Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
 
FORM 8-K  
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbols
 
Name of each exchange on which registered
Common Stock, $0.01 par value
 
REXR
 
New York Stock Exchange
5.875% Series A Cumulative Redeemable Preferred Stock
 
REXR-PA
 
New York Stock Exchange
5.875% Series B Cumulative Redeemable Preferred Stock
 
REXR-PB
 
New York Stock Exchange
 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 
 





ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 30, 2019, Rexford Industrial Realty, Inc. (“Rexford Industrial”) issued a press release announcing its earnings for the quarter ended June 30, 2019, and distributed certain supplemental financial information. On July 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 June 30, 2019 and distributed certain supplemental information. On July 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 July 30, 2019
 
 
 
99.2
 
Second 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.
July 30, 2019
 
/s/ Michael S. Frankel
 
Michael S. Frankel
Co-Chief Executive Officer
(Principal Executive Officer)
 
 
 
Rexford Industrial Realty, Inc.
July 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

 398968081_rexrlogoa59.jpg
REXFORD INDUSTRIAL ANNOUNCES SECOND QUARTER 2019 FINANCIAL RESULTS

- Net Income Attributable to Common Stockholders of $12.8M, or $0.12 per Diluted Share -
- Company Share of Core FFO of $32.1M, Up 40.1% Compared to 2Q 2018 -
- Company Share of Core FFO of $0.30 per Diluted Share, Up 11.1% Compared to 2Q 2018 -
- Consolidated Portfolio NOI and Cash NOI Up 24.8% and 27.5%, Respectively, Over 2Q 2018 -
- Same Property Portfolio NOI and Cash NOI Up 6.8% and 11.1%, Respectively, Over 2Q 2018 -
- GAAP Releasing Spreads of 39.4% and Cash Releasing Spreads of 22.3% -
- Stabilized Same Property Portfolio Ending Occupancy of 97.9% -
- Acquired 16 Industrial Properties for an Aggregate Purchase Price of $340.0 Million -


Los Angeles, California - July 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 and operating results for the second quarter of 2019.

Second Quarter 2019 Financial and Operational Highlights:
Net income attributable to common stockholders of $0.12 per diluted share for the quarter ended June 30, 2019, compared to $0.06 per diluted share for the second quarter of last year.
Company share of Core FFO increased 40.1% year-over-year to $32.1 million for the quarter ended June 30, 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 June 30, 2019.
Total rental revenues of $63.6 million, which represents an increase of 23.2% year-over-year.
Consolidated Portfolio Net Operating Income (NOI) of $48.5 million, which represents an increase of 24.8% year-over-year.
Consolidated Portfolio Cash NOI of $45.3 million, which represents an increase of 27.5% year-over-year.
Same Property Portfolio NOI increased 6.8% compared to the second quarter of 2018, driven by a 5.2% increase in Same Property Portfolio total rental revenue and a 0.4% increase in Same Property Portfolio operating expenses. Same Property Portfolio Cash NOI increased 11.1% compared to the second quarter of 2018.
Stabilized Same Property Portfolio NOI increased 3.9% compared to the second quarter of 2018.
Stabilized Same Property Portfolio Cash NOI increased 7.9% compared to the second quarter of 2018.
Signed new and renewal leases totaling 1,720,414 rentable square feet. Rental rates on new and renewal leases were 39.4% higher than prior rents on a GAAP basis and 22.3% higher on a cash basis.
At June 30, 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 June 30, 2019, the consolidated portfolio, including repositioning assets, was 94.7% leased and 94.2% occupied and the consolidated portfolio, excluding repositioning assets aggregating approximately 0.9 million rentable square feet, was 98.0% leased and 97.8% occupied.
The Company ended the quarter with low leverage measured by a debt-to-enterprise value ratio of 11.1%.




During the second quarter of 2019, the Company acquired 16 industrial properties for an aggregate purchase price of $340.0 million.
During the second quarter of 2019, the Company sold one industrial property for a sales price of $11.6 million.


“We are very pleased with our second quarter results as we continue to drive organic and external growth through our focused strategy within the infill Southern California industrial market, with Core FFO growth of 40.1%, and 11.1% on a per share basis,” stated Michael Frankel and Howard Schwimmer, Co-Chief Executive Officers of the Company. “Our exceptional performance across all fronts reflects the quality of our team, the strength and execution of our value-driven business model, and our ability to capitalize upon the superior market and tenant demand fundamentals within the infill Southern California industrial market. We’ve so far completed $489 million of acquisitions year-to-date through 16 transactions, bringing our consolidated portfolio to 23.9 million square feet. We closed the quarter with a fortress-like, low-leverage balance sheet as measured by Company debt-to-enterprise value of about 11.1%, which positions us well to capitalize upon emerging opportunities as we work to drive cashflow growth and shareholder value over the long term.

Financial Results:

The Company reported net income attributable to common stockholders of $12.8 million, or $0.12 per diluted share, for the three months ended June 30, 2019, as compared to net income attributable to common stockholders of $5.2 million, or $0.06 per diluted share, for the three months ended June 30, 2018. Net income for the three months ended June 30, 2019 includes $4.8 million of gains on sale of real estate, as compared to $1.6 million for the three months ended June 30, 2018.

