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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):
April 30, 2019
 
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 April 30, 2019, Rexford Industrial Realty, Inc. (“Rexford Industrial”) issued a press release announcing its earnings for the quarter ended March 31, 2019, and distributed certain supplemental financial information. On April 30, 2019, 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 March 31, 2019 and distributed certain supplemental information. On April 30, 2019, 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 April 30, 2019
 
 
 
99.2
 
First Quarter 2019 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.
April 30, 2019
 
/s/ Michael S. Frankel
 
Michael S. Frankel
Co-Chief Executive Officer
(Principal Executive Officer)
 
 
 
Rexford Industrial Realty, Inc.
April 30, 2019
 
/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

 397734360_rexrlogoa52.jpg
REXFORD INDUSTRIAL ANNOUNCES FIRST QUARTER 2019 FINANCIAL RESULTS

- 1Q 2019 Net Income Attributable to Common Stockholders of $8.0M, or $0.08 per Diluted Share -
- 1Q 2019 Company Share of Core FFO of $29.4M, Up 37.2% Compared to 1Q 2018 -
- 1Q 2019 Company Share of Core FFO of $0.30 per Diluted Share, Up 11.1% Compared to 1Q 2018 -
- 1Q 2019 Same Property Portfolio NOI Up 7.8% Compared to 1Q 2018 -
- 1Q 2019 GAAP Releasing Spreads of 26.2% and Cash Releasing Spreads of 17.3% -
- Stabilized Same Property Portfolio Ending Occupancy of 97.9% -
- Quarterly Dividend Increased by 15.6% to $0.185 per Share -


Los Angeles, California - April 30, 2019 - 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 first quarter of 2019.

First Quarter 2019 Financial and Operational Highlights:
Net income attributable to common stockholders of $0.08 per diluted share for the quarter ended March 31, 2019, compared to $0.15 per diluted share for the first quarter of last year.
Company share of Core FFO increased 37.2% year-over-year to $29.4 million for the quarter ended March 31, 2019.
Company share of Core FFO per diluted share increased 11.1% year-over-year to $0.30 per diluted share for the quarter ended March 31, 2019.
Total first quarter rental revenues of $59.6 million, which represents an increase of 23.1% year-over-year.
Consolidated first quarter Portfolio Net Operating Income (NOI) of $45.8 million, which represents an increase of 25.6% year-over-year.
Same Property Portfolio NOI increased 7.8% in the first quarter of 2019 compared to the first quarter of 2018, driven by a 6.0% increase in Same Property Portfolio total rental revenue and a 0.5% increase in Same Property Portfolio operating expenses. Same Property Portfolio Cash NOI increased 10.1% compared to the first quarter of 2018.
Stabilized Same Property Portfolio NOI increased 4.5% in the first quarter of 2019 compared to the first quarter of 2018.
Stabilized Same Property Portfolio Cash NOI increased 7.6% in the first quarter of 2019 compared to the first quarter of 2018.
Signed new and renewal leases totaling 1,131,883 rentable square feet. Rental rates on new and renewal leases were 26.2% higher than prior rents on a GAAP basis and 17.3% higher on a cash basis.
At March 31, 2019, the Stabilized Same Property Portfolio occupancy was 97.9% and the Same Property Portfolio occupancy, inclusive of assets in value-add repositioning, was 96.8%.
At March 31, 2019, the consolidated portfolio, including repositioning assets, was 94.8% leased and 94.6% occupied and the consolidated portfolio, excluding repositioning assets aggregating approximately 0.7 million rentable square feet, was 98.0% leased and 97.8% occupied.
During the first quarter, the Company increased its quarterly dividend by 15.6% to $0.185 per Share.
The Company ended the quarter with low leverage measured by a debt-to-enterprise value ratio of 10.9%.




During the first quarter of 2019, the Company acquired five industrial properties for an aggregate purchase price of $146.0 million, with 16 industrial properties acquired year-to-date for an aggregate purchase price of $398.0 million.


“Our strong first quarter 2019 results demonstrate the Rexford team’s ability to consistently execute on our unique growth and value creation opportunity within the infill Southern California industrial market, with Core FFO growth of 37.2%, and 11.1% on a per share basis,” stated Michael Frankel and Howard Schwimmer, Co-Chief Executive Officers of the Company. “The attractive supply and demand characteristics in our region, combined with our first-class leasing platform, allow us to drive attractive portfolio NOI growth, which was 25.6% for the first quarter. Our stabilized consolidated portfolio occupancy reached 97.8%, with Same Property NOI growth of 7.8% on a GAAP basis and 10.1% on a cash basis. We completed $146 million of acquisitions during the quarter, plus an additional $252.0 million of acquisitions completed since the end of the first quarter. With 100% of our investments located in prime, high-demand infill Southern California locations, we are pleased at their quality and potential for further value creation. We closed the quarter with a low-leverage balance sheet measured by Company debt-to-enterprise value of about 10.9%, providing us plenty of dry powder as we continue to grow both externally through acquisitions and internally as we capitalize upon the value creation opportunities within our existing portfolio. Finally, during the quarter, we increased our dividend by 15.6%, reflecting the accretive nature of our historical and ongoing growth opportunities.”


Financial Results:

The Company reported net income attributable to common stockholders of $8.0 million, or $0.08 per diluted share, for the three months ended March 31, 2019, as compared to net income attributable to common stockholders of $12.2 million, or $0.15 per diluted share, for the three months ended March 31, 2018.

