In This Article:
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Leases Executed: 2.4 million square feet with net effective and cash rent spreads of 24% and 15%, respectively.
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Embedded Rent Steps: Averaged 3.6% in executed leases.
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New Leasing Activity: 400,000 square feet from five repositioning and redevelopment projects.
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Overall Absorption: Positive 125,000 square feet.
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Tenant Retention: 82%, highest level over the past year.
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Market Rent Decline: 2.8% sequentially and 9.4% year-over-year.
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Core FFO: $0.62 per share, representing 7% growth sequentially and year-over-year.
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Projected Incremental NOI: Over $230 million embedded within the portfolio.
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Liquidity: More than $1.6 billion, including $608 million of cash.
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Net Debt to EBITDA: Reduced to 3.9 times.
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Credit Facility Recast: Extending duration, lowering interest expense, and increasing liquidity.
Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Rexford Industrial Realty Inc (NYSE:REXR) executed 2.4 million square feet of leases with strong net effective and cash rent spreads of 24% and 15%, respectively.
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The company achieved an 82% tenant retention rate, the highest level over the past year.
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Rexford's portfolio outperformed the overall market in terms of rent declines, with smaller format spaces showing resilience.
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The company stabilized five repositioning projects totaling 560,000 square feet at a 7.6% unlevered yield.
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Rexford has over $230 million of projected incremental NOI embedded within its portfolio, positioning it for long-term growth.
Negative Points
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Market rents across Rexford's portfolio declined 2.8% sequentially and 9.4% year-over-year.
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The company is experiencing some excess supply in spaces above 100,000 square feet in certain submarkets.
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Leasing activity on vacant spaces decreased from 90% to 80% due to economic uncertainty and recent tariff announcements.
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Projected lease-up timing has increased to nine months from prior expectations of eight months due to tariff disruptions.
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Cash leasing spreads for the quarter were negatively impacted, primarily due to one lease with an above-market rent related to specialized improvements.
Q & A Highlights
Q: Market rents have declined. How much further do you expect rents to fall, and what impact could tariffs have on this trend? A: Laura Clark, Chief Operating Officer, noted that while there is some pressure on market rents, demand remains strong with activity on 80% of vacant spaces. Michael Frankel, Co-CEO, added that the tenant base is relatively insulated from trade flow changes due to tariffs, as they primarily serve regional consumption. The infill Southern California market is expected to remain resilient due to its scarcity of space and strong demand drivers.