Angeles–South Bay submarket, for $14.0 million or $153 per square foot.





In June 2018, the Company acquired 4416 Azusa Canyon Road, a 100% leased industrial building containing 70,510 square feet on 5.89 acres of land, located in the Los Angeles–San Gabriel Valley submarket, for $12.0 million or $170 per square foot.

In June 2018, the Company acquired 1420 McKinley Avenue, a vacant, newly constructed single-tenant industrial building containing 136,685 square feet on 6.7 acres of land, located in the Los Angeles–South Bay submarket, for $30.0 million or $219 per square foot.

In June 2018, the Company acquired 12154 Montague Street, a 100% leased single-tenant industrial building containing 122,868 square feet on 4.9 acres of land, located in the Los Angeles–San Fernando Valley submarket, for $22.5 million or $183 per square foot.

In April 2018, the Company sold 6770 Central Avenue, Building B, a vacant industrial building containing 11,808 square feet on 1.1 acres of land in the Inland Empire–East submarket, for $1.7 million or $142 per square foot.

In May 2018, the Company sold 1910-1920 South Archibald Avenue, two 69% occupied flex buildings containing 78,243 square feet, located in the Inland Empire–West submarket, for $9.1 million or $116 per square foot.


Balance Sheet:
  
During the quarter ended June 30, 2018, the Company issued 10,174,245 shares of common stock under its at-the-market equity offering programs (ATM programs). The shares were issued at a weighted average price of $31.17 per share, providing gross proceeds of approximately $317.1 million and net proceeds of approximately $312.4 million. As of June 30, 2018, the current ATM program had approximately $241.5 million of remaining capacity.

In May 2018, the Company closed on a seven-year $150 million unsecured term loan facility. The term loan facility matures on May 22, 2025 and bears interest at LIBOR plus an applicable Eurodollar rate margin that will range from 1.50% to 2.20% per annum depending on the Company's leverage ratio. The proceeds were used to repay amounts outstanding under the Company's unsecured revolving credit facility, to fund acquisitions and for general corporate purposes.

As of June 30, 2018, the Company had $761.2 million of outstanding debt, with an average interest rate of 3.47% and an average term-to-maturity of 6.0 years. As of June 30, 2018, approximately $511.2 million, or 67%, of the Company’s outstanding debt was fixed-rate with an average interest rate of 3.47% and an average term-to-maturity of 6.1 years. The remaining $250.0 million, or 33%, of the Company’s outstanding debt was floating-rate, with an average interest rate of LIBOR + 1.38% and an average term-to-maturity of 6.0 years. The Company has one interest rate swap that will hedge $100 million of its remaining floating-rate debt beginning in August 2018 when the swap becomes effective. If this interest rate swap was effective as of June 30, 2018, the Company’s debt would be 80% fixed and 20% variable with an average interest rate of 3.38%.

Guidance

The Company is reiterating and increasing its full year 2018 guidance as follows:
Net income attributable to common stockholders within a range of $0.29 to $0.31 per diluted share
Company share of Core FFO within a range of $1.05 to $1.07 per diluted share
Year-end Same Property Portfolio occupancy within a range of 95.5% to 97.0%
Year-end Stabilized Same Property Portfolio occupancy within a range of 96.5% to 98.0%
Same Property Portfolio NOI growth for the year of 8.0% to 9.5%
Stabilized Same Property Portfolio NOI growth for the year of 5.5% to 7.0%
General and administrative expenses of $24.5 million to $25.0 million

The Core FFO guidance refers only to the Company’s in-place portfolio as of July 31, 2018, and does not include any assumptions for acquisitions, dispositions or balance sheet activities that may or may not occur later during the year. The Company’s in-place portfolio as of July 31, 2018, reflects the acquisition of two properties totaling 120,814 rentable square feet that occurred subsequent to June 30, 2018. A number of factors could impact the Company’s ability to deliver results in line with its guidance, including, but not limited to, interest rates, the economy, the supply and demand of industrial real estate, the availability and terms of financing to the Company or to potential acquirers of real estate




and the timing and yields for divestment and investment. There can be no assurance that the Company can achieve such results.

Dividends:

On July 30, 2018, the Company’s Board of Directors declared a dividend in the amount of $0.16 per share for the third quarter of 2018, payable in cash on October 15, 2018, to common stockholders and common unit holders of record as of September 28, 2018.
 
On July 30, 2018, the Company’s Board of Directors declared a dividend of $0.367188 per share of its Series A Cumulative Redeemable Preferred Stock and $0.367188 per share of its Series B Cumulative Redeemable Preferred Stock, payable in cash on September 28, 2018, to preferred stockholders of record as of September 14, 2018.

Supplemental Information:

Details regarding these results can be found in the Company’s supplemental financial package available on the Company’s investor relations website at www.ir.rexfordindustrial.com.

Earnings Release, Investor Conference Webcast and Conference Call:

The Company will host a webcast and conference call on Wednesday, August 1, 2018, at 1:00 p.m. Eastern Time to review second quarter results and discuss recent events. The live webcast will be available on the Company’s investor relations website at ir.rexfordindustrial.com. To participate in the call, please dial 877-407-0789 (domestic) or 201-689-8562 (international). A replay of the conference call will be available through September 1, 2018, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13681673.

