EX-99.2
Published on February 26, 2015
Exhibit 99.2
Supplemental Financial ReporSupplemental Financial Reporting Package Fourth Quarter 2014 Rexford Industrial Realty, Inc. NYSE: REXR 11620 Wilshire Blvd Suite 1000 Los Angeles, CA 90025 310-966-1680 www.RexfordIndustrial.com ting Package Fourth Quarter 2014 Rexford Industrial Realty, Inc. NYSE: REXR 11620 Wilshire Blvd Suite 1000 Los Angeles, CA 90025 310-966-1680 www.RexfordIndustrial.com
Table of Contents Section Page Corporate Data: Investor Company Summary 3 Financial and Portfolio Highlights and Common Stock Data 4 Consolidated and Combined Financial Results: Consolidated and Combined Balance Sheet 5 Consolidated and Combined Statement of Operations 6 - 7 Non-GAAP FFO and AFFO Reconciliations 8 - 9 Statement of Operations Reconciliations 10 - 11 Same Property Portfolio Performance 12 - 13 Joint Venture Financial Summary 14 - 15 Capitalization Summary 16 Debt Summary 17 Portfolio Data: Portfolio Overview 18 Occupancy and Leasing Trends 19 Leasing Statistics 20 Top Tenants and Lease Segmentation 21 Capital Expenditure Summary 22 Properties Under Repositioning 23 Acquisitions and Dispositions Summary 24 Net Asset Value Components 25 Fixed Charge Coverage Ratio 26 Definitions / Discussion of Non-GAAP Financial Measures 27 - 28 Disclosures: "Forward Looking Statements: This supplemental package 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 available to management. Such statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the market value of our properties, the inability to enter into or renew leases at favorable rates, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); risks associated with the disruption of credit markets or a global economic slowdown; risks associated with the potential loss of key personnel (most importantly, members of senior management); risks associated with our failure to maintain our status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended; possible adverse changes in tax and environmental laws; litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes, and potential liability for uninsured losses and environmental contamination. For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see Item 1A. Risk Factors in our 2013 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (“SEC”) on March 20, 2014. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes." Fourth Quarter 2014 Page 2 Supplemental Financial Reporting Package
Investor Company Summary Senior Management Team Howard Schwimmer Co-Chief Executive Officer, Director Michael S. Frankel Co-Chief Executive Officer, Director Adeel Khan Chief Financial Officer Patrick Schlehuber Director of Acquisitions Bruce Herbkersman Director of Construction & Development Shannon Lewis Director of Leasing & Asset Management Ashley Arthur Director of Property Operations Board of Directors Richard Ziman Chairman Howard Schwimmer Co-Chief Executive Officer, Director Michael S. Frankel Co-Chief Executive Officer, Director Robert L. Antin Director Steven C. Good Director Peter Schwab Director Tyler H. Rose Director Company Contact Information 11620 Wilshire Blvd Suite 1000 "Los Angeles, CA 90025 " "310-966-1680 " "www.RexfordIndustrial.com " Investor Relations Information ICR Brad Cohen and Stephen Swett www.icrinc.com 212-849-3882 Equity Research Coverage Bank of America Merrill Lynch James Feldman J.P. Morgan Michael W. Mueller, CFA Wells Fargo Securities Brendan Maiorana, CFA Jeffries LLC Tayo Okusanya MLV & Co Jonathan M. Peterson Disclaimer: This list may not be complete and is subject to change as firms add or delete coverage of our company. Please note that any opinions, estimates, forecasts or predictions regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Rexford Industrial Realty, Inc. or its management. We are providing this listing as a service to our stockholders and do not by listing these firms imply our endorsement of, or concurrence with, such information, conclusions or recommendations. Interested persons may obtain copies of analysts' reports on their own; we do not distribute these reports. Fourth Quarter 2014 Page 3 Supplemental Financial Reporting Package
Financial and Portfolio Highlights and Common Stock Data (1) (in thousands except per share figures and portfolio statistics) Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Financial Results: Total rental revenues $19,576 $17,755 $14,718 $13,415 Net income (loss) $145 $(679) $81 $1,429 Net income (loss) per common share - basic and diluted $0.00 $(0.02) $0.00 $0.05 Company share of Recurring FFO $8,970 $7,724 $6,115 $5,239 Recurring FFO per common share - basic and diluted $0.21 $0.23 $0.24 $0.21 Company share of FFO $8,183 $6,984 $5,532 $4,941 FFO per common share - basic and diluted $0.19 $0.21 $0.22 $0.19 EBITDA $10,334 $9,456 $7,769 $8,959 Adjusted EBITDA $12,585 $11,149 $10,325 $7,514 Dividend declared per common share $0.12 $0.12 $0.12 $0.12 Portfolio Statistics: Portfolio SF - consolidated 9,829,020 8,633,812 7,908,456 6,533,452 Ending occupancy - consolidated portfolio 90.7% 91.8% 90.5% 90.2% Pro-forma occupancy including uncommenced leases 90.7% 92.3% 91.1% 91.1% Leasing spreads - cash(2) 1.9% 3.6% 5.2% 3.6% Leasing spreads - GAAP(3) 11.8% 10.3% 17.1% 11.5% Same Property Performance: Total rental revenue growth 8.8% 3.6% 4.8% 3.4% Total property expense growth 4.1% 3.9% -4.1% 15.0% NOI growth 10.7% 3.5% 8.3% -1.1% Cash NOI growth 9.7% 3.8% 3.3% 1.0% Same Property Portfolio ending occupancy #REF! 90.4% 89.8% 89.1% Stabilized Same Property Portfolio ending occupancy 93.7% 91.7% -- -- Same Property Portfolio occupancy growth (ppt) 2.5% 1.4% 1.4% Capitalization: Common stock price at quarter end $15.71 $13.84 $14.24 $14.18 Common shares issued and outstanding 43,382,425 43,059,742 25,420,381 25,419,418 Total shares and units issued and outstanding at period end (4) 45,705,769 45,705,769 28,429,640 28,428,677 Weighted average shares outstanding - basic and diluted 43,234,602 33,527,183 25,419,757 25,419,418 Total equity market capitalization $718,038 $632,568 $404,838 $403,119 Total consolidated debt 357,076 269,699 369,679 212,997 Total debt (pro-rata)(5) 357,076 275,924 375,904 219,222 Total combined market capitalization 1,066,508 847,951 771,470 615,997 Ratios: Net debt (pro-rata) to total combined market capitalization 32.7% 25.4% 47.5% 34.6% Net debt (pro-rata) to adjusted EBITDA (quarterly results annualized) 6.9x 4.9x 8.9x 7.0x (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) Excluding the effect of one new 15,040 sqft lease transaction in our San Diego market, the weighted average cash growth for total combined new and renewal leases executed during Q4-14 is 3.3%. (3) Excluding the effect of one new 15,040 sqft lease transaction in our San Diego market, the weighted average GAAP growth for total combined new and renewal leases executed during Q4-14 is 13.3%. (4) Includes 2,323,344 OP units held by noncontrolling interests (NCI) and excludes 320,017 unvested shares of restricted stock as of December 31, 2014. Includes 2,646,027 OP units held by NCI and excludes 198,141 unvested shares of restricted stock as of September 30, 2014. Includes 3,009,259 OP units held by NCI and excludes 203,264 and 131,786 unvested shares of restricted stock as of June 30, 2014, and March 31, 2014, respectively. (5) Includes our 15% share of debt in our Mission Oaks joint venture for the three months ended September 30, 2014, June 30, 2014 and March 31, 2014. During the three months ended December 31, 2014, in connection with the JV's disposition of 3001 & 3175 Mission Oaks Blvd., the JV repaid the $41.5 million loan secured by the properties located at 3001, 3175 and 3233 Mission Oaks Blvd. Fourth Quarter 2014 Page 4 Supplemental Financial Reporting Package
