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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):
October 30, 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 October 30, 2018, Rexford Industrial Realty, Inc. (“Rexford Industrial”) issued a press release announcing its earnings for the quarter ended September 30, 2018, and distributed certain supplemental financial information. On October 30, 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 September 30, 2018 and distributed certain supplemental information. On October 30, 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 October 30, 2018
 
 
 
99.2
 
Third 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.
October 30, 2018
 
/s/ Michael S. Frankel
 
Michael S. Frankel
Co-Chief Executive Officer
(Principal Executive Officer)
 
 
 
Rexford Industrial Realty, Inc.
October 30, 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

 395553000_rexrlogoa44.jpg
REXFORD INDUSTRIAL ANNOUNCES THIRD QUARTER 2018 FINANCIAL RESULTS

- Net Income of $0.07 per Diluted Share for Third Quarter 2018 -
- Third Quarter 2018 Core FFO of $26.1 million, Up 44.3% Compared to Third Quarter 2017 -
- Third Quarter 2018 Core FFO of $0.28 per Diluted Share, Up 12.0% Compared to Third Quarter 2017 -
- Same Property Portfolio NOI Up 12.6% Compared to Third Quarter 2017 -
- Consolidated Portfolio NOI Up 28.7% Compared to Third Quarter 2017 -
- Stabilized Same Property Portfolio Occupancy of 98.4% -
- 32.2% GAAP and 21.1% Cash Releasing Spreads -


Los Angeles, California - October 30, 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 third quarter of 2018.

Third Quarter 2018 Financial and Operational Highlights:
Net income attributable to common stockholders of $0.07 per diluted share for the quarter ended September 30, 2018, compared to $0.01 per diluted share last year.
Company share of Core FFO increased 44.3% year-over-year to $26.1 million for the quarter ended September 30, 2018.
Company share of Core FFO per diluted share increased 12.0% year-over-year to $0.28 per diluted share for the quarter ended September 30, 2018.
Total third quarter rental revenues of $54.5 million, which represents an increase of 26.0% year-over-year.
Consolidated Portfolio Net Operating Income (NOI) of $41.2 million, which represents an increase of 28.7% year-over-year.
Same Property Portfolio NOI increased 12.6% in the third quarter of 2018 compared to the third quarter of 2017, driven by a 10.3% increase in Same Property Portfolio total rental revenue and a 3.6% increase in Same Property Portfolio operating expenses. Same Property Portfolio Cash NOI increased 14.8% compared to the third quarter of 2017.
Stabilized Same Property Portfolio NOI increased 8.7% in the third quarter of 2018 compared to the third quarter of 2017.
Stabilized Same Property Portfolio Cash NOI increased 11.6% compared to the third quarter of 2017.
Signed new and renewal leases totaling 943,687 rentable square feet. Rental rates on new and renewal leases were 32.2% higher than prior rents on a GAAP basis and 21.1% higher on a cash basis.
Stabilized Same Property Portfolio occupancy was 98.4%, which represents an increase of 170 basis points year-over-year. Same Property Portfolio occupancy, inclusive of assets in value-add repositioning, was 96.8%, which represents an increase of 370 basis points year-over-year.
At September 30, 2018, the consolidated portfolio, including repositioning assets, was 96.0% leased and 95.1% occupied, which represents an increase in occupancy of 220 basis points year-over-year. At September 30, 2018, the consolidated portfolio, excluding repositioning assets aggregating approximately 0.5 million rentable square feet, was 98.0% leased and 97.6% occupied.
During the third quarter of 2018, the Company acquired three industrial properties for a total purchase price of $33.6 million.





“We are very pleased with the continued strong performance of our portfolio, having grown our Core FFO by 44.3% this quarter, and by 12.0% on a per share basis, making the third quarter 2018 our fifth consecutive quarter of double-digit growth in Core FFO per share. Our growth was driven by a 12.6% increase in Same Property NOI and $504 million of investments made over the prior twelve months, among other factors. Further, we continue to capture attractive leasing spreads on both a GAAP and cash basis, which were 32.2% and 21.1%, respectively,” stated Michael Frankel and Howard Schwimmer, Co-Chief Executive Officers of the Company. “Additionally, we completed the quarter with a low leverage balance sheet as measured by a 3.8 times debt-to-EBITDA ratio, positioning the Company to capitalize on opportunities as they may arise. Our target infill Southern California industrial markets continue to operate with historic levels of high tenant demand and low market vacancy, a supply-demand imbalance that we see continuing into the foreseeable future given the difficulty to introduce net new supply within our target markets. Finally, we continue to originate a favorable volume of accretive investment opportunities leveraging our extensive research and market relationships in the nation's largest and highest-demand industrial market.”

