Group 1 - The company High Yield Landlord is positioning itself for a market shift and offers access to its Top Picks for 2026, supported by over 500 five-star reviews and a 30-day money-back guarantee [1] - Jussi Askola, President of Leonberg Capital, leads the investing group High Yield Landlord, which focuses on REIT investing and provides real-time updates on its portfolio and transactions [2] Group 2 - The investing group features three distinct portfolios: core, retirement, and international, along with buy/sell alerts and a chat room for direct interaction with analysts [2]

Financial Obligations and Risks - The company has a balloon payment obligation in its financing arrangements, which may adversely affect its financial condition and ability to make distributions [107]. - Current debt levels reduce cash available for distribution and may expose the company to default risks under its debt obligations [108]. - The company may face challenges in refinancing its indebtedness at maturity, which could lead to forced property disposals on unfavorable terms [110]. - The company’s ability to pay dividends depends on generating revenues exceeding expenses and scheduled principal payments on debt [116]. - The company may choose not to distribute proceeds from real estate sales, potentially reducing cash distributions to stockholders [126]. - The commercial loan originated by the company is subject to risks of delinquency and foreclosure, which could materially adversely affect results of operations [142]. - An allowance for credit losses is required to be established, and changes in economic conditions may require an increase in this allowance, impacting net income [144]. - As of December 31, 2025, the total consolidated indebtedness of the company was $3.28 billion, with 100% of this being fixed-rate debt [408]. - The company is exposed to interest rate risk primarily due to the use of variable-rate debt, which is based on SOFR, and manages this risk through interest rate swaps [407]. Environmental and Regulatory Risks - The company may incur significant costs related to government regulation and litigation over environmental matters, which could exceed the value of the property and aggregate net asset value [131]. - Environmental liabilities could affect a tenant's ability to make rental payments, and changes in laws could increase potential liability for noncompliance, particularly regarding PFAS regulations [135]. - The company has not always implemented actions recommended by environmental assessments, which may expose it to material liability for environmental issues [133]. - The presence of asbestos-containing building materials (ACBM) in properties may expose the company to third-party liability for personal injury associated with exposure to asbestos [134]. - The company is subject to various federal, state, and local environmental, health, and safety requirements, which could result in significant unanticipated expenditures [135]. - The company may face significant remediation costs if material environmental liabilities are incurred in the future, affecting its financial position [136]. Taxation and REIT Compliance - The company has elected to be taxed as a REIT since 2013, and failure to maintain this qualification could lead to significant tax liabilities and reduce cash available for distributions [165]. - Tax Matters Agreements may limit the company's ability to sell certain properties, even if such actions would be in the best interest of stockholders [158]. - The company must distribute at least 90% of its REIT taxable income to qualify as a REIT, which may force it to borrow funds during unfavorable market conditions [174]. - If a subsidiary REIT fails to qualify, it could lead to federal income tax liabilities and affect the company's ability to maintain its REIT status [169]. - The company anticipates that the aggregate value of its taxable REIT subsidiaries will remain below 25% of its total assets to comply with asset test limitations [173]. - Legislative changes affecting REITs could negatively impact the company's ability to qualify as a REIT and the tax consequences for investors [178]. - The company may face a 100% penalty tax on prohibited transactions, which could limit its ability to engage in certain sales [176]. - The company is subject to various federal, state, and local taxes, which could affect its profitability and cash flow [170]. - Compliance with REIT requirements may force the company to liquidate or forgo attractive investments, impacting its business results [177]. Corporate Governance and Shareholder Relations - The partnership agreement provides that the company generally will not be liable for actions taken in its capacity as general partner, except for fraud or gross negligence [148]. - The company has the authority to increase the number of authorized shares of stock without stockholder approval, which could lead to potential conflicts with existing common stock rights [150]. - Certain provisions of Maryland law may inhibit changes in control, potentially discouraging third parties from making acquisition proposals that could provide a premium price for common stock [151]. - The board of directors can change investment and financing policies without stockholder approval, which may increase leverage and risk of default on debt obligations [160]. - Stockholder activism could divert management's attention and create costs, potentially affecting operational results and stock price volatility [154]. - Certain provisions in the partnership agreement may delay or prevent unsolicited acquisitions, which could discourage third parties from making proposals [155]. - As of December 31, 2025, the company owned 96.5% of the outstanding common units in its Operating Partnership, but may issue additional common units to third parties, diluting ownership and affecting distributions [164]. - The company is a holding entity and relies on distributions from its Operating Partnership to meet obligations, which structurally subordinates stockholder claims to the liabilities of the Operating Partnership [163]. Market and Operational Risks - The company faces risks associated with investing in unfamiliar markets when acquiring properties outside its target areas [125]. - Property taxes may increase due to rate changes or reassessments, adversely impacting cash flows [128]. - The company’s performance is subject to risks associated with real estate assets, including economic downturns and rising interest rates [117]. - Impairment losses could negatively impact the company's operating results, as they result in adjustments to publicly reported figures [124]. - The company may incur additional costs to bring properties into compliance with the Americans with Disabilities Act (ADA) and the Fair Housing Amendment Act (FHAA) [139]. - The company uses interest rate swaps to hedge against interest rate risks, but actual movements in interest rates remain uncertain [409].