Consolidated and Combined Balance Sheet (in thousands) Rexford Industrial Realty, Inc. 12/31/14 9/30/14 6/30/14(1) 3/31/14(1) 12/31/13(1) Assets Investments in real estate, net $854,477 $722,689 $651,920 $510,690 $481,673 Cash and cash equivalents 8,606 60,541 9,272 6,344 8,997 Restricted cash - 307 379 352 325 Notes receivable 13,137 13,138 13,136 13,135 13,139 Rents and other receivables, net 1,812 1,738 1,455 1,238 917 Deferred rent receivable 5,014 4,420 4,197 3,809 3,637 Deferred leasing costs, net 3,608 3,275 2,640 2,294 2,153 Deferred loan costs, net 2,789 2,995 3,197 1,476 1,597 Acquired lease intangible assets, net(2) 28,136 23,558 22,621 13,110 13,508 Indefinite-lived intangible 5,271 5,271 5,271 5,271 5,271 Other assets 3,800 4,552 2,568 4,573 2,309 Acquisition related deposits 2,110 - 1,450 1,550 1,510 Investment in unconsolidated real estate entities 4,018 5,744 5,758 5,778 5,687 Assets associated with real estate held for sale - - 1,958 1,995 13,952 Total Assets $932,778 $848,228 $725,822 $571,615 $554,675 Liabilities Notes payable $357,106 $269,811 $369,873 $212,918 $192,491 Accounts payable, accrued expenses and other liabilities 11,304 9,620 6,050 6,140 5,783 Dividends payable 5,244 5,191 3,075 3,066 5,368 Acquired lease intangible liabilities, net(3) 3,016 1,921 1,970 1,547 1,143 Tenant security deposits 8,768 7,927 7,396 6,901 6,099 Prepaid rents 1,463 1,329 964 766 1,426 Liabilities associated with real estate held for sale - - 293 282 596 Total Liabilities 386,901 295,799 389,621 231,620 212,906 Equity Common stock 434 431 255 255 255 Additional paid in capital 542,318 538,248 312,451 312,131 311,936 Cumulative distributions in excess of earnings (21,673) (16,574) (10,784) (7,782) (5,993) Accumulated other comprehensive income (loss) (1,331) 158 (410) 269 - Total stockholders' equity 519,748 522,263 301,512 304,873 306,198 Noncontrolling interests 26,129 30,166 34,689 35,122 35,571 Total Equity 545,877 552,429 336,201 339,995 341,769 Total Liabilities and Equity $932,778 $848,228 $725,822 $571,615 $554,675 (1) For comparability, certain prior period amounts have been reclassified to conform to current period presentation of properties held for sale. (2) Includes net above-market tenant lease intangibles of $3,644 (Dec. 31 2014), $3,474 (Sept. 30, 2014), $3,443 (June 30, 2014), $1,488 (March 31, 2014), and $1,597 (Dec. 31, 2013). (3) Includes net below-market tenant lease intangibles of $2,771 (Dec. 31 2014), $1,668 (Sept. 30, 2014), $1,716 (June 30, 2014), $1,284 (March 31, 2014), and $866 (Dec. 31, 2013). Fourth Quarter 2014 Page 5 Supplemental Financial Reporting Package
Consolidated and Combined Statement of Operations Quarterly Results (unaudited and in thousands, except share count and per share figures) Rexford Industrial Realty, Inc. Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Rental Revenues Rental revenues $16,719 $15,516 $12,773 $11,628 Tenant reimbursements 2,417 2,052 1,681 1,511 Management, leasing, and development services 206 171 249 234 Other income 234 16 15 42 Total rental revenues 19,576 17,755 14,718 13,415 Interest income 282 281 278 276 Total Revenues 19,858 18,036 14,996 13,691 Operating Expenses Property expenses 5,477 4,879 3,892 4,134 General and administrative 3,486 3,273 2,780 2,605 Depreciation and amortization 8,443 8,032 6,003 6,130 Total Operating Expenses 17,406 16,184 12,675 12,869 Other Expense Acquisition expenses 627 426 652 333 Interest expense 1,655 1,957 1,537 1,251 Total Other Expense 2,282 2,383 2,189 1,584 Total Expenses 19,688 18,567 14,864 14,453 Equity in income (loss) from unconsolidated real estate entities (25) 2 (51) 45 Loss on sale of real estate - (150) Net Income (Loss) from Continuing Operations 145 (679) 81 (717) Discontinued Operations Income from discontinued operations before gains on sale of real estate - - - 21 Gain on sale of real estate - - - 2,125 Income from Discontinued Operations - - - 2,146 Net Income (Loss) $145 $(679) $81 $1,429 Net Income (Loss) attributable to: Common shareholders $107 $(623) $49 $1,261 Noncontrolling interests - (80) 8 152 Participating securities 38 24 24 16 Net Income (Loss) $145 $(679) $81 $1,429 Earnings per Common Share - Basic and Diluted Net income (loss) available to common stockholders $0.00 $(0.02) $0.00 $0.05 Weighted average shares outstanding - basic and diluted 43,234,602 33,527,183 25,419,757 25,419,418 Fourth Quarter 2014 Page 6 Supplemental Financial Reporting Package
Consolidated and Combined Statement of Operations (in thousands) Quarterly Results (unaudited results) Rexford Industrial Realty, Inc. Rexford Industrial Realty, Inc. and Predecessor (1) Three Months Ended December 31 Year Ended December 31, 2014 2013 2014 2013 Rental Revenues Rental revenues $16,719 $10,809 $56,636 $37,655 Tenant reimbursements 2,417 1,333 7,661 4,373 Management, leasing, and development services 206 253 860 978 Other income 234 53 307 280 Total rental revenues 19,576 12,448 65,464 43,286 Interest income 282 190 1,117 1,079 Total Revenues 19,858 12,638 66,581 44,365 Operating Expenses Property expenses 5,477 3,869 18,382 12,320 General and administrative 3,486 2,827 12,144 9,747 Depreciation and amortization 8,443 5,661 28,608 15,708 Total Operating Expenses 17,406 12,357 59,134 37,775 Other (Income) Expense Acquisition expenses 627 421 2,038 1,264 Interest expense 1,655 1,046 6,400 11,158 Gain on mark-to-market of interest rate swaps - - - (49) Total Other Expense 2,282 1,467 8,438 12,373 Total Expenses 19,688 13,824 67,572 50,148 Equity in income (loss) from unconsolidated real estate entities (25) 9 (29) (823) Gain from early repayment of note receivable - - - 1,365 Loss on extinguishment of debt - - - (3,955) Loss on sale of real estate - - (150) - Net Income (Loss) from Continuing Operations 145 (1,177) (1,170) (9,196) Discontinued Operations Income (loss) from discontinued operations before gains on sale of real estate - 171 21 (518) Loss on extinguishment of debt - - - (267) Gain on sale of real estate - - 2,125 4,989 Income from Discontinued Operations - 171 2,146 4,204 Net Income (Loss) $145 $(1,006) $976 $(4,992) Net Income (Loss) attributable to: Common shareholders $107 $(910) $794 $(4,920) Noncontrolling interests - (125) 80 (101) Participating securities 38 29 102 29 Net Income (Loss) $145 $(1,006) $976 $(4,992) (1) Reflects the results of operations for our Predecessor for the period from January 1, 2013 to July 23, 2013 and Rexford Industrial Realty, Inc. for the period from July 24, 2013 through December 31, 2013. Fourth Quarter 2014 Page 7 Supplemental Financial Reporting Package