The Company reported net income attributable to common stockholders of $20.8 million, or $0.20 per diluted share, for the six months ended June 30, 2019, as compared to net income attributable to common stockholders of $17.4 million, or $0.21 per diluted share, for the six months ended June 30, 2018. Net income for the six months ended June 30, 2019, includes $4.8 million of gains on sale of real estate, as compared to $11.6 million for the six months ended June 30, 2018.

The Company reported Company share of Core FFO of $32.1 million, or $0.30 per diluted share of common stock, for the three months ended June 30, 2019, as compared to Company share of Core FFO of $22.9 million, or $0.27 per diluted share of common stock, for the three months ended June 30, 2018. Amounts are adjusted for non-core expenses ($29,000 reported during the second quarter of 2019 and $37,000 reported during the second quarter of 2018).

The Company reported Company share of Core FFO of $61.5 million, or $0.60 per diluted share of common stock, for the six months ended June 30, 2019, as compared to Company share of Core FFO of $44.3 million, or $0.54 per diluted share of common stock, for the six months ended June 30, 2018. Amounts are adjusted for non-core expenses ($52,000 reported during the six months ended June 30, 2019 and $46,000 reported during the six months ended June 30, 2018).

For the three months ended June 30, 2019, the Company’s consolidated portfolio NOI increased 24.8% compared to the second quarter of 2018 and the Company’s consolidated portfolio Cash NOI increased 27.5% compared to the second quarter of 2018.

For the six months ended June 30, 2019, the Company’s consolidated portfolio NOI increased 25.2% compared to the six months ended June 30, 2018, and the Company’s consolidated portfolio Cash NOI increased 26.6% compared to the six months ended June 30, 2018.

For the three months ended June 30, 2019, the Company’s Same Property Portfolio NOI increased 6.8% compared to the second quarter of 2018, driven by a 5.2% increase in Same Property Portfolio total rental revenue and a 0.4% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 11.1% compared to the second quarter of 2018. Stabilized Same Property Portfolio NOI increased 3.9% in the second quarter of 2019 compared to the second quarter of 2018 and Stabilized Same Property Portfolio Cash NOI increased 7.9% in the second quarter of 2019 compared to the second quarter of 2018.

For the six months ended June 30, 2019, the Company’s Same Property Portfolio NOI increased 7.2% compared to the six months ended June 30, 2018, driven by a 5.6% increase in Same Property Portfolio total rental revenue and a 0.5% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 10.6% compared to the




six months ended June 30, 2018. Stabilized Same Property Portfolio NOI increased 4.1% during the six months ended June 30, 2019, compared to the six months ended June 30, 2018, and Stabilized Same Property Portfolio Cash NOI increased 7.7% during the six months ended June 30, 2019, compared to the six months ended June 30, 2018.

Operating Results:

During the second quarter of 2019, the Company signed 106 new and renewal leases totaling 1,720,414 rentable square feet. Average rental rates on comparable new and renewal leases were up 39.4% on a GAAP basis and up 22.3% on a cash basis. The Company signed 50 new leases for 651,023 rentable square feet, with GAAP rents up 45.6% compared to the prior in-place leases. The Company signed 56 renewal leases for 1,069,391 rentable square feet, with GAAP rents up 38.1% compared to the prior in-place leases. For the 50 new leases, cash rents increased 28.4%, and for the 56 renewal leases, cash rents were up 21.0%, compared to the ending cash rents for the prior leases.

At June 30, 2019, the Stabilized Same Property Portfolio occupancy was 97.9% and the Same Property Portfolio occupancy, including value-add repositioning assets, was 96.8%. At June 30, 2019, the Company’s consolidated portfolio, excluding value-add repositioning assets, was 97.8% occupied and the Company’s consolidated portfolio, including value-add repositioning assets, was 94.2% occupied.

The Company has included in a supplemental information package the detailed results and operating statistics that reflect the activities of the Company for the three months ended June 30, 2019. See below for information regarding the supplemental information package. 

Transaction Activity:

In the second quarter 2019, the Company acquired 16 properties, for an aggregate purchase price of $340.0 million, as detailed below. Additionally, the Company sold one property for $11.6 million.

In April 2019, the Company acquired:
1515 East 15th Street, a vacant industrial building containing 238,015 square feet on 2.34 acres of land, located in the Central Los Angeles submarket, for $28.1 million or $118 per square foot;
13890 East Nelson Avenue, a 100% leased single-tenant industrial building containing 256,993 square feet on 11.77 acres of land, located in the Los Angeles - San Gabriel Valley submarket, for $41.8 million or $163 per square foot;
445-449 West Freedom Avenue, a 100% leased multi-tenant industrial building containing 92,647 square feet on 4.06 acres of land, located in the North Orange County submarket, for $18.0 million or $194 per square foot;
2270 Camino Vida Roble, a 70% leased multi-tenant industrial building containing 106,311 square feet on 6.34 acres of land, located in the North San Diego submarket, for $16.8 million or $158 per square foot;
980 Rancheros Drive, a 100% leased single-tenant industrial building containing 48,878 square feet on 2.84 acres of land, located in the North San Diego submarket, for $7.9 million or $162 per square foot;
San Fernando Business Center, an 88% occupied industrial business park containing five industrial buildings, totaling 591,660 square feet on 28.67 acres of land, located in the Los Angeles - San Fernando Valley submarket, for $118.1 million or $200 per square foot;
10015 Waples Court, a vacant industrial building, containing 106,412 square feet on 5.42 acres of land, located in the Central San Diego submarket, for $21.3 million or $200 per square foot; and
19100 South Susana Road, a 100% leased single-tenant industrial building, containing 52,714 square feet on 4.01 acres of land, located in the Los Angeles - South Bay submarket, for $13.5 million or $77 per land square foot.