About Rexford Industrial:

Rexford Industrial is a real estate investment trust focused on owning and operating industrial properties in Southern California infill markets. The Company owns 166 properties with approximately 20.3 million rentable square feet and manages an additional 20 properties with approximately 1.2 million rentable square feet.
For additional information, visit www.rexfordindustrial.com.

Forward Looking Statements:

This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the reports and other filings by the Company with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent filings with the Securities and Exchange Commission. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
  




Definitions / Discussion of Non-GAAP Financial Measures:

Funds from Operations (FFO): We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization, gains and losses from property dispositions, other than temporary impairments of unconsolidated real estate entities, and impairment on our investment in real estate, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of performance used by other REITs, FFO may be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. Other equity REITs may not calculate or interpret FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity and is not indicative of funds available for our cash needs, including our ability to pay dividends. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance. A reconciliation of net income, the nearest GAAP equivalent, to FFO is set forth below.

Core Funds from Operations (Core FFO): We calculate Core FFO by adjusting FFO to exclude the impact of certain items that we do not consider reflective of our core revenue or expense streams. These adjustments consist of acquisition expenses. Management believes that Core FFO is a useful supplemental measure as it provides a more meaningful and consistent comparison of operating performance and allows investors to more easily compare the Company’s operating results. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of Core FFO as a measure of our performance is limited. Other REITs may not calculate Core FFO in a consistent manner. Accordingly, our Core FFO may not be comparable to other REITs’ Core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance. A reconciliation of FFO to Core FFO is set forth below.
Reconciliation of Net Income Attributable to Common Stockholders per Diluted Share Guidance to Company share of Core FFO per Diluted Share Guidance: The following is a reconciliation of the Company’s guidance range of net income attributable to common stockholders per diluted share, the most directly comparable forward-looking GAAP financial measure, to Company share of Core FFO per diluted share.
 
2018 Estimate
 
Low
 
High
Net income attributable to common stockholders
$
0.29

 
$
0.31

Company share of depreciation and amortization
$
0.89

 
$
0.89

Company share of gains on sale of real estate
$
(0.13
)
 
$
(0.13
)
Company share of Core FFO
$
1.05

 
$
1.07



Net Operating Income (NOI): NOI is a non-GAAP measure, which includes the revenue and expense directly attributable to our real estate properties. NOI is calculated as total revenue from real estate operations including i) rental income, ii) tenant reimbursements and iii) other income less property expenses (before interest expense, depreciation and amortization). We use NOI as a supplemental performance measure because, in excluding real estate depreciation and amortization expense and gains (or losses) from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that NOI will be useful to investors as a basis to compare our operating performance with that of other REITs. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties (all of which have a real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable




to such other REITs’ NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs.

NOI should not be used as a substitute for cash flow from operating activities in accordance with GAAP. We use NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. A calculation of NOI for our Same Property Portfolio, as well as a reconciliation of net income to NOI for our Same Property Portfolio, is set forth below.

Cash NOI: Cash NOI is a non-GAAP measure, which we calculate by adding or subtracting from NOI i) fair value lease revenue and ii) straight-line rent adjustments. We use Cash NOI, together with NOI, as a supplemental performance measure. Cash NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. Cash NOI should not be used as a substitute for cash flow from operating activities computed in accordance with GAAP. We use Cash NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. A calculation of Cash NOI for our Same Property Portfolio, as well as a reconciliation of net income to Cash NOI for our Same Property Portfolio, is set forth below.

Same Property Portfolio: Our Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly-owned by us as of January 1, 2017, and still owned by us as of June 30, 2018. Therefore, we excluded from our Same Properties Portfolio any properties that were acquired or sold during the period from January 1, 2017 through June 30, 2018. The Company’s computation of same property performance may not be comparable to other REITs.

Stabilized Same Property Portfolio: Our Stabilized Same Property Portfolio represents the properties included in our Same Property Portfolio, adjusted to exclude the properties listed in the tables below that were under repositioning/lease-up during comparable years.

Stabilized Same Property Portfolio occupancy/leasing statistics, excludes vacant/unleased repositioning space at each of these properties as of the end of each reporting period. Stabilized Same Property Portfolio NOI, excludes the NOI for the entire property for all comparable periods.
Our Stabilized Same Property Portfolio excludes the following Same Property Portfolio properties that were in various stages of repositioning or lease-up during the year ended December 31, 2017 and the six months ended June 30, 2018:
12131 Western Avenue
 
301-445 Figueroa Street
14742-14750 Nelson Avenue
 
3233 Mission Oaks Boulevard
1601 Alton Parkway
 
3880 Valley Boulevard
18118-18120 Broadway Street
 
679-691 South Anderson Street
228th Street
 
9615 Norwalk Boulevard
2700-2722 Fairview Street
 
 
As of June 30, 2018, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is 352,185 rentable square feet of space at six of our properties that were classified as repositioning or lease-up. As of June 30, 2017, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is space aggregating 602,270 rentable square feet at seven of our properties that were in various stages of repositioning or lease-up.

Properties and Space Under Repositioning: Typically defined as properties or units where a significant amount of space is held vacant in order to implement capital improvements that improve the functionality (not including basic refurbishments, i.e., paint and carpet), cash flow and value of that space. We define a significant amount of space in a building as the lower of (i) 20,000 square feet of space or (ii) 50% of a building’s square footage. Typically, we would include properties or space where the repositioning and lease-up time frame is estimated to be greater than six months. A repositioning is considered complete once the investment is fully or nearly fully deployed and the property is marketable for leasing. We consider a repositioning property to be stabilized at the earlier of the following: (i) upon reaching 90% occupancy or (ii) one year from the date of completion of repositioning construction work.






