Form: 8-K

Current report filing

November 29, 2016



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549  
 
FORM 8-K  
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 22, 2016
 
REXFORD INDUSTRIAL REALTY, INC.
(Exact name of registrant as specified in its charter) 
 
 
Maryland
 
001-36008
 
46-2024407
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 

11620 Wilshire Boulevard, Suite 1000, Los Angeles, California
 
90025
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (310) 966-1680

N/A
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 






ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On November 22, 2016, Rexford Industrial Realty, Inc., through its operating partnership, Rexford Industrial Realty, L.P., completed the sale of a 115,760 rentable square foot industrial property located at 22343-22349 La Palma Avenue, in Yorba Linda, California, to an unaffiliated third party for a contract price of $17.0 million.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(b)    The following pro forma financial statements are filed herewith:
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2016 (unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Nine Months Ended September 30, 2016 (unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2015 (unaudited)
Notes to the Pro Forma Condensed Consolidated Financial Statements

 



REXFORD INDUSTRIAL REALTY, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION



The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2016, is based on Rexford Industrial Realty, Inc.’s (the “Company”) historical consolidated balance sheet and gives effect to the sale on November 22, 2016, of a 115,760 rentable square foot industrial property located at 22343-22349 La Palma Avenue, in Yorba Linda, California (the “Property”), for a contract price of $17.0 million as if such transaction had occurred on September 30, 2016. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2016, and the year ended December 31, 2015, have been prepared to reflect the estimated effect of the disposition of the Property as if such transaction had occurred on January 1, 2015.
The unaudited pro forma financial information is not necessarily indicative of what the Company’s results of operations or financial condition would have been assuming the disposition of the Property had occurred on the dates discussed above, nor is it indicative of the Company’s results of operations or financial condition for future periods. In management’s opinion, all adjustments necessary to reflect the effect of the disposition transaction have been made. The unaudited pro forma condensed financial statements should be read together with the Company’s historical consolidated financial statements and related notes included in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2016, filed with the Securities and Exchange Commission (the “SEC”) on November 7, 2016, and the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 25, 2016.



REXFORD INDUSTRIAL REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2016
(Unaudited and in thousands – except share and per share data)


 
Rexford Industrial Realty, Inc. (A)
 
Property Disposition- Pro Forma Adjustments (B)
 
Pro Forma Rexford Industrial Realty, Inc.
ASSETS
 
 
 
 
 
Investments in real estate, net
$
1,371,268

 
$
(11,601
)
 
$
1,359,667

Cash and cash equivalents
55,263

 
16,251

 
71,514

Note receivable
5,817

 
—

 
5,817

Rents and other receivables, net
2,633

 
—

 
2,633

Deferred rent receivable, net
10,913

 
(66
)
 
10,847

Deferred leasing costs, net
8,064

 
(53
)
 
8,011

Deferred loan costs, net
996

 
—

 
996

Acquired lease intangible assets, net
38,093

 
49

 
38,142

Acquired indefinite-lived intangible
5,215

 
—

 
5,215

Other assets
5,522

 
—

 
5,522

Acquisition related deposits
400

 
—

 
400

Investment in unconsolidated real estate entities
—

 
—

 
—

Total Assets
1,504,184

 
4,580

 
1,508,764

LIABILITIES & EQUITY
 
 
 
 
 
Liabilities
 
 
 
 
 
Notes payable
500,428

 
—

 
500,428

Interest rate swap liability
5,938

 
—

 
5,938

Accounts payable, accrued expenses and other liabilities
18,433

 
(37
)
 
18,396

Dividends payable
9,214

 
—

 
9,214

Acquired lease intangible liabilities, net
5,722

 
—

 
5,722

Tenant security deposits
14,946

 
(195
)
 
14,751

Prepaid rents
3,945

 
(68
)
 
3,877

Total Liabilities
558,626

 
(300
)
 
558,326

Equity
 
 
 
 
 
Rexford Industrial Realty, Inc. stockholders’ equity
 
 
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized; 5.875% series A cumulative redeemable preferred stock, liquidation preference $25.00 per share, 3,600,000 shares outstanding at September 30, 2016
86,664

 
—

 
86,664

Common Stock, $0.01 par value 490,000,000 shares authorized and 66,048,341 shares outstanding at September 30, 2016
658

 
—

 
658

Additional paid in capital
898,354

 
—

 
898,354

Cumulative distributions in excess of earnings
(56,651
)
 
4,631

 
(52,020
)
Accumulated other comprehensive loss
(5,764
)
 
—

 
(5,764
)
Total stockholders’ equity
923,261

 
4,631

 
927,892

Noncontrolling interests
22,297

 
151

 
22,448

Total Equity
945,558

 
4,782

 
950,340

Total Liabilities and Equity
$
1,504,184

 
$
4,482

 
$
1,508,666




REXFORD INDUSTRIAL REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2016
(Unaudited and in thousands – except share and per share data)


 
Rexford Industrial Realty, Inc. (AA)
 
Property Disposition- Pro Forma Adjustments (BB)
 
Pro Forma Rexford Industrial Realty, Inc.
RENTAL REVENUES
 
 
 
 
 
Rental income
$
77,903

 
$
(937
)
 
$
76,966

Tenant reimbursements
12,144

 
(30
)
 