In May 2019, the Company acquired:
15385 Oxnard Street, a 100% leased single-tenant industrial building, containing 71,467 square feet on 4.9 acres of land, located in the Los Angeles - San Fernando Valley submarket, for $16.8 million or $235 per square foot;
9750-9770 San Fernando Road, a 100% leased 2.69 acre paved land site, located in the Los Angeles - San Fernando Valley submarket, for $7.4 million or $63 per land square foot; and




218 South Turnbull Canyon Road, a 100% leased single-tenant industrial building, containing 190,900 square feet on 8.79 acres of land, located in the Los Angeles - San Gabriel Valley submarket, for $27.1 million or $142 per square foot.

In June 2019, the Company acquired a fully entitled development site, containing 15.47 acres of land, located in the Inland Empire West submarket, for $18.2 million plus an additional $5 million held back in escrow to be released to the seller/developer upon meeting certain development milestones.

In June 2019, the Company sold 2350-2384 Orangethorpe Avenue and 1631 Placentia Avenue, a two building complex containing 62,395 square feet, located in the North Orange County submarket, for $11.6 million or $186 per square foot.

Balance Sheet:
  
During the quarter ended June 30, 2019, the Company issued 5,669,424 shares of common stock under its at-the-market equity offering program (ATM program). The shares were issued at a weighted average price of $38.21 per share, providing gross proceeds of approximately $216.6 million and net proceeds of approximately $213.4 million. As of June 30, 2019, the current ATM program had approximately $535 million of remaining capacity.

As of June 30, 2019, the Company had $761.0 million of outstanding debt, with an average interest rate of 3.46% and an average term-to-maturity of 5.0 years. As of June 30, 2019, $552.5 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 4.9 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 5.4 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 June 30, 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 $0.35 to $0.37 per diluted share
Company share of Core FFO within a range of $1.19 to $1.21 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 97.5%
Same Property Portfolio NOI growth for the year of 5.0% to 6.5%
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 July 30, 2019, and does not include any assumptions for acquisitions, dispositions or balance sheet activities that may or may not occur through the end of the year. A number of factors could impact the Company’s ability to deliver results in line with its guidance, including, but not limited to, interest rates, the economy, the supply and demand of industrial real estate, the availability and terms of financing to the Company or to potential acquirers of real estate and the timing and yields for divestment and investment. There can be no assurance that the Company can achieve such results.

Dividends:

On July 29, 2019, the Company’s Board of Directors declared a dividend in the amount of $0.185 per share for the third quarter of 2019, payable in cash on October 15, 2019, to common stockholders and common unit holders of record as of September 30, 2019.
 
On July 29, 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 September 30, 2019, to preferred stockholders of record as of September 13, 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, July 31, 2019, at 1:00 p.m. Eastern Time to review second quarter results and discuss recent events. The live webcast will be available on the Company’s investor relations website at ir.rexfordindustrial.com. To participate in the call, please dial 877-407-0789 (domestic) or 201-689-8562 (international). A replay of the conference call will be available through August 31, 2019, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13692462.


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 196 properties with approximately 23.9 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
$
0.35

 
$
0.37

Company share of depreciation and amortization
$
0.88

 
$
0.88

Company share of gains on sale of real estate
$
(0.04
)
 
$
(0.04
)
Company share of Core FFO
$
1.19

 
$
1.21



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 June 30, 2019. Therefore, we excluded from our Same Property Portfolio any properties that were acquired or sold during the period from January 1, 2018 through June 30, 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 six months ended June 30, 2019:
14748-14750 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 June 30, 2019, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is 205,855 rentable square feet of space at three of our properties that were classified as repositioning or lease-up.
As of June 30, 2018, the difference between our Same Property Portfolio and our Stabilized Same Property Portfolio is space aggregating 502,115 rentable square feet at eight 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 at a property as the lower of (i) 35,000 square feet of space or (ii) 50% of a property’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. We look to update this definition on an annual basis based on the growth and size of the Company’s consolidated portfolio.

Contact:
Investor Relations:

Stephen Swett
424-256-2153 ext 401
[email protected]




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

 
 
June 30, 2019
 
December 31, 2018
 
(unaudited)
 
 
ASSETS
 
 
 
Land
$
1,590,321

 
$
1,298,957

Buildings and improvements
1,528,750

 
1,332,438

Tenant improvements
66,665

 
60,024

Furniture, fixtures, and equipment
141

 
149

Construction in progress
23,576

 
24,515

Total real estate held for investment
3,209,453

 
2,716,083

Accumulated depreciation
(261,231
)
 
(228,742
)
Investments in real estate, net
2,948,222

 
2,487,341

Cash and cash equivalents
172,209

 
180,601

Restricted cash
11,055

 