Contact:
Investor Relations:

Stephen Swett
424-256-2153 ext 401
investorrelations@rexfordindustrial.com




Rexford Industrial Realty, Inc.
Consolidated Balance Sheets
(In thousands except share data)

 
 
June 30, 2018
 
December 31, 2017
 
(unaudited)
 
 
ASSETS
 
 
 
Land
$
1,199,633

 
$
997,588

Buildings and improvements
1,229,100

 
1,079,746

Tenant improvements
53,531

 
49,692

Furniture, fixtures, and equipment
151

 
167

Construction in progress
44,631

 
34,772

Total real estate held for investment
2,527,046

 
2,161,965

Accumulated depreciation
(200,006
)
 
(173,541
)
Investments in real estate, net
2,327,040

 
1,988,424

Cash and cash equivalents
162,704

 
6,620

Restricted cash

 
250

Rents and other receivables, net
3,920

 
3,664

Deferred rent receivable, net
19,432

 
15,826

Deferred leasing costs, net
12,600

 
12,014

Deferred loan costs, net
1,621

 
1,930

Acquired lease intangible assets, net
57,054

 
49,239

Acquired indefinite-lived intangible
5,156

 
5,156

Interest rate swap asset
13,036

 
7,193

Other assets
8,216

 
6,146

Acquisition related deposits
1,600

 
2,475

Assets associated with real estate held for sale, net

 
12,436

Total Assets
$
2,612,379

 
$
2,111,373

LIABILITIES & EQUITY
 
 
 
Liabilities
 
 
 
Notes payable
$
757,064

 
$
668,941

Interest rate swap liability

 
219

Accounts payable, accrued expenses and other liabilities
19,683

 
21,134

Dividends payable
14,952

 
11,727

Acquired lease intangible liabilities, net
53,939

 
18,067

Tenant security deposits
20,534

 
19,521

Prepaid rents
6,374

 
6,267

Liabilities associated with real estate held for sale

 
243

Total Liabilities
872,546

 
746,119

Equity
 
 
 
Rexford Industrial Realty, Inc. stockholders’ equity
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized;
 
 
 
5.875% series A cumulative redeemable preferred stock, 3,600,000 shares outstanding as of June 30, 2018 and December 31, 2017 ($90,000 liquidation preference)
86,651

 
86,651

5.875% series B cumulative redeemable preferred stock, 3,000,000 shares outstanding as of June 30, 2018 and December 31, 2017 ($75,000 liquidation preference)
72,443

 
73,062

Common Stock, $0.01 par value 490,000,000 shares authorized and 91,062,065 and 78,495,882 shares outstanding as of June 30, 2018 and December 31, 2017, respectively
908

 
782

Additional paid in capital
1,614,650

 
1,239,810

Cumulative distributions in excess of earnings
(76,926
)
 
(67,058
)
Accumulated other comprehensive income
12,753

 
6,799

Total stockholders’ equity
1,710,479

 
1,340,046

Noncontrolling interests
29,354

 
25,208

Total Equity
1,739,833

 
1,365,254

Total Liabilities and Equity
$
2,612,379

 
$
2,111,373





Rexford Industrial Realty, Inc.
Consolidated Statements of Operations
(Unaudited and in thousands, except per share data)


 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
RENTAL REVENUES
 
 
 
 
 
 
 
Rental income
$
43,567

 
$
31,132

 
$
84,478

 
$
60,746

Tenant reimbursements
7,932

 
5,172

 
15,225

 
10,327

Other income
117

 
115

 
346

 
347

TOTAL RENTAL REVENUES
51,616

 
36,419

 
100,049

 
71,420

Management, leasing and development services
140

 
145

 
243

 
271

Interest income

 
218

 

 
445

TOTAL REVENUES
51,756

 
36,782

 
100,292

 
72,136

OPERATING EXPENSES
 
 
 
 
 
 
 
Property expenses
12,775

 
9,536

 
24,735

 
18,758

General and administrative
6,506

 
5,123

 
12,668

 
10,209

Depreciation and amortization
19,775

 
14,515

 
39,227

 
28,114

TOTAL OPERATING EXPENSES
39,056

 
29,174

 
76,630

 
57,081

OTHER EXPENSES
 
 
 
 
 
 
 
Acquisition expenses
37

 
20

 
46

 
405

Interest expense
6,452

 
4,302

 
12,304

 
8,300

TOTAL OTHER EXPENSES
6,489

 
4,322

 
12,350

 
8,705

TOTAL EXPENSES
45,545

 
33,496

 
88,980

 
65,786

Equity in income from unconsolidated real estate entities

 

 

 
11

Loss on extinguishment of debt

 

 

 
(22
)
Gains on sale of real estate
1,608

 
16,569

 
11,591

 
19,237

NET INCOME
7,819

 
19,855

 
22,903

 
25,576

Less: net income attributable to noncontrolling interest
(129
)
 
(531
)
 
(447
)
 
(663
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
7,690

 
19,324

 
22,456

 
24,913

Less: preferred stock dividends
(2,424
)
 
(1,322
)
 
(4,847
)
 
(2,644
)
Less: earnings attributable to participating securities
(94
)
 