Non-GAAP FFO (1) (in thousands) (unaudited results) Rexford Industrial Realty, Inc. Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Funds From Operations (FFO) Net Income (loss) 145 (679) 81 1,429 Add: Depreciation and amortization, including amounts in discontinued operations 8,443 8,032 6,003 6,137 Depreciation and amortization from unconsolidated joint ventures 66 103 103 85 Loss on sale of real estate - 150 - - Deduct: Gain on sale of real estate - - - 2,125 Gain on sale of real estate from unconsolidated joint ventures 3 - - - Funds From Operations 8,651 7,606 6,187 5,526 Company share of FFO (2) $8,183 $6,984 $5,532 $4,941 FFO per share - basic and diluted $0.19 $0.21 $0.22 $0.19 Funds From Operations $8,651 $7,606 $6,187 $5,526 Add: Non-recurring legal fees(3) 205 380 - - Acquisition Expenses 627 426 652 333 FFO available to common shareholders and unitholders before non-recurring legal fees $9,483 $8,412 $6,839 $5,859 Company share of FFO before non-recurring legal fees and acquisition expenses (2) $8,970 $7,724 $6,115 $5,239 FFO per share before non-recurring legal fees and acquisition expenses - basic and diluted $0.21 $0.23 $0.24 $0.21 Weighted-average shares outstanding - basic and diluted 43,234,602 33,527,183 25,419,757 25,419,418 Weighted-average diluted shares and units 45,705,769 36,511,737 28,429,016 28,428,677 (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) Company share of FFO is based on the weighted average interest in our operating partnership of 94.6% , 91.8% , 89.4% and 89.4% for the three months ended December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively. Company share of FFO includes FFO allocated to participating securities of $38, $24, $24 and $16 for the three months ended December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively. (3) Non-recurring legal fees relate to Accommodation and Litigation. For more information, see Item 3. Legal Proceedings in our 2013 Annual Report on Form 10-K and Item 1. Legal Proceedings in our subsequent filings on Form 10-Q. Fourth Quarter 2014 Page 8 Supplemental Financial Reporting Package
Non-GAAP AFFO (1) (in thousands) (unaudited results) Rexford Industrial Realty, Inc. Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Adjusted Funds From Operations (AFFO) Funds From Operations $8,651 $7,606 $6,187 5,526 Add: Amortization of deferred financing costs 206 205 144 129 Fair value lease expense 115 151 73 81 Acquisition costs 627 426 655 333 Non-cash stock compensation 250 340 279 172 Deduct: Straight line rent adjustment 595 227 395 184 Capitalized payments (2) 302 216 222 249 Note Receivable discount amortization 68 66 65 64 Note Payable premium amortization 82 81 35 11 Recurring capital expenditures(3) 908 752 447 280 2nd generation tenant improvements and leasing commissions(4) 918 1,174 795 275 Unconsolidated joint venture AFFO adjustments 3 (2) (3) (9) AFFO $6,973 $6,214 $5,382 $5,187 (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) Includes capitalized leasing and construction development compensation. (3) Excludes nonrecurring capital expenditures of $4,118, $2,670, $1,708, and $557 for the three months ended December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively. (4) Excludes 1st generation tenant improvements and leasing commissions of $640, $423, $31, and $50 for the three months ended December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014, respectively. Fourth Quarter 2014 Page 9 Supplemental Financial Reporting Package
Statement of Operations Reconciliations (1) (in thousands) (unaudited results) Rexford Industrial Realty, Inc. Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Net Operating Income (NOI) Rental revenues $16,719 $15,516 $12,773 $11,628 Tenant reimbursements 2,417 2,052 1,681 1,511 Other income 234 16 15 42 Total operating revenues 19,370 17,584 14,469 13,181 Property expenses 5,477 4,879 3,892 4,134 Total operating expenses 5,477 4,879 3,892 4,134 NOI $13,893 $12,705 $10,577 $9,047 Fair value lease revenue 115 151 73 81 Straight line rent adjustment (595) (227) (395) (184) Cash NOI $13,413 $12,629 $10,255 $8,944 Net Income (Loss) $145 $(679) $81 $1,429 Add: General and administrative 3,486 3,273 2,780 2,605 Depreciation and amortization 8,443 8,032 6,003 6,130 Acquisition expenses 627 426 652 333 Interest expense 1,655 1,957 1,537 1,251 Loss on sale of real estate - 150 - - Subtract: Management, leasing, and development services 206 171 249 234 Interest income 282 281 278 276 Equity in income (loss) from unconsolidated real estate entities (25) 2 (51) 45 Income from discontinued operations - - - 2,146 NOI $13,893 $12,705 $10,577 $9,047 Fair value lease revenue 115 151 73 81 Straight line rent adjustment (595) (227) (395) (184) Cash NOI $13,413 $12,629 $10,255 $8,944 (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. Fourth Quarter 2014 Page 10 Supplemental Financial Reporting Package
Statement of Operations Reconciliations (1) (in thousands) (unaudited results) Rexford Industrial Realty, Inc. Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Net income (loss) $145 $(679) $81 $1,429 Interest expense 1,655 1,957 1,537 1,251 Proportionate share of interest expense from unconsolidated joint ventures 25 43 45 57 Depreciation and amortization 8,443 8,032 6,003 6,130 Depreciation and amortization included in discontinued operations - - - 7 Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures 66 103 103 85 EBITDA $10,334 $9,456 $7,769 $8,959 Stock-based compensation amortization 250 340 279 172 Loss (Gain) on sale of real estate - 150 - (2,125) Non-recurring legal fees(2) 205 380 - - Acquisition expenses 627 426 652 333 Pro forma effect of acquisitions(3) 1,169 497 1,625 203 Pro forma effect of dispositions(4) - (100) - (28) Adjusted EBITDA $12,585 $11,149 $10,325 $7,514 (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) Non-recurring legal fees relate to Accommodation and Litigation. For more information, see Item 3. Legal Proceedings in our 2013 Annual Report on Form 10-K and Item 1. Legal Proceedings in our subsequent filings on Form 10-Q. (3) Represents the estimated impact of Q4'14 acquisitions as if they had been acquired October 1, 2014, Q3'14 acquisitions as if they had been acquired July 1, 2014, Q2'14 acquisitions as if they had been acquired on April 1, 2014, and Q1'14 acquisitions as if they had been acquired on January 1, 2014. We have made a number of assumptions in such estimates and there can be no assurance that we would have generated the projected levels of EBITDA had we owned the acquired entities as of the beginning of each period. (4)Represents the effect of dispositions as if they had occurred at the beginning of the quarter disposed. See the dispositions section on page 24 for additional details. Fourth Quarter 2014 Page 11 Supplemental Financial Reporting Package
Same Property Portfolio Performance (1) (in thousands) Statement of Operations and NOI Reconciliation (unaudited results) Same Property Portfolio Statement of Operations: Three Months Ended December 31, Year Ended December 31, 2014 2013 $ Change % Change 2014 2013 (2) $ Change % Change Rental Revenues Rental revenues $10,830 $10,193 $637 (3) 6.2% $33,156 $31,796 $1,360 4.3% Tenant reimbursements 1,325 1,132 193 17.0% 3,720 3,355 365 10.9% Other operating revenues 211 43 168 (4) 390.7% 262 234 28 12.0% Total rental revenues 12,366 11,368 998 8.8% 37,138 35,385 1,753 5.0% Interest income 282 190 92 48.4% 1,118 1,016 102 10.0% Total Revenues 12,648 11,558 1,090 9.4% 38,256 36,401 1,855 5.1% Operating Expenses Property expenses 3,507 3,368 139 4.1% 10,326 9,807 519 5.3% Depreciation and amortization 4,188 5,529 (1,341) (24.3%) 13,299 12,566 733 5.8% Total Operating Expenses 7,695 8,897 (1,202) (13.5%) 23,625 22,373 1,252 5.6% Other (Income) Expense Interest expense (5) 220 290 (70) (24.1%) 161 9,193 (9,032) (98.2%) Total Other Expense 220 290 (70) (24.1%) 161 9,193 (9,032) (98.2%) Total Expenses 7,915 9,187 (1,272) (13.8%) 23,786 31,566 (7,780) (24.6%) Loss on extinguishment of debt - - - - (3,451) 3,451 (100.0%) Net Income (Loss) $4,733 $2,371 $2,362 (99.6%) $14,470 $1,384 $13,086 (945.5%) Same Property Portfolio NOI Reconciliation: Three Months Ended December 