Financial Results:

The Company reported net income attributable to common stockholders of $6.3 million, or $0.07 per diluted share, for the three months ended September 30, 2018, as compared to net income attributable to common stockholders of $0.6 million, or $0.01 per diluted share, for the three months ended September 30, 2017.

The Company reported net income attributable to common stockholders of $23.7 million, or $0.28 per diluted share, for the nine months ended September 30, 2018, as compared to net income attributable to common stockholders of $22.6 million, or $0.33 per diluted share, for the nine months ended September 30, 2017. Net income for the nine months ended September 30, 2018, includes $11.6 million of gains on sale of real estate, as compared to $19.2 million for the nine months ended September 30, 2017.

The Company reported Company share of Core FFO of $26.1 million, or $0.28 per diluted share of common stock, for the three months ended September 30, 2018, as compared to Company share of Core FFO of $18.0 million, or $0.25 per diluted share of common stock, for the three months ended September 30, 2017. Adjusting for non-core expenses ($0.1 million reported during the third quarter of 2018 and $16,000 reported during the third quarter of 2017), Company share of FFO was $25.9 million, or $0.28 per diluted share of common stock, for the three months ended September 30, 2018, as compared to Company share of FFO of $18.0 million, or $0.25 per diluted share of common stock, for the three months ended September 30, 2017.

The Company reported Company share of Core FFO of $70.4 million, or $0.83 per diluted share of common stock, for the nine months ended September 30, 2018, as compared to Company share of Core FFO of $49.0 million, or $0.71 per diluted share of common stock, for the nine months ended September 30, 2017. Adjusting for non-core expenses ($0.2 million reported during the nine months of 2018 and $0.4 million reported during the nine months of 2017), Company share of FFO was $70.2 million, or $0.83 per diluted share of common stock, for the nine months ended September 30, 2018, as compared to Company share of FFO of $48.6 million, or $0.70 per diluted share of common stock, for the nine months ended September 30, 2017.

For the three months ended September 30, 2018, the Company’s Same Property Portfolio NOI increased 12.6% compared to the third quarter of 2017, driven by a 10.3% increase in Same Property Portfolio total rental revenue and a 3.6% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 14.8% compared to the third quarter of 2017. Stabilized Same Property Portfolio NOI increased 8.7% in the third quarter of 2018 compared to the third quarter of 2017 and Stabilized Same Property Portfolio Cash NOI increased 11.6% in the third quarter of 2018 compared to the third quarter of 2017.

Operating Results:

During the third quarter of 2018, the Company signed 106 new and renewal leases totaling 943,687 rentable square feet. Average rental rates on comparable new and renewal leases were up 32.2% on a GAAP basis and up 21.1% on a cash basis. The Company signed 48 new leases for 583,257 rentable square feet, with GAAP rents up 46.9% compared to the prior in-place leases. The Company signed 58 renewal leases for 360,430 rentable square feet, with GAAP rents up 25.2% compared to the prior in-place leases. For the 48 new leases, cash rents increased 34.1%, and for the 58 renewal leases, cash rents were up 14.8%, 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 September 30, 2018. See below for information regarding the supplemental information package. 

Transaction Activity:

In the third quarter 2018, the Company completed three acquisitions, for an aggregate purchase price of $33.6 million, as detailed below.

In July 2018, the Company acquired 10747 Norwalk Boulevard, a 100% leased single-tenant industrial building containing 52,691 square feet on 2.56 acres of land, located in the Mid-Counties submarket, for $10.8 million or approximately $206 per square foot.

In July 2018, the Company acquired 29003 Avenue Sherman, a vacant single-tenant industrial building containing 68,123 square feet on 2.78 acres of land, located in the Greater San-Fernando Valley submarket, for $9.5 million or approximately $139 per square foot.

In August 2018, the Company acquired 16121 Carmenita Road, an 89% leased single-tenant industrial building containing 108,500 square feet on 4.67 acres of land, located in the Mid-Counties submarket, for $13.3 million or approximately $123 per square foot.


Balance Sheet:
  
During the quarter ended September 30, 2018, the Company issued 1,491,289 shares of common stock under its at-the-market equity offering program (ATM program). The shares were issued at a weighted average price of $31.79 per share, providing gross proceeds of approximately $47.4 million and net proceeds of approximately $46.7 million. As of September 30, 2018, the current ATM program had approximately $194.1 million of remaining capacity.