(156
)
 
(191
)
 
(247
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
5,172

 
$
17,846

 
$
17,418

 
$
22,022

Net income attributable to common stockholders per share  basic
$
0.06

 
$
0.26

 
$
0.22

 
$
0.33

Net income attributable to common stockholders per share  diluted
$
0.06

 
$
0.26

 
$
0.21

 
$
0.33

Weighted-average shares of common stock outstanding – basic
82,924

 
67,921

 
80,821

 
67,135

Weighted-average shares of common stock outstanding – diluted
83,495

 
68,331

 
81,357

 
67,483







Rexford Industrial Realty, Inc.
Same Property Portfolio Occupancy and NOI and Cash NOI
(Unaudited, dollars in thousands)
 
 
Same Property Portfolio Occupancy:
 
 
 
 
 
 
 
June 30, 2018
 
June 30, 2017
 
Change (basis points)
 
Same Property
Portfolio
 
Stabilized
Same
Property
Portfolio
(1)
 
Same Property
Portfolio
 
Stabilized
Same
Property
Portfolio
(2)
 
Same Property
Portfolio
 
Stabilized
Same
Property
Portfolio
Occupancy:
 
 
 
 
 
 
 
 
 
 
 
Los Angeles County
96.8%
 
99.3%
 
93.6%
 
98.4%
 
320 bps
 
90 bps
Orange County
94.4%
 
97.6%
 
92.0%
 
97.2%
 
240 bps
 
40 bps
San Bernardino County
99.7%
 
99.7%
 
93.4%
 
93.4%
 
630 bps
 
630 bps
San Diego County
97.1%
 
97.1%
 
95.6%
 
95.6%
 
150 bps
 
150 bps
Ventura County
89.4%
 
96.1%
 
81.6%
 
90.0%
 
780 bps
 
610 bps
Total/Weighted Average
96.0%
 
98.4%
 
92.2%
 
96.3%
 
380 bps
 
210 bps

(1)
Reflects the occupancy of our Same Property Portfolio as of June 30, 2018, adjusted for total space of 352,185 rentable square feet at six properties that was in various stages of repositioning or lease-up as of June 30, 2018.
(2)
Reflects the occupancy of our Same Property Portfolio as of June 30, 2017, adjusted for space aggregating 602,270 rentable square feet at seven properties that were in various stages of repositioning or lease-up as of June 30, 2017.

Same Property Portfolio NOI and Cash NOI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
$ Change
 
% Change
 
2018
 
2017
 
$ Change
 
% Change
Rental income
$
31,728

 
$
29,017

 
$
2,711

 
9.3%
 
$
62,878

 
$
57,573

 
$
5,305

 
9.2%
Tenant reimbursements
5,347

 
4,885

 
462

 
9.5%
 
10,403

 
9,887

 
516

 
5.2%
Other income
106

 
122

 
(16
)
 
(13.1)%
 
327

 
322

 
5

 
1.6%
Total rental revenues
37,181

 
34,024

 
3,157

 
9.3%
 
73,608

 
67,782

 
5,826

 
8.6%
Property expenses
9,122

 
8,636

 
486

 
5.6%
 
18,112

 
17,310

 
802

 
4.6%
Same Property Portfolio NOI
$
28,059

 
$
25,388

 
$
2,671

 
10.5%
 
$
55,496

 
$
50,472

 
$
5,024

 
10.0%
Straight line rental revenue adjustment
(997
)
 
(778
)
 
(219
)
 
28.1%
 
(2,321
)
 
(1,707
)
 
(614
)
 
36.0%
Amortization of above/below market lease intangibles
(150
)
 
(125
)
 
(25
)
 
20.0%
 
(217
)
 
(267
)
 
50

 
(18.7)%
Same Property Portfolio Cash NOI
$
26,912

 
$
24,485

 
$
2,427

 
9.9%
 
$
52,958

 
$
48,498

 
$
4,460

 
9.2%






Rexford Industrial Realty, Inc.
Reconciliation of Net Income to NOI, Same Property Portfolio NOI and Same Property Portfolio Cash NOI
(Unaudited and in thousands)


 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
7,819

 
$
19,855

 
$
22,903

 
$
25,576

Add:
 
 
 
 
 
 
 
General and administrative
6,506

 
5,123

 
12,668

 
10,209

Depreciation and amortization
19,775

 
14,515

 
39,227

 
28,114

Acquisition expenses
37

 
20

 
46

 
405

Interest expense
6,452

 
4,302

 
12,304

 
8,300

Loss on extinguishment of debt

 

 

 
22

Deduct:
 
 
 
 
 
 
 
Management, leasing and development services
140

 
145

 
243

 
271

Interest income

 
218

 

 
445

Equity in income from unconsolidated real estate entities

 

 

 
11

Gains on sale of real estate
1,608

 
16,569

 
11,591

 
19,237

Net operating income (NOI)
$
38,841

 
$
26,883

 
$
75,314

 
$
52,662

Non-Same Property Portfolio operating revenues
(14,435
)
 
(2,395
)
 
(26,441
)
 
(3,638
)
Non-Same Property Portfolio property expenses
3,653

 
900

 
6,623

 
1,448

Same Property Portfolio NOI
$
28,059

 
$
25,388

 
$
55,496

 
$
50,472

Straight line rental revenue adjustment
(997
)
 
(778
)
 
(2,321
)
 