The Company reported Company share of Core FFO of $29.4 million, or $0.30 per diluted share of common stock, for the three months ended March 31, 2019, as compared to Company share of Core FFO of $21.4 million, or $0.27 per diluted share of common stock, for the three months ended March 31, 2018. Amounts are adjusted for non-core expenses ($23,000 reported during the first quarter of 2019 and $9,000 reported during the first quarter of 2018).

For the three months ended March 31, 2019, the Company’s Same Property Portfolio NOI increased 7.8% compared to the first quarter of 2018, driven by a 6.0% increase in Same Property Portfolio total rental revenue and a 0.5% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 10.1% compared to the first quarter of 2018. Stabilized Same Property Portfolio NOI increased 4.5% in the first quarter of 2019 compared to the first quarter of 2018 and Stabilized Same Property Portfolio Cash NOI increased 7.6% in the first quarter of 2019 compared to the first quarter of 2018.

Operating Results:

During the first quarter of 2019, the Company signed 103 new and renewal leases totaling 1,131,883 rentable square feet. Average rental rates on comparable new and renewal leases were up 26.2% on a GAAP basis and up 17.3% on a cash basis. The Company signed 51 new leases for 527,869 rentable square feet, with GAAP rents up 36.5% compared to the prior in-place leases. The Company signed 52 renewal leases for 604,014 rentable square feet, with GAAP rents up 22.0% compared to the prior in-place leases. For the 51 new leases, cash rents increased 26.4%, and for the 52 renewal leases, cash rents were up 13.5%, 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 March 31, 2019. See below for information regarding the supplemental information package. 

Transaction Activity:

In the first quarter 2019, the Company completed five acquisitions, for an aggregate purchase price of $146.0 million, as detailed below.

In January 2019, the Company acquired 12821 Knott Street, a vacant single-tenant industrial building containing 120,800 square feet on 6.97 acres of land, located in the West Orange County submarket, for $19.8 million or $164 per square foot.





In January 2019, the Company acquired 28510 Industry Drive, a 100% leased single-tenant industrial building containing 46,778 square feet on 2.15 acres of land, located in the Greater San Fernando Valley submarket, for $7.8 million or $166 per square foot.

In January 2019, the Company acquired Conejo Spectrum Business Park, a 72% leased nine-building industrial complex containing 531,378 square feet on 28.05 acres of land, located in the Ventura County submarket, for $106.3 million or $200 per square foot.

In March 2019, the Company acquired 2455 Ash Street, a 100% leased single-tenant industrial building containing 42,508 square feet on 3.45 acres of land, located in the North San Diego County submarket, for $6.7 million or $157 per square foot.

In March 2019, the Company acquired 25413 Rye Canyon Road, a 40% leased single-tenant industrial building containing 48,075 square feet on 2.60 acres of land, located in the Greater San Fernando Valley submarket, for $5.5 million or $115 per square foot.
 
Subsequent to the first quarter 2019, the Company completed eleven acquisitions, for an aggregate purchase price of $252.0 million.


Balance Sheet:
  
During the quarter ended March 31, 2019, the Company issued 7,148,746 shares of common stock under its at-the-market equity offering program (ATM program). The shares were issued at a weighted average price of $34.75 per share, providing gross proceeds of approximately $248.4 million and net proceeds of approximately $244.7 million. As of March 31, 2019, the current ATM program had approximately $201.6 million of remaining capacity.

As of March 31, 2019, the Company had $761.1 million of outstanding debt, with an average interest rate of 3.49% and an average term-to-maturity of 5.3 years. As of March 31, 2019, $552.6 million, or 73%, of the Company’s outstanding debt was fixed-rate with an average interest rate of 3.27% and an average term-to-maturity of 5.1 years. The remaining $208.5 million, or 27%, of the Company’s outstanding debt was floating-rate, with an average interest rate of LIBOR + 1.56% and an average term-to-maturity of 5.6 years. During the fourth quarter of 2018, the Company executed an interest rate swap to hedge $150 million of its remaining floating-rate debt beginning in July 2019 when the swap becomes effective. If this interest rate swap was effective as of March 31, 2019, the Company’s debt would be 92% fixed.

Guidance

The Company is reiterating and increasing its full year 2019 guidance as follows:
Net income attributable to common stockholders within a range of $0.30 to $0.32 per diluted share
Company share of Core FFO within a range of $1.18 to $1.20 per diluted share
Year-end Same Property Portfolio occupancy within a range of 95.5% to 96.5%
Year-end Stabilized Same Property Portfolio occupancy within a range of 96.5% to 97.5%
Same Property Portfolio NOI growth for the year of 4.5% to 6.0%
Stabilized Same Property Portfolio NOI growth for the year of 3.5% to 4.0%
General and administrative expenses of $29.0 million to $30.0 million

The Core FFO guidance refers only to the Company’s in-place portfolio as of April 30, 2019, 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 April 30, 2019, reflects the acquisition of eleven properties containing 1,437,716 rentable square feet that occurred subsequent to March 31, 2019. 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 April 30, 2019, the Company’s Board of Directors declared a dividend in the amount of $0.185 per share for the second quarter of 2019, payable in cash on July 15, 2019, to common stockholders and common unit holders of record as of June 28, 2019.
 