As of September 30, 2018, the Company had $761.2 million of outstanding debt, with an average interest rate of 3.41% and an average term-to-maturity of 5.8 years. As of September 30, 2018, $611.0 million, or 80%, of the Company’s outstanding debt was fixed-rate with an average interest rate of 3.33% and an average term-to-maturity of 5.6 years. The remaining $150.2 million, or 20%, of the Company’s outstanding debt was floating-rate, with an average interest rate of LIBOR + 1.50% and an average term-to-maturity of 6.6 years.

Guidance

The Company is reiterating and increasing its full year 2018 guidance as follows:
Net income attributable to common stockholders within a range of $0.32 to $0.34 per diluted share
Company share of Core FFO within a range of $1.08 to $1.10 per diluted share
Year-end Same Property Portfolio occupancy within a range of 96.0% to 97.0%
Year-end Stabilized Same Property Portfolio occupancy within a range of 97.0% to 98.0%
Same Property Portfolio NOI growth for the year of 9.5% to 10.5%
Stabilized Same Property Portfolio NOI growth for the year of 7.0% to 8.0%
General and administrative expenses of $24.8 million to $25.0 million

The Core FFO guidance refers only to the Company’s in-place portfolio as of October 30, 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 October 30, 2018, reflects the acquisition of one property containing 73,747 rentable square feet that occurred subsequent to September 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 October 29, 2018, the Company’s Board of Directors declared a dividend in the amount of $0.16 per share for the fourth quarter of 2018, payable in cash on January 15, 2019, to common stockholders and common unit holders of record as of December 31, 2018.
 
On October 29, 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 December 31, 2018, to preferred stockholders of record as of December 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, October 31, 2018, at 1:00 p.m. Eastern Time to review third 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 November 28, 2018, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13684004.


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 168 properties with approximately 20.6 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
$
0.32

 
$
0.34

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
$
1.08

 
$
1.10



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 September 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 September 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 table 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 nine months ended September 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 September 30, 2018, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is 227,521 rentable square feet of space at four of our properties that were classified as repositioning or lease-up. As of September 30, 2017, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is space aggregating 527,961 rentable square feet at six 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
[email protected]




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

 
 
September 30, 2018
 
December 31, 2017
 
(unaudited)
 
 
ASSETS
 
 
 
Land
$
1,218,386

 
$
997,588

Buildings and improvements
1,253,935

 
1,079,746

Tenant improvements
54,808

 
49,692

Furniture, fixtures, and equipment
151

 
167

Construction in progress
50,367

 
34,772

Total real estate held for investment
2,577,647

 
2,161,965

Accumulated depreciation
(214,680
)
 
(173,541
)
Investments in real estate, net
2,362,967

 
1,988,424

Cash and cash equivalents
183,904

 
6,620

Restricted cash

 
250

Rents and other receivables, net
5,042

 
3,664

Deferred rent receivable, net
20,770

 
15,826

Deferred leasing costs, net
13,446

 
12,014

Deferred loan costs, net
1,467

 
1,930

Acquired lease intangible assets, net
53,402

 
49,239

Acquired indefinite-lived intangible
5,156

 
5,156

Interest rate swap asset
13,851

 
7,193

Other assets
7,508

 
6,146

Acquisition related deposits
1,325

 
2,475

Assets associated with real estate held for sale, net

 
12,436

Total Assets
$
2,668,838

 
$
2,111,373

LIABILITIES & EQUITY
 
 
 
Liabilities
 
 
 
Notes payable
$
757,218

 
$
668,941

Interest rate swap liability

 
219

Accounts payable, accrued expenses and other liabilities
30,411

 
21,134

Dividends payable
15,214

 
11,727

Acquired lease intangible liabilities, net
52,289

 
18,067

Tenant security deposits
21,888

 
19,521

Prepaid rents
6,424

 
6,267

Liabilities associated with real estate held for sale

 
243

Total Liabilities
883,444

 
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 September 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 September 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 92,706,880 and 78,495,882 shares outstanding as of September 30, 2018 and December 31, 2017, respectively
924

 
782

Additional paid in capital
1,666,339

 
1,239,810

Cumulative distributions in excess of earnings
(85,358
)
 
(67,058
)
Accumulated other comprehensive income
13,558

 
6,799

Total stockholders’ equity
1,754,557

 
1,340,046

Noncontrolling interests
30,837

 
25,208

Total Equity
1,785,394

 
1,365,254

Total Liabilities and Equity
$
2,668,838

 
$
2,111,373





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


 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
RENTAL REVENUES
 
 
 
 
 
 
 