(1,707
)
Amortization of above/below market lease intangibles
(150
)
 
(125
)
 
(217
)
 
(267
)
Same Property Portfolio Cash NOI
$
26,912

 
$
24,485

 
$
52,958

 
$
48,498






Rexford Industrial Realty, Inc.
Reconciliation of Net Income to Funds From Operations and Core Funds From Operations
(Unaudited and in thousands, except per share data)

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
7,819

 
$
19,855

 
$
22,903

 
$
25,576

Add:
 
 
 
 
 

 
 

Depreciation and amortization
19,775

 
14,515

 
39,227

 
28,114

Deduct:
 
 
 
 
 
 
 
Gains on sale of real estate
1,608

 
16,569

 
11,591

 
19,237

Gain on acquisition of unconsolidated joint venture property

 

 

 
11

Funds From Operations (FFO)
$
25,986

 
$
17,801

 
$
50,539

 
$
34,442

Less: preferred stock dividends
(2,424
)
 
(1,322
)
 
(4,847
)
 
(2,644
)
Less: FFO attributable to noncontrolling interest(1)
(562
)
 
(468
)
 
(1,119
)
 
(917
)
Less: FFO attributable to participating securities(2)
(153
)
 
(138
)
 
(311
)
 
(275
)
Company share of FFO
$
22,847

 
$
15,873

 
$
44,262

 
$
30,606

 
 
 
 
 
 
 
 
FFO per common share - basic
$
0.28

 
$
0.23

 
$
0.55

 
$
0.46

FFO per common share - diluted
$
0.27

 
$
0.23

 
$
0.54

 
$
0.45

 
 
 
 
 
 
 
 
FFO
$
25,986

 
$
17,801

 
$
50,539

 
$
34,442

Adjust:
 
 
 
 
 
 
 
Acquisition expenses
37

 
20

 
46

 
405

Core FFO
$
26,023

 
$
17,821

 
$
50,585

 
$
34,847

Less: preferred stock dividends
(2,424
)
 
(1,322
)
 
(4,847
)
 
(2,644
)
Less: Core FFO attributable to noncontrolling interest(1)
(563
)
 
(468
)
 
(1,120
)
 
(928
)
Less: Core FFO attributable to participating securities(2)
(154
)
 
(138
)
 
(312
)
 
(278
)
Company share of Core FFO
$
22,882

 
$
15,893

 
$
44,306

 
$
30,997

 
 
 
 
 
 
 
 
Company share of Core FFO per common share - basic
$
0.28

 
$
0.23

 
$
0.55

 
$
0.46

Company share of Core FFO per common share - diluted
$
0.27

 
$
0.23

 
$
0.54

 
$
0.46

 
 
 
 
 
 
 
 
Weighted-average shares of common stock outstanding – basic
82,924

 
67,921

 
80,821

 
67,135

Weighted-average shares of common stock outstanding – diluted
83,495

 
68,331

 
81,357

 
67,483


(1)
Noncontrolling interest represent holders of outstanding common units of the Company’s operating partnership that are owned by unit holders other than the Company.
(2)
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units.


(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
Exhibit 99.2

394447935_q218.jpg



Table of Contents.
 
 
 
 
 
Section
Page
 
 
Corporate Data:
 
Investor Company Summary
3
Financial and Portfolio Highlights and Common Stock Data
4
Consolidated Financial Results:
 
Consolidated Balance Sheets
5
Consolidated Statements of Operations
6-7
Non-GAAP FFO, Core FFO and AFFO Reconciliations
8-9
Statement of Operations Reconciliations
10
Same Property Portfolio Performance
11
Capitalization Summary
12
Debt Summary
13
Portfolio Data:
 
Portfolio Overview
14
Occupancy and Leasing Trends
15
Leasing Statistics
16-17
Top Tenants and Lease Segmentation
18
Capital Expenditure Summary
19
Properties and Space Under Repositioning
20-21
Current Year Acquisitions and Dispositions Summary
22
Guidance
23
Net Asset Value Components
24
Notes and Definitions
25-28
Disclosures:
Forward Looking Statements: This supplemental package contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We caution investors that any forward-looking statements presented herein are based on management’s beliefs and assumptions and information currently available to management. Such statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the market value of our properties, the inability to enter into or renew leases at favorable rates, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); risks associated with the disruption of credit markets or a global economic slowdown; risks associated with the potential loss of key personnel (most importantly, members of senior management); risks associated with our failure to maintain our status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended; possible adverse changes in tax and environmental laws; litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes, and potential liability for uninsured losses and environmental contamination.
For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see Item 1A. Risk Factors in our 2017 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on February 21, 2018. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

 
Second Quarter 2018
Supplemental Financial Reporting Package
Page 2

 394447935_logo3a06.jpg
 


Investor Company Summary.
 