Rents and other receivables, net
3,614

 
4,944

Deferred rent receivable, net
25,462

 
22,228

Deferred leasing costs, net
16,722

 
14,002

Deferred loan costs, net
1,004

 
1,312

Acquired lease intangible assets, net
61,664

 
55,683

Acquired indefinite-lived intangible
5,156

 
5,156

Interest rate swap asset
1,414

 
8,770

Other assets
14,204

 
6,723

Acquisition related deposits
4,615

 
925

Total Assets
$
3,265,341

 
$
2,787,685

LIABILITIES & EQUITY
 
 
 
Liabilities
 
 
 
Notes payable
$
757,677

 
$
757,371

Interest rate swap liability
8,671

 
2,351

Accounts payable, accrued expenses and other liabilities
26,065

 
21,074

Dividends payable
20,823

 
15,938

Acquired lease intangible liabilities, net
55,084

 
52,727

Tenant security deposits
26,123

 
23,262

Prepaid rents
6,289

 
6,539

Total Liabilities
900,732

 
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 June 30, 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 June 30, 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 109,739,580 and 96,810,504 shares outstanding as of June 30, 2019 and December 31, 2018, respectively
1,095

 
966

Additional paid in capital
2,255,849

 
1,798,113

Cumulative distributions in excess of earnings
(107,056
)
 
(88,341
)
Accumulated other comprehensive income
(7,101
)
 
6,262

Total stockholders’ equity
2,301,881

 
1,876,094

Noncontrolling interests
62,728

 
32,329

Total Equity
2,364,609

 
1,908,423

Total Liabilities and Equity
$
3,265,341

 
$
2,787,685





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


 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
REVENUES
 
 
 
 
 
 
 
Rental income
63,613

 
51,616

 
123,217

 
100,049

Management, leasing and development services
109

 
140

 
211

 
243

Interest income
668

 

 
1,325

 

TOTAL REVENUES
64,390

 
51,756

 
124,753

 
100,292

OPERATING EXPENSES
 
 
 
 
 
 
 
Property expenses
15,139

 
12,775

 
28,951

 
24,735

General and administrative
7,301

 
6,506

 
14,645

 
12,668

Depreciation and amortization
24,522

 
19,775

 
46,518

 
39,227

TOTAL OPERATING EXPENSES
46,962

 
39,056

 
90,114

 
76,630

OTHER EXPENSES
 
 
 
 
 
 
 
Acquisition expenses
29

 
37

 
52

 
46

Interest expense
6,255

 
6,452

 
12,726

 
12,304

TOTAL EXPENSES
53,246

 
45,545

 
102,892

 
88,980

Gains on sale of real estate
4,810

 
1,608

 
4,810

 
11,591

NET INCOME
15,954

 
7,819

 
26,671

 
22,903

Less: net income attributable to noncontrolling interest
(569
)
 
(129
)
 
(770
)
 
(447
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
15,385

 
7,690

 
25,901

 
22,456

Less: preferred stock dividends
(2,424
)
 
(2,424
)
 
(4,847
)
 
(4,847
)
Less: earnings attributable to participating securities
(113
)
 
(94
)
 
(227
)
 
(191
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
12,848

 
$
5,172

 
$
20,827

 
$
17,418

Net income attributable to common stockholders per share  basic
$
0.12

 
$
0.06

 
$
0.20

 
$
0.22

Net income attributable to common stockholders per share  diluted
$
0.12

 
$
0.06

 
$
0.20

 
$
0.21

Weighted-average shares of common stock outstanding – basic
105,848

 
82,924

 
102,116

 
80,821

Weighted-average shares of common stock outstanding – diluted
106,236

 
83,495

 
102,443

 
81,357






Rexford Industrial Realty, Inc.
Same Property Portfolio Occupancy and NOI and Cash NOI
(Unaudited, dollars in thousands)
 
 
Same Property Portfolio Occupancy:
 
 
 
 
 
 
 
June 30, 2019
 
June 30, 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
97.8%
 
98.2%
 
95.6%
 
99.1%
 
220 bps
 
(90) bps
Orange County
94.3%
 
96.6%
 
94.8%
 
97.9%
 
(50) bps
 
(130) bps
San Bernardino County
97.7%
 
97.7%
 
96.6%
 
96.6%
 
110 bps
 
110 bps
San Diego County
98.8%
 
98.8%
 
97.1%
 
97.1%
 
170 bps
 
170 bps
Ventura County
91.1%
 
97.2%
 
90.3%
 
96.4%
 
80 bps
 
80 bps
Total/Weighted Average
96.8%
 
97.9%
 
95.3%
 
98.0%
 
150 bps
 
(10) bps

(1)
Reflects the occupancy of our Same Property Portfolio as of June 30, 2019, adjusted for total space of 205,855 rentable square feet at three properties that were in various stages of repositioning or lease-up as of June 30, 2019.
(2)
Reflects the occupancy of our Same Property Portfolio as of June 30, 2018, adjusted for space aggregating 502,115 rentable square feet at eight properties that were in various stages of repositioning or lease-up as of June 30, 2018.