Rental income
$
45,661

 
$
36,748

 
$
130,139

 
$
97,494

Tenant reimbursements
8,508

 
6,279

 
23,733

 
16,606

Other income
300

 
203

 
646

 
550

TOTAL RENTAL REVENUES
54,469

 
43,230

 
154,518

 
114,650

Management, leasing and development services
116

 
109

 
359

 
380

Interest income
609

 

 
609

 
445

TOTAL REVENUES
55,194

 
43,339

 
155,486

 
115,475

OPERATING EXPENSES
 
 
 
 
 
 
 
Property expenses
13,294

 
11,229

 
38,029

 
29,987

General and administrative
6,229

 
5,843

 
18,897

 
16,052

Depreciation and amortization
20,144

 
17,971

 
59,371

 
46,085

TOTAL OPERATING EXPENSES
39,667

 
35,043

 
116,297

 
92,124

OTHER EXPENSES
 
 
 
 
 
 
 
Acquisition expenses
106

 
16

 
152

 
421

Interest expense
6,456

 
6,271

 
18,760

 
14,571

TOTAL OTHER EXPENSES
6,562

 
6,287

 
18,912

 
14,992

TOTAL EXPENSES
46,229

 
41,330

 
135,209

 
107,116

Equity in income from unconsolidated real estate entities

 

 

 
11

Loss on extinguishment of debt

 

 

 
(22
)
Gains on sale of real estate

 

 
11,591

 
19,237

NET INCOME
8,965

 
2,009

 
31,868

 
27,585

Less: net income attributable to noncontrolling interest
(141
)
 
(21
)
 
(588
)
 
(684
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
8,824

 
1,988

 
31,280

 
26,901

Less: preferred stock dividends
(2,423
)
 
(1,322
)
 
(7,270
)
 
(3,966
)
Less: earnings attributable to participating securities
(94
)
 
(80
)
 
(285
)
 
(327
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
6,307

 
$
586

 
$
23,725

 
$
22,608

Net income attributable to common stockholders per share  basic
$
0.07

 
$
0.01

 
$
0.28

 
$
0.33

Net income attributable to common stockholders per share  diluted
$
0.07

 
$
0.01

 
$
0.28

 
$
0.33

Weighted-average shares of common stock outstanding – basic
91,464

 
72,621

 
84,407

 
68,984

Weighted-average shares of common stock outstanding – diluted
91,945

 
73,068

 
84,925

 
69,365







Rexford Industrial Realty, Inc.
Same Property Portfolio Occupancy and NOI and Cash NOI
(Unaudited, dollars in thousands)
 
 
Same Property Portfolio Occupancy:
 
 
 
 
 
 
 
September 30, 2018
 
September 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
98.1%
 
99.0%
 
94.8%
 
98.5%
 
330 bps
 
50 bps
Orange County
94.5%
 
97.0%
 
90.9%
 
96.1%
 
360 bps
 
90 bps
San Bernardino County
99.8%
 
99.8%
 
99.6%
 
99.6%
 
20 bps
 
20 bps
San Diego County
97.6%
 
97.6%
 
91.6%
 
91.6%
 
600 bps
 
600 bps
Ventura County
90.8%
 
97.5%
 
83.8%
 
92.8%
 
700 bps
 
470 bps
Total/Weighted Average
96.8%
 
98.4%
 
93.1%
 
96.7%
 
370 bps
 
170 bps

(1)
Reflects the occupancy of our Same Property Portfolio as of September 30, 2018, adjusted for total space of 227,521 rentable square feet at four properties that were in various stages of repositioning or lease-up as of September 30, 2018.
(2)
Reflects the occupancy of our Same Property Portfolio as of September 30, 2017, adjusted for space aggregating 527,961 rentable square feet at six properties that were in various stages of repositioning or lease-up as of September 30, 2017.

Same Property Portfolio NOI and Cash NOI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
$ Change
 
% Change
 
2018
 
2017
 
$ Change
 
% Change
Rental income
$
32,158

 
$
29,465

 
$
2,693

 
9.1%
 
$
95,036

 
$
87,039

 
$
7,997

 
9.2%
Tenant reimbursements
5,577

 
4,821

 
756

 
15.7%
 
15,980

 
14,708

 
1,272

 
8.6%
Other income
241

 
146

 
95

 
65.1%
 
568

 
468

 
100

 
21.4%
Total rental revenues
37,976

 
34,432

 
3,544

 
10.3%
 
111,584

 
102,215

 
9,369

 
9.2%
Property expenses
9,170

 
8,851

 
319

 
3.6%
 
27,282

 
26,161

 
1,121

 
4.3%
Same Property Portfolio NOI
$
28,806

 
$
25,581

 
$
3,225

 
12.6%
 
$
84,302

 
$
76,054

 
$
8,248

 
10.8%
Straight line rental revenue adjustment
(494
)
 