On April 30, 2019, 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, in each case, payable in cash on June 28, 2019, to preferred stockholders of record as of June 14, 2019.

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, May 1, 2019, at 1:00 p.m. Eastern Time to review first 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 June 1, 2019, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13690002.


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 192 properties with approximately 23.6 million rentable square feet and manages an additional 19 properties with approximately 1.0 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, 2018, 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 2019 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.
 
2019 Estimate
 
Low
 
High
Net income attributable to common stockholders
$
0.30

 
$
0.32

Company share of depreciation and amortization
$
0.88

 
$
0.88

Company share of Core FFO
$
1.18

 
$
1.20



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 rental income from real estate operations 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 and Stabilized 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 and Stabilized 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 and Stabilized 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, 2018, and still owned by us as of March 31, 2019. Therefore, we excluded from our Same Property Portfolio any properties that were acquired or sold during the period from January 1, 2018 through March 31, 2019. 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, 2018 and the three months ended March 31, 2019:
14742-14750 Nelson Avenue
 
301-445 Figueroa Street
15401 Figueroa Street
 
3233 Mission Oaks Boulevard
1601 Alton Parkway
 
7110 E. Rosecrans Avenue
2700-2722 Fairview Street
 
9615 Norwalk Boulevard
28903 Avenue Paine
 
 

As of March 31, 2019, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is 203,931 rentable square feet of space at three of our properties that were classified as repositioning or lease-up.
As of March 31, 2018, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is space aggregating 487,731 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
investorrelations@rexfordindustrial.com




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

 
 
March 31, 2019
 
December 31, 2018
 
(unaudited)
 
 
ASSETS
 
 
 
Land
$
1,364,738

 
$
1,298,957

Buildings and improvements
1,422,684

 
1,332,438

Tenant improvements
62,908

 
60,024

Furniture, fixtures, and equipment
149

 
149

Construction in progress
20,331

 
24,515

Total real estate held for investment
2,870,810

 
2,716,083

Accumulated depreciation
(245,033
)
 
(228,742
)
Investments in real estate, net
2,625,777

 
2,487,341

Cash and cash equivalents
276,575

 
180,601

Rents and other receivables, net
4,548

 
4,944

Deferred rent receivable, net
24,290

 
22,228

Deferred leasing costs, net
14,139

 
14,002

Deferred loan costs, net
1,158

 
1,312

Acquired lease intangible assets, net
56,122

 
55,683

Acquired indefinite-lived intangible
5,156

 
5,156

Interest rate swap asset
5,896

 
8,770

Other assets
12,580

 
6,723

Acquisition related deposits
10,875

 
925

Total Assets
$
3,037,116

 
$
2,787,685

LIABILITIES & EQUITY
 
 
 
Liabilities
 
 
 
Notes payable
$
757,524

 
$
757,371

Interest rate swap liability
4,604

 
2,351

Accounts payable, accrued expenses and other liabilities
33,728

 
21,074

Dividends payable
19,774

 
15,938

Acquired lease intangible liabilities, net
52,426

 
52,727

Tenant security deposits
24,396

 
23,262

Prepaid rents
6,828

 
6,539

Total Liabilities
899,280

 
879,262

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 March 31, 2019 and December 31, 2018 ($90,000 liquidation preference)
86,651

 
86,651

5.875% series B cumulative redeemable preferred stock, 3,000,000 shares outstanding as of March 31, 2019 and December 31, 2018 ($75,000 liquidation preference)
72,443

 
72,443

Common Stock, $0.01 par value 490,000,000 shares authorized and 104,028,046 and 96,810,504 shares outstanding as of March 31, 2019 and December 31, 2018, respectively
1,038

 
966

Additional paid in capital
2,042,218

 
1,798,113

Cumulative distributions in excess of earnings
(99,715
)
 
(88,341
)
Accumulated other comprehensive income
1,261

 
6,262

Total stockholders’ equity
2,103,896

 
1,876,094

Noncontrolling interests
33,940

 
32,329

Total Equity
2,137,836

 
1,908,423

Total Liabilities and Equity
$
3,037,116

 
$
2,787,685





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


 
Three Months Ended March 31,
 
2019
 
2018
REVENUES
 
 
 
Rental income
59,604

 
48,433

Management, leasing and development services
102

 
103

Interest income
657

 

TOTAL REVENUES
60,363

 
48,536

OPERATING EXPENSES
 
 
 
Property expenses
13,812

 
11,960

General and administrative
7,344

 
6,162

Depreciation and amortization
21,996

 
19,452

TOTAL OPERATING EXPENSES
43,152

 
37,574

OTHER EXPENSES
 
 
 
Acquisition expenses
23

 
9

Interest expense
6,471

 
5,852

TOTAL EXPENSES
49,646

 
43,435

Gains on sale of real estate

 
9,983

NET INCOME
10,717

 
15,084

Less: net income attributable to noncontrolling interest
(201
)
 
(318
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
10,516

 
14,766

Less: preferred stock dividends
(2,423
)
 
(2,423
)
Less: earnings attributable to participating securities
(114
)
 
