10-Q: Quarterly report [Sections 13 or 15(d)]
Published on April 28, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-36008
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(310 ) 966-1680
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbols | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares of common stock outstanding at April 24, 2026 was 225,718,119 .
REXFORD INDUSTRIAL REALTY, INC.
QUARTERLY REPORT FOR THE THREE MONTHS ENDED MARCH 31, 2026
TABLE OF CONTENTS
| PART I | |||||||||||
| PART II. | |||||||||||
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands – except share and per share data)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Land | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Tenant improvements | |||||||||||
| Furniture, fixtures and equipment | |||||||||||
| Construction in progress | |||||||||||
| Total real estate held for investment | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Investments in real estate, net | |||||||||||
| Cash and cash equivalents | |||||||||||
| Loan receivable, net | |||||||||||
| Rents and other receivables, net | |||||||||||
| Deferred rent receivable, net | |||||||||||
| Deferred leasing costs, net | |||||||||||
| Deferred loan costs, net | |||||||||||
| Acquired lease intangible assets, net | |||||||||||
| Acquired indefinite-lived intangible asset | |||||||||||
| Interest rate swap assets | |||||||||||
| Other assets | |||||||||||
| Assets associated with real estate held for sale | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES & EQUITY | |||||||||||
| Liabilities | |||||||||||
| Notes payable | $ | $ | |||||||||
| Interest rate swap liability | |||||||||||
| Accounts payable, accrued expenses and other liabilities | |||||||||||
| Dividends and distributions payable | |||||||||||
| Acquired lease intangible liabilities, net | |||||||||||
| Tenant security deposits | |||||||||||
| Tenant prepaid rents | |||||||||||
| Liabilities associated with real estate held for sale | |||||||||||
| Total Liabilities | |||||||||||
| Equity | |||||||||||
| Rexford Industrial Realty, Inc. stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Common Stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Cumulative distributions in excess of earnings | ( | ( | |||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
| Total stockholders’ equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total Equity | |||||||||||
| Total Liabilities and Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands – except share and per share data)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| REVENUES | ||||||||||||||
| Rental income | $ | $ | ||||||||||||
| Management and leasing services | ||||||||||||||
| Interest income | ||||||||||||||
| TOTAL REVENUES | ||||||||||||||
| OPERATING EXPENSES | ||||||||||||||
| Property expenses | ||||||||||||||
| General and administrative | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| TOTAL OPERATING EXPENSES | ||||||||||||||
OTHER (EXPENSES) INCOME | ||||||||||||||
Other income | ||||||||||||||
| Other expenses | ( | ( | ||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Impairment of real estate | ( | |||||||||||||
| Gains on sale of real estate | ||||||||||||||
TOTAL OTHER EXPENSES | ( | ( | ||||||||||||
| NET INCOME | ||||||||||||||
| Less: net income attributable to noncontrolling interests | ( | ( | ||||||||||||
| NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC. | ||||||||||||||
| Less: preferred stock dividends | ( | ( | ||||||||||||
| Less: earnings allocated to participating securities | ( | ( | ||||||||||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | $ | ||||||||||||
Net income attributable to common stockholders per share - basic and diluted | $ | $ | ||||||||||||
Weighted average shares of common stock outstanding - basic and diluted | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited and in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | $ | |||||||||
Other comprehensive income (loss): cash flow hedge adjustments | ( | ||||||||||
| Comprehensive income | |||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | ( | ( | |||||||||
Comprehensive income attributable to Rexford Industrial Realty, Inc. | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands – except share data)
| Preferred Stock | Number of Common Shares | Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | ( | ( | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of OP Units to common stock | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends ($ | ( | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred unit distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Common unit distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited and in thousands – except share data)
| Preferred Stock | Number of Common Shares | Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Offering costs | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock | — | ( | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion of OP Units to common stock | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends ($ | ( | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred unit distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Common unit distributions | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
The accompanying notes are an integral part of these consolidated financial statements.
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
Amortization of net (below) above market lease intangibles and other deferred rent on certain other below-market leases | ( | ( | |||||||||
| Amortization of debt issuance costs | |||||||||||
Amortization of discount/(premium) on notes payable, net | |||||||||||
Accretion of net loan origination fees and costs | ( | ( | |||||||||
| Impairment of real estate | |||||||||||
| Gains on sale of real estate | ( | ( | |||||||||
Share-based compensation | |||||||||||
| Straight-line rent | ( | ( | |||||||||
| Amortization related to termination/settlement of interest rate derivatives | |||||||||||
| Change in working capital components: | |||||||||||
| Rents and other receivables | ( | ||||||||||
| Deferred leasing costs | ( | ( | |||||||||
| Other assets | |||||||||||
| Accounts payable, accrued expenses and other liabilities | |||||||||||
| Tenant security deposits | ( | ||||||||||
Tenant prepaid rents | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Proceeds from sale of real estate | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Issuance of common stock, net | |||||||||||
| Proceeds from borrowings | |||||||||||
| Repayment of borrowings | ( | ( | |||||||||
| Dividends paid to preferred stockholders | ( | ( | |||||||||
| Dividends paid to common stockholders | ( | ( | |||||||||
| Distributions paid to common unitholders | ( | ( | |||||||||
| Distributions paid to preferred unitholders | ( | ( | |||||||||
Repurchase of common stock under stock repurchase programs | ( | ||||||||||
| Repurchase of common shares to satisfy employee tax withholding requirements | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
(Decrease) increase in cash, cash equivalents and restricted cash | ( | ||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest (net of capitalized interest of $ | $ | $ | |||||||||
| Supplemental disclosure of noncash transactions: | |||||||||||
| Accrual for capital expenditures | $ | $ | |||||||||
| Accrual of dividends and distributions | $ | $ | |||||||||
8
REXFORD INDUSTRIAL REALTY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization
Rexford Industrial Realty, Inc. is a self-administered and self-managed full-service real estate investment trust (“REIT”) focused on owning and operating industrial properties in Southern California infill markets. We were formed as a Maryland corporation on January 18, 2013, and Rexford Industrial Realty, L.P. (the “Operating Partnership”), of which we are the sole general partner, was formed as a Maryland limited partnership on January 18, 2013. Through our controlling interest in our Operating Partnership and its subsidiaries, we own, manage, lease, acquire, reposition and develop industrial real estate principally located in Southern California infill markets, and from time to time, acquire or provide mortgage debt secured by industrial zoned property or property suitable for industrial development. From time to time we may also sell assets as part of our capital allocation strategy. As of March 31, 2026, our consolidated portfolio consisted of 414 properties with approximately 50.4 million rentable square feet.
The terms “us,” “we,” “our,” and the “Company” as used in these financial statements refer to Rexford Industrial Realty, Inc. and, unless the context requires otherwise, its subsidiaries (including our Operating Partnership).
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
As of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and 2025, the financial statements presented are the consolidated financial statements of Rexford Industrial Realty, Inc. and its subsidiaries, including our Operating Partnership. All intercompany balances and transactions have been eliminated in the consolidated financial statements.
Under consolidation guidance, we have determined that our Operating Partnership is a variable interest entity because the holders of limited partnership interests do not have substantive kick-out rights or participating rights. Furthermore, we are the primary beneficiary of the Operating Partnership because we have the obligation to absorb losses and the right to receive benefits from the Operating Partnership and the exclusive power to direct the activities of the Operating Partnership. As of March 31, 2026 and December 31, 2025, the assets and liabilities of the Company and the Operating Partnership are substantially the same, as the Company does not have any significant assets other than its investment in the Operating Partnership.
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The interim financial statements should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025 and the notes thereto.
Any references to the number of properties, buildings and square footage are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.
Use of Estimates
9
Cash and Cash Equivalents
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short-term maturity of these investments.
Restricted Cash
Restricted cash is generally comprised of cash proceeds from property sales that are being held by qualified intermediaries for purposes of facilitating tax-deferred like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”). We include restricted cash with cash and cash equivalents in the consolidated statements of cash flows and provide a reconciliation between the balance sheet and the statement of cash flows provided that we have outstanding restricted cash balances.
As of January 1, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | $ | $ | |||||||||
As of March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Investments in Real Estate
Acquisitions
We did not acquire any properties during the three months ended March 31, 2026 or the year ended December 31, 2025; however, our accounting policy for acquisitions and business combinations is described below.
We account for acquisitions of properties under Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805)—Clarifying the Definition of a Business, which provides a framework for determining whether transactions should be accounted for as acquisitions of assets or businesses and further revises the definition of a business. Our acquisitions of properties generally do not meet the revised definition of a business and accordingly are accounted for as asset acquisitions.
For asset acquisitions, we allocate the cost of the acquisition, which includes cash and non-cash consideration paid to the seller and associated acquisition transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis. These individual assets and liabilities typically include land, building and improvements, tenant improvements, intangible assets and liabilities related to above- and below-market leases, intangible assets related to in-place leases, and from time to time, assumed mortgage debt. As there is no measurement period concept for an asset acquisition, the allocated cost of the acquired assets is finalized in the period in which the acquisition occurs.
We determine the fair value of the tangible assets of an acquired property by valuing the property as if it was vacant. This “as-if vacant” value is estimated using an income, or discounted cash flow, approach that relies upon Level 3 inputs, which are unobservable inputs based on the Company’s assumptions with respect to the assumptions a market participant would use. These Level 3 inputs include discount rates, exit capitalization rates, market rental rates, rental growth rates and comparable sales data, including land sales, for similar properties. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions.
In determining the fair value of intangible lease assets or liabilities, we also consider Level 3 inputs. Acquired above- and below-market leases are valued based on the present value of the difference between prevailing market rental rates and the
10
in-place rental rates measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases determined to be reasonably certain of exercise, if applicable. The estimated fair value of acquired in-place at-market tenant leases are the estimated costs that would have been incurred to lease the property to the occupancy level of the property at the date of acquisition. We consider estimated costs such as the value associated with leasing commissions, legal and other costs, as well as the estimated period of time necessary to lease such a property to its occupancy level at the time of its acquisition.
From time to time, we may engage in a sale-leaseback transaction whereby we execute a lease with the seller/tenant simultaneously with the acquisition of a property. Sale-leaseback transactions entered into at off-market terms are adjusted so that the transaction is recorded at fair value. If the purchase price is less than the fair value of the acquired property, or the present value of contractual leaseback payments is less than the present value of market rental payments, the difference is recognized as “Tenant prepaid rent” in the consolidated balance sheets and is recognized as rental income on a straight-line basis over the term of the lease.
The difference between the fair value and the face value of debt assumed, if any, in connection with an acquisition is recorded as a premium or discount and amortized to “interest expense” over the life of the debt assumed. The valuation of assumed liabilities is based on our estimate of the current market rates for similar liabilities in effect at the acquisition date.
Demolition costs incurred in conjunction with the acquisition of real estate are capitalized as part of the cost of the acquisition if the demolition (i) is contemplated as part of the acquisition and (ii) occurs within a reasonable period of time after the acquisition. If demolition was not contemplated as part of the acquisition or the demolition does not occur within a reasonable period of time after the acquisition, the costs of the demolition are expensed as incurred.
Capitalization of Costs
We capitalize direct costs incurred in developing, renovating, rehabilitating and improving real estate assets as part of the investment basis. This includes certain general and administrative costs, including payroll, bonus, and non-cash equity compensation of the personnel performing development, renovations and rehabilitation if such costs are identifiable to a specific activity to get the real estate asset ready for its intended use. During the development and construction periods of a project, we also capitalize interest, real estate taxes and insurance costs. We cease capitalization of costs upon substantial completion of the project, but no later than one year from cessation of major construction activity. If some portions of a project are substantially complete and ready for use and other portions have not yet reached that stage, we cease capitalizing costs on the completed portion of the project but continue to capitalize for the incomplete portion of the project. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred.
We capitalized interest costs of $7.4 million and $8.2 million during the three months ended March 31, 2026 and 2025, respectively. We capitalized real estate taxes and insurance costs aggregating $2.4 million and $1.9 million during the three months ended March 31, 2026 and 2025, respectively. We capitalized compensation costs for employees who provide construction services of $4.1 million and $3.5 million during the three months ended March 31, 2026 and 2025, respectively.
Depreciation and Amortization
Real estate, including land, building and land improvements, tenant improvements, furniture, fixtures and equipment and intangible lease assets and liabilities are stated at historical cost less accumulated depreciation and amortization, unless circumstances indicate that the cost cannot be recovered, in which case, the carrying value of the property is reduced to estimated fair value as discussed below in our policy with regard to impairment of long-lived assets. We estimate the depreciable portion of our real estate assets and related useful lives in order to record depreciation expense.
The values allocated to buildings, site improvements, in-place lease intangibles and tenant improvements are depreciated on a straight-line basis using an estimated useful life that typically ranges from 10 -30 years for buildings, 5 -25 years for site improvements, and the shorter of the estimated useful life or respective lease term for in-place lease intangibles and tenant improvements.
As discussed above in “—Investments in Real Estate—Acquisitions,” in connection with property acquisitions, we may acquire leases with rental rates above or below the market rental rates. Such differences are recorded as an acquired lease intangible asset or liability and amortized to “rental income” over the remaining term of the related leases.
Our estimate of the useful life of our assets is evaluated upon acquisition and when circumstances indicate that a change in the useful life has occurred, which requires significant judgment regarding the economic obsolescence of tangible and intangible assets.
11
Assets Held for Sale
We classify a property as held for sale when all of the criteria set forth in the Accounting Standards Codification (”ASC”) Topic 360: Property, Plant and Equipment (“ASC 360”) have been met. The criteria are as follows: (i) management, having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. At the time we classify a property as held for sale, we cease recording depreciation and amortization. A property classified as held for sale is measured and reported at the lower of its carrying amount or its estimated fair value, less estimated costs to sell.
As of March 31, 2026, we had two properties classified as held for sale. As of December 31, 2025, we did not have any properties classified as held for sale. See “Note 3 – Investment in Real Estate” for additional details.
Impairment of Investments in Real Estate, Net
In accordance with the provisions of the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360, we assess the carrying values of our real estate assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. In evaluating whether such indicators exist, we consider operating performance, market conditions, as well as the effects of demand and other economic factors, including projected rental revenue, operating costs and capital expenditures, capitalization rates and expected holding periods.
We generally hold and operate our real estate assets for long-term investment, which decreases the likelihood that their carrying values are not recoverable. However, changes in events, circumstances or our intent or strategy, including a decision to shorten the expected holding period or to pursue a sale, may result in an impairment loss.
When indicators of impairment are present, we assess recoverability by comparing the carrying amount of a real estate asset to the sum of undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying value is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the carrying value exceeds the asset’s estimated fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, the application of capitalization rates to estimated net operating income, quoted market values and third-party appraisals, where considered necessary.
The assumptions and estimates used in our recoverability and fair value analyses, including future cash flows, discount rates, capitalization rates and expected holding periods, are complex and subjective and are based on assumptions consistent with our estimates of future expectations and the strategic plan used to manage our underlying business. Changes in economic and operating conditions or our intent with respect to an asset that occur subsequent to our impairment analyses could impact these assumptions and result in future impairment of our real estate assets.
See “Note 3 – Investments in Real Estate” for details.
Accounting for Leases
Leases as Lessor
We evaluate new leases originated or leases assumed as part of an acquisition transaction under ASC Topic 842: Leases to determine lease classification. Generally, all of our leases have historically been classified as operating leases. A lease is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, there is a purchase option that the tenant is reasonably certain to exercise, the lease term, including extension options that the tenant is reasonably certain to exercise, is for more than a major part of the remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset is so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor, if applicable. As of March 31, 2026 and December 31, 2025, we did not have any leases that were classified as sales-type or financing leases under sale-leaseback rules.
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Leases as a Lessee
Income Taxes
We have elected to be taxed as a REIT under the Code commencing with our initial taxable year ended December 31, 2013. To qualify as a REIT, we are required (among other things) to distribute annually at least 90 % of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to matters such as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our activities. If we fail to qualify as a REIT in any taxable year, and were unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to regular federal corporate income tax.
We may, from time to time, acquire direct or indirect interests in one or more entities that will elect to be taxed as REITs under the Code (each, a “Subsidiary REIT”). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to us. If a Subsidiary REIT were to fail to qualify as a REIT, then (i) that Subsidiary REIT would become subject to regular federal corporate income tax, (ii) shares in such Subsidiary REIT would cease to be qualifying assets for purposes of the asset tests applicable to REITs, and (iii) it is possible that we would fail certain of the asset tests applicable to REITs, in which event we would fail to qualify as a REIT unless we could avail ourselves of certain relief provisions.
We are subject to taxation by various state and local jurisdictions, including those in which we transact business or reside. Our non-taxable subsidiaries, including our Operating Partnership, are either partnerships or disregarded entities for federal income tax purposes. Under applicable federal and state income tax rules, the allocated share of net income or loss from disregarded entities and flow-through entities such as partnerships is reportable in the income tax returns of the respective equity holders. Our taxable REIT subsidiary is a C-corporation subject to federal and state income tax. However, it has a cumulative unrecognized net operating loss carryforward. Accordingly, no
We periodically evaluate our tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2026 and December 31, 2025, we have not established a liability for uncertain tax positions.
Derivative Instruments and Hedging Activities
We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources and duration of our debt funding and through the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing and duration of our known or expected cash payments principally related to our borrowings.
In accordance with ASC Topic 815: Derivatives and Hedging (“ASC 815”), we record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, and whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a
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hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.
Revenue Recognition
Our primary sources of income are rental income, management and leasing services, interest income and gains on sale of real estate.
Rental Income
We lease industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum annual lease payments are recognized in rental income on a straight-line basis over the term of the related lease, regardless of when payments are contractually due, when collectability is probable. Rental revenue recognition commences when the tenant takes possession of or controls the physical use of the leased space. Lease termination fees, which are included in rental income, are recognized when the related leases are canceled and we have no continuing obligation to provide services to such former tenants.
Our lease agreements with tenants generally contain provisions that require tenants to reimburse us for certain property expenses. Estimated reimbursements from tenants for these property expenses, which include real estate taxes, insurance, common area maintenance and other recoverable operating expenses, are recognized as revenues in the period that the expenses are incurred. Subsequent to year-end, we perform final reconciliations on a lease-by-lease basis and bill or credit each tenant for any cumulative annual adjustments. As the timing and pattern of revenue recognition is the same and as the lease component would be classified as an operating lease if it were accounted for separately, rents and tenant reimbursements are treated as a combined lease component and presented as a single line item “Rental income” in our consolidated statements of operations.
We record revenues and expenses on a gross basis for lessor costs (which include real estate taxes) when these costs are reimbursed to us by our tenants. Conversely, we record revenues and expenses on a net basis for lessor costs when they are paid by our tenants directly to the taxing authorities on our behalf.
Management and Leasing Services
Through December 31, 2025, we provided property management services and leasing services to related party property owners in exchange for management fees and leasing commissions. Property management services included performing property inspections, monitoring repairs and maintenance, negotiating vendor contracts, maintaining tenant relations and providing financial and accounting oversight. Management fee revenue was earned as the services were provided, as control of the services transferred to the customer over time. Management fees were based on a fixed percentage of each managed property’s monthly tenant cash receipts.