Core Viewpoint - Rexford Industrial reported a GAAP loss of $0.30 per share in Q4 2025, leading to a stock drop of over 5%, but Core FFO was $0.59 per share for the quarter and $2.40 for the full year, indicating a discrepancy between GAAP figures and operational performance [1][2][3] Financial Performance - Q4 included $89.1 million in real estate impairments related to six development projects and $60.2 million in severance costs, totaling approximately $149 million in one-time charges [2] - Full-year Core FFO reached $558.6 million, a 9.2% year-over-year increase, while per-share growth slowed to 2.6% due to dilution [4] - Portfolio NOI increased by 5.7% to $752.7 million, suggesting that the company is not in distress but rather experiencing a deceleration in growth [4] Capital Allocation - Rexford made no acquisitions in 2025, marking a first for the company, and instead sold seven properties for $217.5 million at a 12.4% unlevered IRR, while initiating a $250 million share buyback program [5] - An additional $500 million buyback program was authorized, indicating a shift in capital allocation strategy from offensive to defensive [5] Market Conditions - Market rents in Southern California have declined by approximately 20% since early 2023, with a further 9% year-over-year drop noted in Q4 [5][6] - Portfolio occupancy fell to 90.2%, down 160 basis points from Q3, attributed to repositioning activities and tenant difficulties [6] Future Outlook - Rexford is targeting $400 million to $500 million in asset sales for 2026, with $230 million already under contract, which could support its capital recycling strategy [7] - Management guided for a decline of 1.5% to 2.5% in same-property NOI, marking the first negative guidance from the company [8] - The new CEO, Laura Clark, will focus on cash flow quality and operational efficiency starting April 1, 2026 [9] Guidance and Market Sentiment - The 2026 Core FFO guidance of $2.35 to $2.40 implies flat to slightly negative growth, reflecting a significant deceleration from the previous year's 9.2% growth [10] - The company maintains a clean balance sheet with $1.4 billion in liquidity and $3.3 billion in debt at 3.7%, indicating no leverage issues but highlighting a demand problem in the market [10]

Core Insights - The company aims to reduce General & Administrative (G&A) expenses to below the peer average, targeting approximately 6% of revenue by 2026 [1] - Rexford plans to sell $400 million to $500 million in properties in 2026, having already sold seven properties for $218 million in 2025 [2][8] - The company has identified six development projects totaling about 850,000 square feet that it will not pursue, intending to dispose of these sites [3][8] - Rexford executed 3 million square feet of leasing in the quarter, focusing on improving cash flow quality and optimizing shareholder returns [4] Financial Performance - Q4 core Funds From Operations (FFO) was reported at $0.59, with full-year 2025 core FFO at $2.40; guidance for 2026 core FFO is set at $2.35 to $2.40 [7][19] - The company recognized $89 million in impairments on development sites, allowing for the reallocation of about $285 million in capital [14][23] - Total portfolio occupancy ended the quarter at 90.2%, down 160 basis points sequentially, influenced by repositioning and development starts [15] Market Conditions - Management noted softer fundamentals in Southern California, with CBRE rents down approximately 9% year-over-year and occupancy at 90.2% [6][9] - Early signs of stabilization in select submarkets were mentioned, despite negative net absorption [9][10] - Market rents in Rexford's portfolio have decreased by about 20% since early 2023, impacting expected re-leasing spreads for 2026 [16] Strategic Initiatives - The company is prioritizing occupancy and cash flow, exemplified by an early renewal with its largest tenant, Tireco, which is expected to reduce 2026 same-property NOI by about 50 basis points [10][11] - Rexford's leadership transition includes COO Laura Clark becoming the new CEO, focusing on reducing development exposure and aligning compensation metrics [5][8] - Management expects to redeploy proceeds from asset sales into high-return projects and potential share repurchases [21][22] 2026 Guidance - Core FFO per share guidance for 2026 is set at $2.35 to $2.40, with expectations of stabilization and rent commencement from repositioning projects generating $20 million in annualized NOI [19][20] - The company anticipates a decline in same-property NOI growth of about 2%, with bad debt projected at 35 basis points of revenue [20][17] - Rexford expects to end 2026 with $166 million in cash, with total sources including dispositions estimated at $616 million [23]