(97
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
7,979

 
$
12,246

Net income attributable to common stockholders per share  basic
$
0.08

 
$
0.16

Net income attributable to common stockholders per share  diluted
$
0.08

 
$
0.15

Weighted-average shares of common stock outstanding – basic
98,343

 
78,694

Weighted-average shares of common stock outstanding – diluted
98,608

 
79,196






Rexford Industrial Realty, Inc.
Same Property Portfolio Occupancy and NOI and Cash NOI
(Unaudited, dollars in thousands)
 
 
Same Property Portfolio Occupancy:
 
 
 
 
 
 
 
March 31, 2019
 
March 31, 2018
 
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
97.9%
 
98.3%
 
96.0%
 
99.4%
 
190 bps
 
(110) bps
Orange County
95.2%
 
97.5%
 
94.1%
 
97.1%
 
110 bps
 
40 bps
San Bernardino County
97.2%
 
97.2%
 
98.7%
 
98.7%
 
(150) bps
 
(150) bps
San Diego County
98.4%
 
98.4%
 
95.8%
 
95.8%
 
260 bps
 
260 bps
Ventura County
90.6%
 
96.6%
 
87.1%
 
93.1%
 
350 bps
 
350 bps
Total/Weighted Average
96.8%
 
97.9%
 
95.4%
 
98.0%
 
140 bps
 
(10) bps

(1)
Reflects the occupancy of our Same Property Portfolio as of March 31, 2019, adjusted for total space of 203,931 rentable square feet at three properties that were in various stages of repositioning or lease-up as of March 31, 2019.
(2)
Reflects the occupancy of our Same Property Portfolio as of March 31, 2018, adjusted for space aggregating 487,731 rentable square feet at six properties that were in various stages of repositioning or lease-up as of March 31, 2018.

Same Property Portfolio NOI and Cash NOI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2019
 
2018
 
$ Change
 
% Change
Rental income
50,555

 
47,711

 
2,844

 
6.0%
Property expenses
11,818

 
11,764

 
54

 
0.5%
Same Property Portfolio NOI
$
38,737

 
$
35,947

 
$
2,790

 
7.8%
Straight line rental revenue adjustment
(1,471
)
 
(1,947
)
 
476

 
(24.4)%
Amortization of above/below market lease intangibles
(1,007
)
 
(1,075
)
 
68

 
(6.3)%
Same Property Portfolio Cash NOI
$
36,259

 
$
32,925

 
$
3,334

 
10.1%






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


 
Three Months Ended March 31,
 
2019
 
2018
Net income
$
10,717

 
$
15,084

Add:
 
 
 
General and administrative
7,344

 
6,162

Depreciation and amortization
21,996

 
19,452

Acquisition expenses
23

 
9

Interest expense
6,471

 
5,852

Deduct:
 
 
 
Management, leasing and development services
102

 
103

Interest income
657

 

Gains on sale of real estate

 
9,983

Net operating income (NOI)
$
45,792

 
$
36,473

Non-Same Property Portfolio rental income
(9,049
)
 
(722
)
Non-Same Property Portfolio property expenses
1,994

 
196

Same Property Portfolio NOI
$
38,737

 
$
35,947

Straight line rental revenue adjustment
(1,471
)
 
(1,947
)
Amortization of above/below market lease intangibles
(1,007
)
 
(1,075
)
Same Property Portfolio Cash NOI
$
36,259

 
$
32,925

 
 
 
 
NOI (from above)
$
45,792

 
$
36,473

Non-Stabilized Same Property Portfolio rental income
(11,926
)
 
(2,181
)
Non-Stabilized Same Property Portfolio property expenses
2,669

 
672

Stabilized Same Property Portfolio NOI
$
36,535

 
$
34,964

Straight line rental revenue adjustment
(1,108
)
 
(1,828
)
Amortization of above/below market lease intangibles
(1,015
)
 
(1,162
)
Stabilized Same Property Portfolio Cash NOI
$
34,412

 
$
31,974






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 March 31,
 
2019
 
2018
Net income
$
10,717

 
$
15,084

Add:
 

 
 

Depreciation and amortization
21,996

 
19,452

Deduct:
 
 
 
Gains on sale of real estate

 
9,983

Funds From Operations (FFO)
$
32,713

 
$
24,553

Less: preferred stock dividends
(2,423
)
 
(2,423
)
Less: FFO attributable to noncontrolling interest(1)
(733
)
 
(557
)
Less: FFO attributable to participating securities(2)
(176
)
 
(158
)
Company share of FFO
$
29,381

 
$
21,415

 
 
 
 
Company Share of FFO per common share - basic
$
0.30

 
$
0.27

Company Share of FFO per common share - diluted
$
0.30

 
$
0.27

 
 
 
 
FFO
$
32,713

 
$
24,553

Adjust:
 
 
 
Acquisition expenses
23

 
9

Core FFO
$
32,736

 
$
24,562

Less: preferred stock dividends
(2,423
)
 
(2,423
)
Less: Core FFO attributable to noncontrolling interest(1)
(733
)
 
(557
)
Less: Core FFO attributable to participating securities(2)
(176
)
 
(158
)
Company share of Core FFO
$
29,404

 
$
21,424

 
 
 
 
Company share of Core FFO per common share - basic
$
0.30

 
$
0.27

Company share of Core FFO per common share - diluted
$
0.30

 
$
0.27

 
 
 
 
Weighted-average shares of common stock outstanding – basic
98,343

 
78,694

Weighted-average shares of common stock outstanding – diluted
98,608

 
79,196


(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

397734360_q119covera01.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 2018 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on February 19, 2019. 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.

