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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): May 4, 2020
 
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: (310966-1680

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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
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
5.625% Series C Cumulative Redeemable Preferred Stock
 
REXR-PC
 
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
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.
 





ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 4, 2020, Rexford Industrial Realty, Inc. (“Rexford Industrial”) issued a press release announcing its earnings for the quarter ended March 31, 2020, and distributed certain supplemental financial information. On May 4, 2020, 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, 2020 and distributed certain supplemental information. On May 4, 2020, 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
 
 
 
 
99.2
 
 
 
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)






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.
May 4, 2020
 
/s/ Michael S. Frankel
 
Michael S. Frankel
Co-Chief Executive Officer
(Principal Executive Officer)
 
 
 
Rexford Industrial Realty, Inc.
May 4, 2020
 
/s/ Howard Schwimmer
 
Howard Schwimmer
Co-Chief Executive Officer
(Principal Executive Officer)



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

403856761_rexlogo11520a02.jpg
REXFORD INDUSTRIAL ANNOUNCES FIRST QUARTER 2020 FINANCIAL RESULTS

- 1Q 2020 Net Income Attributable to Common Stockholders of $10.8M, or $0.09 per Diluted Share -
- 1Q 2020 Company Share of Core FFO of $37.5M, Up 27.6% Compared to 1Q 2019 -
- 1Q 2020 Company Share of Core FFO of $0.33 per Diluted Share, Up 10.0% Compared to 1Q 2019 -
- 1Q 2020 Stabilized Same Property Portfolio NOI and Cash NOI Up 3.7% and 7.5%, Respectively, Over 1Q 2019 -
- 1Q 2020 GAAP Releasing Spreads of 36.6% and Cash Releasing Spreads of 24.4% -
- Quarterly Dividend Increased by 16.2% to $0.215 per Share -
- Revised Core FFO 2020 Guidance Range of $1.26 to $1.29 per Diluted Share Due to COVID-19 Impact -

Los Angeles, California - May 4, 2020 - Rexford Industrial Realty, Inc. (the “Company” or “Rexford Industrial”) (NYSE: REXR), a real estate investment trust (“REIT”) focused on creating value by investing in and operating industrial properties in Southern California infill markets, today announced financial and operating results for the first quarter of 2020.

First Quarter 2020 Financial and Operational Highlights:
Net income attributable to common stockholders of $0.09 per diluted share compared to $0.08 per diluted share for the first quarter of last year.
Company share of Core FFO increased 27.6% to $37.5 million year-over-year.
Company share of Core FFO per diluted share increased 10.0% to $0.33 per diluted share year-over-year.
Consolidated Portfolio Net Operating Income (NOI) of $59.4 million, an increase of 29.7% year-over-year.
Consolidated Portfolio Cash NOI of $55.3 million, representing an increase of 31.8% year-over-year.
Stabilized Same Property Portfolio GAAP and Cash NOI increased 3.7% and 7.5%, respectively, year-over-year.
Comparable rental rates on 1,594,358 rentable square feet of new and renewal leases were 36.6% higher than prior rents on a GAAP basis and 24.4% higher on a cash basis.
Acquired 10 industrial properties for an aggregate purchase price of $203.2 million.

“Our first quarter results demonstrate the strength of Rexford’s platform and value creation opportunity within the infill Southern California industrial market. We achieved Core FFO growth of 27.6%, or 10.0% on a per share basis, for the first quarter of 2020, which was driven by strong internal and external growth,” stated Michael Frankel and Howard Schwimmer, Co-Chief Executive Officers of the Company. ”Due to the continued favorable supply demand dynamics within our submarkets, we achieved first quarter Stabilized Same Property NOI growth of 3.7% and 7.5% on a GAAP and cash basis, respectively, and delivered re-leasing spreads of 36.6% on a GAAP basis and 24.4% on a cash basis with nearly 1.6 million square feet of leasing activity. We also completed the acquisition of a 10-property portfolio for an aggregate purchase price of $203.2 million, which was funded through a creative combination of cash and common and preferred operating partnership units.”

“As we look ahead through 2020 and beyond, we continue to navigate the impact of COVID-19. We remain fully operational as an essential part of the supply chain, with our biggest concern being the health and safety of our employees, our tenants and their families during this time. In addition to the impacts associated with health-safety and stay-at-home orders, most of the California municipalities in which we own properties have not only implemented eviction moratoriums but have also reached beyond the mandates granted in most other states by providing tenants impacted by COVID-19 the unilateral ability to defer their rent. While it is impossible to discern which tenants may seek rent relief out of need versus those taking advantage of their new-found, government-mandated ability to defer rent, we believe the favorable long-term tenant demand fundamentals combined with exceptionally high-barriers limiting the ability to resolve our ongoing supply-demand imbalance represent competitive advantages within infill Southern California. We have observed the resilience of tenants in our




markets through prior cycles and believe that to be a positive differentiating attribute associated with our value-driven strategy focused on infill Southern California. Despite these COVID-19 challenges, we believe Rexford Industrial is well positioned to successfully work through these market disruptions, capitalize upon internal and external growth opportunities as they may arise, and emerge from this phase of the cycle stronger than ever. We believe our low-leverage balance sheet and exclusive focus on prime, infill Southern California, the nation’s largest, highest-value and highest-demand last-mile logistics market, which continues to see increasing tenant demand driven by e-commerce, among other growth drivers, represent a favorable back-drop as we move forward, focused on creating value for our shareholders.”

Financial Results:

The Company reported net income attributable to common stockholders of $10.8 million, or $0.09 per diluted share, for the three months ended March 31, 2020, as compared to net income attributable to common stockholders of $8.0 million, or $0.08 per diluted share, for the three months ended March 31, 2019.