Financial Data and Key Metrics Changes - Fourth quarter Core FFO per share was $0.59, in line with expectations, driven by higher Same Property NOI growth, lower G&A expense, and accretive share buybacks, partially offset by higher Bad Debt [14] - For the full year, after adjusting for co-CEO transition severance charges and other non-recurring costs, Core FFO per share was $2.40, placing the company at the high end of initial expectations [14] - Total portfolio occupancy ended the quarter at 90.2%, down 160 basis points sequentially [15] Business Line Data and Key Metrics Changes - In 2025, the company signed approximately 2 million sq ft of repositioning and development leases, generating nearly $40 million of annualized incremental NOI [15] - The company recognized $89 million of real estate impairments related to development sites that are being sold, allowing for the redirection of $285 million of capital into higher-yielding uses [15] Market Data and Key Metrics Changes - Market rents declined 10 basis points in the quarter and 9% year-over-year, with total market rent down 1% in the fourth quarter [9][16] - Vacancy increased 30 basis points during the quarter, and net absorption was negative, reflecting broader market softness [10] Company Strategy and Development Direction - The company is focused on enhancing cash flow quality, driving per share FFO and NAV growth, and optimizing returns for shareholders [6] - A programmatic disposition plan is a key component of the capital allocation strategy, targeting between $400 million and $500 million of dispositions in 2026 [8] - The company aims to reduce G&A as a percentage of revenue below the peer average, with a target of 6% for 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the long-term fundamentals of infill Southern California despite near-term pressures impacting 2026 growth expectations [6] - The company is prioritizing occupancy to drive cash flow and is maintaining rigorous capital discipline in light of current market dynamics [10] - Management believes Rexford is well-positioned to capture recovering demand to drive occupancy and NOI growth [12] Other Important Information - The company executed a strategic early renewal of its largest tenant, Tireco, allowing for significant de-risking of cash flow [10] - The company is committed to aligning executive compensation with shareholder priorities, having recalibrated compensation metrics [9] Q&A Session Summary Question: Can you provide more understanding on the Tireco lease re-signing? - The decision to prioritize occupancy and de-risk future cash flow led to an early renewal of the Tireco lease, which was above market [23][24] Question: How much further do you expect rents to decline? - Management noted signs of stabilization but indicated challenges remain, making it difficult to call an inflection point [28][30] Question: What is driving the occupancy decline? - The occupancy decline is attributed to longer downtime for leasing and repositioning, with specific properties expected to move out [36][39] Question: What industries are on the watch list for bad debt? - The watch list remains similar year-over-year, with a higher concentration in logistics due to specific business issues [43] Question: What are the expected sources and uses of cash for 2026? - The company expects to have $413 million available for deployment after accounting for development spend, which can include share repurchases [78]

Financial Data and Key Metrics Changes - Fourth quarter Core FFO per share was $0.59, in line with expectations, driven by higher Same Property NOI growth, lower G&A expense, and accretive share buybacks, partially offset by higher bad debt [14] - For the full year, after adjusting for co-CEO transition severance charges and other non-recurring costs, Core FFO per share was $2.40, placing the company at the high end of initial expectations [14] - Total portfolio occupancy ended the quarter at 90.2%, down 160 basis points sequentially, largely driven by near-term repositioning and development starts [15] Business Line Data and Key Metrics Changes - The company executed 3 million sq ft of leasing in the fourth quarter, meeting guidance expectations [6] - In 2025, the company signed approximately 2 million sq ft of repositioning and development leases, generating nearly $40 million of annualized incremental NOI [15] - The company recognized $89 million of real estate impairments related to development sites that no longer meet investment hurdles, allowing for the redirection of $285 million of capital into higher-yielding uses [15] Market Data