 
First Quarter 2019
Supplemental Financial Reporting Package
Page 2

 397734360_logo3a09.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.

 
First Quarter 2019
Supplemental Financial Reporting Package
Page 3

 397734360_logo3a09.jpg
 


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

 
Three Months Ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
Financial Results:
 
 
 
 
 
 
 
 
 
Total rental revenues
$
59,604

 
$
56,125

 
$
54,469

 
$
51,616

 
$
48,433

Net income
$
10,717

 
$
15,207

 
$
8,965

 
$
7,819

 
$
15,084

Net Operating Income (NOI)
$
45,792

 
$
42,483

 
$
41,175

 
$
38,841

 
$
36,473

Company share of Core FFO
$
29,404

 
$
27,216

 
$
26,050

 
$
22,882

 
$
21,424

Company share of Core FFO per common share - diluted
$
0.30

 
$
0.29

 
$
0.28

 
$
0.27

 
$
0.27

Adjusted EBITDA
$
42,164

 
$
40,348

 
$
38,003

 
$
36,784

 
$
32,306

Dividend declared per common share
$
0.185

 
$
0.160

 
$
0.160

 
$
0.160

 
$
0.160

Portfolio Statistics:
 
 
 
 
 
 
 
 
 
Portfolio SF - consolidated
22,144,631

 
21,295,443

 
20,505,157

 
20,213,729

 
18,741,304

Ending occupancy - consolidated portfolio
94.6
%
 
95.4
%
 
95.1
%
 
95.2
%
 
95.2
%
Stabilized occupancy - consolidated portfolio
97.8
%
 
97.5
%
 
97.6
%
 
98.1
%
 
97.7
%
Leasing spreads - GAAP
26.2
%
 
25.1
%
 
32.2
%
 
35.5
%
 
25.3
%
Leasing spreads - cash
17.3
%
 
14.8
%
 
21.1
%
 
23.9
%
 
14.9
%
Same Property Performance:
 
 
 
 
 
 
 
 
 
Same Property Portfolio SF
18,314,542

 
18,314,542

 
18,314,542

 
18,314,542

 
18,314,542

Same Property Portfolio ending occupancy
96.8
%
 
96.0
%
 
95.6
%
 
95.3
%
 
95.4
%
Same Property Portfolio NOI growth
7.8
%
 
n/a

 
n/a

 
n/a

 
n/a

Same Property Portfolio Cash NOI growth
10.1
%
 
n/a

 
n/a

 
n/a

 
n/a

Stabilized Same Property Portfolio ending occupancy
97.9
%
 
97.3
%
 
97.6
%
 
98.0
%
 
98.0
%
Stabilized Same Property Portfolio NOI growth
4.5
%
 
n/a

 
n/a

 
n/a

 
n/a

Stabilized Same Property Portfolio Cash NOI growth
7.6
%
 
n/a

 
n/a

 
n/a

 
n/a

Capitalization:
 
 
 
 
 
 
 
 
 
Common stock price at quarter end
$
35.81

 
$
29.47

 
$
31.96

 
$
31.39

 
$
28.79

Common shares issued and outstanding
103,804,570

 
96,610,106

 
92,497,666

 
90,848,198

 
80,441,338

Total shares and units issued and outstanding at period end (2)
106,267,799

 
99,025,917

 
94,500,770

 
92,861,762

 
82,482,513

Weighted average shares outstanding - diluted
98,607,786

 
94,487,773

 
91,945,206

 
83,494,825

 
79,196,060

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

 
$
165,000

 
$
165,000

 
$
165,000

 
$
165,000

Total equity market capitalization
$
3,970,450

 
$
3,083,294

 
$
3,185,245

 
$
3,079,931

 
$
2,539,672

Total consolidated debt
$
761,077

 
$
761,116

 
$
761,154

 
$
761,192

 
$
662,425

Total combined market capitalization (net debt plus equity)
$
4,454,952

 
$
3,663,809

 
$
3,762,495

 
$
3,678,419

 
$
3,186,472

Ratios:
 
 
 
 
 
 
 
 
 
Net debt to total combined market capitalization
10.9
%
 
15.8
%
 
15.3
%
 
16.3
%
 
20.3
%
Net debt to Adjusted EBITDA (quarterly results annualized)
2.9x

 
3.6x

 
3.8x

 
4.1x

 
5.0x

(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)
Includes the following number of OP Units and vested LTIP units held by noncontrolling interests: 2,463,229 (March 31, 2019), 2,415,811 (December 31, 2018), 2,003,104 (September 30, 2018), 2,013,564 (June 30, 2018) and 2,041,175 (March 31, 2018). Excludes the following number of shares of unvested restricted stock: 223,476 (March 31, 2019), 200,398 (December 31, 2018), 209,214 (September 30, 2018), 213,867 (June 30, 2018) and 226,451 (March 31, 2018). Excludes unvested LTIP units and unvested performance units.

 
First Quarter 2019
Supplemental Financial Reporting Package
Page 4

 397734360_logo3a09.jpg
 


Consolidated Balance Sheets.
 