The Company reported Company share of Core FFO of $37.5 million, or $0.33 per diluted share of common stock, for the three months ended March 31, 2020, as compared to 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. Amounts are adjusted for non-core expenses of $5 thousand for the three months ended March 31, 2020, and $23 thousand for the three months ended March 31, 2019.

For the three months ended March 31, 2020, the Company’s consolidated portfolio NOI increased 29.7% compared to the three months ended March 31, 2019, and the Company’s consolidated portfolio Cash NOI increased 31.8% compared to the three months ended March 31, 2019.

For the three months ended March 31, 2020, the Company’s Stabilized Same Property Portfolio NOI increased 3.7% compared to the first quarter of 2019, driven by a 3.7% increase in Stabilized Same Property Portfolio rental income and a 4.0% increase in Stabilized Same Property Portfolio expenses. Stabilized Same Property Portfolio Cash NOI increased 7.5% compared to the first quarter of 2019.

Operating Results:

During the first quarter of 2020, the Company signed 107 new and renewal leases totaling 1,594,358 rentable square feet. Average rental rates on comparable new and renewal leases were up 36.6% on a GAAP basis and up 24.4% on a cash basis. The Company signed 47 new leases for 424,435 rentable square feet, with GAAP rents up 33.5% compared to the prior in-place leases. The Company signed 60 renewal leases for 1,169,923 rentable square feet, with GAAP rents up 37.2% compared to the prior in-place leases. For the 47 new leases, cash rents increased 22.1%, and for the 60 renewal leases, cash rents were up 24.8%, compared to the ending cash rents for the prior leases.

At March 31, 2020, the Stabilized Same Property Portfolio occupancy was 98.0%. At March 31, 2020, the Company’s consolidated portfolio, excluding value-add repositioning assets, was 97.4% occupied and the Company’s consolidated portfolio, including value-add repositioning assets, was 95.2% 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 March 31, 2020. See below for information regarding the supplemental information package. 

Transaction Activity:

In the first quarter 2020, the Company acquired 10 properties, for an aggregate purchase price of $203.2 million, as detailed below.

In March 2020, the Company acquired, as part of a single portfolio:
701-751 Kingshill Place, a 73% leased six-building industrial complex containing 169,069 square feet on 7.95 acres of land, located in the Los Angeles – South Bay submarket, for $33.0 million, or $195 per square foot.
2601-2641 Manhattan Beach Boulevard, a 96% leased six-building industrial complex containing 126,726 square feet on 6.58 acres of land, located in the Los Angeles – South Bay submarket, for $38.2 million, or $302 per square foot.
2410-2420 Santa Fe Avenue, a 100% leased single-tenant industrial building containing 112,000 square feet on 5.57 acres of land, located in the Los Angeles – South Bay submarket, for $34.7 million, or $310 per square foot.




11600 Los Nietos Road, a 100% leased single-tenant industrial building containing 103,982 square feet on 4.54 acres of land, located in the Mid-Counties submarket, for $16.6 million, or $160 per square foot.
5160 Richton Street, an 86% leased multi-tenant industrial building containing 94,976 square feet on 4.28 acres of land, located in the Inland Empire – West submarket, for $15.6 million, or $164 per square foot.
2205 126th Street, a 40% leased multi-tenant industrial building containing 63,532 square feet on 3.56 acres of land, located in the Los Angeles – South Bay submarket, for $17.1 million, or $269 per square foot.
11832-11954 La Cienega Boulevard, a 93% leased four-building industrial complex containing 63,462 square feet on 3.05 acres of land, located in the Los Angeles – South Bay submarket, for $19.2 million, or $302 per square foot.
7612-7642 Woodwind Drive, a 100% leased three-building industrial complex containing 62,377 square feet on 4.04 acres of land, located in the Orange County – West submarket, for $13.7 million, or $220 per square foot.
960-970 Knox Street, a 100% leased two-building industrial complex containing 39,400 square feet on 2.27 acres of land, located in the Los Angeles – South Bay submarket, for $9.6 million, or $244 per square foot.
25781 Atlantic Ocean Drive, a 100% leased single-tenant industrial building containing 27,960 square feet on 1.65 acres of land, located in the Orange County – South submarket, for $5.5 million, or $196 per square foot.

Subsequent to the first quarter of 2020, the Company completed one additional acquisition for a purchase price of $15.5 million.

Balance Sheet:
 
The Company ended the first quarter with $612 million in liquidity, including $112 million in cash and $500 million available under our unsecured revolving credit facility.

During the quarter ended March 31, 2020, the Company issued 2,062,505 shares of common stock under its at-the-market equity offering program (ATM program). The shares were issued at a weighted average price of $36.00 per share, providing gross proceeds of approximately $74.2 million and net proceeds of approximately $73.1 million. As of March 31, 2020, the current ATM program had approximately $269.9 million of remaining capacity.

In February 2020, the Company amended its senior unsecured credit facility to, among other changes, increase the aggregate commitment for the unsecured revolving credit facility to $500 million from $350 million and to extend the maturity date of the unsecured revolving credit facility to February 2024 from February 2021. As of March 31, 2020, the Company did not have any borrowing outstanding under the unsecured revolving credit facility, leaving $500 million available for future borrowings.

In March 2020, in connection with the acquisition of the ten-property industrial portfolio, the Company (i) issued 1,406,170 common units of limited partnership interests in the Operating Partnership, (ii) issued 906,374 4.00% cumulative redeemable convertible preferred units of partnership interest in the Operating Partnership and (iii) assumed $44.7 million of secured mortgage loans.

