Rexford Industrial Realty, Inc. (REXR) Bundle
A Brief History of Rexford Industrial Realty, Inc.
Company Overview
Rexford Industrial Realty, Inc. (REXR) is a real estate investment trust (REIT) focused on the ownership, operation, and development of industrial properties in Southern California. As of 2024, the company has a significant presence in high-barrier infill markets, which are characterized by limited available land and high demand for industrial space.
Financial Performance
For the nine months ended September 30, 2024, Rexford reported:
- Net income attributable to common stockholders: $221.0 million, a 22.7% increase compared to $182.3 million in the same period of 2023.
- Core funds from operations (Core FFO): $383.1 million, an increase of 17.5% year-over-year.
- Net operating income (NOI): $528.1 million, up 17.8% from the prior year.
- Total portfolio occupancy: 93.0% as of September 30, 2024.
- Same Property Portfolio average occupancy: 96.9% for the nine months ended September 30, 2024.
Acquisitions and Dispositions
Rexford has been active in both acquiring and disposing of properties:
- In Q1 2024, completed $1.1 billion in investments for 49 properties covering 3.2 million rentable square feet.
- In Q2 2024, invested $169.5 million in three properties totaling 0.5 million rentable square feet.
- In Q3 2024, invested $60.5 million in two properties totaling 0.3 million rentable square feet.
- As of September 30, 2024, the company had sold five properties for $44.3 million, generating net cash proceeds of $41.3 million.
Capital Raises
During 2024, Rexford raised significant capital through equity transactions:
- Issued 5,263,602 shares for net proceeds of $290.2 million in Q1 2024.
- Completed a public offering of 17,179,318 shares for a gross value of $840.9 million in March 2024.
- As of September 30, 2024, approximately $614.2 million of forward net proceeds remained for future settlements.
Debt and Interest Rates
As of September 30, 2024, Rexford's consolidated indebtedness included:
| Debt Type | Principal Balance (in thousands) | Effective Interest Rate | Contractual Maturity Date |
|---|---|---|---|
| Revolving Credit Facility | $0 | 5.785% | May 26, 2026 |
| $400M Term Loan | $400,000 | 4.872% | July 18, 2025 |
| $575M Exchangeable Senior Notes | $575,000 | 4.375% | March 15, 2027 |
| $300M Senior Notes due 2028 | $300,000 | 5.000% | June 15, 2028 |
Dividends
Rexford has maintained a consistent dividend policy. The declared dividends as of October 14, 2024, include:
| Security | Amount per Share/Unit | Record Date | Payment Date |
|---|---|---|---|
| Common stock | $0.4175 | December 31, 2024 | January 15, 2025 |
| 5.875% Series B Preferred Stock | $0.367188 | December 16, 2024 | December 31, 2024 |
| 5.625% Series C Preferred Stock | $0.351563 | December 16, 2024 | December 31, 2024 |
Market Position and Strategy
Rexford's strategy focuses on providing superior access to industrial property investments in Southern California's infill markets, characterized by high demand and limited supply. The company has positioned itself to capitalize on long-term market fundamentals, including a projected $26 billion increase in consumer spending in 2024.
A Who Owns Rexford Industrial Realty, Inc. (REXR)
Ownership Structure
As of 2024, Rexford Industrial Realty, Inc. (REXR) has a diverse ownership structure that includes institutional investors, retail investors, and insider ownership.
Institutional Ownership
Institutional investors hold a significant portion of REXR's shares. The following table summarizes the major institutional shareholders as of the latest reporting period:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 25,780,000 | 11.7% |
| BlackRock, Inc. | 22,500,000 | 10.2% |
| State Street Corporation | 18,300,000 | 8.4% |
| Invesco Ltd. | 12,000,000 | 5.5% |
| Fidelity Investments | 10,500,000 | 4.8% |
Insider Ownership
Insider ownership provides insight into the management's stake in the company. The table below details the top insiders and their ownership:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Michael S. Frankel | CEO | 1,200,000 | 0.5% |
| Rexford W. H. Smith | Chairman | 800,000 | 0.4% |
| John H. L. Wong | CFO | 500,000 | 0.2% |
| Various Other Insiders | Various | 1,000,000 | 0.5% |
Market Capitalization
As of September 30, 2024, Rexford Industrial Realty, Inc. has a market capitalization of approximately $8.4 billion, based on 219,507,345 shares outstanding at a trading price around $38.26 per share.
Shareholder Returns
Rexford Industrial Realty has consistently provided returns to its shareholders through dividends. The following table outlines the recent dividend declarations:
| Dividend Type | Amount per Share | Record Date | Payment Date |
|---|---|---|---|
| Common Stock | $0.4175 | December 31, 2024 | January 15, 2025 |
| Series B Preferred Stock | $0.367188 | December 16, 2024 | December 31, 2024 |
| Series C Preferred Stock | $0.351563 | December 16, 2024 | December 31, 2024 |
Recent Developments
In the first nine months of 2024, Rexford Industrial Realty completed $1.3 billion in acquisitions, significantly enhancing its portfolio. The company also reported a net income of $221 million for the same period, reflecting a 21% increase year-over-year.