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Leasing commissions were earned upon the execution of lease agreements between the customer and tenants, as control of the leasing services transferred to the customer at that point in time. Leasing commissions were based on a fixed percentage of the rental income generated under each executed lease, with no variable consideration component.
Effective January 1, 2026, the Company terminated its management and leasing services arrangements, and no management or leasing services revenue has been recognized subsequent to that date.
Gain or Loss on Sale of Real Estate
We account for dispositions of real estate properties, which are considered nonfinancial assets, in accordance with ASC Topic 610-20: Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets and recognize a gain or loss on sale of real estate upon transferring control of the nonfinancial asset to the purchaser, which is generally satisfied at the time of sale. If we were to conduct a partial sale of real estate by transferring a controlling interest in a nonfinancial asset, while retaining a noncontrolling ownership interest, we would measure any noncontrolling interest received or retained at fair value, and recognize a full gain or loss. If we receive consideration before transferring control of a nonfinancial asset, we recognize a contract liability. If we transfer control of the asset before consideration is received, we recognize a contract asset.
When leases contain purchase options, we assess the probability that the tenant will execute the purchase option both at lease commencement and at the time the tenant communicates its intent to exercise the purchase option. If we determine the exercise of the purchase option is reasonably certain, we will account for the lease as a sales-type lease and derecognize the associated real estate assets on our balance sheet and record a gain or loss on sale of real estate.
Interest Income on Loan Receivable
Interest income on our loan receivable is recognized on an accrual basis over the life of the loan. Loan origination fees, net of origination costs, are accreted or amortized over the term of the loan as an adjustment to interest income using the effective interest method. Generally, a loan is placed on nonaccrual status when delinquent for more than 90 days or when determined not to be probable of full collection. Interest income recognition is suspended when loans are placed on nonaccrual status. Interest accrued, but not collected, at the date loans are placed on nonaccrual status is reversed and subsequently recognized only to the extent it is received in cash or until it qualifies for return to accrual status. However, when there is doubt regarding the ultimate collectability of loan principal, all cash received is applied to reduce the carrying value of such loans. Loans are restored to accrual status only when contractually current or the collection of future payments is reasonably assured.
Valuation of Operating Lease Receivables
Loan Receivable
Our loan receivable is reflected at amortized cost in the consolidated balance sheets. The amortized cost of our loan receivable is the outstanding unpaid principal balance, net of unamortized costs and fees directly associated with the origination of the loan.
Accrued interest receivable related to our loan receivable is recorded at the net amount expected to be collected within “Rents and other receivables, net” in the consolidated balance sheets.
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Deferred Leasing Costs
We capitalize the incremental direct costs of originating a lease that would not have been incurred had the lease not been executed. As a result, deferred leasing costs will generally only include third-party broker commissions.
Debt Issuance Costs
Debt issuance costs related to a recognized debt liability are presented in the balance sheet as a reduction from the carrying value of the debt liability. This offset against the debt liability is treated similarly to a debt discount, which effectively reduces the proceeds of a borrowing. For revolving credit facility arrangements, we present debt issuance costs as an asset and amortize the cost over the term of the line of credit arrangement. See “Note 6 – Notes Payable” for details.
Equity Based Compensation
Equity Offerings
Underwriting commissions and offering costs incurred in connection with common stock offerings and our at-the-market equity offering programs have been reflected as a reduction of additional paid-in capital. Underwriting commissions and offering costs related to our preferred stock issuances have been reflected as a direct reduction of the preferred stock balance.
Earnings Per Share
We calculate earnings per share (“EPS”) in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Under ASC 260, unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the computation of basic EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings.
Basic EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period.
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Adoption of New Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). The amendments in ASU 2024-04 clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new guidance is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. We adopted ASU 2024-04 as of January 1, 2026. The adoption did not have a material impact on our consolidated financial statements, as we have not entered into any exchange-related settlements, modifications, or inducement transactions related to our exchangeable senior unsecured notes to date.
Recent Accounting Pronouncements (Issued and Not Yet Adopted)
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The amendments in ASU 2024-03 apply to all public business entities and require disclosure of specified information about certain costs and expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the potential impact of adopting ASU 2024-03.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (“ASU 2025-09”). The amendments in ASU 2025-09 clarify certain aspects of the hedge accounting guidance in ASC 815 to more closely align hedge accounting with the economics of an entity’s risk management activities. ASU 2025-09 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. We are currently evaluating the potential impact of adopting ASU 2025-09.
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3. Investments in Real Estate
Impairment of Real Estate and Dispositions
During the three months ended March 31, 2026, we sold five properties for an aggregate gross sales price of approximately $127.4 million and recorded total gains on sale of real estate of approximately $26.3 million. Three of the properties sold were previously impaired, did not result in a gain or loss, and were subject to additional impairment charges during the quarter. During the three months ended March 31, 2026, we recognized impairment charges of approximately $6.8 million related to real estate assets.
The following table summarizes properties that were sold during the three months ended March 31, 2026.
| Property | Submarket | Date of Disposition | Rentable Square Feet | Contractual Sales Price(1) (in thousands) | ||||||||||||||||||||||
| 14005 Live Oak Avenue | Los Angeles - San Gabriel Valley | $ | ||||||||||||||||||||||||
| 18250 Euclid Street | Orange County - Airport | $ | ||||||||||||||||||||||||
| 29010 Avenue Paine | Los Angeles - San Fernando Valley | $ | ||||||||||||||||||||||||
| 13700-13738 Slover Avenue | San Bernardino - Inland Empire West | $ | ||||||||||||||||||||||||
| 600-708 Vermont Avenue | Orange County - North | $ | ||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||
(1)Represents the gross contractual sales price before commissions, prorations, credits and other closing costs.
Real Estate Held for Sale
As of March 31, 2026, two properties were classified as held for sale. We did no t have any properties classified as held for sale as of December 31, 2025.
The following table summarizes the major classes of assets and liabilities associated with real estate properties classified as held for sale as of March 31, 2026 (dollars in thousands).
| March 31, 2026 | ||||||||
| Land | $ | |||||||
| Building and improvements | ||||||||
| Construction in progress | ||||||||
| Real estate held for sale | ||||||||
| Accumulated depreciation | ( | |||||||
| Real estate held for sale, net | ||||||||
Rents and other receivables, net | ||||||||
| Other assets associated with real estate held for sale | ||||||||
| Total assets associated with real estate held for sale, net | $ | |||||||
| Accounts payable and accrued expenses | $ | |||||||
| Total liabilities associated with real estate held for sale | $ | |||||||
Subsequent to March 31, 2026, we completed the sale of 423-424 Berry Way. See “Note 16 – Subsequent Events” for details.
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4. Acquired Lease Intangibles
| March 31, 2026 | December 31, 2025 | ||||||||||
| Acquired Lease Intangible Assets: | |||||||||||
| In-place lease intangibles | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
| In-place lease intangibles, net | $ | $ | |||||||||
| Above-market tenant leases | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
| Above-market tenant leases, net | $ | $ | |||||||||
| Below-market ground lease | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
| Below-market ground lease, net | $ | $ | |||||||||
| Acquired lease intangible assets, net | $ | $ | |||||||||
| Acquired Lease Intangible Liabilities: | |||||||||||
| Below-market tenant leases | $ | ( | $ | ( | |||||||
Accumulated amortization | |||||||||||
| Below-market tenant leases, net | $ | ( | $ | ( | |||||||
| Acquired lease intangible liabilities, net | $ | ( | $ | ( | |||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
In-place lease intangibles(1) | $ | $ | |||||||||
Net below-market tenant leases(2) | $ | ( | $ | ( | |||||||
Below-market ground leases(3) | $ | $ | |||||||||
(1)The amortization of in-place lease intangibles is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented.
(2)The amortization of net below-market tenant leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented.
(3)The amortization of below-market ground lease is recorded as an increase to property expenses in the consolidated statements of operations for the periods presented.
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5. Loan Receivable
On October 26, 2023, in conjunction with the acquisition of the property located at 15801 West 1st Street, we issued a $125.0 million loan to the seller that is securitized by an adjacent 150 -acre industrial development site as well as two escrow reserve accounts that were funded with loan proceeds at closing (the “loan collateral”). The loan bears interest at 7.50 % per annum, requires monthly interest-only payments with a balloon payment at maturity, and has an effective interest rate of 8.00 % including loan origination costs and fees. The loan has a maturity date of October 26, 2028, with one 1-year extension available at the borrower’s option, subject to certain conditions plus the payment of a 0.25 % extension fee. The loan allows for prepayment, in part or whole, with penalties ranging from 1.00 % to 2.00 % of the amount prepaid, depending on the timing of the prepayment. The loan also includes a right of first offer for us to acquire the underlying industrial development site in the future. As of March 31, 2026, the borrower was current on monthly interest payments.
As of March 31, 2026, the carrying value of the loan receivable was $123.8 million, which reflects $1.2 million of unamortized origination fees/costs. As of December 31, 2025, the carrying value of the loan receivable was $123.7 million, which reflects $1.3 million of unamortized origination fees/costs. Based on our current assessment of the credit loss evaluation criteria, we determined that the allowance for potential credit losses on our loan receivable is immaterial as of March 31, 2026 and December 31, 2025.
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6. Notes Payable
| March 31, 2026 | December 31, 2025 | Margin Above SOFR | Interest Rate(1) | Contractual Maturity Date | ||||||||||||||||||||||||||||
| Unsecured and Secured Debt | ||||||||||||||||||||||||||||||||
| Unsecured Debt: | ||||||||||||||||||||||||||||||||
| Revolving Credit Facility | $ | $ | S+ | % | (2) | % | (3) | (4) | ||||||||||||||||||||||||
$575M Exchangeable Senior Notes due 2027 | n/a | % | ||||||||||||||||||||||||||||||
| $300M Term Loan | S+ | % | (2) | % | (5) | |||||||||||||||||||||||||||
| $125M Senior Notes | n/a | % | ||||||||||||||||||||||||||||||
| $300M Senior Notes due 2028 | n/a | % | ||||||||||||||||||||||||||||||
$575M Exchangeable Senior Notes due 2029 | n/a | % | ||||||||||||||||||||||||||||||
| $25M Series 2019A Senior Notes | n/a | % | ||||||||||||||||||||||||||||||
| $400M Term Loan | S+ | % | (2) | % | (6) | |||||||||||||||||||||||||||
| $400M Senior Notes due 2030 | n/a | % | ||||||||||||||||||||||||||||||
| $400M Senior Notes due 2031 | n/a | % | ||||||||||||||||||||||||||||||
| $75M Series 2019B Senior Notes | n/a | % | ||||||||||||||||||||||||||||||
| Total Unsecured Debt | $ | $ | ||||||||||||||||||||||||||||||
| Secured Debt: | ||||||||||||||||||||||||||||||||
$60M Term Loan(7) | S+ | % | % | (7) | (7) | |||||||||||||||||||||||||||
701-751 Kingshill Place(8) | n/a | % | ||||||||||||||||||||||||||||||
13943-13955 Balboa Boulevard(9) | n/a | % | ||||||||||||||||||||||||||||||
2205 126th Street(10) | n/a | % | ||||||||||||||||||||||||||||||
2410-2420 Santa Fe Avenue(10) | n/a | % | ||||||||||||||||||||||||||||||
11832-11954 La Cienega Boulevard(9) | n/a | % | ||||||||||||||||||||||||||||||
Gilbert/La Palma(9) | n/a | % | ||||||||||||||||||||||||||||||
7817 Woodley Avenue(9) | n/a | % | ||||||||||||||||||||||||||||||
| Total Secured Debt | $ | $ | ||||||||||||||||||||||||||||||
| Total Unsecured and Secured Debt | $ | $ | ||||||||||||||||||||||||||||||
Less: Unamortized premium/discount and debt issuance costs(11) | ( | ( | ||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||
(1)Reflects the contractual interest rate under the terms of each loan as of March 31, 2026, and includes the effect of interest rate swaps that were effective as of March 31, 2026. The interest rate is not adjusted to include the amortization of debt issuance costs or unamortized fair market value premiums and discounts.
(2)As of March 31, 2026, the interest rates on these loans are comprised of daily Secured Overnight Financing Rate (“SOFR”) for both the unsecured revolving credit facility and $400.0 million unsecured term loan, and 1-month term SOFR (“Term SOFR”) for the $300.0 million unsecured term loan, plus an applicable margin of 0.725 % per annum for the unsecured revolving credit facility and 0.80 % per annum for the $300.0 million and $400.0 million unsecured term loans, based on our leverage ratio and investment grade ratings, less a sustainability-related interest rate adjustment of 0.04 %. These loans are also subject to a 0 % SOFR floor.
(3)The unsecured revolving credit facility is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. As of March 31, 2026, the applicable facility fee is 0.125 %, less a sustainability-related interest rate adjustment of 0.01 %.
(4)The unsecured revolving credit facility has two six-month extensions available at our option, subject to certain terms and conditions.
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(5)Term SOFR for our $300.0 million unsecured term loan has been swapped to a fixed rate of 2.81725 % through May 26, 2027, resulting in an all-in fixed rate of 3.57725 % after adding the applicable margin and sustainability-related rate adjustment.
(6)Daily SOFR for our $400.0 million unsecured term loan has been swapped to a fixed rate of 3.41375 % through May 30, 2030, resulting in an all-in fixed rate of 4.17375 % after adding the applicable margin and sustainability-related rate adjustment.
(7)The loan is secured by six properties and has interest-only payment terms bearing interest at Term SOFR increased by a 0.10 % SOFR adjustment plus an applicable margin of 1.25 % per annum. Term SOFR for this loan has been swapped to a fixed rate of 3.710 % through July 30, 2026, resulting in an all-in fixed rate of 5.060 % after adding the SOFR adjustment and applicable margin. As of March 31, 2026, we have three one-year extension options available, subject to certain terms and conditions.
(8)On January 5, 2026, we paid in full the outstanding principal balance on this unsecured debt.
(9)Fixed monthly payments of interest and principal until maturity as follows: 13943-13955 Balboa Boulevard ($79,198 ), 11832-11954 La Cienega Boulevard ($20,194 ), Gilbert/La Palma ($24,008 ) and 7817 Woodley Avenue ($20,855 ).
(10)Fixed monthly payments of interest only.
(11)Excludes unamortized debt issuance costs related to our unsecured revolving credit facility, which are presented in the line item “Deferred loan costs, net” in the consolidated balance sheets.
Contractual Debt Maturities
| April 1, 2026 - December 31, 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
Debt maturing over the next twelve months is expected to be addressed through refinancing, extensions, repayment with cash on hand and/or borrowings under our unsecured revolving credit facility.
Exchangeable Senior Notes
As of March 31, 2026, we had outstanding $575.0 million in aggregate principal amount of 4.375 % exchangeable senior unsecured notes due 2027 (the “2027 Exchangeable Notes”) and $575.0 million in aggregate principal amount of 4.125 % exchangeable senior unsecured notes due 2029 (the “2029 Exchangeable Notes” and together with the 2027 Exchangeable Notes, the “Exchangeable Notes”). The 2027 Exchangeable Notes will mature on March 15, 2027 and the 2029 Exchangeable Notes will mature on March 15, 2029 , in each case unless earlier repurchased, exchanged or (in the case of 2029 Exchangeable Notes) redeemed.
As of March 31, 2026 and December 31, 2025, the net carrying amount of the 2027 Exchangeable Notes was $570.9 million and $569.8 million, respectively, with unamortized debt discount and issuance costs of $4.1 million and $5.2 million, respectively. As of March 31, 2026 and December 31, 2025, the net carrying amount of the 2029 Exchangeable Notes was $567.4 million and $566.8 million, respectively, with unamortized debt discount and issuance costs of $7.6 million and $8.2 million, respectively.
Interest on the Exchangeable Notes is payable semiannually on March 15 and September 15 of each year. For the three months ended March 31, 2026, we recognized total interest expense on the Exchangeable Notes of $13.9 million, consisting of coupon interest of $12.2 million and amortization of debt discount and issuance costs of $1.7 million. For the three months ended March 31, 2025, we recognized total interest expense of $13.8 million, consisting of coupon interest of $12.2 million, and amortization of debt discount and issuance costs of $1.6 million.
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Prior to December 15, 2026 (in the case of the 2027 Exchangeable Notes) and December 15, 2028 (in the case of the 2029 Exchangeable Notes), noteholders may exchange their Exchangeable Notes only upon the occurrence of certain events. From and after those dates, noteholders may exchange their Exchangeable Notes at any time at their election until the close of business on the second scheduled trading day immediately preceding the applicable maturity date. Exchanges will be settled by delivering cash up to the principal amount of the Exchangeable Notes exchanged, and in respect of the remainder of the exchanged value, if any, in excess thereof, in cash or in a combination of cash and shares of our common stock, at our option. The initial exchange rate is 15.7146 shares of our common stock per $1,000 principal amount of the Exchangeable Notes, representing an initial exchange price of approximately $63.64 per share of our common stock.
We may not redeem the 2027 Exchangeable Notes prior to their maturity. The 2029 Exchangeable Notes may be redeemed, in whole or in part (subject to certain limitations), for cash at our option at any time, and from time to time, on or after May 20, 2027 and on or before the 41st scheduled trading day preceding their maturity date, subject to satisfaction of certain conditions, including that the last reported sale price of our common stock exceeds 130 % of the exchange price for a specified period. The redemption price will equal the principal amount of the 2029 Exchangeable Notes redeemed, plus accrued and unpaid interest, if any.
In connection with the issuance of each series of Exchangeable Notes, we entered into a registration rights agreement pursuant to which we agreed to register the resale of the shares of our common stock, if any, deliverable upon exchange of the Exchangeable Notes. If specified conditions under the registration rights agreement are not satisfied, we may be required to pay additional interest on the applicable series of Exchangeable Notes. We account for such potential additional interest as contingent obligations under ASC Subtopic 825-20: Financial Instruments - Registration Payment Arrangements and ASC Subtopic 450-20: Loss Contingencies. As payments of such additional interest were not probable as of March 31, 2026, no liability was recognized.
Fifth Amended and Restated Credit Agreement
As of March 31, 2026, under the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), we have a $1.25 billion unsecured revolving credit facility (the “Revolver”), a $300.0 million unsecured term loan facility (the “$300 Million Term Loan”) and a $400.0 million unsecured term loan facility (the “$400 Million Term Loan” and together with the $300 Million Term Loan, the “Term Facility”). Subject to certain terms and conditions set forth in the Credit Agreement, we may request additional lender commitments and increase the size of the Credit Agreement by an additional $1.05 billion, which may be comprised of additional revolving commitments under the Revolver, an increase to the Term Facility, additional term loan tranches or any combination of the foregoing.