31, Year Ended December 31, NOI 2014 2013 $ Change % Change 2014 2013 (2) $ Change % Change Net Income (Loss) $4,733 $2,371 $14,470 $1,384 Add: Interest expense (5) 220 290 161 9,193 Depreciation and amortization 4,188 5,529 13,299 12,566 Deduct: Loss on extinguishment of debt - - - (3,451) Interest income 282 190 1,118 1,016 NOI $8,859 $8,000 $859 10.7% $26,812 $25,578 $1,234 4.8% Straight-line rents (389) (267) (438) (350) Amort. above/below market leases 97 80 136 162 Cash NOI $8,567 $7,813 $754 9.7% $26,510 $25,390 $1,120 4.4% (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) Reflects the results of operations for our Predecessor for the period from January 1, 2013 to July 23, 2013 and Rexford Industrial Realty, Inc. for the period from July 24, 2013 through December 31, 2013. (3) Increase in rental revenues during Q4'14 includes the reversal of a $190 cumulative bad debt allowance for one of our tenants. (4) The increase in other operating revenues during Q4-14 reflects the receipt of $176 easement income at one of our properties. (5) Interest expense for the three and twelve months ended December 31, 2014 only reflects interest for the loans secured by our properties located at 107700 Jersey Blvd. and Glendale Commerce Center. Interest on our post-IPO $60mm term loan, which is secured by multiple properties, is being reported under the operating partnership and accordingly the interest is not being pushed down to the property. Fourth Quarter 2014 Page 12 Supplemental Financial Reporting Package
Same Property Portfolio Performance (1) (in thousands) NOI Reconciliation, Portfolio Detail, and Occupancy (unaudited results) Same Property Portfolio NOI Reconciliation Continued: Three Months Ended December 31, Year Ended December 31, 2014 2013 $ Change % Change 2014 2013 (2) $ Change % Change Rental revenues $10,830 $10,193 $637 6.2% $33,156 $31,796 $1,360 4.3% Tenant reimbursements 1,325 1,132 193 17.0% 3,720 3,355 365 10.9% Other operating revenues 211 43 168 390.7% 262 234 28 12.0% Total rental revenue 12,366 11,368 998 8.8% 37,138 35,385 1,753 5.0% Property expenses 3,507 3,368 139 4.1% 10,326 9,807 519 5.3% NOI $8,859 $8,000 $859 10.7% $26,812 $25,578 $1,234 4.8% Straight-line rents (389) (267) (122) 45.7% (438) (350) (88) 25.1% Amort. above/below market leases 97 80 17 21.3% 136 162 (26) (16.0%) Cash NOI 8,567 7,813 $754 9.7% $26,510 $25,390 $1,120 4.4% Same Property Portfolio Rollforward: Three Month Same Property Portfolio Rollforward Twelve Month Same Property Portfolio Rollforward # of Properties Square Feet Wtd Avg. Occupancy # of Properties Square Feet Wtd Avg. Occupancy 2014 2013 2014 2013 Period ended Sept. 30, 2014 and 2013(3) 53 5,099,658 90.4% 87.9% 49 4,363,498 89.2% 87.4% Additions(4) 3 #REF! 0 - Deductions 0 #REF! 0 #REF! Period ended Dec. 31, 2014 and 2013 56 #REF! #REF! #REF! 49 #REF! #REF! #REF! Same Property Portfolio Occupancy: Three Months Ended December 31, Year Ended December 31, 2014 2013 2014 2013 Same Property Stabilized Same Same Property Stabilized Same Same Property Stabilized Same Same Property Stabilized Same Occupancy: Portfolio Property Portfolio(5) Portfolio Property Portfolio(5) Portfolio Property Portfolio(5) Portfolio Property Portfolio(5) Los Angeles County 97.5% 89.8% 96.6% 89.2% Orange County 98.5% 95.7% 98.5% 95.7% San Bernardino County 87.6% 87.5% 88.2% 88.4% Ventura County 92.5% 97.7% 92.5% 97.7% San Diego County 81.7% 82.8% 79.9% 81.6% Total/Weighted Average #REF! 93.7% #REF! 89.7% #REF! 92.7% #REF! 89.5% (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) Reflects the results of operations for our Predecessor for the period from January 1, 2013 to July 23, 2013 and Rexford Industrial Realty, Inc. for the period from July 24, 2013 through December 31, 2013. (3) Square footage decreased by 1,066 due to renovations at our property located at 28340 - 28400 Avenue Crocker during the current quarter. (4) Reflects the addition of Orion, Tarzana and La Jolla Sorrento to the Same Property Portfolio for the three months ended December 31, 2014. (5) Reflects the occupancy of our Same Property Portfolio adjusted for spaces aggregating 88,399 sqft that were under repositioning as of December 31, 2014. For additional details, refer to page 23 of this report. Fourth Quarter 2014 Page 13 Supplemental Financial Reporting Package
Joint Venture Financial Summary (in thousands) Balance Sheet (unaudited results) Mission Oaks (1) December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Assets: Investments in real estate, net $20,268 $56,488 56,439 $55,085 Cash and cash equivalents 2,331 1,105 427 853 Rents and other receivables, net 231 309 182 133 Deferred rent receivable (11) 251 212 161 Deferred leasing costs and acquisition - - - related intangible assets, net 290 4,211 4,569 4,912 Deferred loan costs, net - 79 106 132 Acquired above-market leases, net 110 557 646 735 Other assets 19 54 64 81 Total Assets $23,238 $63,054 62,645 $62,092 Liabilities: Notes payable $- $41,500 $41,500 $41,500 Accounts payable, accrued expenses and other liabilities 678 930 727 913 Tenant security deposits 292 277 277 277 Prepaid rents - 127 124 143 Total Liabilities 970 42,834 42,628 42,833 Equity: Equity 8,202 19,462 19,462 18,867 Accumulated deficit and distributions 14,066 758 555 392 Total Equity 22,268 20,220 20,017 19,259 Total Liabilities and Equity $23,238 $63,054 $62,645 $62,092 Rexford Industrial Realty, Inc. Ownership %: 15% 15% 15% 15% (1) These financials represent amounts attributable to the entities and do not represent our proportionate share. Fourth Quarter 2014 Page 14 Supplemental Financial Reporting Package
Statement of Operations (unaudited results) Statement of Operations: Mission Oaks (2) Three Months Ended December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Income Statement Rental revenues $807 $1,300 $1,291 $1,286 Tenant reimbursements 355 823 630 526 Other operating revenues - - - - Total revenue 1,162 2,123 1,921 1,812 Total operating expense 555 934 745 629 NOI 607 1,189 1,176 1,183 General and administrative 11 14 28 29 Depreciation and amortization 442 687 686 564 Interest expense 165 285 299 383 Loss on Extinguishment of Debt 70 - - - Gain on sale of assets/investments (13,389) - - - Total expense (12,146) 1,920 1,758 1,605 Net Income $13,308 $203 $163 $207 EBITDA Net income $13,308 $203 $163 $207 Interest expense 165 285 299 383 Depreciation and amortization 442 687 686 564 EBITDA $13,915 $1,175 $1,148 $1,154 Rexford Industrial Realty, Inc. Ownership %: 15% 15% 15% 15% Reconciliation - Equity Income in Joint Venture: Net income $13,308 $203 $163 $207 Rexford Industrial Realty, Inc. Ownership %: 15% 15% 15% 15% Company share 1,996 30 24 31 Intercompany eliminations/basis adjustments (2,021) (28) (75) 14 Equity in net income from unconsolidated real estate entities $(25) $2 $(51) $45 (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) These financials represent amounts attributable to the entities and do not represent our proportionate share. Fourth Quarter 2014 Page 15 Supplemental Financial Reporting Package 