 
 
 
(unaudited and in thousands)
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
ASSETS
 
 
 
 
 
 
 
 
 
Land
$
1,364,738

 
$
1,298,957

 
$
1,218,386

 
$
1,199,633

 
$
1,020,652

Buildings and improvements
1,422,684

 
1,332,438

 
1,253,935

 
1,229,100

 
1,098,695

Tenant improvements
62,908

 
60,024

 
54,808

 
53,531

 
50,998

Furniture, fixtures, and equipment
149

 
149

 
151

 
151

 
151

Construction in progress
20,331

 
24,515

 
50,367

 
44,631

 
45,688

  Total real estate held for investment
2,870,810

 
2,716,083

 
2,577,647

 
2,527,046

 
2,216,184

Accumulated depreciation
(245,033
)
 
(228,742
)
 
(214,680
)
 
(200,006
)
 
(186,234
)
Investments in real estate, net
2,625,777

 
2,487,341

 
2,362,967

 
2,327,040

 
2,029,950

Cash and cash equivalents
276,575

 
180,601

 
183,904

 
162,704

 
15,625

Restricted cash

 

 

 

 
4,211

Rents and other receivables, net
4,548

 
4,944

 
5,042

 
3,920

 
3,328

Deferred rent receivable, net
24,290

 
22,228

 
20,770

 
19,432

 
17,766

Deferred leasing costs, net
14,139

 
14,002

 
13,446

 
12,600

 
12,097

Deferred loan costs, net
1,158

 
1,312

 
1,467

 
1,621

 
1,775

Acquired lease intangible assets, net(1)
56,122

 
55,683

 
53,402

 
57,054

 
45,876

Acquired indefinite-lived intangible
5,156

 
5,156

 
5,156

 
5,156

 
5,156

Interest rate swap asset
5,896

 
8,770

 
13,851

 
13,036

 
11,294

Other assets(2)
12,580

 
6,723

 
7,508

 
8,216

 
5,961

Acquisition related deposits
10,875

 
925

 
1,325

 
1,600

 
4,525

Assets associated with real estate held for sale, net(3)

 

 

 

 
8,300

Total Assets
$
3,037,116


$
2,787,685

 
$
2,668,838

 
$
2,612,379

 
$
2,165,864

LIABILITIES & EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 

 
 
Notes payable
$
757,524

 
$
757,371

 
$
757,218

 
$
757,064

 
$
659,417

Interest rate swap liability
4,604

 
2,351

 

 

 

Accounts payable, accrued expenses and other liabilities(2)
33,728

 
21,074

 
30,411

 
19,683

 
21,441

Dividends payable
19,774

 
15,938

 
15,214

 
14,952

 
13,294

Acquired lease intangible liabilities, net(4)
52,426

 
52,727

 
52,289

 
53,939

 
17,783

Tenant security deposits
24,396

 
23,262

 
21,888

 
20,534

 
19,936

Prepaid rents
6,828

 
6,539

 
6,424

 
6,374

 
5,540

Liabilities associated with real estate held for sale(3)

 

 

 

 
132

Total Liabilities
899,280

 
879,262

 
883,444

 
872,546

 
737,543

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

 
72,443

 
72,443

Common stock
1,038

 
966

 
924

 
908

 
804

Additional paid in capital
2,042,218

 
1,798,113

 
1,666,339

 
1,614,650

 
1,297,391

Cumulative distributions in excess of earnings
(99,715
)
 
(88,341
)
 
(85,358
)
 
(76,926
)
 
(67,622
)
Accumulated other comprehensive income
1,261

 
6,262

 
13,558

 
12,753

 
11,014

Total stockholders’ equity
2,103,896

 
1,876,094

 
1,754,557

 
1,710,479

 
1,400,681

Noncontrolling interests
33,940

 
32,329

 
30,837

 
29,354

 
27,640

Total Equity
2,137,836

 
1,908,423

 
1,785,394

 
1,739,833

 
1,428,321

Total Liabilities and Equity
$
3,037,116

 
$
2,787,685

 
$
2,668,838

 
$
2,612,379

 
$
2,165,864

(1)
Includes net above-market tenant lease intangibles of $5,410 (March 31, 2019), $4,647 (December 31, 2018), $4,453 (September 30, 2018), $4,692 (June 30, 2018) and $4,899 (March 31, 2018).
(2)
In connection with the adoption of Financial Accounting Standards Board Topic 842 - Leases on January 1, 2019, we recognized operating lease right-of-use assets and lease liabilities related to our ground and office leases. As of March 31, 2019, we have operating lease right-of-use assets and lease liabilities of of $6.5 million and $6.8 million, respectively.
(3)
At March 31, 2018, the properties located at 1910 Archibald Avenue and 1920 Archibald Avenue were classified as held for sale.
(4)
Includes net below-market tenant lease intangibles of $52,426 (March 31, 2019), $52,610 (December 31, 2018), $52,164 (September 30, 2018), $53,806 (June 30, 2018) and $17,642 (March 31, 2018).