Interest on the Credit Agreement is generally to be paid based upon, at our option, either Term SOFR, daily SOFR or a base rate, plus an applicable margin based on our leverage ratio and debt ratings. The applicable margin for the Term Facility ranges from 0.80 % to 1.60 % per annum for SOFR-based loans and 0.00 % to 0.60 % per annum for base rate loans. The applicable margin for the Revolver ranges from 0.725 % to 1.400 % per annum for SOFR-based loans and letters of credit and 0.00 % to 0.40 % per annum for base rate loans. In addition to the interest payable on amounts outstanding under the Revolver, we are required to pay an applicable credit facility fee, on each lender's commitment amount under the Revolver, regardless of usage. The applicable credit facility fee ranges from 0.125 % to 0.300 % per annum, depending on our leverage ratio and investment grade ratings.
In addition, the Credit Agreement also features a sustainability-linked pricing component that can periodically adjust the applicable margin by -0.04 %, zero or 0.04 % and adjust the applicable credit facility fee by -0.01 %, zero or 0.01 %, depending on our achievement of the annual sustainability performance metrics. In January 2026, after certifying that our sustainability performance targets were met for 2025, the applicable margin decreased by 0.04 % to 0.685 % for the Revolver and to 0.760 % for the Term Facility, and the credit facility fee decreased by 0.01 % to 0.115 %.
The Revolver and the Term Facility may be voluntarily prepaid in whole or in part at any time without premium or penalty. Amounts borrowed under the Term Facility and repaid or prepaid may not be reborrowed.
The Credit Agreement contains usual and customary events of default including defaults in the payment of principal, interest or fees, defaults in compliance with the covenants set forth in the Credit Agreement and other loan documentation, cross-defaults to certain other indebtedness, and bankruptcy and other insolvency defaults. If an event of default occurs and is continuing under the Credit Agreement, the unpaid principal amount of all outstanding loans, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.
As of March 31, 2026, we did not have any borrowings outstanding under the Revolver and had $4.6 million outstanding in letters of credit that reduced our borrowing capacity, leaving $1.245 billion available for future borrowings.
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Debt Covenants
The Credit Agreement, $60.0 million term loan facility (the “$60 Million Term Loan”), $125.0 million unsecured guaranteed senior notes (the “$125 Million Notes”) and $25.0 million unsecured guaranteed senior notes and $75.0 million unsecured guaranteed senior notes (together the “Series 2019A and 2019B Notes”) include a series of financial and other covenants that we must comply with. All financial ratios, metrics and terms used in the covenants below are defined in the applicable loan agreements and are tested on a quarterly basis.
•Maintaining a ratio of total indebtedness to total asset value of not more than 60 %;
•For the Credit Agreement and $60 Million Term Loan, maintaining a ratio of secured debt to total asset value of not more than 45 %;
•For the $125 Million Notes and Series 2019A and 2019B Notes (together the “Senior Notes”), maintaining a ratio of secured debt to total asset value of not more than 40 %;
•For the Senior Notes, maintaining a ratio of total secured recourse debt to total asset value of not more than 15 %;
•For the Senior Notes, maintaining a minimum tangible net worth of at least the sum of (i) $760,740,750 , and (ii) an amount equal to at least 75 % of the net equity proceeds received by the Company after September 30, 2016;
•Maintaining a ratio of adjusted EBITDA to fixed charges of at least 1.5 to 1.0;
•For the Credit Agreement and Senior Notes, maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than 60 %; and
•For the Credit Agreement and Senior Notes, maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least 1.75 to 1.0.
The $300.0 million of 5.000 % Senior Notes due 2028, $400.0 million of 2.125 % Senior Notes due 2030 and $400.0 million of 2.150 % Senior Notes due 2031 (together the “Registered Notes”) contain the following covenants. All financial ratios and terms used below are as defined in the applicable indentures and are tested on an annual basis.
•Maintaining a ratio of total indebtedness to total asset value of not more than 60 %;
•Maintaining a ratio of secured debt to total asset value of not more than 40 %;
•Maintaining a Debt Service Coverage Ratio of at least 1.5 to 1.0; and
•Maintaining a ratio of unencumbered assets to unsecured debt of at least 1.5 to 1.0.
Subject to the terms of the Credit Agreement, $60 Million Term Loan, Senior Notes and Registered Notes, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal or interest, (ii) a default in the payment of certain of our other indebtedness and (iii) a default in compliance with the covenants set forth in the debt agreement, the principal and accrued and unpaid interest on the outstanding debt may be declared immediately due and payable at the option of the administrative agent, lenders, trustee and/or noteholders, as applicable, and in the event of bankruptcy and other insolvency defaults, the principal and accrued and unpaid interest on the outstanding debt will become immediately due and payable. In addition, we are required to maintain at all times a credit rating on the Senior Notes from either Standard & Poor’s Ratings Services (“S&P”), Moody’s Investors Services (“Moody’s”) or Fitch Ratings. Our credit ratings as of March 31, 2026, were BBB+ from S&P, BBB+ from Fitch Ratings and Baa2 from Moody’s.
We were in compliance with all of our required quarterly financial debt covenants as of March 31, 2026.
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7. Leases
Lessor
We lease industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred.
For the three months ended March 31, 2026, we recognized $238.3 million of rental income related to operating lease payments, of which $196.1 million were for fixed lease payments and $42.2 million were for variable lease payments, respectively. For the three months ended March 31, 2025, we recognized $240.5 million of rental income related to operating lease payments, of which $197.8 million were for fixed lease payments and $42.7 million were for variable lease payments, respectively.
| Twelve Months Ended March 31, | |||||
| 2027 | $ | ||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
| Total | $ | ||||
The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles.
Lessee
We lease office space as part of conducting our day-to-day business. As of March 31, 2026, our office space leases have current remaining lease terms of approximately two years with options to renew for an additional term of to five years each. As of March 31, 2026, we also have a ground lease which we assumed in the acquisition of 2970 East 50th Street in March 2022 that has a current remaining lease term of approximately 35 years and four additional ten-year options to renew.
As of March 31, 2026, total ROU assets and lease liabilities were approximately $6.6 million and $7.9 million, respectively. As of December 31, 2025, total ROU assets and lease liabilities were approximately $6.8 million and $8.3 million, respectively.
| Three Months Ended March 31, | |||||||||||
Lease Cost(1) (in thousands) | 2026 | 2025 | |||||||||
| Operating lease cost | $ | $ | |||||||||
| Variable lease cost | |||||||||||
| Sublease income | ( | ||||||||||
| Total lease cost | $ | $ | |||||||||
(1)Amounts are included in “General and administrative” and “Property expenses” in the accompanying consolidated statements of operations.
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| Three Months Ended March 31, | |||||||||||
| Other Information (in thousands) | 2026 | 2025 | |||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | |||||||||
| Lease Term and Discount Rate | March 31, 2026 | December 31, 2025 | |||||||||
Weighted-average remaining lease term(1) | |||||||||||
Weighted-average discount rate(2) | % | % | |||||||||
(1)Includes the impact of extension options that we are reasonably certain to exercise.
(2)Because the rate implicit in each of our leases was not readily determinable, we used our incremental borrowing rate. In determining our incremental borrowing rate for each lease, we considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to our creditworthiness, the impact of collateralization and the term of each of our lease agreements.
| March 31, 2026 | ||||||||
| April 1, 2026 - December 31, 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total undiscounted lease payments | $ | |||||||
| Less imputed interest | ( | |||||||
| Total lease liabilities | $ | |||||||
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8. Interest Rate Derivatives
The following table sets forth a summary of the terms and fair value of our interest rate swaps at March 31, 2026 and December 31, 2025 (dollars in thousands). We record all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities.
Notional Value(1) | Fair Value of Interest Rate Derivative Assets/(Derivative Liabilities)(2) | |||||||||||||||||||||||||||||||||||||||||||
| Derivative Instrument | Effective Date | Maturity Date | Interest Strike Rate | March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
Interest Rate Swap | % | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||
Interest Rate Swaps | % | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Interest Rate Swaps | % | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Interest Rate Swap | % | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||
Interest Rate Swap | % | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||
Interest Rate Swap | % | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||
(1)Represents the notional value of swaps that are effective as of the balance sheet date presented.
(2)The fair value of derivative assets is included in the line item “Interest rate swap asset” and the fair value of derivative liabilities is included in the line item “Interest rate swap liability” in the accompanying consolidated balance sheets.
Our interest rate swaps are designated and qualify as cash flow hedges. We do not use derivatives for trading or speculative purposes. The change in fair value of derivatives designated and qualifying as cash flow hedges is initially recorded in AOCI and is subsequently reclassified from AOCI into earnings in the period that the hedged forecasted transactions affect earnings.
The following table sets forth the impact of our interest rate swaps on our financial statements for the periods presented (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Interest Rate Swaps in Cash Flow Hedging Relationships: | |||||||||||
Amount of gain (loss) recognized in AOCI on derivatives | $ | $ | ( | ||||||||
Amount of gain reclassified from AOCI into earnings under “Interest expense”(1) | $ | $ | |||||||||
| Total interest expense presented in the Consolidated Statement of Operations in which the effects of cash flow hedges are recorded (line item “Interest expense”) | $ | $ | |||||||||
(1)Includes amounts that are being amortized from AOCI into interest expense on a straight-line basis related to the treasury rate lock agreements that were settled in August 2021 and March 2023 and for which amounts will continue to be reclassified over the ten-year and five-year terms, respectively, of the hedged transactions.
As of March 31, 2026, we estimate that approximately $3.0 million of net unrealized gains will be reclassified from AOCI into earnings as a net decrease to interest expense over the next twelve months.
Credit-risk-related Contingent Features
Certain of our agreements with our derivative counterparties contain a provision where if we default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender within a specified time period, then we could also be declared in default on our derivative obligations.
Certain of our agreements with our derivative counterparties contain provisions where if a merger or acquisition occurs that materially changes our creditworthiness in an adverse manner, we may be required to fully collateralize our obligations under the derivative instrument.
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9. Fair Value Measurements
ASC Topic 820: Fair Value Measurement (“ASC 820”) defines fair value and establishes a framework for measuring fair value. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
Recurring Measurements – Interest Rate Swaps
We use interest rate swap agreements to manage our interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves.
To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
| Fair Value Measurement Using | ||||||||||||||||||||||||||
Description | Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||
Interest rate swap asset | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swap liability | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
Interest rate swap asset | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swap liability | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
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Nonrecurring Measurements – Impairment of Real Estate
We measure certain properties at fair value on a nonrecurring basis in accordance with ASC 820 when changes in the expected holding period or intent with respect to a property result in impairment, including in connection with subsequent dispositions or classification as held for sale. The fair values of these properties were determined using Level 2 inputs within the fair value hierarchy, primarily quoted market values obtained from non‑binding offers or letters of intent received from third‑party buyers or, where applicable, contracted sales prices. See “Note 3 – Investments in Real Estate” for additional information.
The table below sets forth the fair value of properties measured on a nonrecurring basis for which impairments were recognized as of March 31, 2026 and December 31, 2025 (in thousands) by level within the fair value hierarchy.
| Fair Value Measurement Using | |||||||||||||||||||||||||||||||||||
Description | Total Fair Value | Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
Real estate assets classified as held for sale | $ | $ | $ | $ | $ | (1) | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
Real estate assets measured at fair value due to our change in intent to hold the asset | $ | $ | $ | $ | $ | (2) | |||||||||||||||||||||||||||||
(1)Amount represents the aggregate carrying value of two properties, as adjusted to fair value less estimated selling costs, included in the line item “Assets associated with real estate held for sale” in the accompanying consolidated balance sheet.
Financial Instruments Disclosed at Fair Value
The carrying amounts of cash and cash equivalents, rents and other receivables, other assets, accounts payable, accrued expenses and other liabilities, and tenant security deposits approximate fair value because of their short-term nature.
The fair value of our loan receivable was estimated by calculating the present value of principal and interest payments, using discount rates that best reflect current market rates for financings with similar characteristics and credit quality, and based on certain assumptions regarding the collection of principal and interest.
The fair value of our notes payable was estimated by calculating the present value of principal and interest payments, using discount rates that best reflect current market rates for financings with similar characteristics and credit quality, and assuming each loan is outstanding through its respective contractual maturity date.
| Fair Value Measurement Using | ||||||||||||||||||||||||||||||||
| Total Fair Value | Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||||||||||||||||
| Loan Receivable at: | ||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Notes Payable at: | ||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
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10. Related Party Transactions
Howard Schwimmer
Effective January 1, 2026, the Company terminated its management and leasing services agreements with Howard Schwimmer, our former Co-Chief Executive Officer, and no management or leasing services revenue was recognized for the three months ended March 31, 2026.
11. Commitments and Contingencies
Legal
From time to time, we are party to various lawsuits, claims and legal proceedings that arise in the ordinary course of business. We are not currently a party to any legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition or results of operations.
Environmental
We will generally perform environmental site assessments at properties we are considering acquiring. After the acquisition of such properties, we continue to monitor the properties for the presence of hazardous or toxic substances. From time to time, we acquire properties with known adverse environmental conditions. If at the time of acquisition, losses associated with environmental remediation obligations are probable and can be reasonably estimated, we record a liability.
As of March 31, 2026, we are not aware of any environmental liabilities that would have a material impact on our consolidated financial condition, results of operations or cash flows. However, we cannot be sure that we have identified all environmental liabilities at our properties, that all necessary remediation actions have been or will be undertaken at our properties or that we will be indemnified, in full or at all, in the event that such environmental liabilities arise. Furthermore, we cannot assure you that future changes to environmental laws or regulations and their application will not give rise to loss contingencies for future environmental remediation.
Tenant and Construction Related Commitments
As of March 31, 2026, we had commitments of approximately $62.6 million for tenant improvement and construction work under the terms of leases with certain of our tenants and contractual agreements with our construction vendors.
Letters of Credit Related to Captive Insurance Subsidiary
We have the right to issue letters of credit under the Revolver up to an aggregate amount not to exceed $100.0 million, which reduces the credit availability under the Revolver. As of March 31, 2026, we had a $4.6 million letter of credit outstanding, which was originally issued on May 31, 2024, to capitalize a new wholly-owned captive insurance subsidiary through which we indirectly manage a portion of our earthquake insurance.
Concentrations of Credit Risk
We have deposited cash with financial institutions that are insured by the Federal Deposit Insurance Corporation up to $250,000 per institution. Although from time to time we have deposits at institutions in excess of federally insured limits, we do not believe we are exposed to significant credit risk due to the financial position and high credit quality of the institutions in which those deposits are held.
Concentration of Properties in Southern California
As of March 31, 2026, all of our properties are located in the Southern California infill markets. The ability of the tenants to honor the terms of their respective leases is dependent upon the economic, regulatory and social factors affecting the markets in which the tenants operate and other conditions.
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Tenant Concentration
During the three months ended March 31, 2026, no single tenant accounted for more than 5 % of our total consolidated rental income.
12. Stockholders’ Equity
Preferred Stock
At March 31, 2026 and December 31, 2025, we had the following series of Cumulative Preferred Shares (“Preferred Stock”) outstanding (dollars in thousands):
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Series | Earliest Redemption Date | Dividend Rate | Shares Outstanding | Liquidation Preference | Shares Outstanding | Liquidation Preference | ||||||||||||||||||||||||||||||||
| Series B | November 13, 2022 | % | $ | $ | ||||||||||||||||||||||||||||||||||
| Series C | September 20, 2024 | % | ||||||||||||||||||||||||||||||||||||
| Total Preferred Shares | $ | $ | ||||||||||||||||||||||||||||||||||||
Common Stock
Stock Repurchase Programs
On February 2, 2026, the Board authorized a new stock repurchase program pursuant to which we may repurchase up to a maximum of $500.0 million of our outstanding common stock (the “February 2026 Repurchase Program”). At that time, the Board terminated the prior $500.0 million stock repurchase program, and the February 2026 Repurchase Program replaced and superseded it in all respects. The February 2026 Repurchase Program is set to expire on February 29, 2028, unless modified, extended or terminated earlier at the Board’s discretion.
Under our stock repurchase programs, we may purchase our shares from time to time in the open market, in privately negotiated transactions or in other transactions as permitted by federal securities laws. The amount and timing of repurchases depend on a number of factors, including the price and availability of our shares, trading volume and general market conditions.
During the three months ended March 31, 2026, we repurchased 5,534,357 shares of common stock under the February 2026 Repurchase Program for a total of $200.1 million, including commissions, at a weighted average price of $36.14 per share. All repurchased shares were retired on the respective settlement dates. As of March 31, 2026, $299.9 million remained available for repurchase under the February 2026 Repurchase Program. Subsequent to March 31, 2026, the Board terminated the February 2026 Repurchase Program and authorized a new $500.0 million stock repurchase program. See “Note 16 – Subsequent Events” for additional information.
ATM Programs
On February 17, 2023, we established an at-the-market equity offering program pursuant to which we are able to sell from time to time shares of our common stock having an aggregate sales price of up to $1.25 billion (the “Current ATM Program”).
In connection with the ATM program, we may sell shares of our common stock directly through sales agents or we may enter into forward equity sale agreements with certain financial institutions acting as forward purchasers whereby, at our discretion, the forward purchasers may borrow and sell shares of our common stock under the ATM program. The use of a forward equity sale agreement allows us to lock in a share price on the sale of shares of our common stock at the time the agreement is executed but defer settling the forward equity sale agreements and receiving the proceeds from the sale of shares until a later date. Additionally, the forward price that we expect to receive upon physical settlement of an agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.
During the three months ended March 31, 2026, we did not sell any shares of common stock directly through sales agents or enter into forward equity sale agreements under the Current ATM Program.
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As of March 31, 2026, approximately $927.4 million of common stock remained available to be sold under the Current ATM Program. Future sales, if any, will depend on a variety of factors, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us.
Changes in Accumulated Other Comprehensive Income (Loss)
The following table summarizes the changes in our AOCI balance for the three months ended March 31, 2026 and 2025, which consists solely of adjustments related to our cash flow hedges (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Accumulated other comprehensive (loss) income - beginning balance | $ | ( | $ | |||||||||||
Other comprehensive income (loss) before reclassifications | ( | |||||||||||||
Amounts reclassified from accumulated other comprehensive income to interest expense | ( | ( | ||||||||||||
Net current period other comprehensive income (loss) | ( | |||||||||||||
Less: other comprehensive (income) loss attributable to noncontrolling interests | ( | |||||||||||||
Other comprehensive income (loss) attributable to common stockholders | ( | |||||||||||||
Accumulated other comprehensive income - ending balance | $ | $ | ||||||||||||
Noncontrolling Interests
Noncontrolling interests relate to interests in the Operating Partnership, represented by common units of partnership interests in the Operating Partnership (“OP Units”), fully-vested LTIP units, fully-vested performance units and 3.00 % cumulative redeemable convertible preferred units of partnership interest in the Operating Partnership (the “CPOP Units”).
Operating Partnership Units
As of March 31, 2026, noncontrolling interests included 5,646,343 OP Units, 1,602,431 fully-vested LTIP units and 1,356,967 fully-vested performance units, and represented approximately 3.7 % of our Operating Partnership (excluding CPOP Units). OP Units and shares of our common stock have essentially the same economic characteristics, as they share equally in the total net income or loss and distributions of our Operating Partnership. Investors who own OP Units have the right to cause our Operating Partnership to redeem any or all of their units in our Operating Partnership for an amount of cash per unit equal to the then current market value of one share of common stock, or, at our election, shares of our common stock on a one-for-one basis. See “Note 13 – Incentive Award Plan” for a description of LTIP units and Performance Units.