Same Property Portfolio NOI and Cash NOI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
$ Change
 
% Change
 
2019
 
2018
 
$ Change
 
% Change
Rental income
$
50,743

 
48,219

 
$
2,524

 
5.2%
 
101,086

 
$
95,750

 
$
5,336

 
5.6%
Property expenses
11,953

 
11,904

 
49

 
0.4%
 
23,706

 
23,593

 
113

 
0.5%
Same Property Portfolio NOI
$
38,790

 
$
36,315

 
$
2,475

 
6.8%
 
$
77,380

 
$
72,157

 
$
5,223

 
7.2%
Straight line rental revenue adjustment
(468
)
 
(1,452
)
 
984

 
(67.8)%
 
(1,939
)
 
(3,400
)
 
1,461

 
(43.0)%
Amortization of above/below market lease intangibles
(992
)
 
(1,273
)
 
281

 
(22.1)%
 
(1,999
)
 
(2,348
)
 
349

 
(14.9)%
Same Property Portfolio Cash NOI
$
37,330

 
$
33,590

 
$
3,740

 
11.1%
 
$
73,442

 
$
66,409

 
$
7,033

 
10.6%






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 June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
15,954

 
$
7,819

 
$
26,671

 
$
22,903

Add:
 
 
 
 
 
 
 
General and administrative
7,301

 
6,506

 
14,645

 
12,668

Depreciation and amortization
24,522

 
19,775

 
46,518

 
39,227

Acquisition expenses
29

 
37

 
52

 
46

Interest expense
6,255

 
6,452

 
12,726

 
12,304

Deduct:
 
 
 
 
 
 
 
Management, leasing and development services
109

 
140

 
211

 
243

Interest income
668

 

 
1,325

 

Gains on sale of real estate
4,810

 
1,608

 
4,810

 
11,591

Net operating income (NOI)
$
48,474

 
$
38,841

 
$
94,266

 
$
75,314

Non-Same Property Portfolio rental income
(12,870
)
 
(3,397
)
 
(22,131
)
 
(4,299
)
Non-Same Property Portfolio property expenses
3,186

 
871

 
5,245

 
1,142

Same Property Portfolio NOI
$
38,790

 
$
36,315

 
$
77,380

 
$
72,157

Straight line rental revenue adjustment
(468
)
 
(1,452
)
 
(1,939
)
 
(3,400
)
Amortization of above/below market lease intangibles
(992
)
 
(1,273
)
 
(1,999
)
 
(2,348
)
Same Property Portfolio Cash NOI
$
37,330

 
$
33,590

 
$
73,442

 
$
66,409

 
 
 
 
 
 
 
 
NOI (from above)
$
48,474

 
$
38,841

 
$
94,266

 
$
75,314

Non-Stabilized Same Property Portfolio rental income
(15,909
)
 
(5,120
)
 
(28,047
)
 
(7,481
)
Non-Stabilized Same Property Portfolio property expenses
3,881

 
1,353

 
6,614

 
2,100

Stabilized Same Property Portfolio NOI
$
36,446

 
$
35,074

 
$
72,833

 
$
69,933

Straight line rental revenue adjustment
(373
)
 
(1,284
)
 
(1,481
)
 
(3,113
)
Amortization of above/below market lease intangibles
(999
)
 
(1,276
)
 
(2,014
)
 
(2,438
)
Stabilized Same Property Portfolio Cash NOI
$
35,074

 
$
32,514

 
$
69,338

 
$
64,382






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

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
15,954

 
$
7,819

 
$
26,671

 
$
22,903

Add:
 
 
 
 
 

 
 

Depreciation and amortization
24,522

 
19,775

 
46,518

 
39,227

Deduct:
 
 
 
 
 
 
 
Gains on sale of real estate
4,810

 
1,608

 
4,810

 
11,591

Funds From Operations (FFO)
$
35,666

 
$
25,986

 
$
68,379

 
$
50,539

Less: preferred stock dividends
(2,424
)
 
(2,424
)
 
(4,847
)
 
(4,847
)
Less: FFO attributable to noncontrolling interest(1)
(1,021
)
 
(562
)
 
(1,754
)
 
(1,119
)
Less: FFO attributable to participating securities(2)
(182
)
 
(153
)
 
(358
)
 
(311
)
Company share of FFO
$
32,039

 
$
22,847

 
$
61,420

 
$
44,262

 
 
 
 
 
 
 
 
Company Share of FFO per common share - basic
$
0.30

 
$
0.28

 
$
0.60

 
$
0.55

Company Share of FFO per common share - diluted
$
0.30

 
$
0.27

 
$
0.60

 
$
0.54

 
 
 
 
 
 
 
 
FFO
$
35,666

 
$
25,986

 
$
68,379

 
$
50,539

Adjust:
 
 
 
 
 
 
 
Acquisition expenses
29

 
37

 
52

 
46

Core FFO
$
35,695

 
$
26,023

 
$
68,431

 
$
50,585

Less: preferred stock dividends
(2,424
)
 
(2,424
)
 
(4,847
)
 
(4,847
)
Less: Core FFO attributable to noncontrolling interest(1)
(1,021
)
 
(563
)
 
(1,754
)
 
(1,120
)
Less: Core FFO attributable to participating securities(2)
(182
)
 
(154
)
 
(358
)
 
(312
)
Company share of Core FFO
$
32,068

 
$
22,882

 
$
61,472

 
$
44,306

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

 
$
0.28

 
$
0.60

 
$
0.55

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

 
$
0.27

 
$
0.60

 
$
0.54

 
 
 
 
 
 
 
 
Weighted-average shares of common stock outstanding – basic
105,848

 
82,924

 
102,116

 
80,821

Weighted-average shares of common stock outstanding – diluted
106,236

 
83,495

 
102,443

 
81,357


(1)
Noncontrolling interests relate to interests in the Company’s operating partnership, represented by common units and preferred units (Series 1 CPOP units) of partnership interests in the 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

398968081_q2cover.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/Development
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.