As of March 31, 2020, the Company had $905.6 million of outstanding debt, with an average interest rate of 3.52% and an average term-to-maturity of 5.3 years. As of March 31, 2020, $847.1 million, or 94%, of the Company’s outstanding debt was fixed-rate with an average interest rate of 3.58% and an average term-to-maturity of 5.5 years. The remaining $58.5 million, or 6%, of the Company’s outstanding debt was floating-rate, with an average interest rate of LIBOR + 1.70% and an average term-to-maturity of 3.3 years. The Company has no debt maturities until 2022.

COVID-19 Impact on Operations (As of May 3, 2020)

In response to COVID-19, most California municipalities in the markets in which we own properties have implemented eviction moratoriums and granted tenants impacted by COVID-19 the unilateral right to defer rent while the emergency “shelter in place” orders are in effect, with repayment generally within three to six months after the end of the local emergency “shelter in place” or similar order. A number of our tenants have taken advantage of these local government mandates authorizing deferral of rent. While the Company is currently unable to completely estimate the impact that COVID-19 and these emergency orders will have on its financial condition and results of operations, as of the date of this press release, the Company has seen the following impact (using tenant counts and In-Place Annualized Base Rent (“ABR”) as of March 31, 2020):

The Company collected March rents from tenants representing approximately 97.9% of ABR.
The Company has collected contractual April rents or executed short-term rent relief agreements with tenants representing 95.4% of ABR.
The Company has collected April cash rents from tenants representing 82.1% of ABR.
A number of tenants are exercising their local government-mandated rights to unilaterally defer rent without an agreement.
Additional details regarding these rent relief agreements related to the impact of COVID-19 can be found in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020, on the Company’s investor relations website at www.ir.rexfordindustrial.com and via EDGAR through the SEC website at http://www.sec.gov.

Guidance:

While the full economic impact of the COVID-19 pandemic and efforts to contain its spread, as well as the impact of
local California government mandates enabling tenants impacted by COVID-19 to unilaterally defer rent, is difficult to predict or quantify, based on recent trends the Company has observed, the Company is revising its full year 2020 guidance as follows:





Net income attributable to common stockholders within a range of $0.28 to $0.31 per diluted share
Company share of Core FFO within a range of $1.26 to $1.29 per diluted share
Year-end Stabilized Same Property Portfolio occupancy within a range of 95.0% to 96.0%
Stabilized Same Property Portfolio NOI growth for the year within a range of 1.3% to 1.8%
General and administrative expenses within a range of $36.5 million to $37.0 million

The Core FFO guidance refers only to the Company’s in-place portfolio as of May 4, 2020, 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, the number of tenants requesting rent relief or failing to pay rent in future periods, the duration and severity of the impact of the COVID-19 pandemic, 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 May 4, 2020, the Company’s Board of Directors declared a dividend in the amount of $0.215 per share for the second quarter of 2020, payable in cash on July 15, 2020, to common stockholders and common unit holders of record as of June 30, 2020.
 
On May 4, 2020, the Company’s Board of Directors declared a quarterly dividend of $0.367188 per share of its Series A Cumulative Redeemable Preferred Stock, a quarterly dividend of $0.367188 per share of its Series B Cumulative Redeemable Preferred Stock and a quarterly dividend of $0.351563 per share of its Series C Cumulative Redeemable Preferred Stock, in each case, payable in cash on June 30, 2020, to preferred stockholders of record as of June 15, 2020.

Supplemental Information:

Details regarding these results and incremental detail on the Company’s business related to the impact of COVID-19 can be found in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020, on the Company’s investor relations website at www.ir.rexfordindustrial.com and via EDGAR through the SEC website at http://www.sec.gov.

Earnings Release, Investor Conference Webcast and Conference Call:

The Company will host a webcast and conference call on Tuesday, May 5, 2020, 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 5, 2020, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13702286.

About Rexford Industrial:

Rexford Industrial, a real estate investment trust focused on owning and operating industrial properties throughout Southern California infill markets, owns 224 properties with approximately 27.5 million rentable square feet and manages an additional 20 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, 2019, 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 2020 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.
 
2020 Estimate
 
Low
 
High
Net income attributable to common stockholders
$
0.28

 
$
0.31

Company share of depreciation and amortization
$
0.98

 
$
0.98

Company share of Core FFO
$
1.26

 
$
1.29



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 Stabilized Same Property Portfolio. A calculation of NOI for our Stabilized Same Property Portfolio, as well as a reconciliation of net income to NOI for our 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 Stabilized Same Property Portfolio. A calculation of Cash NOI for our Stabilized Same Property Portfolio, as well as a reconciliation of net income to Cash NOI for our Stabilized Same Property Portfolio, is set forth below.

Stabilized Same Property Portfolio:
Our Stabilized Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly owned by us for the period from January 1, 2019 through May 4, 2020, and that were stabilized as of January 1, 2019. Therefore, our Stabilized Same Property Portfolio excludes the properties listed below that were or will be classified as development, repositioning, or lease-up properties during 2019 and 2020. For 2020, our Stabilized Same Property Portfolio consists of 161 properties aggregating 19,831,139 rentable square feet.