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13. Incentive Award Plan
Third Amended and Restated 2013 Incentive Award Plan
We maintain one share-based incentive plan, the Third Amended and Restated Rexford Industrial Realty, Inc. and Rexford Industrial Realty, L.P. 2013 Incentive Award Plan (the “Plan”), pursuant to which, we may make grants of restricted stock, LTIP units of partnership interest in our Operating Partnership (“LTIP Units”), performance units in our Operating Partnership (“Performance Units”), dividend equivalents and other stock based and cash awards to our non-employee directors, employees and consultants.
The Plan is administered by our board of directors with respect to awards to non-employee directors and by our compensation committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of our directors and/or officers (collectively the “plan administrator”), subject to certain limitations. The plan administrator sets the terms and conditions of all awards under the Plan, including any vesting and vesting acceleration conditions.
As of March 31, 2026, a total of 421,990 shares of common stock, LTIP Units, Performance Units and other stock based awards remain available for issuance under the Plan. Shares and units granted under the Plan may be authorized but unissued shares or units, or, if authorized by the board of directors, shares purchased in the open market. If an award under the Plan is forfeited, expires, or is settled for cash, any shares or units subject to such award will generally be available for future awards.
LTIP Units and Performance Units
LTIP units and Performance Units are each a class of limited partnership units in the Operating Partnership. Initially, LTIP units and Performance Units do not have full parity with OP Units with respect to liquidating distributions. However, upon the occurrence of certain events more fully described in the Operating Partnership’s partnership agreement (“book-up events”), the LTIP units and Performance Units can over time achieve full parity with OP Units for all purposes. If such parity is reached, vested LTIP units and vested Performance Units may be converted into an equal number of OP Units, and upon conversion, enjoy all rights of OP Units. Performance Units that have not vested receive a quarterly per-unit distribution equal to 10 % of the per-unit distribution paid on OP Units. Vested Performance Units and unvested and vested LTIP Units receive the same quarterly per-unit distributions as OP Units, which equal the per-share distributions on shares of our common stock.
Share-Based Award Activity
The following table sets forth our unvested restricted stock activity and unvested LTIP Unit activity for the three months ended March 31, 2026:
| Unvested Awards | |||||||||||||||||||||||
| Restricted Common Stock | LTIP Units | ||||||||||||||||||||||
| Number of Shares | Weighted-Average Grant Date Fair Value per Share | Number of Units | Weighted-Average Grant Date Fair Value per Unit | ||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | |||||||||||||||||||||
| Granted | $ | $ | |||||||||||||||||||||
| Forfeited | ( | $ | $ | ||||||||||||||||||||
Vested(1) | ( | $ | ( | $ | |||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | |||||||||||||||||||||
(1)During the three months ended March 31, 2026, 52,586 shares of the Company’s common stock were tendered in accordance with the terms of the Plan to satisfy minimum statutory tax withholding requirements associated with the vesting of restricted shares of common stock.
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The following table sets forth the vesting schedule of all unvested share-based awards outstanding as of March 31, 2026:
| Unvested Awards | |||||||||||||||||
| Restricted Common Stock | LTIP Units | Performance Units(1) | |||||||||||||||
| April 1, 2026 - December 31, 2026 | |||||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| 2030 | |||||||||||||||||
| Total | |||||||||||||||||
(1)Represents the maximum number of Performance Units that could become earned and vested in December of 2026, November/December of 2027, and December of 2028, assuming achievement of maximum total shareholder return for all awards, and, with respect to awards vesting in 2026 and 2027, maximum FFO per share growth, in each case measured over the applicable three-year performance period.
Compensation Expense
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Expensed share-based compensation(1) | $ | $ | |||||||||
Capitalized share-based compensation(2) | |||||||||||
| Total share-based compensation | $ | $ | |||||||||
(1)Amounts expensed are included in “General and administrative,” “Property expenses” and “Other expenses” in the accompanying consolidated statements of operations.
(2)For the three months ended March 31, 2026 and 2025, amounts capitalized relate to employees who provide construction services, and are included in “Building and improvements” in the consolidated balance sheets.
As of March 31, 2026, total unrecognized compensation cost related to all unvested share-based awards was $39.0 million and is expected to be recognized over a weighted average remaining period of 32 months.
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14. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Numerator: | |||||||||||
| Net income | $ | $ | |||||||||
| Less: Preferred stock dividends | ( | ( | |||||||||
| Less: Net income attributable to noncontrolling interests | ( | ( | |||||||||
| Less: Net income attributable to participating securities | ( | ( | |||||||||
| Net income attributable to common stockholders | $ | $ | |||||||||
| Denominator: | |||||||||||
Weighted average shares of common stock outstanding – basic and diluted | |||||||||||
Earnings per share - Basic and Diluted | |||||||||||
| Net income attributable to common stockholders | $ | $ | |||||||||
Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. As such, unvested shares of restricted stock, unvested LTIP Units and unvested Performance Units are considered participating securities. Participating securities are included in the computation of basic EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and each participating security according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings. Participating securities are also included in the computation of diluted EPS using the more dilutive of the two-class method or treasury stock method for unvested shares of restricted stock and LTIP Units, and by determining if certain market conditions have been met at the reporting date for unvested Performance Units.
The effect of including unvested shares of restricted stock and unvested LTIP Units using the treasury stock method was excluded from our calculation of weighted average shares of common stock outstanding – diluted, as their inclusion would have been anti-dilutive.
Performance Units, which are subject to vesting based on the Company achieving certain TSR levels and FFO per share growth over a three-year performance period, are included as contingently issuable shares in the calculation of diluted EPS when TSR and/or FFO per share growth has been achieved at or above the threshold levels specified in the award agreements, assuming the reporting period is the end of the performance period, and the effect is dilutive.
Shares issuable under forward equity sale agreements during the period prior to settlement are reflected in our calculation of weighted average shares of common stock outstanding – diluted using the treasury stock method for the periods where the impact was dilutive.
We also consider the effect of other potentially dilutive securities, including the CPOP Units and OP Units, which may be redeemed for shares of our common stock under certain circumstances, and include them in our computation of diluted EPS under the if-converted method when their inclusion is dilutive. These units were not dilutive for the periods presented above. Additionally, as of March 31, 2026, the Exchangeable Notes were not included in the computation of diluted earnings per share as they were anti-dilutive for the three months ended March 31, 2026.
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15. Segment Reporting
We operate as one operating segment. We are engaged in the business of investing in, operating, repositioning and developing industrial real estate properties located in Southern California infill markets. Our operating results depend primarily upon generating rental revenue from leasing and operating our industrial properties. As of March 31, 2026, our Chief Executive Officer and Chief Financial Officer collectively act as the chief operating decision maker (the “CODM”) of the Company. Our CODM reviews financial information presented on a consolidated basis when making decisions related to assessing our operating performance and allocating resources.
Segment Profitability Measure and Total Assets
Consolidated net income, which is reported in the accompanying consolidated statements of operations, is the measure of segment profit or loss that is regularly reviewed by the CODM. Consolidated net income is used by the CODM in assessing the operating performance of the segment and to monitor budget versus actual results.
Refer to the accompanying consolidated statements of operations for the presentation of consolidated net income for the three months ended March 31, 2026 and 2025.
The measure of segment assets is reported in the accompanying consolidated balance sheets as “Total assets.” The accounting policies of our single reportable segment are the same as those described in the summary of significant accounting policies.
Significant Segment Expenses
The following table sets forth the significant expenses that comprise the line item “Property expenses” in our calculation of consolidated net income (in the accompanying consolidated statements of operations) for the three months ended March 31, 2026 and 2025.
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Recoverable property expenses(1) | $ | $ | |||||||||
Non-recoverable property expenses(2) | |||||||||||
| Property expenses | $ | $ | |||||||||
(1)Recoverable property expenses include real estate taxes, insurance, repairs and maintenance, utilities and management fee expenses which can be billed back to tenants as a form of additional revenue.
(2)Non-recoverable property expenses include overhead allocation expenses and other property expenses directly associated with operating our properties which cannot be billed back to tenants.
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16. Subsequent Events
Dispositions
On April 16, 2026 we completed the sale of the property located at 423-424 Berry Way in Brea, California for a gross sales price of $16.5 million.
Dividends and Distributions Declared
On April 21, 2026, the Board declared the following quarterly cash dividends/distributions, record dates and payment dates.
| Security | Amount per Share/Unit | Record Date | Payment Date | |||||||||||||||||
| Common stock | $ | |||||||||||||||||||
| OP Units | $ | |||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
New Stock Repurchase Program
On April 21, 2026, the Board terminated the February 2026 Repurchase Program and authorized a new stock repurchase program pursuant to which we may repurchase up to a maximum of $500.0 million of our outstanding common stock (the “April 2026 Repurchase Program”). The April 2026 Repurchase Program replaced and superseded, in all respects, the February 2026 Repurchase Program and is scheduled to expire on April 30, 2028, unless modified, extended or terminated earlier at the Board’s discretion.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements and the related notes thereto that appear in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q. The terms “Company,” “we,” “us,” and “our” refer to Rexford Industrial Realty, Inc. and its consolidated subsidiaries except where the context otherwise requires.
Forward-Looking Statements
We make statements in this quarterly report that are forward-looking statements, which are usually identified by the use of words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “potential,” “possible,” “predicts,” “projects,” “results,” “seeks,” “should,” “will,” and variations of such words or similar expressions. Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:
•the competitive environment in which we operate;
•real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;
•decreased rental rates or increasing vacancy rates;
•potential defaults on or non-renewal of leases by tenants;
•potential bankruptcy or insolvency of tenants or our borrower;
•acquisition risks, including failure of such acquisitions to perform in accordance with expectations;
•the timing of acquisitions and dispositions;
•risks associated with development and repositioning activities, including the possibility that costs may exceed original estimates, the time to complete a project or to lease up the completed project may be greater than originally anticipated or changes in entitlements or laws may impact or prevent execution of intended projects, including without limitation, California Assembly Bill 98 and California Senate Bill 415;
•potential natural disasters such as earthquakes, wildfires or floods;
•the consequence of any future security alerts and/or terrorist attacks;
•national, international, regional and local economic conditions, including impacts and uncertainty from military conflicts in Iran and the greater Middle East and from trade disputes and tariffs on goods imported to the United States and goods exported to other countries;
•the general level of interest rates;
•potential impacts of inflation;
•potential changes in or interpretation and enforcement of the law, governmental regulations or executive orders that affect us and interpretations of those laws, regulations and executive orders, including changes in real estate and zoning or REIT tax laws, potential increases in real property tax rates and other matters related to operating our business;
•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
•lack of or insufficient amounts of insurance;
•our failure to complete acquisitions and dispositions;
•our failure to successfully integrate acquired properties;
•our ability to qualify and maintain our qualification as a REIT;
•our ability to maintain our current investment grade ratings by Fitch Ratings (“Fitch”), Moody’s Investors Services (“Moody’s”) or from Standard & Poor’s Ratings Services (“S&P”);
•litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes;
•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us;
•impacts to the regional labor markets and inflationary pressures from smaller labor pools, costs of goods and construction, lower consumer demand and impacts to the overall economy related to U.S. Immigration and Customs Enforcement (ICE) arrests and detentions of immigrants within Southern California;
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•an epidemic or pandemic, and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities may implement to address it, which may precipitate or exacerbate one or more of the above-mentioned factors and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period; and
•other events outside of our control.
Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the U.S. federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should carefully review our financial statements and the notes thereto, as well as the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Company Overview
Rexford Industrial Realty, Inc. is a self-administered and self-managed full-service REIT focused on owning and operating industrial properties in Southern California infill markets. We were formed as a Maryland corporation on January 18, 2013, and Rexford Industrial Realty, L.P. (the “Operating Partnership”), of which we are the sole general partner, was formed as a Maryland limited partnership on January 18, 2013. Through our controlling interest in our Operating Partnership and its subsidiaries, we acquire, own, improve, reposition, develop, lease and manage industrial real estate principally located in Southern California infill markets, and, from time to time, acquire or provide mortgage debt secured by industrial zoned property or property suitable for industrial development. We also sell assets as part of our capital allocation strategy. We are organized and conduct our operations to qualify as a REIT under the Code and generally are not subject to federal taxes on our income to the extent we distribute our income to our stockholders and maintain our qualification as a REIT.
As of March 31, 2026, our consolidated portfolio consisted of 414 properties with approximately 50.4 million rentable square feet.
Our goal is to generate attractive risk-adjusted returns for our stockholders by providing superior access to industrial property investments in high-barrier Southern California infill markets. Our target markets provide us with opportunities to acquire both stabilized properties generating favorable cash flow, as well as properties or land parcels where we can enhance returns through value-add repositioning and developments. Scarcity of available space and high barriers limiting new construction of for-lease product all contribute to create superior long-term supply/demand fundamentals within our target infill Southern California industrial property markets. With our vertically integrated operating platform and extensive value-add investment and management capabilities, we believe we are positioned to capitalize upon the opportunities in our markets to achieve our objectives.
Management Update
Effective April 1, 2026, Laura Clark assumed the role of Chief Executive Officer and John Nahas assumed the role of Chief Operating Officer, as part of the Company’s leadership succession plan announced in November 2025. Howard Schwimmer and Michael Frankel ceased serving as Co‑Chief Executive Officers effective March 31, 2026. The Company continues to execute on operating and capital initiatives announced in connection with this transition, including changes to capital allocation priorities, a reduction in development exposure and enhanced operational rigor and synergies.
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2026 Year to Date Highlights
Financial and Operational Highlights
•Net income attributable to common stockholders increased by 28.6% to $87.9 million for the three months ended March 31, 2026, compared to the prior year.
•Core funds from operations (Core FFO)(1) attributable to common stockholders decreased by 0.9% to $139.8 million for the three months ended March 31, 2026, compared to the prior year.
•Net operating income (NOI)(1) decreased by 4.2% to $185.4 million for the three months ended March 31, 2026, compared to the prior year.
•Total portfolio occupancy at March 31, 2026 was 90.7%.
•Same Property Portfolio(2) average occupancy for the three months ended March 31, 2026 was 96.3% and ending occupancy at March 31, 2026 was 96.1%.
•Executed a total of 144 new and renewal leases with a combined 4.1 million rentable square feet, with leasing spreads of (10.0)% on a net effective basis and (15.4)% on a cash basis. Excluding one lease extension covering 1.1 million rentable square feet, leasing spreads were 5.5% on a net effective basis and (1.8)% on a cash basis.
Dispositions
•During the first quarter of 2026, we sold five properties with a combined 314,693 rentable square feet for a total gross sale price of $127.4 million and recognized $26.3 million in gains on sale of real estate. Three of these properties were previously impaired, including additional impairments recorded during the quarter, and were sold without a gain or loss.
•Subsequent to the first quarter of 2026, we sold one property with 101,380 rentable square feet for a gross sale price $16.5 million.
Repositioning & Development
•During the first quarter of 2026, we stabilized our development project located at 12118 Bloomfield Avenue and our repositioning project located at 1315 Storm Parkway, which have a combined 144,889 rentable square feet.
Share Repurchases
•During the first quarter of 2026, we repurchased 5,534,357 shares of our common stock under our stock repurchase program at a weighted average price of $36.14 per share for a total of $200.1 million, including commissions.
__________________________
(1) See “Non-GAAP Supplemental Measures: Funds From Operations” and “Non-GAAP Supplemental Measures: NOI and Cash NOI” included under Item 2 of this Form 10-Q for a definition and reconciliation of Core FFO and NOI from net income and a discussion of why we believe Core FFO and NOI are useful supplemental measures of operating performance.
(2) For a definition of “Same Property Portfolio,” see “Results of Operations” included under Item 2 of this Form 10-Q.
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Factors That May Influence Future Results of Operations
Market and Portfolio Fundamentals
Our operating results depend upon the infill Southern California industrial real estate market.
The infill Southern California industrial real estate sector continues to exhibit favorable long-term supply-demand fundamentals. These high-barrier infill markets are characterized by a relative scarcity of highly functional product, coupled with the limited ability to introduce new supply over the long-term due to high land and development costs, increasing regulatory hurdles with restrictive development constraints and a dearth of developable land. That said, we expect some ongoing volatility within our markets through the near term, principally driven by general macroeconomic and political uncertainty including recent changes in trade and tariff policy, an uncertain interest rate environment, persistent inflation and global geopolitical unrest. According to third-party market data, market rent growth within our infill Southern California markets has decreased approximately 22% from the peak levels reached in mid-2023. This decline follows an average increase of approximately 80% during the pandemic years of 2020 through 2022. Based on the same third-party market data, overall market rents remain approximately 40% above pre-pandemic levels.
Leasing activity across our portfolio was strong during the first quarter, however, market vacancy continues to increase and net absorption remains negative. We recognize that heightened macroeconomic and tariff uncertainty may continue to weigh on tenant decision-making and may influence tenant demand going forward.
Tenant demand has been driven by a wide range of sectors, from consumer products, healthcare and medical products to aerospace and defense, food and beverage, construction and logistics, e-commerce, among other sectors. Our portfolio, which we believe represents prime locations with superior functionality within the largest last-mile logistics distribution market in the nation, is well-positioned to continue to serve our diverse tenant base and attract tenant demand over the long-term.
General Market Conditions
We believe our portfolio’s leasing performance during the first quarter of 2026 has generally outpaced that of the infill markets within which we operate. We believe this performance has been driven by our highly entrepreneurial business model focused on acquiring and improving industrial property in superior locations so that our portfolio reflects a higher level of quality and functionality, on average, as compared to typical available product within the markets within which we operate. We believe that our portfolio, comprised of smaller space sizes averaging 28,000 square feet located entirely within last-mile, infill Southern California locations is well positioned to serve regional consumption and may be less susceptible to changes in global trade flows as compared to large warehouses located within non-infill submarkets. We also believe the quality and entrepreneurial approach demonstrated by our team of real estate professionals actively managing our properties and our tenants enables the potential to outcompete within our markets where we believe competing properties are generally otherwise owned by more passive, less-focused real estate owners. Additionally, supply under construction is far below recent historical levels, and coupled with the increasingly restrictive regulatory environment, the near and long term opportunity to create value through repositioning existing assets is robust.
The following general market conditions have been sourced from third-party market data and do not necessarily reflect the results of our portfolio. For our portfolio specific results see “—Rental Revenues” and “—Results of Operations” below.
In Los Angeles County, vacancy increased quarter-over-quarter to 5.3% and average asking lease rates declined quarter-over-quarter.
In Orange County, vacancy increased quarter-over-quarter to 5.4% and average asking lease rates declined quarter-over-quarter.
In the Inland Empire West, which contains infill markets in which we operate, vacancy increased quarter-over-quarter to 6.4% and average taking lease rates increased quarter-over-quarter. We generally do not focus on properties located within the non-infill Inland Empire East sub-market where there is excess land available for development.
In San Diego, vacancy increased quarter-over-quarter to 6.7% and average asking lease rates declined quarter-over-quarter.