Summary of Financial Performance
The financial performance metrics as of September 30, 2024, are as follows:
| Metric | Value |
|---|---|
| Net Income | $221 million |
| Core FFO | $383 million |
| Net Operating Income (NOI) | $528 million |
| Total Revenue | $693 million |
Rexford Industrial Realty, Inc. (REXR) Mission Statement
Core Objectives
Rexford Industrial Realty, Inc. aims to generate attractive risk-adjusted returns for stockholders by providing superior access to industrial property investments in high-barrier Southern California infill markets. The company focuses on acquiring both stabilized properties that generate favorable cash flow and properties or land parcels that can enhance returns through value-add repositioning and redevelopment.
Market Strategy
The firm operates in Southern California's industrial real estate sector, characterized by limited new supply and high demand. This environment creates strong long-term supply/demand fundamentals. Rexford leverages its vertically integrated operating platform to capitalize on acquisition opportunities and manage its investments effectively.
Financial Highlights (as of September 30, 2024)
| Metric | 2024 YTD | 2023 YTD | Change (%) |
|---|---|---|---|
| Net Income Attributable to Common Stockholders | $203.5 million | $165.8 million | 22.7% |
| Core Funds from Operations (Core FFO) | $383.1 million | $326.4 million | 17.5% |
| Net Operating Income (NOI) | $528.1 million | $448.1 million | 17.8% |
| Total Portfolio Occupancy | 93.0% | 92.5% | 0.5% |
Leasing Activity
For the nine months ended September 30, 2024, Rexford executed a total of 351 new and renewal leases encompassing approximately 7.1 million rentable square feet. The leasing spreads were 36.1% on a GAAP basis and 26.4% on a cash basis. Excluding one significant lease extension, the leasing spreads were even higher at 55.3% on a GAAP basis and 38.2% on a cash basis.
Investment Activity
In 2024, Rexford completed several significant investments:
- Q1: $1.1 billion across 49 properties (3.2 million rentable square feet)
- Q2: $169.5 million across three properties (0.5 million rentable square feet)
- Q3: $60.5 million across two properties (0.3 million rentable square feet)
Dispositions
During 2024, Rexford sold several properties:
- Q2: Four properties (144,678 rentable square feet) for $37.0 million, recognizing gains of $16.3 million.
- Q3: One property (25,615 rentable square feet) for $7.3 million, recognizing gains of $1.7 million.
Equity and Financing
As of September 30, 2024, Rexford had:
- Common shares outstanding: 219,507,345
- Total stockholders’ equity: $8.07 billion
- Net proceeds from equity transactions in Q1 2024: $290.2 million
- Issued shares under forward equity sale agreements: 1,650,916 shares for net proceeds of $80 million in Q3 2024.
Occupancy and Lease Expirations
As of September 30, 2024, the occupancy rate for the consolidated portfolio was 93.0%, with a stabilized portfolio occupancy of 97.6%. The upcoming lease expirations are detailed below:
| Year of Expiration | Number of Leases Expiring | Total Rentable Square Feet | Annualized Base Rent |
|---|---|---|---|
| 2024 | 91 | 1,773,716 | $24,975 |
| 2025 | 416 | 7,255,347 | $110,757 |
| 2026 | 394 | 8,814,687 | $126,430 |
| 2027 | 296 | 7,676,174 | $124,542 |
| 2028 | 164 | 5,970,039 | $111,437 |
How Rexford Industrial Realty, Inc. (REXR) Works
Business Model Overview
Rexford Industrial Realty, Inc. (REXR) operates as a real estate investment trust (REIT) focused on acquiring, developing, and managing industrial properties in Southern California. The company's strategy centers on high-barrier infill markets where supply is limited, allowing for sustainable rental income growth.
Financial Performance
For the nine months ended September 30, 2024, Rexford reported:
- Net income attributable to common stockholders: $203.5 million, up 22.7% from the prior year.
- Core funds from operations (Core FFO): $383.1 million, an increase of 17.5% compared to the previous year.
- Net operating income (NOI): $528.1 million, reflecting a 17.8% rise year-over-year.
- Total portfolio occupancy rate: 93.0%.
- Same Property Portfolio average occupancy: 96.9%.
Leasing Activity
In 2024, Rexford executed a total of 351 new and renewal leases covering 7.1 million rentable square feet. The leasing spreads were:
- GAAP basis: 36.1%
- Cash basis: 26.4%
Excluding a significant lease extension, the spreads were 55.3% on a GAAP basis and 38.2% on a cash basis.
Acquisitions and Dispositions
Rexford has been active in acquiring new properties, with significant investments in 2024:
| Quarter | Investment Amount | Properties Acquired | Rentable Square Feet |
|---|---|---|---|
| Q1 2024 | $1.1 billion | 49 | 3.2 million |
| Q2 2024 | $169.5 million | 3 | 0.5 million |
| Q3 2024 | $60.5 million | 2 | 0.3 million |
| Post Q3 2024 | $70.1 million | 1 | 278,650 |
During the same period, Rexford sold properties resulting in:
- Q2 2024: 144,678 rentable square feet sold for $37.0 million.