1210 N. Red Gum Street
 
16121 Carmenita Road
 
3233 Mission Oaks Boulevard
1332-1340 Rocky Point Drive
 
1998 Surveyor Avenue
 
7110 E. Rosecrans Avenue
14748-14750 Nelson Avenue
 
2700-2722 Fairview Street
 
851 Lawrence Drive
15401 Figueroa Street
 
28903 Avenue Paine
 
 
1580 Carson Street
 
29003 Avenue Sherman
 
 

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) 40,000 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)

 
 
March 31, 2020
 
December 31, 2019
 
(unaudited)
 
 
ASSETS
 
 
 
Land
$
2,068,460

 
$
1,927,098

Buildings and improvements
1,748,675

 
1,680,178

Tenant improvements
75,341

 
72,179

Furniture, fixtures, and equipment
141

 
141

Construction in progress
26,791

 
18,794

Total real estate held for investment
3,919,408

 
3,698,390

Accumulated depreciation
(316,812
)
 
(296,777
)
Investments in real estate, net
3,602,596

 
3,401,613

Cash and cash equivalents
112,432

 
78,857

Restricted cash
46

 

Rents and other receivables, net
5,859

 
5,889

Deferred rent receivable, net
31,339

 
29,671

Deferred leasing costs, net
19,482

 
18,688

Deferred loan costs, net
2,770

 
695

Acquired lease intangible assets, net
76,138

 
73,090

Acquired indefinite-lived intangible
5,156

 
5,156

Interest rate swap asset

 
766

Other assets
10,717

 
9,671

Acquisition related deposits
5,896

 
14,526

Total Assets
$
3,872,431

 
$
3,638,622

LIABILITIES & EQUITY
 
 
 
Liabilities
 
 
 
Notes payable
$
903,802

 
$
857,842

Interest rate swap liability
22,690

 
8,488

Accounts payable, accrued expenses and other liabilities
39,000

 
31,112

Dividends payable
25,931

 
21,624

Acquired lease intangible liabilities, net
63,914

 
59,340

Tenant security deposits
30,342

 
28,779

Prepaid rents
8,074

 
8,988

Total Liabilities
1,093,753

 
1,016,173

Equity
 
 
 
Rexford Industrial Realty, Inc. stockholders’ equity
 
 
 
Preferred stock, $0.01 par value per share, 10,050,000 shares authorized, at March 31, 2020 and December 31, 2019
 
 
 
5.875% series A cumulative redeemable preferred stock, 3,600,000 shares outstanding at March 31, 2020 and December 31, 2019 ($90,000 liquidation preference)
86,651

 
86,651

5.875% series B cumulative redeemable preferred stock, 3,000,000 shares outstanding at March 31, 2020 and December 31, 2019 ($75,000 liquidation preference)
72,443

 
72,443

5.625% series C cumulative redeemable preferred stock, 3,450,000 shares outstanding at March 31, 2020 and December 31, 2019 ($86,250 liquidation preference)
83,233

 
83,233

Common Stock, $0.01 par value per share, 489,950,000 authorized and 116,331,347 and 113,793,300 shares outstanding at March 31, 2020 and December 31, 2019, respectively
1,162

 
1,136

Additional paid in capital
2,524,274

 
2,439,007

Cumulative distributions in excess of earnings
(132,843
)
 
(118,751
)
Accumulated other comprehensive income
(21,950
)
 
(7,542
)
Total stockholders’ equity
2,612,970

 
2,556,177

Noncontrolling interests
165,708

 
66,272

Total Equity
2,778,678

 
2,622,449

Total Liabilities and Equity
$
3,872,431

 
$
3,638,622





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


 
Three Months Ended March 31,
 
2020
 
2019
REVENUES
 
 
 
Rental income
77,490

 
59,604

Management, leasing and development services
93

 
102

Interest income
97

 
657

TOTAL REVENUES
77,680

 
60,363

OPERATING EXPENSES
 
 
 
Property expenses
18,114

 
13,812

General and administrative
9,317

 
7,344

Depreciation and amortization
27,523

 
21,996

TOTAL OPERATING EXPENSES
54,954

 
43,152

OTHER EXPENSES
 
 
 
Acquisition expenses
5

 
23

Interest expense
7,449

 
6,471

TOTAL EXPENSES
62,408

 
49,646

NET INCOME
15,272

 
10,717

Less: net income attributable to noncontrolling interest
(717
)
 
(201
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
14,555

 
10,516

Less: preferred stock dividends
(3,636
)
 
(2,423
)
Less: earnings attributable to participating securities
(131
)
 
(114
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
10,788

 
$
7,979

Net income attributable to common stockholders per share  basic
$
0.09

 
$
0.08

Net income attributable to common stockholders per share  diluted
$
0.09

 
$
0.08

Weighted-average shares of common stock outstanding – basic
114,054

 
98,343

Weighted-average shares of common stock outstanding – diluted
114,314

 
98,608






Rexford Industrial Realty, Inc.
Stabilized Same Property Portfolio Occupancy and NOI and Cash NOI
(Unaudited, dollars in thousands)
 
 
Stabilized Same Property Portfolio Occupancy:
 
March 31,
 
 
 
2020
 
2019
 
Change (basis points)
Occupancy:
 
 
 
 
 
Los Angeles County
99.1%
 
98.7%
 
40 bps
Orange County
99.3%
 
97.6%
 
170 bps
San Bernardino County
97.2%
 
97.4%
 
(20) bps
San Diego County
94.0%
 
97.2%
 
(320) bps
Ventura County
95.7%
 
97.1%
 
(140) bps
Total/Weighted Average
98.0%
 
98.1%
 
(10) bps

Stabilized Same Property Portfolio NOI and Cash NOI
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
 
$ Change
 
% Change
Rental income
$
57,778

 
$
55,693

 
$
2,085

 
3.7%
Property expenses
13,139

 
12,639

 
500

 
4.0%
Stabilized Same Property Portfolio NOI
$
44,639

 
$
43,054

 
$
1,585

 
3.7%
Straight line rental revenue adjustment
(645
)
 
(1,735
)
 
1,090

 
(62.8)%
Amortization of above/below market lease intangibles
(1,489
)
 
(1,764
)
 
275

 
(15.6)%
Stabilized Same Property Portfolio Cash NOI
$
42,505

 
$
39,555

 
$
2,950

 
7.5%






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


 
Three Months Ended March 31,
 
2020
 
2019
Net income
$
15,272

 
$
10,717

Add:
 
 
 