(936
)
 
442

 
(47.2)%
 
(2,815
)
 
(2,644
)
 
(171
)
 
6.5%
Amortization of above/below market lease intangibles
(173
)
 
(125
)
 
(48
)
 
38.4%
 
(390
)
 
(392
)
 
2

 
(0.5)%
Same Property Portfolio Cash NOI
$
28,139

 
$
24,520

 
$
3,619

 
14.8%
 
$
81,097

 
$
73,018

 
$
8,079

 
11.1%






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 September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
8,965

 
$
2,009

 
$
31,868

 
$
27,585

Add:
 
 
 
 
 
 
 
General and administrative
6,229

 
5,843

 
18,897

 
16,052

Depreciation and amortization
20,144

 
17,971

 
59,371

 
46,085

Acquisition expenses
106

 
16

 
152

 
421

Interest expense
6,456

 
6,271

 
18,760

 
14,571

Loss on extinguishment of debt

 

 

 
22

Deduct:
 
 
 
 
 
 
 
Management, leasing and development services
116

 
109

 
359

 
380

Interest income
609

 

 
609

 
445

Equity in income from unconsolidated real estate entities

 

 

 
11

Gains on sale of real estate

 

 
11,591

 
19,237

Net operating income (NOI)
$
41,175

 
$
32,001

 
$
116,489

 
$
84,663

Non-Same Property Portfolio operating revenues
(16,493
)
 
(8,798
)
 
(42,934
)
 
(12,435
)
Non-Same Property Portfolio property expenses
4,124

 
2,378

 
10,747

 
3,826

Same Property Portfolio NOI
$
28,806

 
$
25,581

 
$
84,302

 
$
76,054

Straight line rental revenue adjustment
(494
)
 
(936
)
 
(2,815
)
 
(2,644
)
Amortization of above/below market lease intangibles
(173
)
 
(125
)
 
(390
)
 
(392
)
Same Property Portfolio Cash NOI
$
28,139

 
$
24,520

 
$
81,097

 
$
73,018






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 September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
8,965

 
$
2,009

 
$
31,868

 
$
27,585

Add:
 
 
 
 
 

 
 

Depreciation and amortization
20,144

 
17,971

 
59,371

 
46,085

Deduct:
 
 
 
 
 
 
 
Gains on sale of real estate

 

 
11,591

 
19,237

Gain on acquisition of unconsolidated joint venture property

 

 

 
11

Funds From Operations (FFO)
$
29,109

 
$
19,980

 
$
79,648

 
$
54,422

Less: preferred stock dividends
(2,423
)
 
(1,322
)
 
(7,270
)
 
(3,966
)
Less: FFO attributable to noncontrolling interest(1)
(574
)
 
(491
)
 
(1,693
)
 
(1,408
)
Less: FFO attributable to participating securities(2)
(165
)
 
(133
)
 
(476
)
 
(408
)
Company share of FFO
$
25,947

 
$
18,034

 
$
70,209

 
$
48,640

 
 
 
 
 
 
 
 
FFO per common share - basic
$
0.28

 
$
0.25

 
$
0.83

 
$
0.71

FFO per common share - diluted
$
0.28

 
$
0.25

 
$
0.83

 
$
0.70

 
 
 
 
 
 
 
 
FFO
$
29,109

 
$
19,980

 
$
79,648

 
$
54,422

Adjust:
 
 
 
 
 
 
 
Acquisition expenses
106

 
16

 
152

 
421

Core FFO
$
29,215

 
$
19,996

 
$
79,800

 
$
54,843

Less: preferred stock dividends
(2,423
)
 
(1,322
)
 
(7,270
)
 
(3,966
)
Less: Core FFO attributable to noncontrolling interest(1)
(576
)
 
(492
)
 
(1,696
)
 
(1,420
)
Less: Core FFO attributable to participating securities(2)
(166
)
 
(133
)
 
(478
)
 
(411
)
Company share of Core FFO
$
26,050

 
$
18,049

 
$
70,356

 
$
49,046

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

 
$
0.25

 
$
0.83

 
$
0.71

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

 
$
0.25

 
$
0.83

 
$
0.71

 
 
 
 
 
 
 
 
Weighted-average shares of common stock outstanding – basic
91,464

 
72,621

 
84,407

 
68,984

Weighted-average shares of common stock outstanding – diluted
91,945

 
73,068

 
84,925

 
69,365


(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

395553000_q318suppcover.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.

