Rexford Industrial Realty(US:REXR)2019-11-01 01:11Portfolio Overview - As of September 30, 2019, Rexford Industrial Realty's consolidated portfolio consisted of 205 properties with approximately 24.8 million rentable square feet[209]. - As of September 30, 2019, the consolidated portfolio occupancy rate was approximately 94.9%, while the stabilized portfolio occupancy rate was approximately 97.5%[229]. - The company's Same Properties Portfolio occupancy was approximately 97.0% as of September 30, 2019, compared to 95.6% in the same period of 2018[254]. - The weighted average occupancy rates in Los Angeles, Orange County, Ventura, and San Diego as of September 30, 2019, were 96.3%, 92.6%, 90.8%, and 90.6%, respectively[230]. Acquisitions and Sales - In 2019, the company completed the acquisition of 30 properties totaling approximately 3.5 million rentable square feet for an aggregate purchase price of $712.5 million[213]. - The company has acquired 33 properties totaling 4.0 million rentable square feet for a gross purchase price of $773.3 million year to date[324]. - The company completed the sale of one property and one industrial unit for a total gross sales price of $12.8 million during the nine months ended September 30, 2019[311]. - The company sold one property in Q2 2019 for a gross sales price of $11.6 million, resulting in net cash proceeds of $11.1 million[211]. Financing Activities - In July 2019, the company completed a private placement of $100 million in senior notes, including $25 million of 10-year notes at a fixed rate of 3.88% and $75 million of 15-year notes at a fixed rate of 4.03%[214]. - The company has a $450.0 million senior unsecured credit facility, which includes a $350.0 million revolving credit facility and a $100.0 million term loan facility[313]. - As of the filing date, there were no borrowings outstanding under the Revolver, leaving $350.0 million available for future borrowings[321]. - The total principal payments and debt maturities scheduled amount to $860.999 million, with significant payments due in 2022 and thereafter[328]. Revenue and Income - Net income for the three months ended September 30, 2019, was $12.948 million, compared to $8.965 million for the same period in 2018, representing a year-over-year increase of 44%[291]. - Funds From Operations (FFO) for the three months ended September 30, 2019, was $37.549 million, up from $29.109 million in 2018, reflecting a 29% increase[291]. - Net Operating Income (NOI) for the three months ended September 30, 2019, was $50.855 million, compared to $41.175 million in 2018, indicating a 23% growth[297]. - Total revenues for the Same Properties Portfolio were $51.1 million, up from $48.7 million in 2018, and for the Total Portfolio, revenues increased to $68.1 million from $55.2 million, reflecting a 23.3% growth[259]. Leasing Activity - The company executed 141 new leases totaling 1,575,007 rentable square feet with an average effective rent of $11.46 per square foot during the nine months ended September 30, 2019[233]. - The average retention rate for expired leases during the nine months ended September 30, 2019, was 73.5%[233]. - As of September 30, 2019, the company renewed 159 leases for a total of 2,292,387 rentable square feet, achieving a retention rate of 73.5%[246]. - Leases scheduled to expire during the remainder of 2019 and 2020 represent approximately 1.8% and 17.0% of the total annualized base rent for the portfolio, respectively[247]. Market Conditions - The Southern California industrial real estate market is operating at above 98% occupancy, with limited new supply due to high land and development costs[216]. - In Los Angeles County, average asking lease rates increased quarter-over-quarter, indicating a likely continued upward trend in rents through the remainder of 2019[217]. - General market conditions in Southern California are expected to remain positive, supporting opportunities to increase occupancy and rental rates[232]. Capital Expenditures - Non-recurring capital expenditures for the nine months ended September 30, 2019, amounted to $23.3 million, with a per square foot cost of $1.46[326]. - Recurring capital expenditures for the same period totaled $5.4 million, with a per square foot cost of $0.23[326]. - The company estimates that approximately $90.1 million of capital will be required through the end of 2021 for ongoing projects[325]. Cash Flow and Debt Management - Cash provided by operating activities increased by $26.7 million to $107.6 million for the nine months ended September 30, 2019, compared to $80.9 million for the same period in 2018[344]. - Cash used in investing activities increased by $347.1 million to $715.6 million for the nine months ended September 30, 2019, primarily due to a $330.9 million increase in cash paid for property acquisitions[345]. - The company maintained a net debt to total combined market capitalization ratio of approximately 11.2% as of September 30, 2019[339]. - The company was in compliance with all quarterly debt covenants as of September 30, 2019[342]. Interest Rate Management - The company utilized interest rate swaps to manage interest rate risks related to its borrowings[349]. - A 50 basis point increase in LIBOR would decrease future earnings and cash flows by approximately $0.3 million annually[353]. - A 50 basis point decrease in LIBOR would increase future earnings and cash flows by approximately $0.3 million annually[353]. - Interest risk estimates are based on hypothetical interest rate changes affecting financial instruments[354].