Rexford Industrial Realty(REXR) - 2025 Q2 - Quarterly Results

Corporate Data Investor Company Summary The section lists the company's executive management, board of directors, investor relations, and covering equity research firms - The executive management team is led by Co-Chief Executive Officers Howard Schwimmer and Michael S. Frankel[7] - The Board of Directors is chaired by Tyler H. Rose[7] Company Overview As of Q2 2025, the company's portfolio comprises 422 properties totaling 51.0 million square feet with 89.2% occupancy, maintaining a Net Debt to Adjusted EBITDAre of 4.0x and BBB+/Baa2 credit ratings Q2 2025 Portfolio and Financial Snapshot | Metric | Value | | :--- | :--- | | Total of Properties | 422 | | Total Rentable Square Feet | 51,021,897 | | Total Portfolio Occupancy | 89.2% | | Same Property Portfolio Occupancy | 96.1% | | Same Property Portfolio NOI Growth | 1.1% | | Core FFO Growth | 7.8% | | Core FFO/Share Growth | (1.7)% | | Credit Ratings (S&P/Moody's/Fitch) | BBB+ / Baa2 / BBB+ | | Net Debt to Total Combined Market Capitalization | 25.0% | | Net Debt to Adjusted EBITDAre | 4.0x | Financial and Portfolio Highlights and Capitalization Data Q2 2025 saw total rental income of $241.6 million, net income of $120.4 million, and Core FFO per diluted share of $0.59, with portfolio occupancy at 89.2% and Same Property Cash NOI growth of 3.9% Quarterly Financial Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total rental income | $241,568 | $248,821 | $232,973 | | Net income | $120,394 | $74,048 | $86,017 | | Company share of Core FFO | $139,709 | $141,023 | $129,575 | | Company share of Core FFO per diluted share | $0.59 | $0.62 | $0.60 | | Dividend declared per common share | $0.4300 | $0.4300 | $0.4175 | Quarterly Portfolio & Capitalization Highlights | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Portfolio rentable square feet | 51,021,897 | 50,952,137 | 49,710,628 | | Ending occupancy | 89.2% | 89.6% | 93.7% | | Same Property Portfolio ending occupancy | 96.1% | 95.7% | 97.4% | | Same Property Portfolio Cash NOI growth | 3.9% | 5.0% | N/A | | Net debt to Adjusted EBITDAre | 4.0x | 3.9x | 4.6x | Guidance The company updated its full-year 2025 guidance, raising Net Income per diluted share to $1.38-$1.42, while maintaining Core FFO per diluted share at $2.37-$2.41 and lowering net interest expense to $107 million 2025 Full-Year Guidance | Metric | Q2-2025 Updated Guidance | Q1-2025 Guidance | | :--- | :--- | :--- | | Net Income per diluted share | $1.38 - $1.42 | $1.31 - $1.35 | | Company share of Core FFO per diluted share | $2.37 - $2.41 | $2.37 - $2.41 | | Same Property Portfolio NOI Growth - GAAP | 0.75% - 1.25% | 0.75% - 1.25% | | Same Property Portfolio NOI Growth - Cash | 2.25% - 2.75% | 2.25% - 2.75% | | Average Same Property Portfolio Occupancy | 95.5% - 96.0% | 95.5% - 96.0% | | Net Interest Expense | +/- $107M | +/- $109.5M | - The 2025 Core FFO per diluted share guidance remains unchanged at $2.37 to $2.41, representing 1% to 3% annual growth[25] - The change in guidance is primarily driven by a $0.01 per share positive impact from lower net interest expense, offset by a $0.01 negative impact from extended rent commencement timing in the repositioning/redevelopment portfolio[25] Consolidated Financial Results Consolidated Balance Sheets As of June 30, 2025, total assets were $13.08 billion, total liabilities $3.88 billion, and total equity $9.20 billion, with cash and cash equivalents at $431.1 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | :--- | | Investments in real estate, net | $11,929,199 | $11,918,957 | $11,979,183 | | Cash and cash equivalents | $431,117 | $504,579 | $55,971 | | Total Assets | $13,079,612 | $13,085,857 | $12,648,218 | | Notes payable | $3,347,575 | $3,348,060 | $3,345,962 | | Total Liabilities | $3,884,588 | $3,911,111 | $3,922,239 | | Total Equity | $9,195,024 | $9,174,746 | $8,725,979 | Consolidated