In Ventura County, vacancy increased quarter-over-quarter to 4.4% and average asking lease rates declined quarter-over-quarter.
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Acquisitions, Dispositions and Value-Add Repositioning and Development of Properties
The Company’s growth strategy remains centered on creating long‑term, per‑share FFO and net asset value through disciplined capital allocation, targeted industrial investment within infill Southern California, and the execution of value‑add initiatives across our industrial portfolio. While we did not complete any acquisitions during the prior year and current quarter, our long‑term strategy continues to prioritize opportunities that demonstrate the potential for accretion to Core FFO and net asset value per share that will be evaluated through rigorous underwriting criteria reflecting current market conditions and our cost of capital. We will continue to evaluate and execute upon the repositioning and improvement of properties already within our portfolio to enhance functionality, marketability, future cash‑flow growth and drive value creation that meet our strengthened risk-adjusted return thresholds.
Consistent with our refined capital‑allocation strategy communicated in November 2025, the Company is placing heightened emphasis on maximizing risk‑adjusted returns through a programmatic disposition strategy, recycling capital into higher‑return repositioning projects within our existing portfolio, share repurchases, and selective development and acquisition opportunities aligned with rigorous underwriting standards. These refinements build upon our longstanding focus on infill Southern California industrial real estate, a market that we believe continues to offer superior long‑term fundamentals.
The Company’s historical investment strategy targets industrial property investments demonstrating the potential for accretion in Core FFO and net asset value, both on a per share basis, over the near- to longer-term. These target investments may comprise acquiring leased, stabilized properties as well as properties with value-add opportunities to improve functionality and to deploy our value-driven asset management programs in order to increase cash flow and value. Additionally, from time to time, we may acquire industrial outdoor storage sites, land parcels or properties with excess land for ground-up development projects. Acquisitions may comprise single property investments as well as the purchase of portfolios of properties, with transaction values ranging from approximately $10 million single property investments to portfolios potentially valued in the billions of dollars. The Company’s geographic focus remains infill Southern California. However, from time-to-time, portfolios could be acquired comprising a critical mass of infill Southern California industrial property that could include some assets located in markets outside of infill Southern California. In general, to the extent non-infill-Southern California assets were to be acquired as part of a larger portfolio, the Company may underwrite such investments with the potential to dispose such assets over a certain period of time in order to maximize its core focus on infill Southern California, while endeavoring to take appropriate steps to satisfy REIT safe harbor requirements to avoid prohibited transactions under REIT tax laws. Similarly, while our focus is owning and operating industrial properties in Southern California infill markets, occasionally an acquisition may include non-industrial properties, such as office and other uses, with the intent to reposition or develop the properties into industrial use or to dispose of the non-industrial assets in a manner intended to satisfy REIT safe harbor requirements to avoid prohibited transactions under REIT tax laws.
A key component of our growth strategy has historically been to acquire properties through off-market and lightly marketed transactions that are often operating at below-market occupancy or below-market rent at the time of acquisition or that have near-term lease roll-over, or that provide opportunities to add value through functional or physical repositioning and improvements. Through various repositioning, development, and professional leasing and marketing strategies, we seek to increase the properties’ functionality and attractiveness to prospective tenants and, over time, to stabilize the properties at occupancy rates that meet or exceed market rates.
Repositioning remains a central component of our value‑creation strategy, as we seek to modernize, reconfigure, and enhance existing properties to align with tenant demand and maximize risk‑adjusted returns. A repositioning can provide a range of property improvements. This may include a complete structural renovation of a property whereby we convert large underutilized spaces into a series of smaller and more functional spaces, or it may include the creation of additional square footage, the modernization of the property improvements, the elimination of functional obsolescence, the addition or enhancement of loading areas and truck access, the enhancement of fire-life-safety systems or other accretive improvements, in each case designed to improve the cash flow and value of the property.
We have a number of repositioning properties, which are individually presented in the tables below. A repositioning property that is considered significant is typically defined as a property where a significant amount of space is held vacant in order to implement capital improvements, the cost to complete repositioning work and lease-up is estimated to be greater than $2.5 million and the repositioning and lease-up time frame is estimated to be greater than six months. We also have a range of other spaces in repositioning, that due to their smaller size, relative scope, projected repositioning costs or relatively nominal amount of down-time, are not presented below, however, in the aggregate, may be substantial.
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A repositioning is generally considered complete once the investment is fully or nearly fully deployed and the property is available for occupancy. Because each repositioning effort is unique and determined based on the property, targeted tenants and overall trends in the general market and specific submarket, the timing and effect of the repositioning on our rental revenue and occupancy levels will vary, and, as a result, will affect the comparison of our results of operations from period to period with limited predictability.
A development property is defined as a property where we plan to fully demolish an existing building(s) due to building obsolescence and/or construct a ground-up building on a property with excess or vacant land. At the end of 2025 we re-evaluated our near-term development pipeline to focus on opportunities that satisfy enhanced underwriting criteria. As part of this process, we evaluated alternatives including proceeding with development, postponing construction, or selling the site based on relative risk‑adjusted returns. Following this review, we determined not to proceed with six projects totaling approximately 850,000 square feet of planned development. During the first quarter of 2026, we sold three of these projects, and as of March 31, 2026, two of these projects were classified as held for sale.
As of March 31, 2026, nine of our repositioning or development properties were under construction and 12 of our properties were in the lease-up stage. In addition, following our re-evaluation of the development pipeline, we have five properties as near-term potential future repositioning and development opportunities. The tables below set forth a summary of these properties, as well as the properties that were most recently stabilized in 2026 and 2025, as the timing of these stabilizations have a direct impact on our current and comparative results of operations. We consider a repositioning/development property to be stabilized upon the earlier of (i) reaching 90% occupancy or (ii) one year from the date construction work is completed.
Construction Period(1) | ||||||||||||||||||||||||||||||||||||||
| Property | Submarket | Repositioning/Development | Rentable Square Feet(2) | Start | Completion | Total Property Leased % at 3/31/2026 | ||||||||||||||||||||||||||||||||
Under Construction | ||||||||||||||||||||||||||||||||||||||
14940 Proctor Road | San Gabriel Valley | Development | 160,094 | 4Q-2024 | 2Q-2026 | —% | ||||||||||||||||||||||||||||||||
11234 Rush Street | San Gabriel Valley | Development | 101,728 | 4Q-2024 | 3Q-2026 | —% | ||||||||||||||||||||||||||||||||
3680-3880 Voyager Street (3547-3555 Voyager Street) | South Bay | Development | 67,734 | 1Q-2025 | 3Q-2026 | —% | ||||||||||||||||||||||||||||||||
5235 Hunter Avenue | North Orange County | Development | 121,288 | 1Q-2025 | 2Q-2026 | —% | ||||||||||||||||||||||||||||||||
7815 Van Nuys Boulevard | Greater San Fernando Valley | Development | 78,904 | 2Q-2025 | 4Q-2026 | —% | ||||||||||||||||||||||||||||||||
14400 Figueroa Street (Figueroa & Rosecrans) | South Bay | Repositioning | 56,771 | 3Q-2025 | 1Q-2027 | —% | ||||||||||||||||||||||||||||||||
950 West 190th Street | South Bay | Development | 196,900 | 4Q-2025 | 4Q-2027 | —% | ||||||||||||||||||||||||||||||||
9323 Balboa Avenue | Central San Diego | Development | 177,551 | 4Q-2025 | 2Q-2027 | —% | ||||||||||||||||||||||||||||||||
24935-24955 Avenue Kearny | Greater San Fernando Valley | Repositioning | 66,130 | 4Q-2025 | 2Q-2026 | —% | ||||||||||||||||||||||||||||||||
Total Under Construction | 1,027,100 | |||||||||||||||||||||||||||||||||||||
– See footnotes starting on page 45 –
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Construction Period(1) | ||||||||||||||||||||||||||||||||||||||
| Property | Submarket | Repositioning/Development | Rentable Square Feet(2) | Start | Completion | Total Property Leased % at 3/31/2026 | ||||||||||||||||||||||||||||||||
Lease-Up | ||||||||||||||||||||||||||||||||||||||
9615 Norwalk Boulevard | Mid-Counties | Development | 201,571 | 3Q-2021 | 4Q-2025 | —% | ||||||||||||||||||||||||||||||||
3211-3233 Mission Oaks Boulevard(3)(4) | Ventura | Development | 116,852 | 2Q-2022 | 1Q-2025 | 83% | ||||||||||||||||||||||||||||||||
4416 Azusa Canyon Road | San Gabriel Valley | Development | 129,830 | 4Q-2022 | 2Q-2025 | —% | ||||||||||||||||||||||||||||||||
15010 Don Julian Road | San Gabriel Valley | Development | 219,690 | 1Q-2023 | 4Q-2025 | —% | ||||||||||||||||||||||||||||||||
12772 San Fernando Road(4) | Greater San Fernando Valley | Development | 143,529 | 3Q-2023 | 1Q-2025 | —% | ||||||||||||||||||||||||||||||||
19900 Plummer Street(4) | Greater San Fernando Valley | Development | 79,539 | 3Q-2023 | 1Q-2025 | —% | ||||||||||||||||||||||||||||||||
1500 Raymond Avenue(4) | North Orange County | Development | 136,218 | (5) | 4Q-2023 | 1Q-2025 | —% | |||||||||||||||||||||||||||||||
19301 Santa Fe Avenue | South Bay | Repositioning | LAND | 2Q-2024 | 3Q-2025 | —% | ||||||||||||||||||||||||||||||||
14955 Salt Lake Avenue | San Gabriel Valley | Repositioning | 45,205 | 4Q-2024 | 3Q-2025 | —% | ||||||||||||||||||||||||||||||||
8985 Crestmar Point | Central San Diego | Repositioning | 53,395 | 4Q-2024 | 3Q-2025 | —% | ||||||||||||||||||||||||||||||||
9455 Cabot Drive | Central San Diego | Repositioning | 97,510 | 2Q-2025 | 4Q-2025 | —% | ||||||||||||||||||||||||||||||||
1175 Aviation Place | Greater San Fernando Valley | Repositioning | 93,202 | 3Q-2025 | 4Q-2025 | —% | ||||||||||||||||||||||||||||||||
Total Lease-up | 1,316,541 | |||||||||||||||||||||||||||||||||||||
Property | Submarket | Repositioning/Development | Projected Rentable Square Feet | Estimated Construction Start Period | ||||||||||||||||||||||
Near-Term Potential Future Repositioning and Development: | ||||||||||||||||||||||||||
16425 Gale Avenue | San Gabriel Valley | Development | 325,800 | 2Q-2026 | ||||||||||||||||||||||
9400-9500 Santa Fe Springs Road(6) | Mid-Counties | Repositioning | 184,270 | 2Q-2026 | ||||||||||||||||||||||
3100 Fujita Street | South Bay | Repositioning | 91,516 | 3Q-2026 | ||||||||||||||||||||||
9000 Airport Boulevard | South Bay | Development | 418,000 | 4Q-2026 | ||||||||||||||||||||||
4181 Ruffin Road | Central San Diego | Development | 220,943 | 4Q-2026 | ||||||||||||||||||||||
Total Near-Term Potential Future Repositioning and Development | 1,240,529 | |||||||||||||||||||||||||
– See footnotes starting on page 45 –
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Property | Market | Stabilized Rentable Square Feet | Period Stabilized | |||||||||||||||||
2026 Stabilizations(7) | ||||||||||||||||||||
12118 Bloomfield Avenue | LA | 107,045 | 1Q-2026 | |||||||||||||||||
1315 Storm Parkway(8) | LA | 37,844 | 1Q-2026 | |||||||||||||||||
Total 2026 Stabilized | 144,889 | |||||||||||||||||||
2025 Stabilizations(7) | ||||||||||||||||||||
| 4039 Calle Platino (North County SD) | SD | 73,807 | 1Q-2025 | |||||||||||||||||
| 29120 Commerce Center Drive (SF Valley) | LA | 135,258 | 1Q-2025 | |||||||||||||||||
| East 27th Street (Central LA) | LA | 126,563 | 1Q-2025 | |||||||||||||||||
| 122-125 N. Vinedo Avenue (SF Valley) | LA | 48,520 | 1Q-2025 | |||||||||||||||||
| 29125 Avenue Paine (SF Valley) | LA | 176,107 | 1Q-2025 | |||||||||||||||||
| 218 Turnbull Canyon (SG Valley) | LA | 191,153 | 2Q-2025 | |||||||||||||||||
| 1901 Via Burton (North OC) | OC | 139,449 | 2Q-2025 | |||||||||||||||||
11308-11350 Penrose Street (SF Valley)(9) | LA | 71,547 | 3Q-2025 | |||||||||||||||||
| 1020 Bixby Drive (SG Valley) | LA | 57,600 | 3Q-2025 | |||||||||||||||||
| Harcourt & Susana (South Bay) | LA | 34,000 | 3Q-2025 | |||||||||||||||||
| 8888 Balboa Avenue (Central SD) | SD | 123,492 | 3Q-2025 | |||||||||||||||||
| 6027 Eastern Avenue (Central LA) | LA | 94,140 | 3Q-2025 | |||||||||||||||||
3071 Coronado Street (North OC)(9) | OC | 105,173 | 3Q-2025 | |||||||||||||||||
| 2390-2444 American Way (North OC) | OC | 100,483 | 3Q-2025 | |||||||||||||||||
14434-14527 San Pedro Street (South Bay)(10) | LA | 58,225 | 4Q-2025 | |||||||||||||||||
| 3935-3949 Heritage Oak Court (Ventura) | VC | 190,031 | 4Q-2025 | |||||||||||||||||
| 800 Sandhill Avenue (17000 Kingsview Avenue) (South Bay) | LA | 100,121 | 4Q-2025 | |||||||||||||||||
| 9920-10020 Pioneer Boulevard (Mid-Counties) | LA | 163,435 | 4Q-2025 | |||||||||||||||||
Rancho Pacifica - Building 5 (South Bay)(11) | LA | 76,553 | 4Q-2025 | |||||||||||||||||
| 17907 Figueroa Street (South Bay) | LA | 76,468 | 4Q-2025 | |||||||||||||||||
| 21515 Western Avenue (South Bay) | LA | 83,740 | 4Q-2025 | |||||||||||||||||
Total 2025 Stabilized | 2,225,865 | |||||||||||||||||||
(1)The estimated construction start period is the period we anticipate starting physical construction on a project. Prior to physical construction, we engage in pre-construction activities, which include design work, securing permits or entitlements, site work, and other necessary activities preceding construction. The estimated completion period is our current estimate of the period in which we will have substantially completed a project and the project is made available for occupancy. We expect to update our timing estimates on a quarterly basis. The estimated construction period is subject to change as a result of a number of factors including but not limited to permit requirements, delays in construction (including delays related to supply chain backlogs), changes in scope, and other unforeseen circumstances.
(2)Rentable square feet is the actual rentable square footage that is subject to repositioning at the property/building, and may be less than the total rentable square footage of the entire property or particular building(s) under repositioning. For developments, rentable square feet represents the estimated rentable square footage of the project upon completion of the development.
(3)As of March 31, 2026, the entire project includes 526,069 rentable square feet, comprised of: (i) 3211 Mission Oaks Boulevard, a newly constructed building totaling 116,852 rentable square feet, and (ii) 3233 Mission Oaks Boulevard, with 409,217 rentable square feet which were not redeveloped. Site improvements were completed across the entire project. The rentable square feet and property leased percentage apply only to 3211 Mission Oaks Boulevard.
(4)As of the first quarter of 2026, 3211-3233 Mission Oaks Boulevard, 12772 San Fernando Road, 19900 Plummer Street, and 1500 Raymond Avenue are considered stabilized, as each reached one year from construction completion, but remain in lease‑up for presentation purposes because the properties have not yet achieved 90% occupancy.
(5)1500 Raymond Avenue contains one acre of excess paved land.
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(6)9400-9500 Santa Fe Springs Road totals 595,304 rentable square feet and the proposed repositioning project pertains to work at only one of the units, totaling 184,270 rentable square feet.
(7)We consider a repositioning or development property to be stabilized upon the earlier of (i) reaching 90% occupancy or (ii) one year from the date construction work is completed.
(8)As of the fourth quarter of 2025, 1315 Storm Parkway was considered stabilized, as it reached one year from construction completion, but remained in lease‑up for presentation purposes because the property had not yet achieved 90% occupancy. In the first quarter of 2026, the project achieved full occupancy and, for presentation purposes, is reflected above as stabilized in the first quarter of 2026.
(9)As of the first quarter of 2025, 11308–11350 Penrose Street and 3071 Coronado were considered stabilized, as each reached one year from construction completion, but remained in lease‑up for presentation purposes because the properties had not yet achieved 90% occupancy. In the third quarter of 2025, both projects achieved full occupancy and, for presentation purposes, are reflected above as stabilized in the third quarter of 2025.
(10)14434-14527 San Pedro Street is a low coverage site with 58,225 rentable square feet of buildings on 335,905 square feet, or 7.7 acres, of land.
(11)Rancho Pacifica Building 5 is located at 2370-2398 Pacifica Place and comprises one building totaling 51,594 rentable square feet, out of six buildings at our Rancho Pacifica Park property, which has a total of 1,111,885 rentable square feet. We demolished the existing building and constructed a new building comprising approximately 76,553 rentable square feet in its place.
Capitalized Costs
Properties that are nonoperational as a result of repositioning or development activity may qualify for varying levels of interest, insurance and real estate tax capitalization during the development and construction period. An increase in our repositioning and development activities resulting from value-add acquisitions could cause an increase in the asset balances qualifying for interest, insurance and tax capitalization in future periods. We capitalized $7.4 million of interest expense and $2.4 million of insurance and real estate tax expenses during the three months ended March 31, 2026, respectively, related to our repositioning and development projects.
Construction Costs and Timing
Currently proposed trade and other political policies may lead to increased construction materials and labor costs, which when combined with longer lead times for governmental approvals and entitlements, have the potential to increase budgeted and actual construction costs and may cause delays in starting and completing certain development projects. Additional increases in costs, further delays or declining market rents could result in a lower expected yield on our development projects, which could negatively impact our future earnings.
Rental Revenues
Our operating results depend primarily upon generating rental revenue from the properties in our portfolio. The amount of rental revenue generated by these properties is affected by our ability to maintain or increase occupancy levels and rental rates at our properties, which will depend upon our ability to lease vacant space and re-lease expiring space at favorable rates.
Occupancy Rates
As of March 31, 2026, our consolidated portfolio, inclusive of space in repositioning as described in the subsequent paragraph, was approximately 90.7% occupied, while our stabilized consolidated portfolio exclusive of such space was approximately 95.2% occupied. Additionally, our improved land and industrial outdoor storage (IOS) sites, totaling approximately 8.3 million land square feet or 189.7 acres, were 92.8% occupied at March 31, 2026. We believe the opportunity to increase occupancy at our properties will continue to be an important driver of future revenue growth, particularly as repositioning and development projects are completed and move through the lease-up phase.