Capitalization Summary (unaudited results) Capitalization as of December 31, 2014 Description December 31, 2014 September 30, 2014 June 30, 2014 March 31, 2014 Common shares (1) 43,382,425 43,059,742 25,420,381 25,419,418 Operating partnership units 2,323,344 2,646,027 3,009,259 3,009,259 Total shares and units at period end (1) 45,705,769 45,705,769 28,429,640 28,428,677 Share price at end of quarter $15.71 $13.84 $14.24 $14.18 Total Equity Market Capitalization $718,037,631 $632,567,843 $404,838,074 $403,118,640 Total consolidated debt $357,076,000 $269,699,000 $369,679,177 $212,997,286 Plus: pro-rata share of debt related to unconsolidated JV's - 6,225,000 6,225,000 6,225,000 Total Debt (pro-rata) $357,076,000 $275,924,000 $375,904,177 $219,222,286 Less: Cash and cash equivalents (8,606,000) (60,541,000) (9,272,000) (6,344,000) Net Debt (pro-rata) $348,470,000 $215,383,000 $366,632,177 $212,878,286 Total Combined Market Capitalization $1,066,507,631 $847,950,843 $771,470,251 $615,996,926 Net debt (pro-rata) to total combined market capitalization 32.7% 25.4% 47.5% 34.6% Net debt (pro-rata) to adjusted EBITDA (quarterly results annualized) 6.9x 4.9x 8.9x 7.0x (1) Excludes the following number of unvested shares of restricted stock: 320,017 (December 31, 2014), 198,141 (September 30, 2014), 203,264 (June 30, 2014), and 131,786 (March 31, 2014). Fourth Quarter 2014 Page 16 Supplemental Financial Reporting Package
Debt Summary (in thousands) (unaudited results) Debt Detail: As of December 31, 2014 Debt Description "Initial Maturity Date" Maturity Date w/ Extensions "Stated Interest Rate" "Effective Interest Rate" Balance Secured Debt: Glendale Commerce Center 5/1/2016 5/1/2018 LIBOR + 2.00% 2.171% $42,750 Term Loan 8/1/2019 8/1/2020 LIBOR + 1.90% 2.071% 60,000 Gilbert/La Palma 3/1/2031 N/A 5.125% 5.125% 3,173 2980 San Fernando 7/1/2015 N/A 5.088% 5.088% 10,153 Term Loan 7/24/2017 7/24/2019 LIBOR + 1.55% 1.738% 48,500 Unsecured Debt: $100M Term Loan Facility 6/11/2019 N/A LIBOR + 1.50% 1.671% 100,000 $200M Revolving Credit Facility 6/11/2018 6/11/2019 LIBOR + 1.55% 1.721% (1) 92,500 Total Consolidated: 1.948% $357,076 Pro-rata Joint Venture Interest: Mission Oaks (2) 6/28/2015 6/28/2017 LIBOR + 2.50% -- $- (1) At December 31, 2014, the total outstanding balance was comprised of 4 separate loan draws locked at various LIBOR rates. We incur an unused commitment fee calculated at 0.30% or 0.20% of the daily unused commitment if the balance is under $100,000,000 or over $100,000,000, respectively. (2) In connection with the JV's disposition of 3001 & 3175 Mission Oaks Blvd. on 11/17/14, the JV repaid the $41.5 million loan secured by the properties located at 3001, 3175 and 3233 Mission Oaks Blvd. Consolidated Debt Composition: Category Avg. Term Remaining (yrs) "Stated Interest Rate" Effective Interest Rate Balance % of Total Fixed 4.2 5.10% 5.10% $13,326 4% Variable(1) 3.5 LIBOR + 1.65% 1.83% $343,750 96% Secured 3.1 2.24% $164,576 46% Unsecured facility 4.0 1.70% $192,500 54% (1) On February 4, 2014 we executed two forward interest rate swaps that will effectively fix the annual interest rate on our $60mm term loan in the future as follows: (i) $30mm at 3.726% from 1/15/15 to 2/15/19, and (ii) $30mm at 3.91% from 7/15/15 to 2/15/19. On August 19, 2014 we executed two forward interest rate swaps that will effectively fix the annual interest rate on our $100mm term loan in the future as follows: (i) $50mm at 1.79% plus the applicable term loan facility margin from 8/14/15 - 12/14/18, and (ii) $50mm at 2.005% plus the applicable term loan facility margin from 2/16/16 to 12/14/18. If our swaps were effective as of December 31, 2014, our consolidated debt would be 49% fixed and 51% variable. Debt Maturity Schedule: Year Secured Unsecured Debt Total % Total Interest Rate 2015 10,153 - 10,153 3% 5.088% 2016 42,750 - 42,750 12% 2.171% 2017 48,500 - 48,500 13% 1.738% 2018 - 92,500 92,500 26% 1.721% 2019 60,000 100,000 160,000 45% 1.821% Thereafter 3,173 - 3,173 1% 5.125% Total $164,576 $192,500 $357,076 100% 1.948% Fourth Quarter 2014 Page 17 Supplemental Financial Reporting Package
Portfolio Overview at 12/31/14 (unaudited results) Consolidated Portfolio: Annualized Base Rent Market # Properties % Owned Pro-rata Sq. Ft. Occ. % "Total (in thousands)(1)" per SF Greater San Fernando Valley 24 100.0% 2,706,356 86.0% $20,697 $8.89 San Gabriel Valley 10 100.0% 1,213,095 95.8% 8,920 $7.67 Central LA 2 100.0% 238,153 100.0% 1,602 $6.73 Mid-Counties 4 100.0% 522,430 100.0% 3,832 $7.34 South Bay 11 100.0% 648,648 90.7% 4,678 $7.95 Los Angeles County 51 100.0% 5,328,682 90.8% 39,729 $8.21 North Orange County 5 100.0% 579,446 95.6% 5,036 $9.09 West Orange County 1 100.0% 170,865 100.0% 1,308 $7.65 South Orange County 1 100.0% 46,178 100.0% 371 $8.04 OC Airport 6 100.0% 511,270 84.9% 3,286 $7.57 Orange County 13 100.0% 1,307,759 92.1% 10,001 $8.30 Inland Empire West 9 100.0% 961,184 93.1% 6,511 $7.28 Inland Empire East 2 100.0% 85,282 81.1% 422 $6.10 San Bernardino County 11 100.0% 1,046,466 92.1% 6,933 $7.19 Ventura 8 100.0% 818,757 92.7% 6,150 $8.11 Ventura County 8 100.0% 818,757 92.7% 6,150 $8.11 North County San Diego 6 100.0% 584,254 76.1% 4,006 $9.01 Central San Diego 8 100.0% 664,487 93.9% 6,676 $10.70 South County San Diego 1 100.0% 78,615 98.0% 607 $7.88 San Diego County 15 100.0% 1,327,356 86.3% 11,289 $9.85 CONSOLIDATED TOTAL / WEIGHTED AVERAGE 98 100.0% 9,829,020 90.7% $74,102 $8.31 Unconsolidated Joint Ventures: Ventura 1 15.0% 68,370 39.7% $242 $8.92 UNCONSOLIDATED TOTAL / WEIGHTED AVERAGE 1 15.0% 68,370 39.7% $242 $8.91 Total Portfolio: GRAND TOTAL / WEIGHTED AVERAGE 99 96.2% 9,897,390 90.3% $74,344 $8.32 (1) Calculated for each property as monthly contracted base rent per the terms of the lease(s) at such property, as of December 31, 2014, multiplied by 12 and then multiplied by our ownership interest for such property, and then aggregated by market. Excludes billboard and antenna revenue and rent abatements. Fourth Quarter 2014 Page 18 Supplemental Financial Reporting Package
Occupancy and Leasing Trends (unaudited results, data represents consolidated portfolio only on a pro rata basis) Occupancy by County: Dec. 31, 2014 Sep. 30, 2014 Jun. 30, 2014 Mar. 31, 2014 Dec. 31, 2013 Occupancy: Los Angeles County (1) 90.8% #REF! #REF! #REF! #REF! Orange County 92.1% #REF! #REF! #REF! #REF! San Bernardino County 92.1% #REF! #REF! #REF! #REF! Ventura County 92.7% #REF! #REF! #REF! #REF! San Diego County 86.3% #REF! #REF! #REF! #REF! Other -- -- #REF! #REF! #REF! Total/Weighted Average(2) 90.7% #REF! #REF! #REF! #REF! Consolidated Portfolio SF 9,829,020 #REF! #REF! #REF! #REF! Leasing Activity: Three Months Ended Dec. 31, 2014 Sep. 30, 2014 Jun. 30, 2014 Mar. 31, 2014 Dec. 31, 2013 Leasing Activity (SF): (3) New leases 201,269 253,422 208,819 307,102 142,248 Renewal 229,226 438,251 363,798 351,995 244,068 Gross leasing 430,495 691,673 572,617 659,097 386,316 Expiring leases 388,816 624,995 582,344 618,303 309,769 Net absorption 41,679 66,678 -9,727 40,794 76,547 Retention rate 59% 70% 62% 57% 79% Weighted Average New/Renewal Leasing Spreads: Dec. 31, 2014 Sep. 30, 2014 Jun. 30, 2014 Mar. 31, 2014 Dec. 31, 2013 Cash Rent Change 1.9%(4) 3.6% 5.2% 3.6% 3.5% GAAP Rent Change 11.8%(5) 10.3% 17.1% 11.5% 12.9% (1) Excluding the December 17, 2013 acquisition of the office building located at 2900 N. Madera Road, the occupancy at December 31, 2013 is 91.5%. (2) Excluding the December 17, 2013 acquisition of the office building located at 2900 N. Madera Road, the occupancy at December 31, 2013 is 90.6%. (3) Excludes month-to-month tenants. (4) Excluding the effect of one new 15,040 sqft lease transaction in our San Diego market, the weighted average cash growth total leases is 3.3%. (5) Excluding the effect of one new 15,040 sqft lease transaction in our San Diego market, the weighted average GAAP growth for total leases is 13.3%. Fourth Quarter 2014 Page 19 Supplemental Financial Reporting Package