 
Third Quarter 2018
Supplemental Financial Reporting Package
Page 2

 395553000_logo3a07.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
 
Chris Testa
 
(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.

 
Third Quarter 2018
Supplemental Financial Reporting Package
Page 3

 395553000_logo3a07.jpg
 


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

 
Three Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Financial Results:
 
 
 
 
 
 
 
 
 
Total rental revenues
$
54,469

 
$
51,616

 
$
48,433

 
$
45,767

 
$
43,230

Net income
$
8,965

 
$
7,819

 
$
15,084

 
$
14,115

 
$
2,009

Net Operating Income (NOI)
$
41,175

 
$
38,841

 
$
36,473

 
$
33,615

 
$
32,001

Company share of Core FFO
$
26,050

 
$
22,882

 
$
21,424

 
$
20,025

 
$
18,049

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

 
$
0.27

 
$
0.27

 
$
0.26

 
$
0.25

Adjusted EBITDA
$
38,003

 
$
36,784

 
$
32,306

 
$
30,675

 
$
28,265

Dividend declared per common share
$
0.160

 
$
0.160

 
$
0.160

 
$
0.145

 
$
0.145

Portfolio Statistics:
 
 
 
 
 
 
 
 
 
Portfolio SF - consolidated
20,505,157

 
20,213,729

 
18,741,304

 
18,476,809

 
18,044,612

Ending occupancy - consolidated portfolio
95.1
%
 
95.2
%
 
95.2
%
 
95.5
%
 
92.9
%
Stabilized occupancy - consolidated portfolio
97.6
%
 
98.1
%
 
97.7
%
 
98.2
%
 
97.2
%
Leasing spreads - GAAP
32.2
%
 
35.5
%
 
25.3
%
 
27.7
%
 
26.3
%
Leasing spreads - cash
21.1
%
 
23.9
%
 
14.9
%
 
18.9
%
 
16.7
%
Same Property Performance:
 
 
 
 
 
 
 
 
 
Same Property Portfolio SF
14,154,629

 
14,088,668

 
14,088,668

 
14,088,668

 
14,088,668

Same Property Portfolio ending occupancy
96.8
%
 
96.0
%
 
94.9
%
 
95.2
%
 
93.1
%
Same Property Portfolio NOI growth(2)
12.6
%
 
10.5
%
 
9.4
%
 
n/a

 
n/a

Same Property Portfolio Cash NOI growth(2)
14.8
%
 
9.9
%
 
8.5
%
 
n/a

 
n/a

Stabilized Same Property Portfolio ending occupancy
98.4
%
 
98.4
%
 
97.6
%
 
97.9
%
 
96.7
%
Stabilized Same Property Portfolio NOI growth(2)
8.7
%
 
7.7
%
 
7.5
%
 
n/a

 
n/a

Stabilized Same Property Portfolio Cash NOI growth(2)
11.6
%
 
9.5
%
 
8.2
%
 
n/a

 
n/a

Capitalization:
 
 
 
 
 
 
 
 
 
Common stock price at quarter end
$
31.96

 
$
31.39

 
$
28.79

 
$
29.16

 
$
28.62

Common shares issued and outstanding
92,497,666

 
90,848,198

 
80,441,338

 
78,305,187

 
77,337,373

Total shares and units issued and outstanding at period end (3)
94,500,770

 
92,861,762

 
82,482,513

 
80,323,432

 
79,284,781

Weighted average shares outstanding - diluted
91,945,206

 
83,494,825

 
79,196,060

 
78,227,824

 
73,068,081

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

 
$
165,000

 
$
165,000

 
$
165,000

 
$
90,000

Total equity market capitalization
$
3,185,245

 
$
3,079,931

 
$
2,539,672

 
$
2,507,231

 
$
2,359,130

Total consolidated debt
$
761,154

 
$
761,192

 
$
662,425

 
$
671,657

 
$
666,979

Total combined market capitalization (net debt plus equity)
$
3,762,495

 
$
3,678,419

 
$
3,186,472

 
$
3,172,268

 
$
3,013,191

Ratios:
 
 
 
 
 
 
 
 
 
Net debt to total combined market capitalization
15.3
%
 
16.3
%
 
20.3
%
 
21.0
%
 
21.7
%
Net debt to Adjusted EBITDA (quarterly results annualized)
3.8x

 
4.1x

 
5.0x

 
5.4x

 
5.8x

(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: 2,003,104 (Sep 30, 2018), 2,013,564 (Jun 30, 2018), 2,041,175 (Mar 31, 2018), 2,018,245 (Dec 31, 2017) and 1,947,408 (Sep 30, 2017). Excludes the following number of shares of unvested restricted stock: 209,214 (Sep 30, 2018), 213,867 (Jun 30, 2018), 226,451 (Mar 31, 2018), 190,695 (Dec 31, 2017) and 257,867 (Sep 30, 2017). Excludes unvested LTIP units and unvested performance units.