 
 
 
 
Executive Management Team
Howard Schwimmer
 
Co-Chief Executive Officer, Director
Michael S. Frankel
 
Co-Chief Executive Officer, Director
Adeel Khan
 
Chief Financial Officer
David Lanzer
 
General Counsel and Corporate Secretary
Board of Directors
Richard Ziman
 
Chairman
Howard Schwimmer
 
Co-Chief Executive Officer, Director
Michael S. Frankel
 
Co-Chief Executive Officer, Director
Robert L. Antin
 
Director
Steven C. Good
 
Director
Diana J. Ingram
 
Director
Tyler H. Rose
 
Director
Peter Schwab
 
Director
Investor Relations Information
ICR
Stephen Swett
www.icrinc.com
212-849-3882
 
 
Equity Research Coverage
 
 
Bank of America Merrill Lynch
 
James Feldman
 
(646) 855-5808
Capital One
 
Chris Lucas
 
(571) 633-8151
Citigroup Investment Research
 
Emmanuel Korchman
 
(212) 816-1382
D.A Davidson
 
Barry Oxford
 
(212) 240-9871
J.P. Morgan
 
Michael W. Mueller, CFA
 
(212) 622-6689
Jefferies LLC
 
Jonathan Petersen
 
(212) 284-1705
National Securities Corporation
 
John R. Benda
 
(212) 417-8127
Stifel Nicolaus & Co.
 
John W. Guinee
 
(443) 224-1307
Wells Fargo Securities
 
Blaine Heck
 
(443) 263-6529
Disclaimer: This list may not be complete and is subject to change as firms add or delete coverage of our company. Please note that any opinions, estimates, forecasts or predictions regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Rexford Industrial Realty, Inc. or its management. We are providing this listing as a service to our stockholders and do not by listing these firms imply our endorsement of, or concurrence with, such information, conclusions or recommendations. Interested persons may obtain copies of analysts’ reports on their own; we do not distribute these reports.

 
Second Quarter 2018
Supplemental Financial Reporting Package
Page 3

 394447935_logo3a06.jpg
 


Financial and Portfolio Highlights and Common Stock Data. (1)
 
 
(in thousands except share and per share data and portfolio statistics)

 
Three Months Ended
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
Financial Results:
 
 
 
 
 
 
 
 
 
Total rental revenues
$
51,616

 
$
48,433

 
$
45,767

 
$
43,230

 
$
36,419

Net income
$
7,819

 
$
15,084

 
$
14,115

 
$
2,009

 
$
19,855

Net Operating Income (NOI)
$
38,841

 
$
36,473

 
$
33,615

 
$
32,001

 
$
26,883

Company share of Core FFO
$
22,882

 
$
21,424

 
$
20,025

 
$
18,049

 
$
15,893

Company share of Core FFO per common share - diluted
$
0.27

 
$
0.27

 
$
0.26

 
$
0.25

 
$
0.23

Adjusted EBITDA
$
36,784

 
$
32,306

 
$
30,675

 
$
28,265

 
$
25,360

Dividend declared per common share
$
0.160

 
$
0.160

 
$
0.145

 
$
0.145

 
$
0.145

Portfolio Statistics:
 
 
 
 
 
 
 
 
 
Portfolio SF - consolidated
20,213,729

 
18,741,304

 
18,476,809

 
18,044,612

 
16,221,646

Ending occupancy - consolidated portfolio
95.2
%
 
95.2
%
 
95.5
%
 
92.9
%
 
91.4
%
Stabilized occupancy - consolidated portfolio
98.1
%
 
97.7
%
 
98.2
%
 
97.2
%
 
96.5
%
Leasing spreads - GAAP
35.5
%
 
25.3
%
 
27.7
%
 
26.3
%
 
20.4
%
Leasing spreads - cash
23.9
%
 
14.9
%
 
18.9
%
 
16.7
%
 
10.6
%
Same Property Performance:
 
 
 
 
 
 
 
 
 
Same Property Portfolio SF
14,088,668

 
14,088,668

 
14,088,668

 
14,088,668

 
14,088,668

Same Property Portfolio ending occupancy
96.0
%
 
94.9
%
 
95.2
%
 
93.1
%
 
92.2
%
Same Property Portfolio NOI growth(2)
10.5
%
 
9.4
%
 
n/a

 
n/a

 
n/a

Same Property Portfolio Cash NOI growth(2)
9.9
%
 
8.5
%
 
n/a

 
n/a

 
n/a

Stabilized Same Property Portfolio ending occupancy
98.4
%
 
97.6
%
 
97.9
%
 
96.7
%
 
96.3
%
Stabilized Same Property Portfolio NOI growth(2)
7.7
%
 
7.5
%
 
n/a

 
n/a

 
n/a

Stabilized Same Property Portfolio Cash NOI growth(2)
9.5
%
 
8.2
%
 
n/a

 
n/a

 
n/a

Capitalization:
 
 
 
 
 
 
 
 
 
Common stock price at quarter end
$
31.39

 
$
28.79

 
$
29.16

 
$
28.62

 
$
27.44

Common shares issued and outstanding
90,848,198

 
80,441,338

 
78,305,187

 
77,337,373

 
70,810,523

Total shares and units issued and outstanding at period end (3)
92,861,762

 
82,482,513

 
80,323,432

 
79,284,781

 
72,785,007

Weighted average shares outstanding - diluted
83,494,825

 
79,196,060

 
78,227,824

 
73,068,081

 
68,331,234

5.875% Series A and Series B Cumulative Redeemable Preferred Stock
$
165,000

 
$
165,000

 
$
165,000

 
$
90,000

 
$
90,000

Total equity market capitalization
$
3,079,931

 
$
2,539,672

 
$
2,507,231

 
$
2,359,130

 
$
2,087,221

Total consolidated debt
$
761,192

 
$
662,425

 
$
671,657

 
$
666,979

 
$
564,242

Total combined market capitalization (net debt plus equity)
$
3,678,419

 
$
3,186,472

 
$
3,172,268

 
$
3,013,191

 
$
2,638,345

Ratios:
 