Leasing Statistics (unaudited results, data represents consolidated portfolio only on a pro rata basis) Leasing Activity: # Leases Signed SF of Leasing Wtd. Avg. Lease Term Rent Change - Cash Rent Change - GAAP Fourth Quarter 2014: New 43 201,269 3.9 (0.7%)(1) 10.7%(2) Renewal (3) 56 229,226 2.8 3.6% 12.4% Total/Weighted Average 99 430,495 3.2 1.9%(1) 11.8%(2) Uncommenced Leases by County: Market Leased SF " Uncommenced Leases Annual Base Rent (in thousands)" "Total Pro Forma Annualized Base Rent (in thousands)" "Pro Forma Occupancy %" Pro Forma Annualized Base Rent per SF Los Angeles County - $- $39,730 90.8% $8.21 Orange County 1,450 16 10,017 92.2% $8.30 San Bernardino County - - 6,933 92.1% $7.19 Ventura County - - 6,150 92.7% $8.11 San Diego County 3,497 31 11,320 86.6% $9.85 Total/Weighted Average 4,947 $47 $74,149 90.7% $8.32 Lease Expiration Schedule: Year of Lease Expiration # of Leases Expiring Total Rentable SF "Annualized Base Rent (in thousands)" % of Annualized Base Rent " Annualized Base Rent per SF" Available - 916,942 - - - MTM Tenants 112 226,721 $2,177 2.9% $9.60 2014 (4) 28 348,399 2,009 2.7% $5.77 2015 364 1,636,014 14,466 19.5% $8.84 2016 313 2,533,568 19,961 26.9% $7.88 2017 183 1,652,805 13,591 18.4% $8.22 2018 67 784,754 6,707 9.1% $8.55 2019 27 494,627 4,264 5.8% $8.62 2020 11 607,312 5,455 7.4% $8.98 2021 7 149,433 1,861 2.5% $12.46 2022 3 143,742 767 1.0% $5.34 Thereafter 3 334,703 2,844 3.8% $8.50 Total Portfolio 1,118 9,829,020 $74,102 100.0% $8.31 (1) Excluding the effect of one new 15,040 sqft lease transaction in our San Diego market, the weighted average cash growth for new leases and total leases is 2.8% and 3.3%, respectively. (2) Excluding the effect of one new 15,040 sqft lease transaction in our San Diego market, the weighted average GAAP growth for new leases and total leases is 14.9% and 13.3%, respectively. (3) Over 96% of lease renewals during the quarter achieved flat or positive cash rent growth. (4) Of the 28 leases expiring on 12/31/14, 14 leases vacated totaling 228,424 SF and $1,450,627 of annualized base rent, 4 leases subsequently renewed totaling 5,501 SF and $40,540 of annualized base rent and 10 leases are holdover leases totaling 114,474 SF and $517,656 of annualized base rent. Fourth Quarter 2014 Page 20 Supplemental Financial Reporting Package
Top Tenants and Lease Segmentation (unaudited results, data represents consolidated portfolio only on a pro rata basis) Top 10 Tenants: Tenant Submarket Leased SF % of Total Ann. Base Rent Ann. Base Rent per SF Lease Expiration Cosmetic Laboratories of America LA - San Fern. Valley 319,348 2.4% $5.64 6/30/2020 Dendreon Corporation OC - West 170,865 1.8% $7.65 12/31/2019 Senior Operations LA - San Fern. Valley 130,800 1.6% $8.88 11/30/2024 Biosense Webster LA - San Gabriel Valley 89,920 1.5% $12.76 10/31/2020(1) Warehouse Specialists LA - San Gabriel Valley 245,961 1.5% $4.44 11/30/2017 Department of Corrections Inland Empire West 58,781 1.4% $18.13 3/31/2020 Tarnik, Inc. LA - San Fern. Valley 138,980 1.2% $6.60 4/30/2016 Exelis Inc. LA - San Gabriel Valley 67,838 1.2% $13.01 9/30/2023 Kingsbridge International LA - San Fern. Valley 136,065 1.1% $5.88 1/31/2024 Tree Island Wire LA - San Gabriel Valley 108,703 1.0% $6.69 11/30/2016 Top 10 Total / Wtd. Avg. 1,467,261 14.7% $7.43 (1)Includes 1,120 square feet expiring 9/30/2016, 12,800 square feet expiring 9/30/2017 and 76,000 square feet expiring 10/31/2020, as of December 31, 2014. Lease Segmentation by Size: Square Feet Number of Leases Leased SF Ann. Base Rent (in thousands) % of Total Ann. Base Rent Ann. Base Rent per SF <4,999 805 1,645,124 $16,831 22.7% $10.23 5,000 - 9,999 121 830,755 8,199 11.1% $9.87 10,000 - 24,999 123 1,919,342 16,808 22.7% $8.76 25,000 - 49,999 36 1,311,656 10,833 14.6% $8.26 >50,000 33 3,205,201 21,431 28.9% $6.69 Total / Wtd. Avg. 1,118 8,912,078 $74,102 100.0% $8.31 Fourth Quarter 2014 Page 21 Supplemental Financial Reporting Package
Capital Expenditure Summary (unaudited results, data represents consolidated portfolio only on a pro rata basis) Quarter Ended December 31, 2014: Amount SF(1) PSF Tenant Improvements: New Leases - 1st Generation $436,000 238,045 $1.83 New Leases - 2nd Generation $570,000 182,790 $3.12 Renewals $53,000 67,357 $0.79 Leasing Commissions & Lease Costs: New Leases - 1st Generation $204,000 147,845 $1.38 New Leases - 2nd Generation $83,000 99,159 $0.84 Renewals $212,000 284,349 $0.75 Total Recurring Capex: Recurring Capex $908,000 8,934,006 $0.10 Recurring Capex % NOI 6.5% Recurring Capex % Operating Revenue 4.7% Nonrecurring Capex $4,118,000 3,312,081 $1.24 Year Ended December 31, 2014: Amount SF(1) PSF Tenant Improvements: New Leases - 1st Generation $547,000 272,523 $2.01 New Leases - 2nd Generation $1,303,000 679,558 $1.92 Renewals $419,000 568,956 $0.74 Leasing Commissions & Lease Costs: New Leases - 1st Generation $597,000 426,427 $1.40 New Leases - 2nd Generation $767,000 704,126 $1.09 Renewals $674,000 671,935 $1.00 Total Recurring Capex: Recurring Capex $2,387,000 7,621,459 $0.31 Recurring Capex % NOI 5.2% Recurring Capex % Operating Revenue 3.7% Nonrecurring Capex $9,053,000 4,575,916 $1.98 (1) For tenant improvements and leasing commissions, reflects the aggregate square footage of the leases in which we incurred such costs, excluding new/renewal leases in which there were no tenant improvements and/or leasing commissions. For recurring capex, reflects the weighted average square footage of our consolidated portfolio for the period. For nonrecurring capex, reflects the aggregate square footage of the properties in which we incurred such capital expenditures. Fourth Quarter 2014 Page 22 Supplemental Financial Reporting Package
Properties and Space Under Repositioning (unaudited results, in millions, except square footage) Repositioning Properties As of December 31, 2014 Estimated Construction Period Costs Incurred Property Rentable Square Feet Acquisition Date Start Completion Purchase Price Repositioning Cumulative Investment-to-date(1) Projected Total Investment(2) "Occupancy % 12/31/14" CURRENT REPOSITIONING: 7110 Rosecrans Ave. 72,000 Jan-14 3Q-2014 1Q-2015 $5.0 $0.4 $5.4 $5.9 #REF! 1601 Alton Pkwy. #REF! Jun-14 4Q-2014 4Q-2015 $13.3 $0.0 $13.3 $15.3 #REF! 605 8th Street #REF! Aug-14 4Q-2014 3Q-2015 $5.1 $0.0 $5.1 $6.6 #REF! 7900 Nelson Rd. 203,082 Nov-14 1Q-2015 3Q-2015 $24.3 $0.0 $24.3 $26.7 #REF! TOTAL/WEIGHTED AVERAGE #REF! $47.7 $0.4 $48.1 $54.5 #REF! FUTURE REPOSITIONING: 2610 & 2701 S. Birch Street 98,105 Jun-14 $11.0 $0.0 $11.0 $13.6 #REF! 679-691 S. Anderson St. 47,490 Nov-14 $6.5 $0.0 $6.5 $9.0 #REF! TOTAL/WEIGHTED AVERAGE 145,595 $17.5 $0.0 $17.5 $22.6 #REF! (1)Investment-to-date includes the purchase price of the property and subsequent costs incurred for for nonrecurring capital expenditures. (2)Projected Total Investment includes the purchase price of the property and an estimate of total expected nonrecurring capital expenditures to be incurred on each repositioning project to reach completion. Repositioning Space As of December 31, 2014 Estimated Construction Period Property Rentable Square Feet Space Under Repositioning Start Completion "Occupancy % 12/31/14" CURRENT REPOSITIONING: 28340 - 28400 Avenue Crocker #REF! 70,325 4Q-2014 1Q-2015 #REF! 28159 Avenue Stanford #REF! 18,074 4Q-2014 2Q-2015 #REF! TOTAL/WEIGHTED AVERAGE #REF! 88,399 #REF! FUTURE REPOSITIONING: 15140 & 15148 Bledsoe St. #REF! 77,118 #REF! Fourth Quarter 2014 Page 23 Supplemental Financial Reporting Package