 
Third Quarter 2018
Supplemental Financial Reporting Package
Page 4

 395553000_logo3a07.jpg
 


Consolidated Balance Sheets.
 
 
 
 
(unaudited and in thousands)
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
ASSETS
 
 
 
 
 
 
 
 
 
Land
$
1,218,386

 
$
1,199,633

 
$
1,020,652

 
$
997,588

 
$
925,360

Buildings and improvements
1,253,935

 
1,229,100

 
1,098,695

 
1,079,746

 
1,051,037

Tenant improvements
54,808

 
53,531

 
50,998

 
49,692

 
47,663

Furniture, fixtures, and equipment
151

 
151

 
151

 
167

 
167

Construction in progress
50,367

 
44,631

 
45,688

 
34,772

 
33,158

  Total real estate held for investment
2,577,647

 
2,527,046

 
2,216,184

 
2,161,965

 
2,057,385

Accumulated depreciation
(214,680
)
 
(200,006
)
 
(186,234
)
 
(173,541
)
 
(165,385
)
Investments in real estate, net
2,362,967

 
2,327,040

 
2,029,950

 
1,988,424

 
1,892,000

Cash and cash equivalents
183,904

 
162,704

 
15,625

 
6,620

 
12,918

Restricted cash

 

 
4,211

 
250

 

Rents and other receivables, net
5,042

 
3,920

 
3,328

 
3,664

 
3,040

Deferred rent receivable, net
20,770

 
19,432

 
17,766

 
15,826

 
14,929

Deferred leasing costs, net
13,446

 
12,600

 
12,097

 
12,014

 
10,756

Deferred loan costs, net
1,467

 
1,621

 
1,775

 
1,930

 
2,084

Acquired lease intangible assets, net(1)
53,402

 
57,054

 
45,876

 
49,239

 
49,147

Acquired indefinite-lived intangible
5,156

 
5,156

 
5,156

 
5,156

 
5,156

Interest rate swap asset
13,851

 
13,036

 
11,294

 
7,193

 
4,752

Other assets
7,508

 
8,216

 
5,961

 
6,146

 
7,144

Acquisition related deposits
1,325

 
1,600

 
4,525

 
2,475

 
1,075

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

 

 
8,300

 
12,436

 

Total Assets
$
2,668,838


$
2,612,379

 
$
2,165,864

 
$
2,111,373

 
$
2,003,001

LIABILITIES & EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 

 
 
Notes payable
$
757,218

 
$
757,064

 
$
659,417

 
$
668,941

 
$
664,209

Interest rate swap liability

 

 

 
219

 
785

Accounts payable, accrued expenses and other liabilities
30,411

 
19,683

 
21,441

 
21,134

 
22,190

Dividends payable
15,214

 
14,952

 
13,294

 
11,727

 
11,580

Acquired lease intangible liabilities, net(3)
52,289

 
53,939

 
17,783

 
18,067

 
18,147

Tenant security deposits
21,888

 
20,534

 
19,936

 
19,521

 
19,149

Prepaid rents
6,424

 
6,374

 
5,540

 
6,267

 
5,738

Liabilities associated with real estate held for sale(2)

 

 
132

 
243

 

Total Liabilities
883,444

 
872,546

 
737,543

 
746,119

 
741,798

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

 
72,443

 
73,062

 

Common stock
924

 
908

 
804

 
782

 
773

Additional paid in capital
1,666,339

 
1,614,650

 
1,297,391

 
1,239,810

 
1,213,123

Cumulative distributions in excess of earnings
(85,358
)
 
(76,926
)
 
(67,622
)
 
(67,058
)
 
(67,578
)
Accumulated other comprehensive income
13,558

 
12,753

 
11,014

 
6,799

 
3,870

Total stockholders’ equity
1,754,557

 
1,710,479

 
1,400,681

 
1,340,046

 
1,236,839

Noncontrolling interests
30,837

 
29,354

 
27,640

 
25,208

 
24,364

Total Equity
1,785,394

 
1,739,833

 
1,428,321

 
1,365,254

 
1,261,203

Total Liabilities and Equity
$
2,668,838

 
$
2,612,379

 
$
2,165,864

 
$
2,111,373

 
$
2,003,001

(1)
Includes net above-market tenant lease intangibles of $4,453 (September 30, 2018), $4,692 (June 30, 2018), $4,899 (March 31, 2018), $5,223 (December 31, 2017) and $5,512 (September 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 $52,164 (September 30, 2018), $53,806 (June 30, 2018), $17,642 (March 31, 2018), $17,919 (December 31, 2017) and $17,990 (September 30, 2017).