General and administrative
9,317

 
7,344

Depreciation and amortization
27,523

 
21,996

Acquisition expenses
5

 
23

Interest expense
7,449

 
6,471

Deduct:
 
 
 
Management, leasing and development services
93

 
102

Interest income
97

 
657

Net operating income (NOI)
$
59,376

 
$
45,792

Non-Stabilized Same Property Portfolio rental income
(19,712
)
 
(3,911
)
Non-Stabilized Same Property Portfolio property expenses
4,975

 
1,173

Stabilized Same Property Portfolio NOI
$
44,639

 
$
43,054

Straight line rental revenue adjustment
(645
)
 
(1,735
)
Amortization of above/below market lease intangibles
(1,489
)
 
(1,764
)
Stabilized Same Property Portfolio Cash NOI
$
42,505

 
$
39,555






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,
 
2020
 
2019
Net income
$
15,272

 
$
10,717

Add:
 
 
 
Depreciation and amortization
27,523

 
21,996

Funds From Operations (FFO)
$
42,795

 
$
32,713

Less: preferred stock dividends
(3,636
)
 
(2,423
)
Less: FFO attributable to noncontrolling interest(1)
(1,450
)
 
(733
)
Less: FFO attributable to participating securities(2)
(195
)
 
(176
)
Company share of FFO
$
37,514

 
$
29,381

 
 
 
 
Company Share of FFO per common share – basic
$
0.33

 
$
0.30

Company Share of FFO per common share – diluted
$
0.33

 
$
0.30

 
 
 
 
FFO
$
42,795

 
$
32,713

Adjust:
 
 
 
Acquisition expenses
5

 
23

Core FFO
$
42,800

 
$
32,736

Less: preferred stock dividends
(3,636
)
 
(2,423
)
Less: Core FFO attributable to noncontrolling interest(1)
(1,450
)
 
(733
)
Less: Core FFO attributable to participating securities(2)
(195
)
 
(176
)
Company share of Core FFO
$
37,519

 
$
29,404

 
 
 
 
Company share of Core FFO per common share – basic
$
0.33

 
$
0.30

Company share of Core FFO per common share – diluted
$
0.33

 
$
0.30

 
 
 
 
Weighted-average shares of common stock outstanding – basic
114,054

 
98,343

Weighted-average shares of common stock outstanding – diluted
114,314

 
98,608

(1)
Noncontrolling interests relate to interests in the Company’s operating partnership, represented by common units and preferred units (Series 1 & 2 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

403856761_q120coverv3.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
Stabilized Same Property Portfolio Performance
11
Capitalization Summary
12
Debt Summary
13-14
Portfolio Data:
 
Portfolio Overview
15
Occupancy and Leasing Trends
16
Leasing Statistics
17-18
Top Tenants and Lease Segmentation
19
Capital Expenditure Summary
20
Properties and Space Under Repositioning/Development
21-22
Current Year Acquisitions and Dispositions Summary
23
Guidance
24
Net Asset Value Components
25
Notes and Definitions
26-29
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;an epidemic or pandemic (such as the outbreak and worldwide spread of novel coronavirus (COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities may implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned factors and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period; 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 2019 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on February 19, 2020. 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 2020
Supplemental Financial Reporting Package
Page 2

 403856761_logo3a17.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
Green Street Advisors
 
Eric Frankel
 
(949) 640-8780
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.

 
First Quarter 2020
Supplemental Financial Reporting Package
Page 3

 403856761_logo3a17.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, 2020
 
December 31, 2019
 
September 30, 2019
 
June 30, 2019
 
March 31, 2019
Financial Results:
 
 
 
 
 
 
 
 
 
Total rental income
$
77,490

 
$
74,015

 
$
67,020

 
$
63,613

 
$
59,604

Net income
$
15,272

 
$
24,382

 
$
12,948

 
$
15,954

 
$
10,717

Net Operating Income (NOI)
$
59,376

 
$
55,859

 
$
50,855

 
$
48,474

 
$
45,792

Company share of Core FFO
$
37,519

 
$
35,754

 
$
33,853

 
$
32,068

 
$
29,404

Company share of Core FFO per common share - diluted
$
0.33

 
$
0.32

 
$
0.31

 
$
0.30

 
$
0.30

Adjusted EBITDA
$
55,566

 
$
52,232

 
$
49,271

 
$
45,342

 
$
42,164

Dividend declared per common share
$
0.215

 
$
0.185

 
$
0.185

 
$
0.185

 
$
0.185

Portfolio Statistics:
 
 
 
 
 
 
 
 
 
Portfolio rentable square feet (“RSF”) - consolidated
27,429,136

 
26,551,084

 
24,814,281

 
23,874,494

 
22,144,631

Ending occupancy - consolidated portfolio
95.2
%
 
96.1
%
 
94.9
%
 
94.2
%
 
94.6
%
Stabilized occupancy - consolidated portfolio
97.4
%
 
97.9
%
 
97.5
%
 
97.8
%
 
97.8
%
Leasing spreads - GAAP
36.6
%
 
42.0
%
 
31.2
%
 
39.4
%
 
26.2
%
Leasing spreads - cash
24.4
%
 
27.1
%
 
19.4
%
 
22.3
%
 
17.3
%
Stabilized Same Property Performance:
 
 
 
 
 
 
 
 
 
Stabilized Same Property Portfolio RSF
19,831,139

 
19,831,139

 
18,134,752

 
18,134,752

 
18,134,752

Stabilized Same Property Portfolio ending occupancy
98.0
%
 
98.0
%
 
97.7
%
 
98.0
%
 
98.1
%
Stabilized Same Property Portfolio NOI growth(2)
3.7
%
 
n/a

 
n/a

 
n/a

 
n/a

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

 
n/a

 
n/a

 
n/a

Capitalization:
 
 
 