and Key Metrics Changes - Market rents declined 10 basis points in the quarter and 9% year-over-year, reflecting broader market softness [9] - Vacancy increased 30 basis points during the quarter, with net absorption being negative, indicating a more measured pace of demand [10] - The company noted that supply under construction in the market is near historic lows, supporting future rent growth potential [11] Company Strategy and Development Direction - The company outlined immediate strategic priorities to enhance cash flow quality, drive per share FFO and NAV growth, and optimize shareholder returns [6] - A programmatic disposition plan is a key component of the broader capital allocation strategy, targeting between $400 million and $500 million of dispositions in 2026 [8] - The company is committed to driving operating efficiencies, targeting a reduction in G&A as a percentage of revenue below the peer average, with a goal of 6% for 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of infill Southern California, despite near-term pressures impacting 2026 growth expectations [6] - The company is maintaining rigorous capital discipline and prioritizing occupancy to drive cash flow, with a focus on maximizing risk-adjusted returns [12] - Management acknowledged the challenges in the current market but emphasized the unique upside potential of the company and its assets [11] Other Important Information - The company opportunistically sold seven properties in 2025, totaling $218 million, and plans to continue recycling capital into accretive opportunities [8] - The company recalibrated executive compensation metrics to align with shareholder priorities, underscoring its commitment to operating in direct alignment with shareholder interests [9] Q&A Session Summary Question: Insights on the Tireco lease re-signing - Management prioritized occupancy and de-risked future cash flow growth by negotiating an early renewal with Tireco, allowing for a strategic three-year lease to reset at market rent sooner [24][25] Question: Expectations for market rent trends - Management noted signs of stabilization in leasing activity but indicated challenges remain, making it difficult to call an inflection point in the market [30][34] Question: Factors driving occupancy decline - The decline in occupancy was attributed to longer downtime for leasing and repositioning, with specific properties expected to move out for redevelopment [37][39] Question: Bad debt and watchlist tenants - Management indicated that the watchlist size remained stable year-over-year, with a concentration in logistics, and emphasized a judicious approach to bad debt reserves [40][43] Question: Expected sources and uses of cash for 2026 - The company expects to have $413 million available for deployment after accounting for development spend, which can include share repurchases or future projects [79]

Financial Data and Key Metrics Changes - Fourth quarter Core FFO per share was $0.59, in line with expectations, driven by higher Same Property NOI growth, lower G&A expense, and accretive share buybacks, partially offset by higher Bad Debt [15] - For the full year, after adjusting for co-CEO transition severance charges and other non-recurring costs, Core FFO per share was $2.40, placing the company at the high end of initial expectations [15] - Total portfolio occupancy ended the quarter at 90.2%, down 160 basis points sequentially [16] Business Line Data and Key Metrics Changes - In 2025, the company signed approximately 2 million sq ft of repositioning and development leases, generating nearly $40 million of annualized incremental NOI [16] - The company recognized $89 million of real estate impairments related to development sites elected for sale, allowing redirection of $285 million of capital into higher-yielding uses [16] Market Data and Key Metrics Changes - Market rents declined 1% in the fourth quarter and have fallen 20% since the peak in early 2023, contributing to pressure on expected re-leasing spreads for 2026 [17] - Vacancy increased by 30 basis points during the quarter, and net absorption was negative, reflecting broader market softness [11] Company Strategy and Development Direction - The company is focused on enhancing cash flow quality, driving per share FFO and NAV growth, and optimizing shareholder returns through a rigorous approach to capital allocation [6][8] - A programmatic disposition plan is in place, targeting between $400 million and $500 million of dispositions in 2026 to recycle capital into accretive opportunities [9] - The company aims to reduce G&A as a percentage of revenue below the peer average, with a target of 6% for 2026 [9] Management's Comments on Operating Environment and Future Outlook - Management noted that tenant demand is influenced by macroeconomic forces and elevated market availability, contributing to a more measured pace of demand [10] - The company remains confident in the long-term fundamentals of infill Southern California, despite near-term pressures impacting growth expectations for 2026 [6] - Management emphasized the importance of prioritizing occupancy to maintain cash flow and de-risk future growth [12] Other Important Information - The company executed a strategic early renewal of its largest tenant, Tireco, allowing for significant cash flow preservation [11] - The company is committed to aligning executive compensation with shareholder priorities, having recalibrated incentive compensation metrics [10] Q&A Session Summary Question: Clarification on Tireco lease re-signing - Management prioritized occupancy and de-risked future cash flow growth by negotiating a 3-year lease renewal with Tireco, which was above market [24][25] Question: Expectations for market rent declines - Management indicated that while there are signs of stabilization, they are not ready to call an inflection point in the market yet [30][34] Question: Specifics on occupancy decline - Management noted that the decline in occupancy was driven by longer downtime for repositioning and redevelopment projects [37] Question: Bad debt concerns - Management reported a watch list of tenants with some concentration in logistics, indicating ongoing monitoring of larger tenants [44] Question: Expected sources and uses of cash for 2026 - Management expects to have approximately $413 million available for deployment after accounting for development spend, which can include share repurchases [78]

NYSE: REXR Rexford Industrial Realty Earnings Presentation 4Q 2025 14434-14527 San Pedro Street, South Bay 2390 58K SF Repositioning | 100% Leased in 4Q25 -2442 North American Way, North Orange County Forward Looking Statements This presentation 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 av ...

Financial Performance - For the quarter ended December 2025, Rexford Industrial reported revenue of $248.1 million, reflecting a year-over-year increase of 2.1% [1] - Earnings per share (EPS) for the quarter was $0.59, a significant increase from $0.27 in the same quarter last year [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $250.22 million, resulting in a revenue surprise of -0.85% [1] - The company achieved an EPS surprise of +1.01%, with the consensus EPS estimate being $0.58 [1] Key Metrics - Rental income was reported at $243.23 million, compared to the average estimate of $247.13 million, representing a year-over-year change of +1.5% [4] - Management and leasing services revenue was $0.2 million, exceeding the average estimate of $0.12 million, with a year-over-year increase of +18% [4] - Interest income was reported at $4.67 million, below the average estimate of $6.07 million, but showed a substantial year-over-year increase of +56.1% [4] - Net earnings per share (diluted) was reported at -$0.30, compared to the average estimate of $0.26 [4] Stock Performance - Shares of Rexford Industrial have returned +4.5% over the past month, outperforming the Zacks S&P 500 composite's +0.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Rexford Industrial (REXR) reported quarterly funds from operations (FFO) of $0.59 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, and showing an increase from $0.58 per share a year ago [1] Financial Performance - The company achieved an FFO surprise of +1.01% for the quarter, and previously had an FFO of $0.6 per share, resulting in a surprise of +1.69% [1][2] - Revenues for the quarter ended December 2025 were $248.1 million, which fell short of the Zacks Consensus Estimate by 0.85%, compared to $242.9 million in the same quarter last year [2] - Over the last four quarters, Rexford Industrial has surpassed consensus FFO estimates four times and revenue estimates three times [2] Stock Performance - Rexford Industrial shares have increased by approximately 4.8% since the beginning of the year, outperforming the S&P 500's gain of 1.1% [3] Future Outlook - The future performance of Rexford Industrial's stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [3][4] - The current consensus FFO estimate for the upcoming quarter is $0.62 on revenues of $249.29 million, and for the current fiscal year, it is $2.46 on revenues of $1.01 billion [7] Industry Context - The REIT and Equity Trust - Other industry, to which Rexford Industrial belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, indicating potential challenges ahead [8]