12,114

Other income
764

 
(15
)
 
749

TOTAL RENTAL REVENUES
90,811

 
(982
)
 
89,829

Management, leasing and development services
376

 
—

 
376

Interest income
228

 
—

 
228

TOTAL REVENUES
91,415

 
(982
)
 
90,433

OPERATING EXPENSES
 
 
 
 
 
Property expenses
24,480

 
(371
)
 
24,109

General and administrative
13,190

 
—

 
13,190

Depreciation and amortization
37,165

 
(294
)
 
36,871

TOTAL OPERATING EXPENSES
74,835

 
(665
)
 
74,170

OTHER EXPENSE
 
 
 
 
 
Acquisition expenses
1,490

 
—

 
1,490

Interest expense
10,774

 
—

 
10,774

TOTAL OTHER EXPENSE
12,264

 
—

 
12,264

TOTAL EXPENSES
87,099

 
(665
)
 
86,434

Equity in income from unconsolidated real estate entities
1,451

 
—

 
1,451

Gains on sale of real estate
11,563

 
 
 
11,563

NET INCOME
17,330

 
(317
)
 
17,013

 Less: net income attributable to noncontrolling interest
(533
)
 
10

 
(523
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
16,797

 
(307
)
 
16,490

 Less: preferred stock dividends
(661
)
 
—

 
(661
)
 Less: earnings allocated to participating securities
(223
)
 
—

 
(223
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
15,913

 
$
(307
)
 
$
15,606

Net income available to common stockholders per share - basic and diluted
$
0.26

 
 
 
$
0.25

Weighted average shares of common stock outstanding - basic
61,694,835

 
 
 
61,694,835

Weighted average shares of common stock outstanding - diluted
61,919,976

 
 
 
61,919,976




REXFORD INDUSTRIAL REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2015
(Unaudited and in thousands – except share and per share data)


 
Rexford Industrial Realty, Inc. (CC)
 
Property Disposition- Pro Forma Adjustments (DD)
 
Pro Forma Rexford Industrial Realty, Inc.
RENTAL REVENUES
 
 
 
 
 
Rental revenues
$
81,114

 
$
(1,096
)
 
$
80,018

Tenant reimbursements
10,479

 
(27
)
 
10,452

Other income
1,013

 
(14
)
 
999

TOTAL RENTAL REVENUES
92,606

 
(1,137
)
 
91,469

Management, leasing and development services
584

 
—

 
584

Interest income
710

 
—

 
710

TOTAL REVENUES
93,900

 
(1,137
)
 
92,763

OPERATING EXPENSES
 
 
 
 
 
Property expenses
25,000

 
(440
)
 
24,560

General and administrative
15,016

 
—

 
15,016

Depreciation and amortization
41,837

 
(488
)
 
41,349

TOTAL OPERATING EXPENSES
81,853

 
(928
)
 
80,925

OTHER EXPENSE
 
 
 
 
 
Acquisition expenses
2,136

 
—

 
2,136

Interest expense
8,453

 
—

 
8,453

TOTAL OTHER EXPENSE
10,589

 
—

 
10,589

TOTAL EXPENSES
92,442

 
(928
)
 
91,514

Equity in income from unconsolidated real estate entities
93

 
—

 
93

Gain from early repayment of note receivable
581

 
—

 
581

Loss on extinguishment of debt
(182
)
 
—

 
(182
)
NET INCOME
1,950

 
(209
)
 
1,741

Net income attributable to noncontrolling interests
(76
)
 
8

 
(68
)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
1,874

 
(201
)
 
1,673

 Less: earnings allocated to participating securities
(223
)
 
—

 
(223
)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
1,651

 
$
(201
)
 
$
1,450

Net income attributable to common stockholders per share - basic and diluted
$
0.03

 
 
 
$
0.03

Weighted average shares of common stock outstanding - basic and diluted
54,024,923

 
 
 
54,024,923




REXFORD INDUSTRIAL REALTY, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



1.
Balance sheet adjustments

(A)
Represents the unaudited historical balance sheet of the Company as of September 30, 2016. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 7, 2016.
(B)
Adjustments reflect the net sale proceeds received from the sale of the Property and the elimination of the related account balances as if the sale was consummated as of September 30, 2016. Cumulative distributions in excess of earnings and Noncontrolling interests have been increased to reflect the receipt of net sale proceeds and removal of assets and liabilities related to the sale, as follows (in thousands):
Contract sale price
$
17,000

Closing credits and transaction costs
(749
)
Net proceeds from sale
$
16,251

Net book value of the Property
(11,469
)
Gain on sale
$
4,782


2.
Income statement adjustments
(AA) Represents the unaudited historical consolidated statement of operations of the Company for the nine months ended September 30, 2016. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 7, 2016.
(BB) The pro forma adjustments reflect the results of operations for the Property for the nine months ended September 30, 2016.
(CC) Represents the audited historical consolidated statement of operations of the Company for the year ended December 31, 2015. See the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 25, 2016.
(DD) The pro forma adjustments reflect the results of operations for the Property for the year ended December 31, 2015.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Rexford Industrial Realty, Inc.
November 29, 2016
 
/s/ Adeel Khan
 
Adeel Khan
Chief Financial Officer