 
 
 
 
 
 
Common stock price at quarter end
$
41.01

 
$
45.67

 
$
44.02

 
$
40.37

 
$
35.81

Common shares issued and outstanding
116,087,092

 
113,580,755

 
110,669,277

 
109,519,791

 
103,804,570

Total shares and units issued and outstanding at period end(3)
120,004,376

 
116,304,528

 
113,091,134

 
111,943,020

 
106,267,799

Weighted average shares outstanding - diluted
114,314,331

 
112,096,619

 
110,074,074

 
106,236,309

 
98,607,786

Series A, B and C Preferred Stock and Series 1 and 2 CPOP Units
$
319,068

 
$
278,281

 
$
278,281

 
$
192,031

 
$
165,000

Total equity market capitalization
$
5,240,447

 
$
5,589,909

 
$
5,256,553

 
$
4,711,171

 
$
3,970,450

Total consolidated debt
$
905,645

 
$
860,958

 
$
860,999

 
$
761,038

 
$
761,077

Total combined market capitalization (net debt plus equity)
$
6,033,660

 
$
6,372,010

 
$
5,920,044

 
$
5,300,000

 
$
4,454,952

Ratios:
 
 
 
 
 
 
 
 
 
Net debt to total combined market capitalization
13.1
%
 
12.3
%
 
11.2
%
 
11.1
%
 
10.9
%
Net debt to Adjusted EBITDA (quarterly results annualized)
3.6x

 
3.7x

 
3.4x

 
3.2x

 
2.9x

(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 26 and page 8 of this report, respectively.
(2)
Represents the year over year percentage change in NOI and Cash NOI for the Stabilized Same Property Portfolio.
(3)
Includes the following number of OP Units and vested LTIP units held by noncontrolling interests: 3,917,284 (Mar 31, 2020), 2,723,773 (Dec 31, 2019), 2,421,857 (Sep 30, 2019), 2,423,229 (Jun 30, 2019) and 2,463,229 (Mar 31, 2019). Excludes the following number of shares of unvested restricted stock: 244,255 (Mar 31, 2020), 212,545 (Dec 31, 2019), 214,995 (Sep 30, 2019), 219,789 (Jun 30, 2019) and 223,476 (Mar 31, 2019). Excludes unvested LTIP units and unvested performance units.

 
First Quarter 2020
Supplemental Financial Reporting Package
Page 4

 403856761_logo3a17.jpg
 


Consolidated Balance Sheets.
 
 
 
 
(unaudited and in thousands)
 
March 31, 2020
 
December 31, 2019
 
September 30, 2019
 
June 30, 2019
 
March 31, 2019
ASSETS
 
 
 
 
 
 
 
 
 
Land
$
2,068,460

 
$
1,927,098

 
$
1,728,490

 
$
1,590,321

 
$
1,364,738

Buildings and improvements
1,748,675

 
1,680,178

 
1,611,060

 
1,528,750

 
1,422,684

Tenant improvements
75,341

 
72,179

 
68,124

 
66,665

 
62,908

Furniture, fixtures, and equipment
141

 
141

 
141

 
141

 
149

Construction in progress
26,791

 
18,794

 
29,094

 
23,576

 
20,331

  Total real estate held for investment
3,919,408

 
3,698,390

 
3,436,909

 
3,209,453

 
2,870,810

Accumulated depreciation
(316,812
)
 
(296,777
)
 
(278,726
)
 
(261,231
)
 
(245,033
)
Investments in real estate, net
3,602,596

 
3,401,613

 
3,158,183

 
2,948,222

 
2,625,777

Cash and cash equivalents
112,432

 
78,857

 
197,508

 
172,209

 
276,575

Restricted cash
46

 

 

 
11,055

 

Rents and other receivables, net
5,859

 
5,889

 
4,376

 
3,614

 
4,548

Deferred rent receivable, net
31,339

 
29,671

 
27,502

 
25,462

 
24,290

Deferred leasing costs, net
19,482

 
18,688

 
17,561

 
16,722

 
14,139

Deferred loan costs, net
2,770

 
695

 
849

 
1,004

 
1,158

Acquired lease intangible assets, net(1)
76,138

 
73,090

 
67,110

 
61,664

 
56,122

Acquired indefinite-lived intangible
5,156

 
5,156

 
5,156

 
5,156

 
5,156

Interest rate swap asset

 
766

 
374

 
1,414

 
5,896

Other assets
10,717

 
9,671

 
10,778

 
14,204

 
12,580

Acquisition related deposits
5,896

 
14,526

 
8,415

 
4,615

 
10,875

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

 

 
4,582

 

 

Total Assets
$
3,872,431


$
3,638,622

 
$
3,502,394

 
$
3,265,341

 
$
3,037,116

LIABILITIES & EQUITY
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 

 
 
Notes payable
$
903,802

 
$
857,842

 
$
857,688

 
$
757,677

 
$
757,524

Interest rate swap liability
22,690

 
8,488

 
10,727

 
8,671

 
4,604

Accounts payable, accrued expenses and other liabilities
39,000

 
31,112

 
34,669

 
26,065

 
33,728

Dividends payable
25,931

 
21,624

 
21,034

 
20,823

 
19,774

Acquired lease intangible liabilities, net(3)
63,914

 
59,340

 
56,151

 
55,084

 
52,426

Tenant security deposits
30,342

 
28,779

 
27,688

 
26,123

 
24,396

Prepaid rents
8,074

 
8,988

 
7,759

 
6,289

 
6,828

Liabilities associated with real estate held for sale(2)

 

 
135

 

 

Total Liabilities
1,093,753

 
1,016,173

 
1,015,851

 
900,732

 
899,280

Equity
 
 
 
 
 
 

 
 