Acquisitions and Dispositions Summary (unaudited results, data presented on a wholly owned basis) Acquisitions: Date Property Address Submarket SF "Price ($ in MM)" Occ. % at Acquisition "Occ. % at December 31, 2014" Jun-14 Birch 2610 & 2701 S. Birch Street OC - Airport 98,105 $11.0 100% #REF! Jun-14 Dupont 4051 Santa Ana St. & 701 Dupont Ave. Inland Empire West 111,890 $10.2 100% #REF! Jun-14 9755 Distribution Ave 9755 Distribution Ave San Diego - Central 47,666 $5.4 100% #REF! Jun-14 9855 Distribution Ave 9855 Distribution Ave San Diego - Central 60,819 $8.5 100% #REF! Jun-14 9340 Cabot Drive 9340 Cabot Drive San Diego - Central 86,564 $11.0 84% #REF! Jun-14 9404 Cabot Drive 9404 Cabot Drive San Diego - Central 46,846 $6.4 100% #REF! Jun-14 9455 Cabot Drive 9455 Cabot Drive San Diego - Central 96,840 $12.1 84% #REF! Jun-14 14955-14971 E Salt Lake Ave 14955-14971 E Salt Lake Ave LA - San Gabriel Valley 126,036 $10.9 100% #REF! Jun-14 5235 Hunter Ave 5235 Hunter Ave OC - North 119,692 $11.3 100% #REF! Jun-14 3880 W Valley Blvd 3880 W Valley Blvd LA - San Gabriel Valley 108,703 $9.6 100% #REF! Jun-14 1601 & 1621 Alton Pkwy 1601 & 1621 Alton Pkwy OC - Airport 124,000 $13.3 40% #REF! Jul-14 #REF! #REF! LA - San Fern. Valley 100,500 $11.0 100% #REF! Jul-14 Chatsworth Industrial Park 21040 Nordoff St.; 9035 Independence Ave.; 21019-21045 Osborne St. LA - San Fern. Valley 153,212 $16.8 100% #REF! Jul-14 Avenue Kearny #REF! LA - San Fern. Valley 138,980 $11.5 100% #REF! Aug-14 #REF! #REF! LA - San Fern. Valley 55,516 $5.1 65% #REF! Sep-14 #REF! #REF! LA - San Fern. Valley 319,348 $30.5 100% #REF! Nov-14 679 Anderson 679-691 S. Anderson St. LA - Central 47,490 $6.5 100% #REF! Nov-14 7900 Nelson Rd. 7900 Nelson Road LA - San Fern. Valley 203,082 $24.3 0% #REF! Dec-14 10509 Business Dr. 10509 Business Dr. Inland Empire West 130,788 $9.0 100% #REF! Dec-14 13231 Slover Ave 13231 Slover Ave Inland Empire West 109,463 $7.6 100% #REF! Dec-14 240 Ivy Ave. 240 West Ivy Ave. LA - South Bay 45,685 $5.9 100% #REF! Dec-14 3000-3150 Paseo Mercado 3000-3150 Paseo Mercado Ventura County 132,187 $11.6 86% #REF! Dec-14 2350-2380 Eastman Ave 2350-2380 Eastman Avenue Ventura County 55,296 $6.0 93% #REF! Dec-14 1800 Eastman Ave 1800 Eastman Avenue Ventura County 33,332 $3.3 100% #REF! Dec-14 2360-2364 E. Sturgis Rd 2360-2364 E. Sturgis Road Ventura County 49,624 $4.1 96% #REF! Dec-14 201 Rice Avenue 201 Rice Avenue Ventura County 137,785 $13.7 97% #REF! Dec-14 11120-11160 Hindry Ave 11120, 11160, 11200 Hindry Ave LA - South Bay 63,654 $11.9 88% #REF! Dec-14 6970-7374 Convoy Court 6970-7170 and 7310-7374 Convoy Court San Diego - Central 187,763 $32.3 98% #REF! Dispositions: Date Property Address Submarket SF "Sale Price ($ in MM)" Reason for Selling Jan-13 Bonnie Beach 4578 Worth Street LA - Central 79,370 $4.1 User sale Apr-13 Williams 1950 East Williams Drive Ventura County 161,682 $8.5 Marketed sale May-13 Glenoaks 9027 Glenoaks Blvd. LA - San Fern. Valley 14,700 $1.7 User sale May-13 Interstate 2441, 2507, 2515 W. Erie Dr., & 2929 S. Fair Lane Arizona 83,385 $5.0 Non-strategic location Jun-13 Knollwood 1255 Knollwood Circle OC - North 25,162 $2.8 User sale Jan-14 Kaiser 1335 Park Center Drive San Diego - North 124,997 $10.1 User sale Mar-14 Madera - Office 2900 N. Madera Road LA - San Fern. Valley 63,305 $4.4 Non core business Aug-14 Zenith 500-560 Zenith Dr. Other 37,992 $1.8 Non-strategic location Fourth Quarter 2014 Page 24 Supplemental Financial Reporting Package
Net Asset Value Components at 12/31/14 (unaudited and in thousands, except share count) Net Operating Income ProForma Net Operating Income (NOI)(1)(2) For the Three Months Ended December 31, 2014 Total operating revenues $19,370 Property operating expenses (5,477) Pro forma effect of acquisitions(3) 1,169 ProForma NOI 15,062 Fair value lease revenue 115 Straight line rent adjustment (595) ProForma Cash NOI $14,582 Balance Sheet Items Other assets and liabilities December 31, 2014 Cash and cash equivalents $8,606 Notes receivable 13,137 Rents and other receivables, net 1,812 Other assets 3,800 Acquisition related deposits 2,110 Accounts payable, accrued expenses and other liabilities (11,304) Dividends payable (5,244) Tenant security deposits (8,768) Prepaid rents (1,463) Total other assets and liabilities $2,686 Debt and Shares Outstanding Total consolidated debt(4) $357,076 Common shares outstanding 43,382,425 Operating partnership units outstanding 2,323,344 (1) For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 27 of this report. (2) ProForma Net Operating Income as calculated does not reflect the potential incremental value from properties and space under repositioning. See page 23 for additional details. (3) Represents the estimated impact of Q4'14 acquisitions as if they had been acquired October 1, 2014. (4) Excludes the net loan premium of $30. Fourth Quarter 2014 Page 25 Supplemental Financial Reporting Package
Fixed Charge Coverage Ratio at 12/31/14 (unaudited and in thousands) For the Three Months Ended December 31, 2014 Total revenues $19,858 Property expenses (5,477) General and administrative (3,486) Expenses from discontinued operations - Recurring operating EBITDA (excluding discontinued operations and joint ventures) 10,895 Recurring cash distributions from unconsolidated joint ventures 89 Non-cash above (below) market lease adjustments 115 Recurring Operating EBITDA 11,099 Straight line rent adjustment (595) Maintenance Capital Expenditures (908) Tenant improvements - New Leases - 2nd Generation (570) Tenant improvements - Renewals (53) Leasing Commissions & Lease Costs - New Leases - 2nd Generation (83) Leasing Commissions & Lease Costs - Renewals (212) Cash flow for fixed charge coverage calculation $8,678 Interest expense calculation detail: Interest expense $1,655 Interest expense from discontinued operations - Capitalized interest 42 Cash interest expense $1,697 Fixed Charge Coverage Ratio 5.1x Fourth Quarter 2014 Page 26 Supplemental Financial Reporting Package
Definitions / Discussion of Non-GAAP Financial Measures Adjusted Funds from Operations (AFFO): We calculate adjusted funds from operations, or AFFO, by adding to or subtracting from FFO (i) non-cash operating revenues and expenses, (ii) capitalized operating expenditures such as leasing payroll, (iii) recurring capital expenditures required to maintain and re-tenant our properties, (iv) regular principal payments required to service our debt, and (v) 2nd generation tenant improvements and leasing commissions. Management uses AFFO as a supplemental performance measure because it provides a performance measure that, when compared year over year, captures trends in portfolio operating results. We also believe that, as a widely recognized measure of the performance of REITs, AFFO will be used by investors as a basis to assess our performance in comparison to other REITs. However, because AFFO may exclude certain non-recurring capital expenditures and leasing costs, the utility of AFFO as a measure of our performance is limited. Additionally, other Equity REITs may not calculate AFFO using the method we do. As a result, our AFFO may not be comparable to such other Equity REITs’ AFFO. AFFO should be considered only as a supplement to net income (as computed in accordance with GAAP) as a measure of our performance. Annualized Base Rent: Calculated for each lease as the latest monthly contracted base rent per the terms of such lease multiplied by 12. Excludes billboard and antenna revenue and rent abatements. Capital Expenditures, Non-recurring: Expenditures