 
Third Quarter 2018
Supplemental Financial Reporting Package
Page 5

 395553000_logo3a07.jpg
 


Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands, except share and per share data)
 
Three Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Revenues
 
 
 
 
 
 
 
 
 
Rental income
$
45,661

 
$
43,567

 
$
40,911


$
38,691

 
$
36,748

Tenant reimbursements
8,508

 
7,932

 
7,293


6,757

 
6,279

Other income
300

 
117

 
229


319

 
203

Total Rental Revenues
54,469

 
51,616

 
48,433


45,767

 
43,230

Management, leasing, and development services
116

 
140

 
103


113

 
109

Interest income
609

 

 



 

Total Revenues
55,194

 
51,756

 
48,536


45,880

 
43,339

Operating Expenses
 
 
 
 


 
 
 
Property expenses
13,294

 
12,775

 
11,960


12,152

 
11,229

General and administrative
6,229

 
6,506

 
6,162


5,558

 
5,843

Depreciation and amortization
20,144

 
19,775

 
19,452


18,767

 
17,971

Total Operating Expenses
39,667

 
39,056

 
37,574


36,477

 
35,043

Other Expenses
 
 
 
 


 
 
 
Acquisition expenses
106

 
37

 
9


33

 
16

Interest expense
6,456

 
6,452

 
5,852


5,638

 
6,271

Total Other Expenses
6,562

 
6,489

 
5,861


5,671

 
6,287

Total Expenses
46,229

 
45,545

 
43,435


42,148

 
41,330

Gain on extinguishment of debt

 

 


47

 

Gains on sale of real estate

 
1,608

 
9,983


10,336

 

Net Income
8,965

 
7,819

 
15,084


14,115

 
2,009

Less: net income attributable to noncontrolling interest
(141
)
 
(129
)
 
(318
)

(304
)
 
(21
)
Net income attributable to Rexford Industrial Realty, Inc.
8,824

 
7,690

 
14,766


13,811

 
1,988

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

(1,909
)
 
(1,322
)
Less: earnings allocated to participating securities
(94
)
 
(94
)
 
(97
)

(83
)
 
(80
)
Net income attributable to common stockholders
$
6,307

 
$
5,172

 
$
12,246


$
11,819

 
$
586

 
 
 
 
 



 

Earnings per Common Share
 
 
 
 



 

Net income attributable to common stockholders per share - basic
$
0.07

 
$
0.06

 
$
0.16


$
0.15

 
$
0.01

Net income attributable to common stockholders per share - diluted
$
0.07

 
$
0.06

 
$
0.15


$
0.15

 
$
0.01

 
 
 
 
 


 
 
 
Weighted average shares outstanding - basic
91,463,594
 
82,924,208
 
78,694,161
 
77,771,084
 
72,621,219
Weighted average shares outstanding - diluted
91,945,206
 
83,494,825
 
79,196,060
 
78,227,824
 
73,068,081


 
Third Quarter 2018
Supplemental Financial Reporting Package
Page 6

 395553000_logo3a07.jpg
 


Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Rental Revenues
 
 
 
 
 
 
 
Rental income
$
45,661

 
$
36,748

 
$
130,139

 
$
97,494

Tenant reimbursements
8,508

 
6,279

 
23,733

 
16,606

Other income
300

 
203

 
646

 
550

Total Rental Revenues
54,469

 
43,230

 
154,518

 
114,650

Management, leasing, and development services
116

 
109

 
359

 
380

Interest income
609

 

 
609

 
445

Total Revenues
55,194

 
43,339

 
155,486

 
115,475

Operating Expenses
 
 
 
 
 
 
 
Property expenses
13,294

 
11,229

 
38,029

 
29,987

General and administrative
6,229

 
5,843

 
18,897

 
16,052

Depreciation and amortization
20,144

 
17,971

 
59,371

 
46,085

Total Operating Expenses
39,667

 
35,043

 
116,297

 
92,124

Other Expenses
 
 
 
 
 
 
 
Acquisition expenses
106

 
16

 
152

 
421

Interest expense
6,456

 
6,271

 
18,760

 
14,571