Rexford Industrial Realty, Inc. Q3 FY2024 earnings call

• Thanked the Rexford team for their work in delivering a strong quarter with FFO per share growth. - Highlighted consolidated stabilized portfolio occupancy of 97.6%. - Noted execution of 1.6 million square feet of leases with positive net absorption outperforming the overall market. - Mentioned leasing spreads in the quarter at 39% net effective and 27% cash basis. - Discussed investment activity with $60 million in Q3 and $70 million post-quarter, initial yield 5.8%. - Talked about dispositions with $44 million year-to-date and $90 million+ in negotiations. - Reported 325,000 square feet of repositioning and redevelopment projects stabilized in Q3 with a weighted average unlevered stabilized yield of 7.6%.

Rexford ended the third quarter with a 5.4% increase in FFO per share compared to the prior year quarter, bringing FFO per share growth to 9.3% for the first nine months. The consolidated stabilized portfolio occupancy was 97.6% at quarter end. They executed 1.6 million square feet of leases, driving 394,000 square feet of positive net absorption. Leasing spreads in the quarter were 39% on a net effective basis and 27% on a cash basis. Annual embedded rent steps in executed leases averaged 3.9%. Market rents for highly functional product comparable to the Rexford portfolio were down approximately 2.5% sequentially and 7.5% year-over-year.

• 2024 FFO per share guidance increased to $2.33 to $2.35, representing 7% year-over-year earnings growth at the midpoint. - Same property NOI growth guidance: 4.25% to 4.75% net effective and 7% to 7.5% cash, reduced 25 basis points at the midpoint. - Factors driving guidance include average occupancy of 96.5% to 96.75%, leasing spreads, concessions, and bad debt. - Incremental contributions from $131 million of acquisition activity and higher occupancy in the non-same property pool.

• Global unrest, presidential election uncertainty, and uncertain economic outlook weighing on markets and business decision making. - Current leasing activity with tenants taking longer to make decisions. - Subleasing activity and potential impacts on portfolio occupancy and NOI.

Q: John Kim asked about tenant decision-making flow and rents signed.

A: Michael Frankel and Laura Clark discussed macro factors, leasing spreads, and mark-to-market.

Q: Jeff Spector asked about tenant decision-making differences from peers.

A: Michael Frankel explained differences in tenant size and market dynamics.

Q: Craig Mailman asked about redevelopment yields.

A: Howard Schwimmer explained the one-off nature of Dupont's yield due to market oversupply.

Q: Nicholas Yulico asked about same-store occupancy change.

A: Laura Clark explained occupancy guidance changes and drivers.

Q: Nick Thillman asked about repositioning redevelopment NOI flow-through.

A: Laura Clark and Michael Frankel discussed timing and guidance.

Q: Mike Mueller asked about dispositions and occupancy declines.

A: Laura Clark provided details on San Diego and Ventura occupancy changes.

Q: Blaine Heck asked about AB 98 impact and acquisition cost of capital.

A: Howard Schwimmer and Michael Frankel discussed AB 98 impact and cost of capital.

Q: Vikram Malhotra asked about TAM and three-year guide removal.

A: Michael Frankel discussed focus on annual guidance and market opportunities.

Q: Richard Anderson asked about market rent changes and redevelopment underwriting.

A: Michael Frankel discussed normalization and underwriting approach.

Q: Brendan Lynch asked about LL Flooring and dispositions.

A: Laura Clark and Howard Schwimmer discussed LL Flooring and disposition characteristics