 
First Quarter 2019
Supplemental Financial Reporting Package
Page 5

 397734360_logo3a09.jpg
 


Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands, except share and per share data)
 
Three Months Ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
Revenues
 
 
 
 
 
 
 
 
 
Rental income
59,604

 
56,125

 
54,469


51,616

 
48,433

Management, leasing, and development services
102

 
114

 
116


140

 
103

Interest income
657

 
769

 
609



 

Total Revenues
60,363

 
57,008

 
55,194


51,756

 
48,536

Operating Expenses
 
 
 
 


 
 
 
Property expenses
13,812

 
13,642

 
13,294


12,775

 
11,960

General and administrative(2)
7,344

 
6,297

 
6,229


6,506

 
6,162

Depreciation and amortization
21,996

 
20,671

 
20,144


19,775

 
19,452

Total Operating Expenses
43,152

 
40,610

 
39,667


39,056

 
37,574

Other Expenses
 
 
 
 


 
 
 
Acquisition expenses
23

 
166

 
106


37

 
9

Interest expense
6,471

 
6,656

 
6,456


6,452

 
5,852

Total Expenses
49,646

 
47,432

 
46,229


45,545

 
43,435

Gains on sale of real estate

 
5,631

 


1,608

 
9,983

Net Income
10,717

 
15,207

 
8,965


7,819

 
15,084

Less: net income attributable to noncontrolling interest
(201
)
 
(277
)
 
(141
)

(129
)
 
(318
)
Net income attributable to Rexford Industrial Realty, Inc.
10,516

 
14,930

 
8,824


7,690

 
14,766

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

(2,424
)
 
(2,423
)
Less: earnings allocated to participating securities
(114
)
 
(93
)
 
(94
)

(94
)
 
(97
)
Net income attributable to common stockholders
$
7,979

 
$
12,413

 
$
6,307


$
5,172

 
$
12,246

 
 
 
 
 



 

Earnings per Common Share
 
 
 
 



 

Net income attributable to common stockholders per share - basic
$
0.08

 
$
0.13

 
$
0.07


$
0.06

 
$
0.16

Net income attributable to common stockholders per share - diluted
$
0.08

 
$
0.13

 
$
0.07


$
0.06

 
$
0.15

 
 
 
 
 


 
 
 
Weighted average shares outstanding - basic
98,342,677
 
93,995,846
 
91,463,594
 
82,924,208
 
78,694,161
Weighted average shares outstanding - diluted
98,607,786
 
94,487,773
 
91,945,206
 
83,494,825
 
79,196,060
(1)
See footnote (1) on the next page (pg 7) for details related to our presentation of “Rental income” in the consolidated statements of operations for all periods presented.
(2)
In connection with the adoption of Financial Accounting Standards Board Topic 842, Leases (“ASC 842”), beginning in 2019 we are required to expense internal leasing costs that were previously allowed to be capitalized under prior lease accounting guidance (“ASC 840”). If we had adopted ASC 842 as of January 1, 2018, we would have expensed internal leasing costs (in thousands) of $288, $288, $232 and $185 for the three months ended December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018, respectively.


 
First Quarter 2019
Supplemental Financial Reporting Package
Page 6

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Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands)
 
Three Months Ended March 31,
 
2019
 
2018
Revenues
 
 
 
Rental income(1)
59,604

 
48,433

Management, leasing, and development services
102

 
103

Interest income
657

 

Total Revenues
60,363

 
48,536

Operating Expenses
 
 
 
Property expenses
13,812

 
11,960

General and administrative (2)
7,344

 
6,162

Depreciation and amortization
21,996

 
19,452

Total Operating Expenses
43,152

 
37,574

Other Expenses
 
 
 
Acquisition expenses
23

 
9

Interest expense
6,471

 
5,852

Total Expenses
49,646

 
43,435

Gains on sale of real estate

 
9,983

Net Income
10,717

 
15,084

 Less: net income attributable to noncontrolling interest
(201
)
 
(318
)
Net income attributable to Rexford Industrial Realty, Inc.
10,516

 
14,766

 Less: preferred stock dividends
(2,423
)
 
(2,423
)
 Less: earnings allocated to participating securities
(114
)
 
(97
)
Net income attributable to common stockholders
$
7,979

 
$
12,246

(1)
On January 1, 2019, we adopted ASC 842 and, among other practical expedients, elected the “non-separation practical expedient” in ASC 842, which allows us to avoid separating lease and non-lease rental income. As a result of this election, all rental income earned pursuant to tenant leases, including tenant reimbursements, in 2019 is reflected as one line, “Rental income,” in the 2019 consolidated statement of operations. Prior to the adoption of ASC 842, we presented rental revenues, tenant reimbursements and other income related to leases separately in our consolidated statements of operations. To facilitate comparability, we have reclassified 2018 amounts to conform with 2019 presentation. Under the section “Rental Income” on page 27 in the definitions section of this report, we include a presentation of rental revenues, tenant reimbursements and other income for all periods because we believe this information is frequently used by management, investors, securities analysts and other interested parties to evaluate our performance.
(2)
In connection with the adoption of ASC 842, beginning in 2019 we are required to expense internal leasing costs that were previously allowed to be capitalized under ASC 840. If we had adopted ASC 842 as of January 1, 2018, we would have expensed internal leasing costs of $185 thousand during the three months ended March 31, 2018.