 
 
 
 
 
 
 
 
Net debt to total combined market capitalization
16.3
%
 
20.3
%
 
21.0
%
 
21.7
%
 
20.9
%
Net debt to Adjusted EBITDA (quarterly results annualized)
4.1x

 
5.0x

 
5.4x

 
5.8x

 
5.4x

(1)
For definition/discussion of non-GAAP financial measures and reconciliations to their nearest GAAP equivalents, see the definitions section and reconciliation section beginning on page 25 and page 8 of this report, respectively.
(2)
Represents the year over year percentage change in NOI and Cash NOI for the Same Property Portfolio and Stabilized Same Property Portfolio. For comparability, NOI growth and Cash NOI growth for Q1’18 has been restated to remove the results of 6770 Central Avenue–Building B, which was sold during Q2’18. See page 22 for a list of dispositions completed during 2018.
(3)
Includes the following number of OP Units and vested LTIP units held by noncontrolling interests: 2,013,564 (Jun 30, 2018), 2,041,175 (Mar 31, 2018), 2,018,245 (Dec 31, 2017), 1,947,408 (Sep 30, 2017) and 1,974,484 (Jun 30, 2017). Excludes the following number of shares of unvested restricted stock: 213,867 (Jun 30, 2018), 226,451 (Mar 31, 2018), 190,695 (Dec 31, 2017), 257,867 (Sep 30, 2017) and 312,379 (Jun 30, 2017). Excludes unvested LTIP units and unvested performance units.

 
Second Quarter 2018
Supplemental Financial Reporting Package
Page 4

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Consolidated Balance Sheets.
 
 
 
 
(unaudited and in thousands)
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
Assets
 
 
 
 
 
 
 
 
 
Land
$
1,199,633

 
$
1,020,652

 
$
997,588

 
$
925,360

 
$
763,622

Buildings and improvements
1,229,100

 
1,098,695

 
1,079,746

 
1,051,037

 
923,760

Tenant improvements
53,531

 
50,998

 
49,692

 
47,663

 
43,717

Furniture, fixtures, and equipment
151

 
151

 
167

 
167

 
167

Construction in progress
44,631

 
45,688

 
34,772

 
33,158

 
25,792

  Total real estate held for investment
2,527,046

 
2,216,184

 
2,161,965

 
2,057,385

 
1,757,058

Accumulated depreciation
(200,006
)
 
(186,234
)
 
(173,541
)
 
(165,385
)
 
(153,163
)
Investments in real estate, net
2,327,040

 
2,029,950

 
1,988,424

 
1,892,000

 
1,603,895

Cash and cash equivalents
162,704

 
15,625

 
6,620

 
12,918

 
13,118

Restricted cash

 
4,211

 
250

 

 

Rents and other receivables, net
3,920

 
3,328

 
3,664

 
3,040

 
2,644

Deferred rent receivable
19,432

 
17,766

 
15,826

 
14,929

 
13,628

Deferred leasing costs, net
12,600

 
12,097

 
12,014

 
10,756

 
9,448

Deferred loan costs, net
1,621

 
1,775

 
1,930

 
2,084

 
2,239

Acquired lease intangible assets, net(1)
57,054

 
45,876

 
49,239

 
49,147

 
41,087

Indefinite-lived intangible
5,156

 
5,156

 
5,156

 
5,156

 
5,156

Interest rate swap asset
13,036

 
11,294

 
7,193

 
4,752

 
4,399

Other assets
8,216

 
5,961

 
6,146

 
7,144

 
7,388

Acquisition related deposits
1,600

 
4,525

 
2,475

 
1,075

 
2,250

Assets associated with real estate held for sale, net(2)

 
8,300

 
12,436

 

 

Total Assets
$
2,612,379


$
2,165,864

 
$
2,111,373

 
$
2,003,001

 
$
1,705,252

Liabilities
 
 
 
 
 
 

 
 
Notes payable
$
757,064

 
$
659,417

 
$
668,941

 
$
664,209

 
$
561,530

Interest rate swap liability

 

 
219

 
785

 
1,094

Accounts payable and accrued expenses
19,683

 
21,441

 
21,134

 
22,190

 
14,298

Dividends and distributions payable
14,952

 
13,294

 
11,727

 
11,580

 
10,642

Acquired lease intangible liabilities, net(3)
53,939

 
17,783

 
18,067

 
18,147

 
10,785

Tenant security deposits
20,534

 
19,936

 
19,521

 
19,149

 
16,721

Prepaid rents
6,374

 
5,540

 
6,267

 
5,738

 
5,204

Liabilities associated with real estate held for sale(2)

 
132

 
243

 

 

Total Liabilities
872,546

 
737,543

 
746,119

 
741,798

 
620,274

Equity
 
 
 
 
 
 

 
 
Series A preferred stock, net ($90,000 liquidation preference)
86,651

 
86,651

 
86,651

 
86,651

 
86,651

Series B preferred stock, net ($75,000 liquidation preference)
72,443

 
72,443

 
73,062

 

 

Common stock
908

 
804

 
782

 
773

 
708

Additional paid in capital
1,614,650

 
1,297,391

 
1,239,810

 
1,213,123

 
1,027,282

Cumulative distributions in excess of earnings
(76,926
)
 