 
Second Quarter 2019
Supplemental Financial Reporting Package
Page 2

 398968081_logo3a12.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
J.P. Morgan
 
Michael W. Mueller, CFA
 
(212) 622-6689
Jefferies LLC
 
Jonathan Petersen
 
(212) 284-1705
Stifel Nicolaus & Co.
 
John W. Guinee
 
(443) 224-1307
Wells Fargo Securities
 
Blaine Heck
 
(443) 263-6529
Disclaimer: This list may not be complete and is subject to change as firms add or delete coverage of our company. Please note that any opinions, estimates, forecasts or predictions regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Rexford Industrial Realty, Inc. or its management. We are providing this listing as a service to our stockholders and do not by listing these firms imply our endorsement of, or concurrence with, such information, conclusions or recommendations. Interested persons may obtain copies of analysts’ reports on their own; we do not distribute these reports.

 
Second Quarter 2019
Supplemental Financial Reporting Package
Page 3

 398968081_logo3a12.jpg
 


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

 
Three Months Ended
 
June 30, 2019
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
Financial Results:
 
 
 
 
 
 
 
 
 
Total rental revenues
$
63,613

 
$
59,604

 
$
56,125

 
$
54,469

 
$
51,616

Net income
$
15,954

 
$
10,717

 
$
15,207

 
$
8,965

 
$
7,819

Net Operating Income (NOI)
$
48,474

 
$
45,792

 
$
42,483

 
$
41,175

 
$
38,841

Company share of Core FFO
$
32,068

 
$
29,404

 
$
27,216

 
$
26,050

 
$
22,882

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

 
$
0.30

 
$
0.29

 
$
0.28

 
$
0.27

Adjusted EBITDA
$
45,342

 
$
42,164

 
$
40,348

 
$
38,003

 
$
36,784

Dividend declared per common share
$
0.185

 
$
0.185

 
$
0.160

 
$
0.160

 
$
0.160

Portfolio Statistics:
 
 
 
 
 
 
 
 
 
Portfolio SF - consolidated
23,874,494

 
22,144,631

 
21,295,443

 
20,505,157

 
20,213,729

Ending occupancy - consolidated portfolio
94.2
%
 
94.6
%
 
95.4
%
 
95.1
%
 
95.2
%
Stabilized occupancy - consolidated portfolio
97.8
%
 
97.8
%
 
97.5
%
 
97.6
%
 
98.1
%
Leasing spreads - GAAP
39.4
%
 
26.2
%
 
25.1
%
 
32.2
%
 
35.5
%
Leasing spreads - cash
22.3
%
 
17.3
%
 
14.8
%
 
21.1
%
 
23.9
%
Same Property Performance:
 
 
 
 
 
 
 
 
 
Same Property Portfolio SF
18,251,504

 
18,251,504

 
18,251,504

 
18,251,504

 
18,251,504

Same Property Portfolio ending occupancy
96.8
%
 
96.8
%
 
96.0
%
 
95.6
%
 
95.3
%
Same Property Portfolio NOI growth(2)
6.8
%
 
7.7
%
 
n/a

 
n/a

 
n/a

Same Property Portfolio Cash NOI growth(2)
11.1
%
 
10.0
%
 
n/a

 
n/a

 
n/a

Stabilized Same Property Portfolio ending occupancy
97.9
%
 
97.9
%
 
97.3
%
 
97.7
%
 
98.0
%
Stabilized Same Property Portfolio NOI growth(2)
3.9
%
 
4.4
%
 
n/a

 
n/a

 
n/a

Stabilized Same Property Portfolio Cash NOI growth(2)
7.9
%
 
7.5
%
 
n/a

 
n/a

 
n/a

Capitalization:
 
 
 
 
 
 
 
 
 
Common stock price at quarter end
$
40.37

 
$
35.81

 
$
29.47

 
$
31.96

 
$
31.39

Common shares issued and outstanding
109,519,791

 
103,804,570

 
96,610,106

 
92,497,666

 
90,848,198

Total shares and units issued and outstanding at period end(3)
111,943,020

 
106,267,799

 
99,025,917

 
94,500,770

 
92,861,762

Weighted average shares outstanding - diluted
106,236,309

 
98,607,786

 
94,487,773

 
91,945,206

 
83,494,825

5.875% Series A and Series B Cumulative Redeemable Preferred Stock and 4.43937% Cumulative Redeemable Convertible Preferred Units
$
192,031

 
$
165,000

 
$
165,000

 
$
165,000

 
$
165,000

Total equity market capitalization
$
4,711,171

 
$
3,970,450

 
$
3,083,294

 
$
3,185,245

 
$
3,079,931

Total consolidated debt
$
761,038

 
$
761,077

 
$
761,116

 
$
761,154

 
$
761,192

Total combined market capitalization (net debt plus equity)
$
5,300,000

 
$
4,454,952

 
$
3,663,809

 
$
3,762,495

 
$
3,678,419

Ratios:
 