Preferred stock
242,327

 
242,327

 
242,529

 
159,094

 
159,094

Common stock
1,162

 
1,136

 
1,106

 
1,095

 
1,038

Additional paid in capital
2,524,274

 
2,439,007

 
2,306,282

 
2,255,849

 
2,042,218

Cumulative distributions in excess of earnings
(132,843
)
 
(118,751
)
 
(117,711
)
 
(107,056
)
 
(99,715
)
Accumulated other comprehensive income
(21,950
)
 
(7,542
)
 
(10,132
)
 
(7,101
)
 
1,261

Total stockholders’ equity
2,612,970

 
2,556,177

 
2,422,074

 
2,301,881

 
2,103,896

Noncontrolling interests
165,708

 
66,272

 
64,469

 
62,728

 
33,940

Total Equity
2,778,678

 
2,622,449

 
2,486,543

 
2,364,609

 
2,137,836

Total Liabilities and Equity
$
3,872,431

 
$
3,638,622

 
$
3,502,394

 
$
3,265,341

 
$
3,037,116

(1)
Includes net above-market tenant lease intangibles of $6,675 (March 31, 2020), $6,675 (December 31, 2019), $5,517 (September 30, 2019), $5,450 (June 30, 2019) and $5,410 (March 31, 2019).
(2)
At September 30, 2019, our property located at 13914-13932 East Valley Boulevard was classified as held for sale.
(3)
Represents net below-market tenant lease intangibles as of the balance sheet date.

 
First Quarter 2020
Supplemental Financial Reporting Package
Page 5

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Consolidated Statements of Operations.
 
 
Quarterly Results
 
(unaudited and in thousands, except share and per share data)
 
Three Months Ended
 
Mar 31, 2020
 
Dec 31, 2019
 
Sep 30, 2019
 
Jun 30, 2019
 
Mar 31, 2019
Revenues
 
 
 
 
 
 
 
 
 
Rental income(1)
$
77,490

 
$
74,015

 
$
67,020


$
63,613

 
$
59,604

Management, leasing, and development services
93

 
105

 
90


109

 
102

Interest income
97

 
279

 
951


668

 
657

Total Revenues
77,680

 
74,399

 
68,061


64,390

 
60,363

Operating Expenses
 
 
 
 


 
 
 
Property expenses
18,114

 
18,156

 
16,165


15,139

 
13,812

General and administrative
9,317

 
8,215

 
7,440


7,301

 
7,344

Depreciation and amortization
27,523

 
26,877

 
25,496


24,522

 
21,996

Total Operating Expenses
54,954

 
53,248

 
49,101


46,962

 
43,152

Other Expenses
 
 
 
 


 
 
 
Acquisition expenses
5

 
(3
)
 
122


29

 
23

Interest expense
7,449

 
7,364

 
6,785


6,255

 
6,471

Total Expenses
62,408

 
60,609

 
56,008


53,246

 
49,646

Gains on sale of real estate

 
10,592

 
895


4,810

 

Net Income
15,272

 
24,382

 
12,948


15,954

 
10,717

Less: net income attributable to noncontrolling interests
(717
)
 
(734
)
 
(518
)

(569
)
 
(201
)
Net income attributable to Rexford Industrial Realty, Inc.
14,555

 
23,648

 
12,430


15,385

 
10,516

Less: preferred stock dividends
(3,636
)
 
(3,636
)
 
(2,572
)

(2,424
)
 
(2,423
)
Less: earnings allocated to participating securities
(131
)
 
(108
)
 
(112
)

(113
)
 
(114
)
Net income attributable to common stockholders
$
10,788

 
$
19,904

 
$
9,746


$
12,848

 
$
7,979

 
 
 
 
 



 

Earnings per Common Share
 
 
 
 



 

Net income attributable to common stockholders per share - basic
$
0.09

 
$
0.18

 
$
0.09


$
0.12

 
$
0.08

Net income attributable to common stockholders per share - diluted
$
0.09

 
$
0.18

 
$
0.09


$
0.12

 
$
0.08

 
 
 
 
 


 
 
 
Weighted average shares outstanding - basic
114,054,434
 
111,612,279
 
109,645,216
 
105,847,557
 
98,342,677
Weighted average shares outstanding - diluted
114,314,331
 
112,096,619
 
110,074,074
 
106,236,309
 
98,607,786
(1)
See footnote (1) on page 7 for details related to our presentation of “Rental income” in the consolidated statements of operations for all periods presented.



 
First Quarter 2020
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,
 
2020
 
2019
Revenues
 
 
 
Rental income(1)
$
77,490

 
$
59,604

Management, leasing, and development services
93

 
102

Interest income
97

 
657

Total Revenues
77,680

 
60,363

Operating Expenses
 
 
 
Property expenses
18,114

 
13,812

General and administrative
9,317

 
7,344

Depreciation and amortization
27,523

 
21,996

Total Operating Expenses
54,954

 
43,152

Other Expenses
 
 
 
Acquisition expenses
5

 
23

Interest expense
7,449

 
6,471

Total Expenses
62,408

 
49,646

Gains on sale of real estate

 

Net Income
15,272

 
10,717

 Less: net income attributable to noncontrolling interests
(717
)
 
(201
)
Net income attributable to Rexford Industrial Realty, Inc.
14,555

 
10,516

 Less: preferred stock dividends
(3,636
)
 
(2,423
)
 Less: earnings allocated to participating securities
(131
)
 
(114
)
Net income attributable to common stockholders
$
10,788

 
$
7,979

(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, is reflected as one line, “Rental income,” in the 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. Under the section “Rental Income” on page 28 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.