Statements of Operations Q2 2025 total revenues reached $249.5 million, with net income of $120.4 million ($0.48 per diluted share), primarily boosted by $44.4 million in real estate sale gains Q2 2025 Statement of Operations (in thousands) | Account | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Rental income | $241,568 | $248,821 | $232,973 | | Total Revenues | $249,507 | $252,287 | $237,573 | | Total Operating Expenses | $146,238 | $161,869 | $139,108 | | Gains on sale of real estate | $44,361 | $13,157 | $16,268 | | Net Income | $120,394 | $74,048 | $86,017 | | Net income attributable to common stockholders | $113,427 | $68,346 | $79,752 | | EPS - diluted | $0.48 | $0.30 | $0.37 | Six Months Ended June 30 Statement of Operations (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $501,794 | $451,669 | | Net Income | $194,442 | $150,294 | | Net income attributable to common stockholders | $181,773 | $138,391 | | EPS - diluted | $0.78 | $0.64 | Non-GAAP FFO, Core FFO and AFFO Reconciliations This section reconciles GAAP Net Income to non-GAAP metrics, showing Q2 2025 NAREIT FFO at $147.2 million, Core FFO at $147.7 million, and AFFO at $120.5 million FFO and Core FFO Reconciliations Q2 2025 Company share of FFO and Core FFO both stood at $0.59 per diluted share, with year-to-date Core FFO per diluted share at $1.21 Q2 2025 FFO and Core FFO Reconciliation (in thousands) | Metric | Q2 2025 | | :--- | :--- | | Net Income | $120,394 | | Adjustments (Depreciation, Gains on sale) | $26,827 | | NAREIT Defined FFO | $147,221 | | Core FFO Adjustments | $513 | | Core FFO | $147,734 | | Company share of FFO | $139,216 | | Company share of Core FFO | $139,709 | | Company share of FFO per diluted share | $0.59 | | Company share of Core FFO per diluted share | $0.59 | AFFO Reconciliation Q2 2025 Adjusted Funds From Operations (AFFO) was $120.5 million, derived from FFO by adjusting for non-cash items and deducting recurring capital expenditures Q2 2025 AFFO Reconciliation (in thousands) | Metric | Q2 2025 | | :--- | :--- | | Funds From Operations (FFO) | $147,221 | | Non-cash & other adjustments | $13,791 | | Deduct: Straight line rent, capex, TIs, commissions | ($40,116) | | Adjusted Funds From Operations (AFFO) | $120,496 | Statement of Operations Reconciliations Q2 2025 Net Operating Income (NOI) was $186.3 million, Cash NOI $173.6 million, and Adjusted EBITDAre $184.1 million, after adjusting GAAP net income Q2 2025 NOI and Cash NOI (in thousands) | Metric | Q2 2025 | | :--- | :--- | | Rental income | $241,568 | | Property expenses | ($55,298) | | Net Operating Income (NOI) | $186,270 | | Straight line & market lease adjustments | ($12,706) | | Cash NOI | $173,564 | Q2 2025 EBITDAre and Adjusted EBITDAre (in thousands) | Metric | Q2 2025 | | :--- | :--- | | Net income | $120,394 | | Interest, D&A, Gains on sale | $53,528 | | EBITDAre | $173,922 | | Adjustments (Stock comp, acq. exp, etc.) | $10,189 | | Adjusted EBITDAre | $184,111 | Same Property Portfolio Performance The Same Property Portfolio (SPP) achieved 1.1% NOI growth and 3.9% Cash NOI growth in Q2 2025, with quarterly weighted average occupancy at 95.9% Same Property Portfolio NOI Growth (Y-o-Y) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Same Property Portfolio NOI Growth | 1.1% | 0.9% | | Same Property Portfolio Cash NOI Growth | 3.9% | 4.5% | Same Property Portfolio Occupancy | Metric | Q2 2025 | Q2 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Quarterly Weighted Average Occupancy | 95.9% | 97.0% | (110) bps | | Ending Occupancy | 96.1% | 97.4% | (130) bps | Capitalization Summary As of June 30, 2025, total equity market capitalization was $8.86 billion, net debt $2.95 billion, and total combined market capitalization $11.81 billion, with net debt to Adjusted EBITDAre at 4.0x Capitalization as of June 30, 2025 (in thousands) | Component | Value | | :--- | :--- | | Common Stock and OP Units Capitalization | $8,690,970 | | Preferred Equity | $173,250 | | Total Equity Market Capitalization | $8,864,220 | | Total Debt | $3,379,141 | | Less: Cash and cash equivalents | ($431,117) | | Net Debt | $2,948,024 | | Total Combined Market Capitalization | $11,812,244 | Key Leverage Ratios | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net debt to total combined market capitalization | 25.0% | 22.8% | 24.1% | | Net debt to Adjusted EBITDAre (annualized) | 4.0x | 3.9x | 4.6x | Debt Summary As of June 30, 2025, total debt was $3.38 billion at a 3.757% weighted average interest rate, 97% unsecured and fixed-rate, with the largest maturity of $1.02 billion in 2027 Debt Composition as of June 30, 2025 | Category | Wtd. Avg. Term (yrs) | Effective Interest Rate | Balance ($ in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Fixed | 3.7 | 3.757% | $3,379,141 | 100% | | Variable | — | — | $0 | 0% | | Secured | 2.5 | 4.589% | $104,141 | 3% | | Unsecured | 3.7 | 3.731% | $3,275,000 | 97% | Debt Maturity Schedule ($ in thousands) | Year | Total | % Total | | :--- | :--- | :--- | | 2025 | $100,000 | 3% | | 2026 | $66,784 | 2% | | 2027 | $1,019,215 | 30% | | 2028 | $314,031 | 9% | | 2029 | $600,000 | 18% | | 2030 | $800,000 | 24% | | Thereafter | $479,111 | 14% | | Total | $3,379,141 | 100% | Portfolio Data Portfolio Overview As of June 30, 2025, the portfolio comprises 422 properties totaling 51.0 million square feet with 89.2% occupancy, generating $778.8 million in-place ABR Portfolio Breakdown by Market | Market | of Properties | Total RSF | Ending Occupancy % | In-Place ABR (in 000's) | | :--- | :--- | :--- | :--- | :--- | | Los Angeles County | 262 | 29,020,444 | 87.9% | $452,504 | | Orange County | 54 | 5,700,074 | 90.7% | $95,412 | | Riverside / San Bernardino County | 54 | 9,575,506 | 93.9% | $137,210 | | San Diego County | 34 | 3,502,230 | 86.7% | $55,845 | | Ventura County | 18 | 3,223,643 | 87.5% | $37,858 | | Consolidated Total | 422 | 51,021,897 | 89.2% | $778,829 | - Excluding space under repositioning/redevelopment, the total portfolio occupancy was 95.0%[79] Executed Leasing Statistics and Trends Q2 2025 saw 1.7 million square feet of leases executed, with Net Effective Rent Change of 20.9% and Cash Rent Change of 8.1%, and a 69% retention rate Quarterly Leasing Spreads | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Net Effective Rent Change | 20.9% | 23.8% | 55.4% | | Cash Rent Change | 8.1% | 14.7% | 41.0% | Q2 2025 Leasing Activity (Building SF) | Activity | Square Feet | | :--- | :--- | | New leases | 678,727 | | Renewal leases | 1,020,266 | | Total leasing activity | 1,698,993 | | Net absorption | 216,955 | | Retention rate | 69% | Lease Expiration Schedule (Top 5 Years) | Year of Expiration | Rentable Square Feet | In-Place + Uncommenced ABR (in thousands) | | :--- | :--- | :--- | | 2025 | 4,122,156 | $62,790 | | 2026 | 8,657,602 | $134,289 | | 2027 | 7,439,877 | $129,504 | | 2028 | 6,753,145 | $126,904 | | 2029 | 4,958,782 | $94,085 | Top Tenants and Lease Segmentation Top 10 tenants represent 14.2% of ABR, with the largest tenant at 2.5%, demonstrating a diversified portfolio by tenant and lease size - The top 10 tenants contribute 14.2% of total ABR, and the top 20 tenants contribute 20.7%, indicating a diversified tenant base[92] Top 5 Tenants by ABR | Tenant | Leased Rentable SF | % of In-Place + Uncommenced ABR | | :--- | :--- | :--- | | Tireco, Inc. | 1,101,840 | 2.5% | | L3 Technologies, Inc. | 595,267 | 1.6% | | Zenith Energy West Coast Terminals LLC | Land Lease | 1.5% | | Cubic Corporation | 515,382 | 1.5% | | IBY, LLC | 1,178,021 | 1.4% | Lease Segmentation by Size | Square Feet | % of In-Place + Uncommenced ABR | | :--- | :--- | | <100,000 | 52.4% | | >100,000 | 41.5% | | Land/IOS & Other | 6.1% | Capital Expenditure Summary For H1 2025, recurring capital expenditures were $7.2 million (1.9% of NOI), while nonrecurring capex totaled $108.7 