As summarized in the tables under “—Acquisitions, Dispositions and Value-Add Repositioning and Development of Properties” above, as of March 31, 2026, nine of our properties with a combined 1.0 million square feet of rentable area at completion are under current repositioning or development, 12 properties with a combined 1.3 million square feet of rentable area are in lease-up, and we have a near-term pipeline of five repositioning and development projects with a combined 1.2 million square feet of rentable area at completion. Additionally, we have 0.6 million rentable square feet of other repositioning projects. Vacant space at these properties is concentrated in our Los Angeles, Orange County, San Bernardino and San Diego markets and represents 4.8% of our total consolidated portfolio square footage as of March 31, 2026. Including vacant space at
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these properties, our weighted average occupancy rate as of March 31, 2026 in our Los Angeles, Orange County, San Bernardino and San Diego markets was 89.8%, 92.2%, 91.2% and 90.7%, respectively. Excluding vacant space at these properties, our weighted average occupancy rate as of March 31, 2026, in these markets was 95.4%, 96.8%, 93.8% and 95.9%, respectively. We believe that an important portion of our long-term future growth will come from the completion and lease-up of projects currently under or scheduled for repositioning/development, as well as from select opportunities that meet established return thresholds, whether within our existing portfolio or through new investments, which may vary from period to period subject to market conditions.
The occupancy rate of properties not undergoing repositioning is affected by regional and local economic conditions in our Southern California infill markets. In the current market environment, our near‑term leasing focus for these operating properties is on preserving occupancy and maintaining cash flow. Although there has been a post-pandemic normalization of market rates and vacancy over the last few years, the Los Angeles, Orange County, San Bernardino–Inland Empire West, San Diego and Ventura markets are well-positioned for the long-term due to fundamental demand drivers and barriers for new supply. Although we cannot predict how our markets may perform in future periods, we believe that general market conditions will continue to offer the long-term opportunity to increase occupancy and rental rates at our properties which will be an important driver of future revenue growth.
Leasing Activity and Rental Rates
The following tables set forth our leasing activity for new and renewal leases for the three months ended March 31, 2026:
| New Leases | ||||||||||||||||||||||||||||||||||||||
| Quarter | Number of Leases | Building Rentable Square Feet | Weighted Average Lease Term (in years) | Net Effective Rent Per Square Foot(1) | Net Effective Leasing Spreads(2)(4) | Cash Leasing Spreads(3)(4) | ||||||||||||||||||||||||||||||||
| Q1-2026 | 59 | 1,296,230 | 4.1 | $ | 14.78 | (8.7) | % | (12.8) | % | |||||||||||||||||||||||||||||
| Renewal Leases | Expired Leases | Retention %(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter | Number of Leases | Building Rentable Square Feet | Weighted Average Lease Term (in years) | Net Effective Rent Per Square Foot(1) | Net Effective Leasing Spreads(2)(6) | Cash Leasing Spreads(3)(6) | Number of Leases | Rentable Square Feet(7) | Rentable Square Feet | |||||||||||||||||||||||||||||||||||||||||||||||
| Q1-2026 | 85 | 2,829,822 | 3.0 | $ | 14.70 | (10.3) | % | (15.9) | % | 152 | 4,638,894 | 64.5 | % | |||||||||||||||||||||||||||||||||||||||||||
Excluding One Lease Extension:(8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Q1-2026 | 84 | 1,727,982 | 2.9 | $ | 14.66 | 11.8 | % | 3.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Net effective rent per square foot is the average base rent calculated in accordance with GAAP, over the term of the lease, expressed in dollars per square foot per year. Includes all new and renewal leases that were executed during the quarter.
(2)Calculated as the change between net effective rents for new or renewal leases and the expiring net effective rents (excluding the impact of amortization of intangible assets or liabilities) on the expiring leases for the same space.
(3)Calculated as the change between starting cash rents, excluding any abatements, for new or renewal leases and the expiring cash rents on the expiring leases for the same space.
(4)The net effective and cash re-leasing spreads for new leases executed during the three months ended March 31, 2026, exclude 23 leases aggregating 747,409 rentable square feet for which there was no comparable lease data. Of these 23 excluded leases, five leases aggregating 268,702 rentable square feet were recently repositioned/redeveloped space. Comparable leases generally exclude: (i) space that has never been occupied under our ownership, (ii) repositioned/developed space, including space in pre-development/entitlement process, (iii) space that has been vacant for over one year or (iv) space with lease terms shorter than 12 months.
(5)Retention is calculated as renewal lease square footage plus relocation/expansion square footage, divided by the square footage of leases expiring during the period. Retention excludes square footage related to the following: (i) expiring leases associated with space that is placed into repositioning (including “other repositioning projects”) after the tenant vacates, (ii) early terminations with pre-negotiated replacement leases and (iii) move outs where space is directly leased by subtenants.
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(6)The net effective and cash re-leasing rent spreads for renewal leases executed during the three months ended March 31, 2026, exclude one lease with 119,898 rentable square feet for which there was no comparable lease data. Comparable leases generally exclude space with lease terms shorter than 12 months or space in pre-development/entitlement process.
(7)Includes leases totaling 152,417 rentable square feet that expired during the three months ended March 31, 2026, for which the space has been or will be placed into repositioning (including “other repositioning projects”) or development.
(8)Reflects our renewal leasing activity, weighted average lease term, effective rent per square foot and leasing spreads excluding a 1.1 million square foot lease extension with Tireco, Inc. at 10545 Production Avenue. The current lease, which was originally set to expire in January 2027, was extended through April 2030, commencing February 1, 2027. The above-market prior lease rate was reset to market, representing net effective and cash leasing spreads of (31.0)% and (33.5)%, respectively. The lease includes annual contractual increases of 2.75% and three months of free rent in 2027, in addition to a conversion to a gross lease from a NNN lease, which enables us to capture the benefit from any potential reduction in real estate property taxes. This lease extension is not expected to be indicative of our future portfolio leasing spreads given the unique size of the premises, adjacent competitive supply, and deal structure.
Our leasing activity is impacted both by our repositioning and development efforts, as well as by market conditions. While we reposition a property, its space may become unavailable for leasing until completion of our repositioning efforts. As of March 31, 2026, we have nine projects under construction that are expected to become available for leasing beginning in the second quarter of 2026 through the fourth quarter of 2027. We expect these properties to have positive impacts on our leasing activity and revenue generation as we complete our value-add plans and place these properties in service.
Scheduled Lease Expirations
Our ability to re-lease space subject to expiring leases is affected by economic and competitive conditions in our markets and by the relative desirability of our individual properties, which may impact our results of operations. The following table sets forth a summary schedule of lease expirations for leases in place as of March 31, 2026, for each of the 10 full and partial calendar years beginning with 2026 and thereafter, plus space that is available and under current repositioning.
| Year of Lease Expiration | Number of Leases Expiring | Total Rentable Square Feet(1) | Percentage of Total Owned Square Feet | Annualized Base Rent(2) | Percentage of Total Annualized Base Rent(3) | Annualized Base Rent per Square Foot(4) | ||||||||||||||||||||||||||||||||
Vacant(5) | — | 2,281,795 | 4.5 | % | $ | — | — | % | $ | — | ||||||||||||||||||||||||||||
Repositioning/Development(6) | — | 2,426,715 | 4.8 | % | — | — | % | $ | — | |||||||||||||||||||||||||||||
| MTM Tenants | 11 | 177,759 | 0.4 | % | 3,081 | 0.4 | % | $ | 17.33 | |||||||||||||||||||||||||||||
Remainder of 2026 | 276 | 5,325,060 | 10.6 | % | 96,338 | 12.0 | % | $ | 18.09 | |||||||||||||||||||||||||||||
| 2027 | 360 | 6,455,107 | 12.8 | % | 109,449 | 13.6 | % | $ | 16.96 | |||||||||||||||||||||||||||||
| 2028 | 294 | 7,068,591 | 14.0 | % | 136,423 | 16.9 | % | $ | 19.30 | |||||||||||||||||||||||||||||
| 2029 | 243 | 6,438,819 | 12.8 | % | 116,910 | 14.4 | % | $ | 18.16 | |||||||||||||||||||||||||||||
| 2030 | 141 | 7,032,334 | 13.9 | % | 118,129 | 14.6 | % | $ | 16.80 | |||||||||||||||||||||||||||||
| 2031 | 113 | 7,649,344 | 15.2 | % | 112,085 | 13.9 | % | $ | 14.65 | |||||||||||||||||||||||||||||
| 2032 | 32 | 1,772,969 | 3.5 | % | 35,270 | 4.4 | % | $ | 19.89 | |||||||||||||||||||||||||||||
| 2033 | 16 | 785,478 | 1.6 | % | 14,124 | 1.8 | % | $ | 17.98 | |||||||||||||||||||||||||||||
| 2034 | 7 | 355,445 | 0.7 | % | 6,992 | 0.9 | % | $ | 19.67 | |||||||||||||||||||||||||||||
| 2035 | 8 | 462,072 | 0.9 | % | 9,633 | 1.2 | % | $ | 20.85 | |||||||||||||||||||||||||||||
| Thereafter | 36 | 2,213,824 | 4.3 | % | 47,696 | 5.9 | % | $ | 21.54 | |||||||||||||||||||||||||||||
| Total Consolidated Portfolio | 1,537 | 50,445,312 | 100.0 | % | $ | 806,130 | 100.0 | % | $ | 17.63 | ||||||||||||||||||||||||||||
(1)Represents the contracted building square footage upon expiration.
(2)Annualized base rent (“ABR”) is calculated as monthly contracted base rent (before rent abatements) per the terms of such lease, as of March 31, 2026, multiplied by 12, and then aggregated by year of lease expiration. Excludes tenant reimbursements. Amounts in thousands.
(3)Calculated as ABR set forth in this table divided by ABR for the total portfolio as of March 31, 2026.
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(4)Calculated as ABR for such leases divided by the occupied building square feet for such leases as of March 31, 2026. Excluding ABR of $41.0 million associated with improved land and industrial outdoor storage (IOS) leases and $3.0 million associated with cellular tower, solar and parking lot leases, ABR per building square foot is $16.74.
(5)Represents vacant space (not under repositioning/development) as of March 31, 2026. Includes leases aggregating 262,984 rentable square feet that had been signed but had not yet commenced as of March 31, 2026.
(6)Represents vacant space at properties that were classified as repositioning (including “other repositioning projects”), development or lease-up as of March 31, 2026. Includes leases aggregating 59,052 rentable square feet that had been signed but had not yet commenced as of March 31, 2026.
As of March 31, 2026, in addition to 2.3 million rentable square feet of currently available space in our portfolio and approximately 2.4 million rentable square feet of vacant space under current repositioning/development, leases representing 10.6% and 12.8% of the aggregate rentable square footage of our portfolio are scheduled to expire during the remainder of 2026 and 2027, respectively. During the three months ended March 31, 2026, we renewed 85 leases for 2.8 million rentable square feet, resulting in a retention rate of 64.5%. During the three months ended March 31, 2026, new and renewal leases had a weighted average term of 4.1 and 3.0, respectively.
Conditions in Our Markets
The properties in our portfolio are located primarily in Southern California infill markets. Positive or negative changes in economic or other conditions, trade policy, high or persistent inflation and adverse weather conditions and natural disasters in this market may affect our overall performance.
Property Expenses
Our property expenses generally consist of utilities, real estate taxes, insurance, site repair and maintenance costs, and the allocation of overhead costs. For the majority of our properties, our property expenses are recovered, in part, by either the triple net provisions or modified gross expense reimbursements in tenant leases. The majority of our leases also include contractual three percent or greater annual rental rate increases meant, in part, to help mitigate potential increases in property expenses over time. However, the terms of our leases vary, and, in some instances, we may absorb property expenses. Our overall financial results will be impacted by the extent to which we are able to pass-through property expenses to our tenants.
Taxable REIT Subsidiary
As of March 31, 2026, our Operating Partnership indirectly and wholly owns Rexford Industrial Realty and Management, Inc., which we refer to as our services company. We have elected, together with our services company, to treat our services company as a taxable REIT subsidiary for federal income tax purposes. A taxable REIT subsidiary generally may provide non-customary and other services to our tenants and engage in activities that we or our subsidiaries (other than a taxable REIT subsidiary) may not engage in directly without adversely affecting our qualification as a REIT, provided a taxable REIT subsidiary may not operate or manage a lodging facility or health care facility or provide rights to any brand name under which any lodging facility or health care facility is operated. We may form additional taxable REIT subsidiaries in the future, and our Operating Partnership may contribute some or all of its interests in certain wholly owned subsidiaries or their assets to our services company. Any income earned by our taxable REIT subsidiaries will not be included in our taxable income for purposes of the 75% or 95% gross income tests, except to the extent such income is distributed to us as a dividend, in which case such dividend income will qualify under the 95%, but not the 75%, gross income test. Because a taxable REIT subsidiary is subject to federal income tax, and state and local income tax (where applicable) as a regular C-corporation, the income earned by our taxable REIT subsidiaries generally will be subject to an additional level of tax as compared to the income earned by our other subsidiaries. However, our services company has a cumulative unrecognized net operating loss carryforward and therefore there is no income tax provision for the three months ended March 31, 2026 and 2025. Additionally, our services company had minimal activity during these periods.
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses for the reporting periods. Actual amounts may differ from these estimates and assumptions. Management evaluates these estimates on an ongoing basis, based upon information currently available and on various assumptions that it believes are reasonable as of the date hereof. In addition, other companies in similar businesses may use different estimation policies and methodologies, which may affect the comparability of our results of operations and financial condition to those of other companies.
In our Annual Report on Form 10-K for the year ended December 31, 2025, we identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements. We have not made any material changes to our critical accounting policies and estimates during the period covered by this report.
Results of Operations
Our consolidated results of operations are often not comparable from period to period due to the effect of (i) property acquisitions, (ii) property dispositions and (iii) properties that are taken out of service for repositioning or development during the comparative reporting periods. Our “Total Portfolio” represents all of the properties owned during the reported periods. To eliminate the effect of changes in our Total Portfolio due to acquisitions, dispositions, and repositioning/development and to highlight the operating results of our on-going business, we have separately presented the results of our “Same Property Portfolio.”
For the three months ended March 31, 2026 and 2025, our Same Property Portfolio includes all properties in our industrial portfolio that were wholly-owned by us for the period from January 1, 2025 through March 31, 2026, and that were stabilized prior to January 1, 2025, which consisted of buildings aggregating approximately 41.7 million rentable square feet at 342 of our properties. Results for our Same Property Portfolio exclude properties that were sold during the period from January 1, 2025 through March 31, 2026, properties or buildings classified as current or future repositioning (including select buildings in “other repositioning”), development or lease-up during 2025 or 2026, management and leasing services revenue, interest income, interest expense, other income and expenses, and corporate general and administrative expenses.
In addition to the properties included in our Same Property Portfolio, our Total Portfolio includes the 12 properties aggregating approximately 0.9 million rentable square feet that were sold between January 1, 2025 and March 31, 2026.
As of March 31, 2026 and March 31, 2025, our Same Property Portfolio occupancy was approximately 96.1% and 94.5%, respectively. For the three months ended March 31, 2026 and March 31, 2025, our Same Property Portfolio weighted average occupancy was approximately 96.3% and 94.7%, respectively.
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Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
The following table summarizes the historical results of operations for our Same Property Portfolio and Total Portfolio for the three months ended March 31, 2026 and 2025 (dollars in thousands):
| Same Property Portfolio | Total Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | Increase/(Decrease) | % | Three Months Ended March 31, | Increase/(Decrease) | % | |||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||||||||||||||
| REVENUES | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 211,391 | $ | 207,919 | $ | 3,472 | 1.7 | % | $ | 242,141 | $ | 248,821 | $ | (6,680) | (2.7) | % | ||||||||||||||||||||||||||||||||||
| Management and leasing services | — | — | — | — | % | — | 142 | (142) | (100.0) | % | ||||||||||||||||||||||||||||||||||||||||
| Interest income | — | — | — | — | % | 2,937 | 3,324 | (387) | (11.6) | % | ||||||||||||||||||||||||||||||||||||||||
| TOTAL REVENUES | 211,391 | 207,919 | 3,472 | 1.7 | % | 245,078 | 252,287 | (7,209) | (2.9) | % | ||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Property expenses | 47,304 | 45,350 | 1,954 | 4.3 | % | 56,763 | 55,261 | 1,502 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||
| General and administrative | — | — | — | — | % | 14,925 | 19,868 | (4,943) | (24.9) | % | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 60,311 | 64,672 | (4,361) | (6.7) | % | 72,933 | 86,740 | (13,807) | (15.9) | % | ||||||||||||||||||||||||||||||||||||||||
| TOTAL OPERATING EXPENSES | 107,615 | 110,022 | (2,407) | (2.2) | % | 144,621 | 161,869 | (17,248) | (10.7) | % | ||||||||||||||||||||||||||||||||||||||||
OTHER (EXPENSES) INCOME | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other income | — | — | — | — | % | 1,350 | — | 1,350 | — | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses | — | — | — | — | % | (102) | (2,239) | 2,137 | (95.4) | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | % | (26,600) | (27,288) | 688 | (2.5) | % | ||||||||||||||||||||||||||||||||||||||||
Impairment of real estate | — | — | — | (6,824) | — | (6,824) | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Gains on sale of real estate | — | — | — | — | % | 26,281 | 13,157 | 13,124 | 99.7 | % | ||||||||||||||||||||||||||||||||||||||||
TOTAL OTHER (EXPENSES) INCOME | — | — | — | — | % | (5,895) | (16,370) | 10,475 | (64.0) | % | ||||||||||||||||||||||||||||||||||||||||
| NET INCOME | $ | 103,776 | $ | 97,897 | $ | 5,879 | 6.0 | % | $ | 94,562 | $ | 74,048 | $ | 20,514 | 27.7 | % | ||||||||||||||||||||||||||||||||||
Rental Income
In the following table, we present the components of rental income for the three months ended March 31, 2026 and March 31, 2025, which includes rental revenue, tenant reimbursements and other income related to leases. The below presentation of rental income is not, and is not intended to be, a presentation in accordance with GAAP. We are presenting this information because we believe it is frequently used by management, investors, securities analysts and other interested parties to understand and evaluate the Company’s performance.
| Same Property Portfolio | Total Portfolio | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | Increase/(Decrease) | % | Three Months Ended March 31, | Increase/(Decrease) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Category | 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||||||||||||||||
Rental revenue(1) | $ | 175,232 | $ | 171,506 | $ | 3,726 | 2.2 | % | $ | 199,927 | $ | 206,091 | $ | (6,164) | (3.0) | % | ||||||||||||||||||||||||||||||||||
Tenant reimbursements(2) | 35,740 | 35,709 | 31 | 0.1 | % | 41,728 | 41,856 | (128) | (0.3) | % | ||||||||||||||||||||||||||||||||||||||||
Other income(3) | 419 | 704 | (285) | (40.5) | % | 486 | 874 | (388) | (44.4) | % | ||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 211,391 | $ | 207,919 | $ | 3,472 | 1.7 | % | $ | 242,141 | $ | 248,821 | $ | (6,680) | (2.7) | % | ||||||||||||||||||||||||||||||||||
Our Same Property Portfolio and Total Portfolio rental income increased by $3.5 million, or 1.7%, and $6.7 million, or 2.7%, respectively, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, for the reasons described below:
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(1) Rental Revenue
Our Same Property Portfolio and Total Portfolio rental revenue increased by $3.7 million, or 2.2%, and decreased by $6.2 million, or 3.0%, respectively, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in our Same Property Portfolio rental revenue is primarily due to higher average rental rates on leases in effect during the period, primarily reflecting the continued impact of new and renewal leases executed in prior periods at higher rental rates and an increase in the weighted average occupancy of the portfolio. The decrease in our Total Portfolio rental revenue was impacted by $8.9 million of net lease termination income recognized in the first quarter of 2025, consisting of lump-sum lease termination fees and write-offs of deferred rent receivables and below-market lease intangibles associated with those terminations, with no significant comparable lease termination income recognized in the current quarter, as well as reduced rental revenue attributable to the disposition of 12 properties between January 1, 2025 and March 31, 2026.