 
First Quarter 2020
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, 2020
 
December 31, 2019
 
September 30, 2019
 
June 30, 2019
 
March 31, 2019
Net Income
$
15,272

 
$
24,382

 
$
12,948

 
$
15,954

 
$
10,717

Add:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
27,523

 
26,877

 
25,496

 
24,522

 
21,996

Deduct:
 
 
 
 
 
 
 
 
 
Gains on sale of real estate

 
10,592

 
895

 
4,810

 

Funds From Operations (FFO)
42,795

 
40,667

 
37,549

 
35,666

 
32,713

Less: preferred stock dividends
(3,636
)
 
(3,636
)
 
(2,572
)
 
(2,424
)
 
(2,423
)
Less: FFO attributable to noncontrolling interests(2)
(1,450
)
 
(1,087
)
 
(1,056
)
 
(1,021
)
 
(733
)
Less: FFO attributable to participating securities(3)
(195
)
 
(188
)
 
(187
)
 
(182
)
 
(176
)
Company share of FFO
$
37,514

 
$
35,756

 
$
33,734

 
$
32,039

 
$
29,381

 
 
 
 
 
 
 
 
 
 
Company share of FFO per common share‐basic
$
0.33

 
$
0.32

 
$
0.31

 
$
0.30

 
$
0.30

Company share of FFO per common share‐diluted
$
0.33

 
$
0.32

 
$
0.31

 
$
0.30

 
$
0.30

 
 
 
 
 
 
 
 
 
 
FFO
$
42,795

 
$
40,667

 
$
37,549

 
$
35,666

 
$
32,713

Add:
 
 
 
 
 
 
 
 
 
Acquisition expenses
5

 
(3
)
 
122

 
29

 
23

Core FFO
42,800

 
40,664

 
37,671

 
35,695

 
32,736

Less: preferred stock dividends
(3,636
)
 
(3,636
)
 
(2,572
)
 
(2,424
)
 
(2,423
)
Less: Core FFO attributable to noncontrolling interests(2)
(1,450
)
 
(1,086
)
 
(1,059
)
 
(1,021
)
 
(733
)
Less: Core FFO attributable to participating securities(3)
(195
)
 
(188
)
 
(187
)
 
(182
)
 
(176
)
Company share of Core FFO
$
37,519

 
$
35,754

 
$
33,853

 
$
32,068

 
$
29,404

 
 
 
 
 
 
 
 
 
 
Company share of Core FFO per common share‐basic
$
0.33

 
$
0.32

 
$
0.31

 
$
0.30

 
$
0.30

Company share of Core FFO per common share‐diluted
$
0.33

 
$
0.32

 
$
0.31

 
$
0.30

 
$
0.30

 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding-basic
114,054,434

 
111,612,279

 
109,645,216

 
105,847,557

 
98,342,677

Weighted-average shares outstanding-diluted(4)
114,314,331

 
112,096,619

 
110,074,074

 
106,236,309

 
98,607,786

(1)
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 26 of this report.
(2)
Noncontrolling interests relate to interests in the Company’s operating partnership, represented by common units and preferred units (Series 1 & Series 2 CPOP units) of partnership interests in the operating partnership that are owned by unit holders other than the Company.
(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 2020
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, 2020
 
December 31, 2019
 
September 30, 2019
 
June 30, 2019
 
March 31, 2019
Funds From Operations(2)
$
42,795

 
$
40,667

 
$
37,549

 
$
35,666

 
$
32,713

Add:
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs
343

 
347

 
347

 
345

 
344

Non-cash stock compensation
3,570

 
2,800

 
2,668

 
2,709

 
2,579

Deduct:
 
 
 
 
 
 
 
 
 
Preferred stock dividends
3,636

 
3,636

 
2,572

 
2,424

 
2,423

Straight line rental revenue adjustment(3)
1,672

 
2,200

 
2,080

 
1,241

 
2,067

Amortization of net below-market lease intangibles
2,402

 
2,191

 
2,065

 
1,900

 
1,751

Capitalized payments(4)
2,067

 
1,851

 
2,375

 
2,008

 
1,495

Note payable premium amortization
16

 
(2
)
 
(1
)
 
(2
)
 
(1
)
Recurring capital expenditures(5)
1,575

 
1,383

 
1,851

 
1,280

 
2,294

2nd generation tenant improvements and leasing commissions(6)
1,727

 
1,754

 
1,211

 
1,358

 
1,209

Adjusted Funds From Operations (AFFO)
$
33,613

 
$
30,801

 
$
28,411

 
$
28,511

 
$
24,398


(1)
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 26 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 $1,329, $1,285, $1,057, $916 and $1,399 for the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, respectively.
(4)
Includes capitalized interest, taxes, insurance and construction related compensation costs.
(5)
Excludes nonrecurring capital expenditures of $12,411, $10,857, $8,816, $6,672 and $7,779 for the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, respectively.
(6)
Excludes 1st generation tenant improvements/space preparation and leasing commissions of $831, $1,497, $1,164, $2,791 and $282 for the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, respectively.


 
First Quarter 2020
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, 2020
 
Dec 31, 2019
 
Sep 30, 2019
 
Jun 30, 2019
 
Mar 31, 2019
Rental income(2)
$
77,490

 
$
74,015

 
$
67,020

 
$
63,613

 
$
59,604

Property expenses
18,114

 
18,156

 
16,165

 
15,139

 
13,812

Net Operating Income (NOI)
$
59,376

 
$
55,859

 
$
50,855

 
$
48,474

 
$
45,792

Amortization of above/below market lease intangibles
(2,402
)
 
(2,191
)
 
(2,065
)
 
(1,900
)
 
(1,751
)
Straight line rental revenue adjustment
(1,672
)
 
(2,200
)
 
(2,080
)
 
(1,241
)
 
(2,067
)
Cash NOI
$
55,302

 
$
51,468

 
$
46,710

 
$
45,333

 
$