 
First Quarter 2019
Supplemental Financial Reporting Package
Page 7

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Non-GAAP FFO and Core FFO Reconciliations. (1)
 
 
 
(unaudited and in thousands, except share and per share data)
 
Three Months Ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
Net Income
$
10,717

 
$
15,207

 
$
8,965

 
$
7,819

 
$
15,084

Add:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
21,996

 
20,671

 
20,144

 
19,775

 
19,452

Deduct:
 
 
 
 
 
 
 
 
 
Gains on sale of real estate

 
5,631

 

 
1,608

 
9,983

Funds From Operations (FFO)
32,713

 
30,247

 
29,109

 
25,986

 
24,553

Less: preferred stock dividends
(2,423
)
 
(2,424
)
 
(2,423
)
 
(2,424
)
 
(2,423
)
Less: FFO attributable to noncontrolling interests(2)
(733
)
 
(602
)
 
(574
)
 
(562
)
 
(557
)
Less: FFO attributable to participating securities(3)
(176
)
 
(166
)
 
(165
)
 
(153
)
 
(158
)
Company share of FFO
$
29,381

 
$
27,055

 
$
25,947

 
$
22,847

 
$
21,415

 
 
 
 
 
 
 
 
 
 
Company share of FFO per common share‐basic
$
0.30

 
$
0.29

 
$
0.28

 
$
0.28

 
$
0.27

Company share of FFO per common share‐diluted
$
0.30

 
$
0.29

 
$
0.28

 
$
0.27

 
$
0.27

 
 
 
 
 
 
 
 
 
 
FFO
$
32,713

 
$
30,247

 
$
29,109

 
$
25,986

 
$
24,553

Adjust:
 
 
 
 
 
 
 
 
 
Acquisition expenses
23

 
166

 
106

 
37

 
9

Core FFO
32,736

 
30,413

 
29,215

 
26,023

 
24,562

Less: preferred stock dividends
(2,423
)
 
(2,424
)
 
(2,423
)
 
(2,424
)
 
(2,423
)
Less: Core FFO attributable to noncontrolling interests(2)
(733
)
 
(606
)
 
(576
)
 
(563
)
 
(557
)
Less: Core FFO attributable to participating securities(3)
(176
)
 
(167
)
 
(166
)
 
(154
)
 
(158
)
Company share of Core FFO
$
29,404

 
$
27,216

 
$
26,050

 
$
22,882

 
$
21,424

 
 
 
 
 
 
 
 
 
 
Company share of Core FFO per common share‐basic
$
0.30

 
$
0.29

 
$
0.28

 
$
0.28

 
$
0.27

Company share of Core FFO per common share‐diluted
$
0.30

 
$
0.29

 
$
0.28

 
$
0.27

 
$
0.27

 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding-basic
98,342,677

 
93,995,846

 
91,463,594

 
82,924,208

 
78,694,161

Weighted-average shares outstanding-diluted(4)
98,607,786

 
94,487,773

 
91,945,206

 
83,494,825

 
79,196,060

(1)
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 25 of this report.
(2)
Noncontrolling interests represent holders of outstanding common units of the Company’s operating partnership that are owned by unit holders other than us.
(3)
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units.
(4)
Weighted-average shares outstanding-diluted includes adjustments for unvested performance units if the effect is dilutive for the reported period.

 
First Quarter 2019
Supplemental Financial Reporting Package
Page 8

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Non-GAAP AFFO Reconciliation. (1)
 
 
 
 
(unaudited and in thousands, except share and per share data)

 
Three Months Ended
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
Funds From Operations(2)
$
32,713

 
$
30,247

 
$
29,109

 
$
25,986

 
$
24,553

Add:
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs
344

 
345

 
344

 
332

 
311

Non-cash stock compensation
2,579

 
2,282

 
2,244

 
2,658

 
1,727

Straight line corporate office rent expense adjustment

 
(47
)
 
(43
)
 
(34
)
 
(41
)
Deduct:
 
 
 
 
 
 
 
 
 
Preferred stock dividends
2,423

 
2,424

 
2,423

 
2,424

 
2,423

Straight line rental revenue adjustment(3)
2,067

 
1,492

 
1,343

 
1,673

 
1,969

Amortization of net below-market lease intangibles
1,751

 
1,627

 
1,622

 
1,616

 
1,116

Capitalized payments(4)
1,495

 
1,573

 
1,677

 
1,490

 
1,252

Note payable premium amortization
(1
)
 
(1
)
 
(1
)
 
(2
)
 
(1
)
Recurring capital expenditures(5)
2,294

 
2,403

 
1,405

 
959

 
854

2nd generation tenant improvements and leasing commissions(6)
1,209

 
1,252

 
966

 
795

 
983

Adjusted Funds From Operations (AFFO)
$
24,398

 
$
22,057

 
$
22,219

 
$
19,987

 
$
17,954


(1)
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 25 of this report.
(2)
A reconciliation of net income to Funds From Operations is set forth on page 8 of this report.
(3)
The straight line rental revenue adjustment includes concessions of $1,399, $1,039, $914, $1,180 and $1,627 for the three months ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018, respectively.
(4)
Includes capitalized interest, taxes, insurance and leasing and construction development compensation.
(5)
Excludes nonrecurring capital expenditures of $7,779, $10,529, $14,211, $9,320 and $11,392 for the three months ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018, respectively.
(6)
Excludes 1st generation tenant improvements/space preparation and leasing commissions of $282, $1,014, $805, $630 and $257 for the three months ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018, and March 31, 2018, respectively.


 
First Quarter 2019
Supplemental Financial Reporting Package
Page 9

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Statement of Operations Reconciliations - NOI, Cash NOI, EBITDAre and Adjusted EBITDA. (1)
 
 
(unaudited and in thousands)
NOI and Cash NOI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
 
Mar 31, 2018
 
Rental income(2)
59,604

 
56,125

 
54,469