- Q3 2024: 25,615 rentable square feet sold for $7.3 million.
Capital Expenditures
For the nine months ended September 30, 2024, Rexford's capital expenditures were:
| Type | Total Amount | Square Feet | Per Square Foot |
|---|---|---|---|
| Non-Recurring Capital Expenditures | $245.6 million | 34,345,576 | $7.15 |
| Recurring Capital Expenditures | $11.7 million | 48,686,146 | $0.24 |
| Total Capital Expenditures | $257.3 million |
Dividend Distribution
On October 14, 2024, Rexford declared the following quarterly cash dividends:
| Security | Amount per Share/Unit | Record Date | Payment Date |
|---|---|---|---|
| Common stock | $0.4175 | December 31, 2024 | January 15, 2025 |
| 5.875% Series B Cumulative Redeemable Preferred Stock | $0.367188 | December 16, 2024 | December 31, 2024 |
| 5.625% Series C Cumulative Redeemable Preferred Stock | $0.351563 | December 16, 2024 | December 31, 2024 |
Debt and Financing
As of September 30, 2024, the following is a summary of Rexford's consolidated indebtedness:
| Debt Type | Principal Balance (in thousands) | Effective Interest Rate | Contractual Maturity Date |
|---|---|---|---|
| Revolving Credit Facility | $0 | 5.785% | 5/26/2026 |
| $400M Term Loan | $400,000 | 4.872% | 7/18/2025 |
| $575M Exchangeable Senior Notes due 2027 | $575,000 | 4.375% | 3/15/2027 |
| $300M Senior Notes due 2030 | $400,000 | 2.125% | 12/1/2030 |
Market Conditions
The Southern California industrial real estate market continues to show strong fundamentals, characterized by:
- Low market vacancy rates.
- High demand for industrial space due to e-commerce growth.
- Limited new supply due to regulatory constraints and high land costs.
How Rexford Industrial Realty, Inc. (REXR) Makes Money
Revenue Streams
Rexford Industrial Realty, Inc. generates revenue primarily through rental income from industrial properties, tenant reimbursements, management and leasing services, and interest income from loans.
Rental Income
For the nine months ended September 30, 2024, Rexford reported total rental income of $682.4 million, an increase of $98.9 million or 16.9% compared to the same period in 2023. This growth was driven by:
- Same Property Portfolio rental revenue of $429.9 million, up 4.8% year-over-year.
- Total Portfolio rental revenue of $563.9 million, up 16.7% year-over-year.
| Category | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Same Property Portfolio Rental Revenue | $429,896,000 | $410,043,000 | $19,853,000 | 4.8% |
| Total Portfolio Rental Revenue | $563,963,000 | $483,183,000 | $80,780,000 | 16.7% |
Tenant Reimbursements
Tenant reimbursements increased to $116.3 million for the nine months ended September 30, 2024, representing an increase of 18.1% year-over-year. This includes:
- Same Property Portfolio tenant reimbursements of $88.4 million, up 4.3%.
- Total Portfolio tenant reimbursements of $116.3 million, up 18.1%.
Other Income
Other income, which includes fees from late rental payments, totaled $2.1 million for the nine months ended September 30, 2024, an increase of 16.8%.
Management and Leasing Services
Management and leasing services revenue decreased slightly to $444,000 for the nine months ended September 30, 2024. This reflects a decrease of 14.5% from the previous year.
Interest Income
Interest income surged to $10.7 million for the nine months ended September 30, 2024, up from $3.4 million in the same period of 2023. This increase is attributed to interest earned on a $125 million loan originated in October 2023.
Property Expenses
Rexford's total property expenses increased to $154.3 million, up 14.1% year-over-year, driven by higher real estate taxes, insurance, and maintenance costs.
Net Income
Net income attributable to common stockholders for the nine months ended September 30, 2024, was $203.5 million, representing an increase of 22.7% compared to the prior year.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Income | $221,016,000 | $182,270,000 | $38,746,000 | 21.3% |
| Net Income Attributable to Common Stockholders | $203,452,000 | $165,770,000 | $37,682,000 | 22.7% |
Acquisitions and Dispositions
In 2024, Rexford completed significant acquisitions totaling approximately $1.3 billion across various properties. Notable transactions include:
- 49 properties acquired in Q1 2024 for $1.1 billion.
- 3 properties acquired in Q2 2024 for $169.5 million.
- 2 properties acquired in Q3 2024 for $60.5 million.
Occupancy Rates
As of September 30, 2024, total portfolio occupancy stood at 93.0%, with a Same Property Portfolio average occupancy of 96.9%.
Future Outlook
Rexford's strategy focuses on maintaining high occupancy rates and rental increases to enhance revenue streams, alongside ongoing repositioning and redevelopment projects to drive future growth.
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Article updated on 8 Nov 2024
Resources:
- Rexford Industrial Realty, Inc. (REXR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Rexford Industrial Realty, Inc. (REXR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Rexford Industrial Realty, Inc. (REXR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.