(67,622
)
 
(67,058
)
 
(67,578
)
 
(56,992
)
Accumulated other comprehensive income
12,753

 
11,014

 
6,799

 
3,870

 
3,216

Total stockholders’ equity
1,710,479

 
1,400,681

 
1,340,046

 
1,236,839

 
1,060,865

Noncontrolling interests
29,354

 
27,640

 
25,208

 
24,364

 
24,113

Total Equity
1,739,833

 
1,428,321

 
1,365,254

 
1,261,203

 
1,084,978

Total Liabilities and Equity
$
2,612,379

 
$
2,165,864

 
$
2,111,373

 
$
2,003,001

 
$
1,705,252

(1)
Includes net above-market tenant lease intangibles of $4,692 (June 30, 2018), $4,899 (March 31, 2018), $5,223 (December 31, 2017), $5,512 (September 30, 2017) and $5,640 (June 30, 2017).
(2)
At March 31, 2018, the properties located at 1910 Archibald Avenue and 1920 Archibald Avenue were classified as held for sale. At December 31, 2017, the properties located at 700 Allen Avenue, 1851 & 1830 Flower Street and 8900-8980 Benson Avenue were classified as held for sale.
(3)
Includes net below-market tenant lease intangibles of $53,806 (June 30, 2018), $17,642 (March 31, 2018), $17,919 (December 31, 2017), $17,990 (September 30, 2017) and $10,102 (June 30, 2017).

 
Second Quarter 2018
Supplemental Financial Reporting Package
Page 5

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Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands, except share and per share data)
 
Three Months Ended
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
Revenues
 
 
 
 
 
 
 
 
 
Rental income
$
43,567

 
$
40,911

 
$
38,691


$
36,748

 
$
31,132

Tenant reimbursements
7,932

 
7,293

 
6,757


6,279

 
5,172

Other income
117

 
229

 
319


203

 
115

Total Rental Revenues
51,616

 
48,433

 
45,767


43,230

 
36,419

Management, leasing, and development services
140

 
103

 
113


109

 
145

Interest income

 

 



 
218

Total Revenues
51,756

 
48,536

 
45,880


43,339

 
36,782

Operating Expenses
 
 
 
 


 
 
 
Property expenses
12,775

 
11,960

 
12,152


11,229

 
9,536

General and administrative
6,506

 
6,162

 
5,558


5,843

 
5,123

Depreciation and amortization
19,775

 
19,452

 
18,767


17,971

 
14,515

Total Operating Expenses
39,056

 
37,574

 
36,477


35,043

 
29,174

Other Expenses
 
 
 
 


 
 
 
Acquisition expenses
37

 
9

 
33


16

 
20

Interest expense
6,452

 
5,852

 
5,638


6,271

 
4,302

Total Other Expenses
6,489

 
5,861

 
5,671


6,287

 
4,322

Total Expenses
45,545

 
43,435

 
42,148


41,330

 
33,496

Gain on extinguishment of debt

 

 
47



 

Gains on sale of real estate
1,608

 
9,983

 
10,336



 
16,569

Net Income
7,819

 
15,084

 
14,115


2,009

 
19,855

Less: net income attributable to noncontrolling interest
(129
)
 
(318
)
 
(304
)

(21
)
 
(531
)
Net income attributable to Rexford Industrial Realty, Inc.
7,690

 
14,766

 
13,811


1,988

 
19,324

Less: preferred stock dividends
(2,424
)
 
(2,423
)
 
(1,909
)

(1,322
)
 
(1,322
)
Less: earnings allocated to participating securities
(94
)
 
(97
)
 
(83
)

(80
)
 
(156
)
Net income attributable to common stockholders
$
5,172

 
$
12,246

 
$
11,819


$
586

 
$
17,846

 
 
 
 
 



 

Earnings per Common Share
 
 
 
 



 

Net income attributable to common stockholders per share - basic
$
0.06

 
$
0.16

 
$
0.15


$
0.01

 
$
0.26

Net income attributable to common stockholders per share - diluted
$
0.06

 
$
0.15

 
$
0.15


$
0.01

 
$
0.26

 
 
 
 
 


 
 
 
Weighted average shares outstanding - basic
82,924,208
 
78,694,161
 
77,771,084
 
72,621,219
 
67,920,773
Weighted average shares outstanding - diluted
83,494,825
 
79,196,060
 
78,227,824
 
73,068,081
 
68,331,234


 
Second Quarter 2018
Supplemental Financial Reporting Package
Page 6

 394447935_logo3a06.jpg
 


Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Rental Revenues
 
 
 
 
 
 
 
Rental income
$
43,567

 
$
31,132

 
$
84,478

 
$
60,746

Tenant reimbursements
7,932

 
5,172

 
15,225

 
10,327

Other income
117

 
115

 
346

 
347

Total Rental Revenues
51,616

 
36,419

 
100,049

 
71,420

Management, leasing, and development services
140

 
145

 
243

 
271

Interest income

 
218

 

 
445

Total Revenues
51,756

 
36,782

 
100,292

 
72,136

Operating Expenses
 
 
 
 
 
 
 
Property expenses
12,775

 
9,536

 
24,735

 
18,758

General and administrative
6,506

 
5,123

 
12,668

 
10,209

Depreciation and amortization
19,775

 
14,515

 
39,227

 
28,114

Total Operating Expenses
39,056

 
29,174

 
76,630