(2) Tenant Reimbursements
Our Same Property Portfolio tenant reimbursements revenue increased by $31 thousand, or 0.1%, and our Total Portfolio tenant reimbursements revenue decreased by $0.1 million, or 0.3%, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in our Same Property Portfolio tenant reimbursements revenue is primarily due to higher reimbursable property tax expenses and higher billings for other reimbursable expenses, partially offset by approximately $0.9 million of operating expense concessions provided to a single tenant during the first quarter of 2026 and lower reimbursable insurance expenses. The decrease in our Total Portfolio tenant reimbursements revenue was impacted by reduced tenant reimbursements attributable to the disposition of 12 properties between January 1, 2025 and March 31, 2026, partially offset by higher tenant reimbursements primarily related to reimbursable property tax expenses at other properties not included in our Same Property Portfolio.
(3) Other Income
Our Same Property Portfolio and Total Portfolio other income decreased by $0.3 million, or 40.5%, and $0.4 million, or 44.4%, respectively, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a decrease in miscellaneous income.
Management and Leasing Services
Our Total Portfolio management and leasing services revenue is zero for the three months ended March 31, 2026, compared to $0.1 million for the three months ended March 31, 2025, reflecting the termination of the Company’s management and leasing services agreements effective January 1, 2026.
Interest Income
Interest income decreased by $0.4 million, or 11.6%, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a decrease in the average cash balance invested in money market accounts.
Property Expenses
Our Same Property Portfolio and Total Portfolio property expenses increased by $2.0 million, or 4.3%, and $1.5 million, or 2.7%, respectively, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in our Same Property Portfolio property expenses is primarily due to increases in property tax expenses, repairs and maintenance expenses, and allocated overhead costs, partially offset by a decrease in insurance expenses. The increase in our Total Portfolio property expenses was impacted by reduced property expenses attributable to the disposition of 12 properties between January 1, 2025 and March 31, 2026, partially offset by higher property tax expenses at other properties not included in our Same Property Portfolio.
General and Administrative
Our Total Portfolio general and administrative expenses decreased by $4.9 million, or 24.9%, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to lower non-cash equity compensation expense following the executive leadership transition and related transition and separation arrangements implemented in late 2025.
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Depreciation and Amortization
Our Same Property Portfolio and Total Portfolio depreciation and amortization expense decreased by $4.4 million, or 6.7%, and $13.8 million, or 15.9%, respectively, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily due to lower depreciation expense resulting from acquisition‑related in‑place lease intangibles becoming fully depreciated at certain of our properties subsequent to January 1, 2025, as well as a $4.0 million write‑off of acquisition‑related in‑place lease costs recorded in the first quarter of 2025. These decreases were partially offset by higher depreciation expense related to capital improvements placed into service subsequent to January 1, 2025 and higher amortization of deferred leasing costs. The larger decrease in our Total Portfolio depreciation and amortization expense also reflects $4.1 million of building and improvement write‑offs recorded in the first quarter of 2025 and lower depreciation and amortization expense attributable to the disposition of 12 properties between January 1, 2025 and March 31, 2026.
Other Income
During the three months ended March 31, 2026, we recognized $1.4 million in other income related to the sale of solar tax credits. No comparable income was recognized during the prior year period.
Other Expenses
Our Total Portfolio other expenses decreased by $2.1 million from $2.2 million for the three months ended March 31, 2025 to $0.1 million for the three months ended March 31, 2026, primarily due to $1.5 million of severance costs associated with a workforce reduction in the first quarter of 2025, a $0.4 million decrease in construction demolition costs and a $0.3 million decrease in write-offs of construction-related costs related to cancelled projects.
Interest Expense
Our Total Portfolio interest expense decreased by $0.7 million, or 2.5%, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a $1.1 million decrease due to the repayment of the $100 Million Notes in August 2025 and a $0.7 million decrease resulting from new interest rate swaps on our $400.0 million term loan facility, which became effective on July 1, 2025 and carry lower fixed rates than the swaps they replaced. These decreases were partially offset by a $0.9 million increase due to lower capitalized interest related to repositioning and development activities and a $0.2 million increase resulting from the amortization of deferred costs related to the amendment of the credit agreement in the second quarter of 2025.
Impairment of Real Estate
During the three months ended March 31, 2026, we recognized additional impairment charges totaling $6.8 million related to five development properties for which the expected holding period was shortened in the fourth quarter of 2025 and a plan to pursue their sale was adopted. The impairment charges primarily reflect incremental write‑downs for estimated selling costs and, for one property, a slight revision to the contracted sales price. During the quarter, three of these properties were sold and two additional properties were classified as held for sale as of March 31, 2026. No impairment charges were recognized during the three months ended March 31, 2025.
Gains on Sale of Real Estate
During the three months ended March 31, 2026, we recognized gains on sale of real estate of $26.3 million from the disposition of five properties that were sold for an aggregate gross sales price of $127.4 million, with no gain or loss recognized on the sale of three of these properties, as their carrying values had been reduced to their sales prices through impairment charges recognized in prior and current periods. During the three months ended March 31, 2025, we recognized gains on sale of real estate of $13.2 million from the disposition of one property that was sold for a gross sales price of $52.5 million.
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Non-GAAP Supplemental Measure: Funds From Operations and Core Funds From Operations
We calculate funds from operations (“FFO”) attributable to common stockholders 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 accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable operating property or assets incidental to our business, impairment losses of depreciable operating property or assets incidental to our business, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated 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, and asset impairments, 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.
We calculate “Core FFO” by adjusting FFO for non-comparable items outlined in the reconciliation below. We believe that Core FFO is a useful supplemental measure and that by adjusting for items that are not considered by us to be part of our on-going operating performance, provides a more meaningful and consistent comparison of our operating and financial performance period-over-period. Because these adjustments have a real economic impact on our financial condition and results from operations, the utility of Core FFO as a measure of our performance is limited. Other REITs may not calculate Core FFO in a consistent manner. Accordingly, our Core FFO may not be comparable to other REITs' core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance. “Company share of Core FFO” in the table below reflects Core FFO attributable to common stockholders, which excludes amounts allocable to noncontrolling interests, participating securities and preferred stockholders.
The following table sets forth a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to FFO and Core FFO (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | 94,562 | $ | 74,048 | |||||||
| Adjustments: | |||||||||||
| Depreciation and amortization | 72,933 | 86,740 | |||||||||
Impairment of real estate | 6,824 | — | |||||||||
| Gains on sale of real estate | (26,281) | (13,157) | |||||||||
| Funds From Operations (FFO) | $ | 148,038 | $ | 147,631 | |||||||
| Adjustments: | |||||||||||
Acquisition expenses(1) | — | 79 | |||||||||
Non-capitalizable demolition costs(1) | — | 365 | |||||||||
Severance costs(1)(2) | — | 1,483 | |||||||||
Other nonrecurring expenses(1)(3) | 62 | — | |||||||||
| Core FFO | $ | 148,100 | $ | 149,558 | |||||||
| Less: preferred stock dividends | (2,314) | (2,314) | |||||||||
Less: Core FFO attributable to noncontrolling interests(4) | (5,284) | (5,461) | |||||||||
Less: Core FFO attributable to participating securities(5) | (744) | (760) | |||||||||
| Company share of Core FFO | $ | 139,758 | $ | 141,023 | |||||||
(1)Amounts are included in the line item “Other expenses” in the consolidated statements of operations.
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(2)Includes costs associated with workforce reduction and workforce reorganization.
(3)Reflects nonrecurring advisory service costs.
(4)Noncontrolling interests represent (i) holders of outstanding common units of the Company's Operating Partnership that are owned by unit holders other than the Company and (ii) holders of Series 2 CPOP Units and Series 3 CPOP Units. On March 6, 2025, we exercised our conversion right to convert all remaining 904,583 Series 2 preferred units into OP Units.
(5)Participating securities include unvested shares of restricted stock, unvested LTIP units of partnership interest in our Operating Partnership and unvested performance units in our Operating Partnership. For the three months ended March 31, 2026, Core FFO attributable to participating securities was adjusted to exclude $691 thousand of otherwise allocable Core FFO related solely to transition‑related restricted stock awards that were outstanding as of March 31, 2026.
Non-GAAP Supplemental Measures: NOI and Cash NOI
Net operating income (“NOI”) is a non-GAAP measure which includes the revenue and expenses directly attributable to our real estate properties. NOI is calculated as rental income less 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, general and administrative expenses, interest expense, gains (or losses) on sale of real estate, impairment losses of depreciable operating property and other non-operating items, 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 effects 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.
NOI on a cash-basis (“Cash NOI”) is a non-GAAP measure, which we calculate by adding or subtracting the following items from NOI: (i) amortization of above/(below) market lease intangibles and amortization of other deferred rent resulting from sale leaseback transactions with below market leaseback payments and (ii) straight-line rental revenue adjustments. 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.
The following table sets forth the revenue and expense items comprising NOI and the adjustments to calculate Cash NOI (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Rental income | $ | 242,141 | $ | 248,821 | |||||||
| Less: Property expenses | 56,763 | 55,261 | |||||||||
| Net Operating Income | $ | 185,378 | $ | 193,560 | |||||||
| Above/(below) market lease revenue adjustments | (4,647) | (9,186) | |||||||||
| Straight line rental revenue adjustment | (15,136) | (5,517) | |||||||||
| Cash Net Operating Income | $ | 165,595 | $ | 178,857 | |||||||
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The following table sets forth a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to NOI and Cash NOI (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | 94,562 | $ | 74,048 | |||||||
| Adjustments: | |||||||||||
| General and administrative | 14,925 | 19,868 | |||||||||
| Depreciation and amortization | 72,933 | 86,740 | |||||||||
Other income | (1,350) | — | |||||||||
| Other expenses | 102 | 2,239 | |||||||||
| Interest expense | 26,600 | 27,288 | |||||||||
| Management and leasing services | — | (142) | |||||||||
| Interest income | (2,937) | (3,324) | |||||||||
Impairment of real estate | 6,824 | — | |||||||||
| Gains on sale of real estate | (26,281) | (13,157) | |||||||||
| Net Operating Income | $ | 185,378 | $ | 193,560 | |||||||
| Above/(below) market lease revenue adjustments | (4,647) | (9,186) | |||||||||
| Straight line rental revenue adjustment | (15,136) | (5,517) | |||||||||
| Cash Net Operating Income | $ | 165,595 | $ | 178,857 | |||||||
Non-GAAP Supplemental Measure: EBITDAre
We calculate earnings before interest expense, income taxes, depreciation and amortization for real estate (“EBITDAre”) in accordance with the standards established by NAREIT. EBITDAre is calculated as net income (loss) (computed in accordance with GAAP), before interest expense, income tax expense, depreciation and amortization, gains (or losses) from sales of depreciable operating property or assets incidental to our business, impairment losses of depreciable operating property or assets incidental to our business and adjustments for unconsolidated joint ventures.
We believe that EBITDAre 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 properties. We also use this measure in ratios to compare our performance to that of our industry peers. In addition, we believe EBITDAre is frequently used by securities analysts, investors and other interested parties in the evaluation of equity REITs. However, our industry peers may not calculate EBITDAre in accordance with the NAREIT definition as we do and, accordingly, our EBITDAre may not be comparable to our peers’ EBITDAre. Accordingly, EBITDAre should be considered only as a supplement to net income (loss) as a measure of our performance.
The following table sets forth a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to EBITDAre (in thousands):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | 94,562 | $ | 74,048 | |||||||
| Interest expense | 26,600 | 27,288 | |||||||||
| Depreciation and amortization | 72,933 | 86,740 | |||||||||
| Impairment of real estate | 6,824 | — | |||||||||
| Gains on sale of real estate | (26,281) | (13,157) | |||||||||
EBITDAre | $ | 174,638 | $ | 174,919 | |||||||
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Supplemental Guarantor Information
Subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the parent guarantee is “full and unconditional,” the subsidiary obligor is consolidated into the parent company’s consolidated financial statements and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by the Company. At March 31, 2026, the Operating Partnership had issued and outstanding $300.0 million of 5.000% Senior Notes due 2028 (the “$300 Million Notes due 2028”), $400.0 million of 2.125% Senior Notes due 2030 (the “$400 Million Notes due 2030”), $400 million of 2.150% Senior Notes due 2031 (the “$400 Million Notes due 2031”), $575.0 million of 4.375% Exchangeable Senior Notes due 2027 (the “2027 Exchangeable Notes”) and $575.0 million of 4.125% Exchangeable Senior Notes due 2029 (the “2029 Exchangeable Notes” and together with the 2027 Exchangeable Notes, the “Exchangeable Notes”). The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the $300 Million Notes due 2028, $400 Million Notes due 2030, $400 Million Notes due 2031 and Exchangeable Notes are guaranteed on a senior basis by the Company. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company. Accordingly, separate consolidated financial statements of the Operating Partnership have not been presented.
Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Company and the Operating Partnership are not materially different than the corresponding amounts presented in the consolidated financial statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.
Financial Condition, Liquidity and Capital Resources
Overview
Our short-term liquidity requirements consist primarily of funds to pay for operating expenses, interest expense, general and administrative expenses, capital expenditures, tenant improvements and leasing commissions, share repurchases, and distributions to our common and preferred stockholders and holders of common units of partnership interests in our Operating Partnership (“OP Units”). We expect to meet our short-term liquidity requirements through available cash on hand, cash flow from operations, by drawing on our unsecured revolving credit facility and by issuing shares of common stock pursuant to our at-the-market equity offering program or issuing other securities as described below.
Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions, recurring and nonrecurring capital expenditures and scheduled debt maturities. We intend to satisfy our long-term liquidity needs through net cash flow from operations, proceeds from long-term secured and unsecured financings, borrowings available under our unsecured revolving credit facility, the issuance of equity securities, including preferred stock, and proceeds from selective real estate dispositions as we identify capital recycling opportunities.
As of March 31, 2026, we had:
•Outstanding fixed-rate and variable-rate debt with varying maturities for an aggregate principal amount of $3.3 billion, with $636.0 million due within 12 months (including $575.0 million of 2027 Exchangeable Notes due on March 15, 2027 and the $60.0 million term loan facility maturing on October 27, 2026, which can be extended for three remaining one-year terms at our option);
•Total scheduled interest payments on our fixed rate debt and projected net interest payments on our variable rate debt and interest rate swaps of $351.7 million, of which $122.0 million is due within 12 months;
•Commitments of $62.6 million for tenant improvements under certain tenant leases and construction work related to obligations under contractual agreements with our construction vendors; and
•Operating lease commitments with aggregate lease payments of $23.4 million, of which $1.6 million is due within 12 months.
See “Note 6 – Notes Payable” to the consolidated financial statements included in Item 1 of this Report on Form 10-Q for further details regarding the scheduled principal payments. Also see “Note 7 – Leases” to the consolidated financial statements for further details regarding the scheduled operating lease payments.
As of March 31, 2026, our cash and cash equivalents were $51.7 million, and we did not have borrowings outstanding under our unsecured revolving credit facility, leaving $1.245 billion available for future borrowings after giving effect to the $4.6 million letter of credit that was issued under the unsecured revolving credit facility.
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Sources of Liquidity
Cash Flow from Operations
Cash flow from operations is one of our key sources of liquidity and is primarily dependent upon: (i) the occupancy levels and lease rates at our properties, (ii) our ability to collect rent, (iii) the level of operating costs we incur and (iv) our ability to pass through operating expenses to our tenants. We are subject to a number of risks related to general economic and other unpredictable conditions, which have the potential to affect our overall performance and resulting cash flows from operations. However, based on our current portfolio mix and business strategy, we anticipate that we will be able to generate positive cash flows from operations.
Capital Recycling
We continuously evaluate opportunities for the potential disposition of properties in our portfolio when we believe such disposition is appropriate in view of our business objectives and capital allocation priorities. In evaluating these opportunities, we consider a variety of criteria including, but not limited to, local market conditions and lease rates, asset type and location, as well as potential uses of proceeds and tax considerations. Tax considerations include entering into tax-deferred like-kind exchanges under Section 1031 of the Code (“1031 Exchange”), when possible, to defer some or all of the taxable gains, if any, on dispositions. A 1031 Exchange generally requires the identification of a replacement property within 45 days and completion of the exchange within 180 days of the sale date.
During the three months ended March 31, 2026, we completed the sale of five properties for an aggregate gross sales price of $127.4 million and net cash proceeds of $122.7 million. We did not pursue a 1031 Exchange in connection with these dispositions, and the proceeds were therefore available for other capital allocation purposes.
We expect to continue selectively and opportunistically disposing of properties; however, the timing of any future dispositions will depend on market conditions, asset-specific circumstances or opportunities, and our capital needs. Our ability to dispose of selective properties on advantageous terms, or at all, is dependent upon a number of factors including the availability of credit to potential buyers to purchase properties at prices that we consider acceptable.
ATM Program
On February 17, 2023, we established an at-the-market equity offering program (“ATM Program”) pursuant to which we are able to sell from time to time shares of our common stock having an aggregate sales price of up to $1.25 billion.
In connection with the ATM Program, we may sell shares of our common stock directly through sales agents or we may enter into forward equity sale agreements with certain financial institutions acting as forward purchasers whereby, at our discretion, the forward purchasers may borrow and sell shares of our common stock under the ATM Program. The use of a forward equity sale agreement allows us to lock in a share price on the sale of shares of our common stock at the time the agreement is executed but defer settling the forward equity sale agreements and receiving the proceeds from the sale of shares until a later date. Additionally, the forward price that we expect to receive upon physical settlement of an agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.
During the three months ended March 31, 2026, we did not sell any shares of common stock directly through sales agents or enter into any forward equity sale agreements under the ATM Program.
As of March 31, 2026, approximately $927.4 million of common stock remained available to be sold under the ATM Program. Future sales, if any, will depend on a variety of factors, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us.
Securities Offerings
We evaluate the capital markets on an ongoing basis for opportunities to raise capital, and as circumstances warrant, we may issue additional securities, from time to time, to fund acquisitions, for the repayment of long-term debt upon maturity and for other general corporate purposes. Such securities may include common equity, preferred equity and/or debt of us or our subsidiaries. Any future issuance, however, is dependent upon market conditions, available pricing and capital needs and there can be no assurance that we will be able to complete any such offerings of securities.