made in respect of a property for improvement to the appearance of such property or any other major upgrade or renovation of such property, and further includes capital expenditures for seismic upgrades, or capital expenditures for deferred maintenance existing at the time such property was acquired. Capital Expenditures, Recurring: Expenditures made in respect of a property for maintenance of such property and replacement of items due to ordinary wear and tear including, but not limited to, expenditures made for maintenance or replacement of parking lot, roofing materials, mechanical systems, HVAC systems and other structural systems. Recurring capital expenditures shall not include any of the following: (a) improvements to the appearance of such property or any other major upgrade or renovation of such property not necessary for proper maintenance or marketability of such property; (b) capital expenditures for seismic upgrades; or (c) capital expenditures for deferred maintenance for such property existing at the time such property was acquired. Capital Expenditures, First Generation: Capital expenditures for newly acquired space, newly developed or redeveloped space, or change in use. Cash NOI: Cash basis NOI is a non-GAAP measure, which we calculate by adding or subtracting from NOI i) fair value lease revenue and ii) straight-line rent adjustment. We use Cash NOI, together with NOI, as a supplemental performance measure. Cash NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. Cash NOI should not be used as a substitute for cash flow from operating activities computed in accordance with GAAP. We use Cash NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. EBITDA and Adjusted EBITDA: We believe that EBITDA is helpful to investors as a supplemental measure of our operating performance as a real estate company because it is a direct measure of the actual operating results of our industrial properties. We also use this measure in ratios to compare our performance to that of our industry peers. In addition, we believe EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of Equity REITs. However, because EBITDA is calculated before recurring cash charges including interest expense and income taxes, and is not adjusted for capital expenditures or other recurring cash requirements of our business, its utility as a measure of our liquidity is limited. Accordingly, EBITDA should not be considered an alternative to cash flow from operating activities (as computed in accordance with GAAP) as a measure of our liquidity. EBITDA should not be considered as an alternative to net income or loss as an indicator of our operating performance. Other Equity REITs may calculate EBITDA differently than we do; accordingly, our EBITDA may not be comparable to such other Equity REITs’ EBITDA. Adjusted EBITDA includes add backs of non-cash stock based compensation expense, loss on extinguishment of debt, non-recurring legal fees and the pro-forma effects of acquisitions and assets classified as held for sale. Investment to Date and Total: Reflects the total purchase price for a property plus additional or planned tangible investment subsequent to acquisition. Funds from Operations (FFO): We calculate FFO before non-controlling interest in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization, gains and losses from property dispositions, other than temporary impairments of unconsolidated real estate entities, and impairment on our investment in real estate, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of performance used by other REITs, FFO may be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. Other equity REITs may not calculate or interpret FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity, and is not indicative of funds available for our cash needs, including our ability to pay dividends. Fourth Quarter 2014 Page 27 Supplemental Financial Reporting Package
Definitions / Discussion of Non-GAAP Financial Measures NOI: Includes the revenue and expense directly attributable to our real estate properties calculated in accordance with GAAP. Calculated as total revenue from real estate operations including i) rental revenues ii) tenant reimbursements, and iii) other income less property expenses and other property expenses (before interest expense, depreciation and amortization). We use NOI as a supplemental performance measure because, in excluding real estate depreciation and amortization expense and gains (or losses) from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that NOI will be useful to investors as a basis to compare our operating performance with that of other REITs. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties (all of which have real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable to such other REITs’ NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. NOI should not be used as a substitute for cash flow from operating activities in accordance with GAAP. We use NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. Proforma NOI: Proforma NOI is calculated by adding to NOI the estimated impact of current period acquisitions as if they had been acquired at the beginning of the reportable period. These estimates do not purport to be indicative of what operating results would have been had the acquisitions actually occured at the beginning of the reportable period and may not be indicative of future operating results. Properties Under Repositioning: Typically defined as properties where a significant amount of space is held vacant in order to implement capital improvements that improve the market rentability and leasing functionality of that space. Considered completed once investment is fully or nearly fully deployed and the property is marketable for leasing. Recurring Funds From Operations (Recurring FFO): We calculate Recurring FFO by adjusting FFO to exclude the effect of non-recurring expenses and acquisition expenses. Rent Change - Cash: Compares the first month cash rent excluding any abatement on new leases to the last month rent for the most recent expiring lease. Data included for comparable leases only. Comparable leases generally exclude properties under repositioning, short-term leases, and space that has been vacant for over one year. Rent Change - GAAP: Compares GAAP rent, which straightlines rental rate increases and abatement, on new leases to GAAP rent for the most recent expiring lease. Data included for comparable leases only. Comparable leases generally exclude properties under repositioning, short-term leases, and space that has been vacant for over one year. Same Property Portfolio: Determined independently for each period presented. Our Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly-owned by us during the entire span of both periods being compared. The Company’s computation of same property performance may not be comparable to other REITs. Space Under Repositioning: Defined as space held vacant in order to implement capital improvements to change the leasing functionality of that space. Considered completed once the repositioning has been completed and the unit is marketable for leasing. Stabilized Same Property Portfolio: Our Stabilized Same Property Portfolio represents the properties included in our Same Property Portfolio, adjusted to exclude spaces that were under repositioning. Uncommenced Leases: Reflects signed leases that have not yet commenced as of the reporting date. Fourth Quarter 2014 #REF! Supplemental Financial Reporting Package