 
 
 
 
 
 
 
 
Net debt to total combined market capitalization
11.1
%
 
10.9
%
 
15.8
%
 
15.3
%
 
16.3
%
Net debt to Adjusted EBITDA (quarterly results annualized)
3.2x

 
2.9x

 
3.6x

 
3.8x

 
4.1x

(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 Q1’19 has been restated to remove the results of Orangethorpe, which was sold during Q2’19. See page 22 for a list of dispositions completed during 2019.
(3)
Includes the following number of OP Units and vested LTIP units held by noncontrolling interests: 2,423,229 (June 30, 2019), 2,463,229 (March 31, 2019), 2,415,811 (December 31, 2018), 2,003,104 (September 30, 2018) and 2,013,564 (June 30, 2018). Excludes the following number of shares of unvested restricted stock: 219,789 (June 30, 2019), 223,476 (March 31, 2019), 200,398 (December 31, 2018), 209,214 (September 30, 2018) and 213,867 (June 30, 2018). Excludes unvested LTIP units and unvested performance units.

 
Second Quarter 2019
Supplemental Financial Reporting Package
Page 4

 398968081_logo3a12.jpg
 


Consolidated Balance Sheets.
 
 
 
 
(unaudited and in thousands)
 
June 30, 2019
 
March 31, 2019
 
December 31, 2018
 
September 30, 2018
 
June 30, 2018
ASSETS
 
 
 
 
 
 
 
 
 
Land
$
1,590,321

 
$
1,364,738

 
$
1,298,957

 
$
1,218,386

 
$
1,199,633

Buildings and improvements
1,528,750

 
1,422,684

 
1,332,438

 
1,253,935

 
1,229,100

Tenant improvements
66,665

 
62,908

 
60,024

 
54,808

 
53,531

Furniture, fixtures, and equipment
141

 
149

 
149

 
151

 
151

Construction in progress
23,576

 
20,331

 
24,515

 
50,367

 
44,631

  Total real estate held for investment
3,209,453

 
2,870,810

 
2,716,083

 
2,577,647

 
2,527,046

Accumulated depreciation
(261,231
)
 
(245,033
)
 
(228,742
)
 
(214,680
)
 
(200,006
)
Investments in real estate, net
2,948,222

 
2,625,777

 
2,487,341

 
2,362,967

 
2,327,040

Cash and cash equivalents
172,209

 
276,575

 
180,601

 
183,904

 
162,704

Restricted cash
11,055

 

 

 

 

Rents and other receivables, net
3,614

 
4,548

 
4,944

 
5,042

 
3,920

Deferred rent receivable, net
25,462

 
24,290

 
22,228

 
20,770

 
19,432

Deferred leasing costs, net
16,722

 
14,139

 
14,002

 
13,446

 
12,600

Deferred loan costs, net
1,004

 
1,158

 
1,312

 
1,467

 
1,621

Acquired lease intangible assets, net(1)
61,664

 
56,122

 
55,683

 
53,402

 
57,054

Acquired indefinite-lived intangible
5,156

 
5,156

 
5,156

 
5,156

 
5,156

Interest rate swap asset
1,414

 
5,896

 
8,770

 
13,851

 
13,036

Other assets(2)
14,204

 
12,580

 
6,723

 
7,508

 
8,216

Acquisition related deposits
4,615

 
10,875

 
925

 
1,325

 
1,600

Total Assets
$
3,265,341


$
3,037,116

 
$
2,787,685

 
$
2,668,838

 
$
2,612,379

LIABILITIES & EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 

 
 
Notes payable
$
757,677

 
$
757,524

 
$
757,371

 
$
757,218

 
$
757,064

Interest rate swap liability
8,671

 
4,604

 
2,351

 

 

Accounts payable, accrued expenses and other liabilities(2)
26,065

 
33,728

 
21,074

 
30,411

 
19,683

Dividends payable
20,823

 
19,774

 
15,938

 
15,214

 
14,952

Acquired lease intangible liabilities, net(3)
55,084

 
52,426

 
52,727

 
52,289

 
53,939

Tenant security deposits
26,123

 
24,396

 
23,262

 
21,888

 
20,534

Prepaid rents
6,289

 
6,828

 
6,539

 
6,424

 
6,374

Total Liabilities
900,732

 
899,280

 
879,262

 
883,444

 
872,546

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
1,095

 
1,038

 
966

 
924

 
908

Additional paid in capital
2,255,849

 
2,042,218

 
1,798,113

 
1,666,339

 
1,614,650

Cumulative distributions in excess of earnings
(107,056
)
 
(99,715
)
 
(88,341
)
 
(85,358
)
 
(76,926
)
Accumulated other comprehensive income
(7,101
)
 
1,261

 
6,262

 
13,558

 
12,753

Total stockholders’ equity
2,301,881

 
2,103,896

 
1,876,094

 
1,754,557

 
1,710,479

Noncontrolling interests
62,728

 
33,940

 
32,329

 
30,837

 
29,354

Total Equity
2,364,609

 
2,137,836

 
1,908,423

 
1,785,394

 
1,739,833

Total Liabilities and Equity
$
3,265,341

 
$
3,037,116

 
$
2,787,685

 
$
2,668,838

 
$
2,612,379

(1)
Includes net above-market tenant lease intangibles of $5,450 (June 30, 2019), $5,410 (March 31, 2019), $4,647 (December 31, 2018), $4,453 (September 30, 2018) and $4,692 (June 30, 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 June 30, 2019 we have operating lease right-of-use assets and lease liabilities of of $6.3 million and $6.6 million, respectively.
(3)
Includes net below-market tenant lease intangibles of $55,084 (June 30, 2019), $52,426 (March 31, 2019), $52,610 (December 31, 2018), $52,164 (September 30, 2018) and $53,806 (June 30, 2018).