million, primarily for repositioning and redevelopment projects Year-to-Date Capital Expenditures (in thousands) | Category | YTD Total | | :--- | :--- | | Total Tenant Improvements | $1,915 | | Total Leasing Commissions & Lease Costs | $13,978 | | Total Recurring Capex | $7,198 | | Repositioning and Redevelopment in Process | $100,946 | | Total Nonrecurring Capex | $108,737 | - Recurring capex as a percentage of NOI was 1.9% for the first six months of 2025[99] Properties and Space Under Repositioning/Redevelopment The company holds a substantial value-add pipeline, including current repositioning projects ($208.9 million, 4.5-5.0% yield) and redevelopment projects ($361.1 million, 5.25-5.75% yield), plus a future pipeline exceeding 3 million square feet Current Repositioning and Redevelopment Active repositioning projects total 273,588 square feet with $208.9 million investment and 4.5-5.0% yield, while redevelopment projects cover 1.03 million square feet with $361.1 million investment and 5.25-5.75% yield Current Repositioning Pipeline Summary | Metric | Value | | :--- | :--- | | Total RSF | 273,588 | | Projected Total Investment | $208.9M | | Remaining Costs | $21.2M | | Estimated Unlevered Stabilized Yield | 4.5% - 5.0% | Current Redevelopment Pipeline Summary | Metric | Value | | :--- | :--- | | Projected RSF | 1,031,839 | | Projected Total Investment | $361.1M | | Remaining Costs | $105.0M | | Estimated Unlevered Stabilized Yield | 5.25% - 5.75% | Future Repositioning and Redevelopment A future pipeline of over 3.0 million square feet includes 853,722 square feet of repositioning projects ($30.0-$33.0 million) and 2.19 million square feet of redevelopment projects ($355.0-$385.0 million) - The future repositioning pipeline totals 853,722 square feet with aggregate projected costs of $30.0 - $33.0 million[108] - The future redevelopment pipeline totals 2,187,282 square feet with aggregate projected costs of $355.0 - $385.0 million[108] Current Year Investments and Dispositions Summary Through June 30, 2025, the company completed three dispositions totaling 336,385 square feet for $134.03 million, aligning with its capital recycling strategy 2025 Dispositions through June 30, 2025 | of Properties | Total Square Feet | Total Sale Price ($ in MM) | | :--- | :--- | :--- | | 3 | 336,385 | $134.03 | Net Asset Value Components Key NAV components for Q2 2025 include Pro Forma NOI of $204.6 million, Pro Forma Cash NOI of $191.9 million, total debt of $3.38 billion, and 244.3 million shares outstanding Pro Forma NOI (Three Months Ended Jun 30, 2025, in thousands) | Metric | Value | | :--- | :--- | | Pro Forma NOI | $204,590 | | Pro Forma Cash NOI | $191,884 | Debt and Shares Outstanding (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total consolidated debt (in thousands) | $3,379,141 | | Preferred stock/units - liquidation preference (in thousands) | $173,250 | | Total common shares and OP units outstanding | 244,334,274 | Notes and Definitions Definitions of Key Metrics This section defines non-GAAP financial measures and key terms, including FFO, Core FFO, AFFO, NOI, Cash NOI, EBITDAre, and Same Property Portfolio, for clarity and comparability - Defines NAREIT Funds from Operations (FFO) as net income excluding gains on sale of real estate and real estate related depreciation and amortization[137] - Defines Core Funds from Operations (Core FFO) by adjusting FFO for non-comparable items such as acquisition expenses and severance costs to provide a more consistent comparison of performance[130] - Defines Net Operating Income (NOI) as revenue from real estate operations less property expenses, excluding items like depreciation, G&A, and interest expense[138] - Defines the Same Property Portfolio (SPP) as properties wholly owned from January 1, 2024, through June 30, 2025, excluding properties acquired, sold, or under significant repositioning/redevelopment during that period[145]