 
Second Quarter 2019
Supplemental Financial Reporting Package
Page 5

 398968081_logo3a12.jpg
 


Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands, except share and per share data)
 
Three Months Ended
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Sep 30, 2018
 
Jun 30, 2018
Revenues
 
 
 
 
 
 
 
 
 
Rental income(1)
63,613

 
59,604

 
56,125


54,469

 
51,616

Management, leasing, and development services
109

 
102

 
114


116

 
140

Interest income
668

 
657

 
769


609

 

Total Revenues
64,390

 
60,363

 
57,008


55,194

 
51,756

Operating Expenses
 
 
 
 


 
 
 
Property expenses
15,139

 
13,812

 
13,642


13,294

 
12,775

General and administrative(2)
7,301

 
7,344

 
6,297


6,229

 
6,506

Depreciation and amortization
24,522

 
21,996

 
20,671


20,144

 
19,775

Total Operating Expenses
46,962

 
43,152

 
40,610


39,667

 
39,056

Other Expenses
 
 
 
 


 
 
 
Acquisition expenses
29

 
23

 
166


106

 
37

Interest expense
6,255

 
6,471

 
6,656


6,456

 
6,452

Total Expenses
53,246

 
49,646

 
47,432


46,229

 
45,545

Gains on sale of real estate
4,810

 

 
5,631



 
1,608

Net Income
15,954

 
10,717

 
15,207


8,965

 
7,819

Less: net income attributable to noncontrolling interests
(569
)
 
(201
)
 
(277
)

(141
)
 
(129
)
Net income attributable to Rexford Industrial Realty, Inc.
15,385

 
10,516

 
14,930


8,824

 
7,690

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

(2,423
)
 
(2,424
)
Less: earnings allocated to participating securities
(113
)
 
(114
)
 
(93
)

(94
)
 
(94
)
Net income attributable to common stockholders
$
12,848

 
$
7,979

 
$
12,413


$
6,307

 
$
5,172

 
 
 
 
 



 

Earnings per Common Share
 
 
 
 



 

Net income attributable to common stockholders per share - basic
$
0.12

 
$
0.08

 
$
0.13


$
0.07

 
$
0.06

Net income attributable to common stockholders per share - diluted
$
0.12

 
$
0.08

 
$
0.13


$
0.07

 
$
0.06

 
 
 
 
 


 
 
 
Weighted average shares outstanding - basic
105,847,557
 
98,342,677
 
93,995,846
 
91,463,594
 
82,924,208
Weighted average shares outstanding - diluted
106,236,309
 
98,607,786
 
94,487,773
 
91,945,206
 
83,494,825
(1)
See footnote (1) on the next page (page 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 and $232 for the three months ended December 31, 2018, September 30, 2018, and June 30, 2018, respectively.


 
Second Quarter 2019
Supplemental Financial Reporting Package
Page 6

 398968081_logo3a12.jpg
 



Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues
 
 
 
 
 
 
 
Rental income(1)
63,613

 
51,616

 
123,217

 
100,049

Management, leasing, and development services
109

 
140

 
211

 
243

Interest income
668

 

 
1,325

 

Total Revenues
64,390

 
51,756

 
124,753

 
100,292

Operating Expenses
 
 
 
 
 
 
 
Property expenses
15,139

 
12,775

 
28,951

 
24,735

General and administrative (2)
7,301

 
6,506

 
14,645

 
12,668

Depreciation and amortization
24,522

 
19,775

 
46,518

 
39,227

Total Operating Expenses
46,962

 
39,056

 
90,114

 
76,630

Other Expenses
 
 
 
 
 
 
 
Acquisition expenses
29

 
37

 
52

 
46

Interest expense
6,255

 
6,452

 
12,726

 
12,304

Total Expenses
53,246

 
45,545

 
102,892

 
88,980

Gains on sale of real estate
4,810

 
1,608

 
4,810

 
11,591

Net Income
15,954

 
7,819

 
26,671

 
22,903

 Less: net income attributable to noncontrolling interests
(569
)
 
(129
)
 
(770
)
 
(447
)
Net income attributable to Rexford Industrial Realty, Inc.
15,385

 
7,690

 
25,901

 
22,456

 Less: preferred stock dividends
(2,424
)
 
(2,424
)
 
(4,847
)
 
(4,847
)
 Less: earnings allocated to participating securities
(113
)
 
(94
)
 
(227
)
 
(191
)
Net income attributable to common stockholders
$
12,848

 
$
5,172

 
$
20,827

 
$
17,418

(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 statements 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 $232 thousand and $417 thousand during the three and six months ended June 30, 2018, respectively.

 
Second Quarter 2019
Supplemental Financial Reporting Package
Page 7

 398968081_logo3a12.jpg