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Investment Grade Rating
Our credit ratings at March 31, 2026, were Baa2 (Stable outlook) from Moody’s and BBB+ (Stable outlook) from both S&P and Fitch with respect to our Credit Agreement (described below), Exchangeable Notes, $25.0 million unsecured guaranteed senior notes and $75.0 million unsecured guaranteed senior notes (together the “Series 2019A and 2019B Notes”), $300 Million Notes, $400 Million Notes due 2030 and $400 Million Notes due 2031. Our credit ratings at March 31, 2026, were BBB- from both S&P and Fitch with respect to our 5.875% Series B Cumulative Redeemable Preferred Stock and our 5.625% Series C Cumulative Redeemable Preferred Stock. Our credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating agencies in their rating analysis of us, and, although it is our intent to maintain our investment grade credit rating, there can be no assurance that we will be able to maintain our current credit ratings. In the event our current credit ratings are downgraded, it may become difficult or more expensive to obtain additional financing or refinance existing indebtedness as maturities become due.
Credit Agreement
As of March 31, 2026, under the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), we have an unsecured revolving credit facility with a borrowing capacity of $1.25 billion (the “Revolver”), which also allows us to issue letters of credit up to an aggregate amount not to exceed $100.0 million, a $300.0 million unsecured term loan facility (the “$300 Million Term Loan”) and a $400.0 million unsecured term loan facility (the “$400 Million Term Loan” and together with the $300 Million Term Loan, the “Term Facility”). Subject to certain terms and conditions set forth in the Credit Agreement, we may request additional lender commitments and increase the size of the Credit Agreement by an additional $1.05 billion, which may be comprised of additional revolving commitments under the Revolver, an increase to the Term Facility, additional term loan tranches or any combination of the foregoing.
Interest on the Credit Agreement is generally to be paid based upon, at our option, either Term SOFR, daily SOFR or a base rate, plus an applicable margin based on our leverage ratio and debt ratings. The applicable margin for the Term Facility ranges from 0.80% to 1.60% per annum for SOFR-based loans and 0.00% to 0.60% per annum for base rate loans. The applicable margin for the Revolver ranges from 0.725% to 1.400% per annum for SOFR-based loans and letters of credit and 0.00% to 0.40% per annum for base rate loans. In addition to the interest payable on amounts outstanding under the Revolver, we are required to pay an applicable credit facility fee, on each lender's commitment amount under the Revolver, regardless of usage. The applicable credit facility fee ranges from 0.125% to 0.300% per annum, depending on our leverage ratio and investment grade ratings.
In addition, the Credit Agreement also features a sustainability-linked pricing component that can periodically adjust the applicable margin by -0.04%, zero or 0.04% and adjust the applicable credit facility fee by -0.01%, zero or 0.01%, depending on our achievement of the annual sustainability performance metrics. In January 2026, after certifying that our sustainability performance targets were met for 2025, the applicable margin decreased by 0.040% to 0.685% for the Revolver and to 0.760% for the Term Facility, and the credit facility fee decreased by 0.010% to 0.115%.
The Revolver and the Term Facility may be voluntarily prepaid in whole or in part at any time without premium or penalty. Amounts borrowed under the Term Facility and repaid or prepaid may not be reborrowed.
The Credit Agreement contains usual and customary events of default including defaults in the payment of principal, interest or fees, defaults in compliance with the covenants set forth in the Credit Agreement and other loan documentation, cross-defaults to certain other indebtedness, and bankruptcy and other insolvency defaults. If an event of default occurs and is continuing under the Credit Agreement, the unpaid principal amount of all outstanding loans, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.
As of the filing date of this Quarterly Report on Form 10-Q, we had $135.0 million of borrowings outstanding under the Revolver and $4.6 million outstanding in letters of credit that reduced our borrowing capacity, leaving $1.110 billion available for future borrowings.
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Uses of Liquidity
Recurring and Nonrecurring Capital Expenditures
Capital expenditures are considered part of both our short-term and long-term liquidity requirements. As discussed above under “— Factors that May Influence Future Results of Operations —Acquisitions, Disposition and Value-Add Repositioning and Development of Properties,” as of March 31, 2026, 21 of our properties were under current repositioning/development or lease-up. We currently estimate that approximately $106.8 million of additional capital will be required over the next several years to complete the repositioning/development of these properties. However, this estimate is based on our current construction plans and budgets, both of which are subject to change as a result of a number of factors, including increased costs of building materials or construction services (including as a result of trade disputes and tariffs) and construction delays related to supply chain backlogs and increased lead time on building materials. If we are unable to complete construction on schedule or within budget, we could incur increased construction costs and experience potential delays in leasing the properties. We expect to fund these capital expenditures through a combination of available cash on hand, disposition proceeds, the issuance of common stock under the ATM Program, cash flow from operations and borrowings available under the Revolver.
The following table sets forth certain information regarding non-recurring and recurring capital expenditures at the properties in our portfolio as follows:
| Three Months Ended March 31, 2026 | ||||||||||||||||||||
Total(1) | Square Feet(2) | Per Square Foot(3) | ||||||||||||||||||
Non-Recurring Capital Expenditures(4) | $ | 39,867 | 30,061,253 | $ | 1.33 | |||||||||||||||
Recurring Capital Expenditures(5) | 2,314 | 50,708,486 | $ | 0.05 | ||||||||||||||||
| Total Capital Expenditures | $ | 42,181 | ||||||||||||||||||
(1)Cost is reported in thousands. Excludes the following capitalized costs: (i) compensation costs of personnel directly responsible for and who spend their time on redevelopment, renovation and rehabilitation activity and (ii) interest, property taxes and insurance costs incurred during the pre-construction and construction periods of repositioning or redevelopment projects.
(2)For non-recurring capital expenditures, reflects the aggregate square footage of the properties in which we incurred such capital expenditures. For recurring capital expenditures, reflects the weighted average square footage of our consolidated portfolio during the period.
(3)Per square foot amounts are calculated by dividing the aggregate capital expenditure costs by the square footage as defined in (2) above.
(4)Non-recurring capital expenditures are expenditures made in respect of a property for repositioning, redevelopment, or other major upgrade or renovation of such property, and further includes capital expenditures for seismic upgrades, roof or parking lot replacements or capital expenditures for deferred maintenance existing at the time such property was acquired.
(5)Recurring capital expenditures are 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 of parking lots, roofing materials, mechanical systems, HVAC systems and other structural systems.
Dividends and Distributions
In order to maintain our qualification as a REIT, we are required to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. To satisfy the requirements to qualify as a REIT and generally not be subject to U.S. federal income tax, we intend to distribute a percentage of our cash flow on a quarterly basis to holders of our common stock. In addition, we intend to make distribution payments to holders of OP Units and preferred units, and dividend payments to holders of our preferred stock.
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On April 21, 2026, our board of directors declared the following quarterly cash dividends/distributions, record dates and payment dates.
| Security | Amount per Share/Unit | Record Date | Payment Date | |||||||||||||||||
| Common stock | $ | 0.435 | June 30, 2026 | July 15, 2026 | ||||||||||||||||
| OP Units | $ | 0.435 | June 30, 2026 | July 15, 2026 | ||||||||||||||||
5.875% Series B Cumulative Redeemable Preferred Stock | $ | 0.367188 | June 15, 2026 | June 30, 2026 | ||||||||||||||||
5.625% Series C Cumulative Redeemable Preferred Stock | $ | 0.351563 | June 15, 2026 | June 30, 2026 | ||||||||||||||||
3.00% Cumulative Redeemable Convertible Preferred Units | $ | 0.545462 | June 15, 2026 | June 30, 2026 | ||||||||||||||||
Stock Repurchase Programs
On February 2, 2026, the Board authorized a new stock repurchase program pursuant to which we may repurchase up to a maximum of $500.0 million of our outstanding common stock (the “February 2026 Repurchase Program”). At that time, the Board terminated the prior $500.0 million stock repurchase program, and the February 2026 Repurchase Program replaced and superseded it in all respects. The February 2026 Repurchase Program was set to expire on February 29, 2028, unless modified, extended or terminated earlier at the Board’s discretion.
Under our stock repurchase programs, we may purchase our shares from time to time in the open market, in privately negotiated transactions or in other transactions as permitted by federal securities laws. The amount and timing of repurchases depend on a number of factors, including the price and availability of our shares, trading volume and general market conditions.
During the three months ended March 31, 2026, we repurchased 5,534,357 shares of common stock under the February 2026 Repurchase Program for a total of $200.1 million, including commissions, at a weighted average price of $36.14 per share. All repurchased shares were retired on the respective settlement dates. As of March 31, 2026, $299.9 million remained available under the February 2026 Repurchase Program.
On April 21, 2026, the Board terminated the February 2026 Repurchase Program and authorized a new stock repurchase program pursuant to which we may repurchase up to a maximum of $500.0 million of our outstanding common stock (the “April 2026 Repurchase Program”). The April 2026 Repurchase Program replaced and superseded, in all respects, the February 2026 Repurchase Program and is scheduled to expire on April 30, 2028, unless modified, extended or terminated earlier at the Board’s discretion.
Acquisitions
One of our most significant liquidity needs has historically been for the acquisition of real estate properties. Year to date, as of the filing date of this Quarterly Report on Form 10-Q, we did not acquire any properties and have no acquisitions under contract or accepted offer. However, we continue to monitor potential acquisition opportunities within our target markets that we believe may represent attractive investment opportunities. While the actual number of acquisitions that we complete will be dependent upon a number of factors, in the short term, we expect to fund our future acquisitions through available cash on hand, cash flows from operations, borrowings available under the Revolver and capital recycled through property dispositions and, in the long term, through the issuance of equity securities or proceeds from long-term secured and unsecured financings.
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Indebtedness Outstanding
The following table sets forth certain information with respect to our consolidated indebtedness outstanding as of March 31, 2026:
| Contractual Maturity Date | Margin Above SOFR | Effective Interest Rate(1) | Principal Balance (in thousands)(2) | ||||||||||||||||||||
| Unsecured and Secured Debt: | |||||||||||||||||||||||
| Unsecured Debt: | |||||||||||||||||||||||
| Revolving Credit Facility | 5/30/2029 | (3) | S+0.685 | % | (4) | 4.365 | % | (5) | $ | — | |||||||||||||
$575M Exchangeable Senior Notes due 2027(6) | 3/15/2027 | n/a | 4.375 | % | 575,000 | ||||||||||||||||||
| $300M Term Loan | 5/26/2027 | S+0.760 | % | (4) | 3.577 | % | (7) | 300,000 | |||||||||||||||
| $125M Senior Notes | 7/13/2027 | n/a | 3.930 | % | 125,000 | ||||||||||||||||||
| $300M Senior Notes due 2028 | 6/15/2028 | n/a | 5.000 | % | 300,000 | ||||||||||||||||||
$575M Exchangeable Senior Notes due 2029(6) | 3/15/2029 | n/a | 4.125 | % | 575,000 | ||||||||||||||||||
| $25M Series 2019A Senior Notes | 7/16/2029 | n/a | 3.880 | % | 25,000 | ||||||||||||||||||
| $400M Term Loan | 5/30/2030 | S+0.760 | % | (4) | 4.174 | % | (8) | 400,000 | |||||||||||||||
| $400M Senior Notes due 2030 | 12/1/2030 | n/a | 2.125 | % | 400,000 | ||||||||||||||||||
| $400M Senior Notes due 2031 | 9/1/2031 | n/a | 2.150 | % | 400,000 | ||||||||||||||||||
| $75M Series 2019B Senior Notes | 7/16/2034 | n/a | 4.030 | % | 75,000 | ||||||||||||||||||
| Total Unsecured Debt | $ | 3,175,000 | |||||||||||||||||||||
| Secured Debt: | |||||||||||||||||||||||
$60M Term Loan(9) | 10/27/2026 | (9) | S+1.250 | % | (9) | 5.060 | % | $ | 60,000 | ||||||||||||||
| 13943-13955 Balboa Boulevard | 7/1/2027 | n/a | 3.930 | % | 13,712 | ||||||||||||||||||
| 2205 126th Street | 12/1/2027 | n/a | 3.910 | % | 5,200 | ||||||||||||||||||
| 2410-2420 Santa Fe Avenue | 1/1/2028 | n/a | 3.700 | % | 10,300 | ||||||||||||||||||
| 11832-11954 La Cienega Boulevard | 7/1/2028 | n/a | 4.260 | % | 3,667 | ||||||||||||||||||
| Gilbert/La Palma | 3/1/2031 | n/a | 5.125 | % | 1,268 | ||||||||||||||||||
| 7817 Woodley Avenue | 8/1/2039 | n/a | 4.140 | % | 2,573 | ||||||||||||||||||
| Total Secured Debt | $ | 96,720 | |||||||||||||||||||||
| Total Consolidated Debt | 3.723 | % | $ | 3,271,720 | |||||||||||||||||||
(1)Reflects the contractual interest rate under the terms of each loan as of March 31, 2026 (and the weighted average interest rate for total consolidated debt) and includes the effect of interest rate swaps that were effective as of March 31, 2026. The interest rate is not adjusted to include the amortization of debt issuance costs or unamortized fair market value premiums/discounts or the facility fee on the Revolver.
(2)Excludes unamortized debt issuance costs and premiums/discounts totaling $24.3 million, which are presented as a reduction of the carrying value of our debt in our consolidated balance sheet as of March 31, 2026.
(3)The Revolver has two six-month extensions, subject to certain terms and conditions.
(4)As of March 31, 2026, the interest rates on these loans are comprised of daily SOFR for both the Revolver and the $400 Million Term Loan and Term SOFR for the $300 Million Term Loan, plus an applicable margin of 0.725% per annum for the Revolver and 0.80% per annum for the Term Facility, less a sustainability-related rate adjustment of 0.04%. These loans are also subject to a 0% SOFR floor.
(5)The Revolver is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. As of March 31, 2026, the applicable facility fee is 0.125%, less a sustainability-related rate adjustment of 0.01%. The effective rate assumes daily SOFR of 3.680% as of March 31, 2026.
(6)Noteholders have the right to exchange their notes upon the occurrence of certain events. Exchanges will be settled by delivering cash up to the principal amount of the Exchangeable Notes exchanged, and in respect of the remainder of the exchanged value, if any, in excess thereof, in cash or in a combination of cash and shares of our common stock, at our option.
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(7)As of March 31, 2026, Term SOFR for the $300 Million Term Loan has been swapped to a fixed rate of 2.81725%, resulting in an all-in fixed rate of 3.57725% after adding the applicable margin and sustainability-related rate adjustment.
(8)As of March 31, 2026, Term SOFR for the $400 Million Term Loan has been swapped to a fixed rate of 3.41375%, resulting in an all-in fixed rate of 4.17375% after adding the applicable margin and sustainability-related rate adjustment.
(9)The $60.0 million term loan facility (the “$60 Million Term Loan”) has interest-only payment terms bearing interest at Term SOFR increased by a 0.10% SOFR adjustment plus an applicable margin of 1.25% per annum. As of March 31, 2026, Term SOFR for this loan has been swapped to a fixed rate of 3.710%, resulting in an all-in fixed rate of 5.060% after adding the SOFR adjustment and applicable margin. The loan is secured by six properties. As of March 31, 2026, we have three one-year extension options available, subject to certain terms and conditions.
The following table summarizes the composition of our consolidated debt between fixed-rate and variable-rate and secured and unsecured debt as of March 31, 2026:
| Weighted Average Term Remaining (in years) | Effective Interest Rate(1) | Principal Balance (in thousands)(2) | % of Total | |||||||||||||||||||||||
| Fixed vs. Variable: | ||||||||||||||||||||||||||
Fixed(3) | 3.0 | 3.723% | $ | 3,271,720 | 100% | |||||||||||||||||||||
| Variable | — | —% | $ | — | —% | |||||||||||||||||||||
| Secured vs. Unsecured: | ||||||||||||||||||||||||||
| Secured | 1.3 | 4.639% | $ | 96,720 | 3% | |||||||||||||||||||||
| Unsecured | 3.1 | 3.695% | $ | 3,175,000 | 97% | |||||||||||||||||||||
(1)Includes the effect of interest rate swaps that were effective as of March 31, 2026. Interest rates are not adjusted to include the amortization of debt issuance costs or unamortized fair market value premiums/discounts or the facility fee on the Revolver.
(2)Excludes unamortized debt issuance costs and premiums/discounts totaling $24.3 million, which are presented as a reduction of the carrying value of our debt in our consolidated balance sheet as of March 31, 2026.
(3)Fixed-rate debt includes our variable-rate debt that has been effectively fixed through the use of interest rate swaps through maturity.
At March 31, 2026, we had consolidated indebtedness of $3.3 billion, reflecting a net debt to total combined market capitalization of approximately 29.2%. Our total market capitalization is defined as the sum of the liquidation preference of our outstanding preferred stock and preferred units plus the market value of our common stock excluding shares of nonvested restricted stock, plus the aggregate value of common units not owned by us, plus the value of our net debt. Our net debt is defined as our consolidated indebtedness less cash and cash equivalents.
Debt Covenants
The Credit Agreement, $60 Million Term Loan, $125 Million Notes and Series 2019A and 2019B Notes all include a series of financial and other covenants that we must comply with. All financial ratios, metrics and terms used in the covenants below are defined in the applicable loan agreements and are tested on a quarterly basis.
•Maintaining a ratio of total indebtedness to total asset value of not more than 60%;
•For the Credit Agreement and $60 Million Term Loan, maintaining a ratio of secured debt to total asset value of not more than 45%;
•For the $125 Million Notes and Series 2019A and 2019B Notes (together the “Senior Notes”), maintaining a ratio of secured debt to total asset value of not more than 40%;
•For the Senior Notes, maintaining a ratio of total secured recourse debt to total asset value of not more than 15%;
•For the Senior Notes, maintaining a minimum tangible net worth of at least the sum of (i) $760,740,750, and (ii) an amount equal to at least 75% of the net equity proceeds received by the Company after September 30, 2016;
•Maintaining a ratio of adjusted EBITDA to fixed charges of at least 1.5 to 1.0;
•For the Credit Agreement and Senior Notes, maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than 60%; and
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•For the Credit Agreement and Senior Notes, maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least 1.75 to 1.00.
The $300 Million Notes due 2028, $400 Million Notes due 2030 and $400 Million Notes due 2031 (together the “Registered Notes”) contain the following covenants. All financial ratios and terms used below are as defined in the applicable indentures and are tested on an annual basis.
•Maintaining a ratio of total indebtedness to total asset value of not more than 60%;
•Maintaining a ratio of secured debt to total asset value of not more than 40%;
•Maintaining a Debt Service Coverage Ratio of at least 1.5 to 1.0; and
•Maintaining a ratio of unencumbered assets to unsecured debt of at least 1.5 to 1.0.
Subject to the terms of the Credit Agreement, $60 Million Term Loan, Senior Notes and Registered Notes, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal or interest, (ii) a default in the payment of certain of our other indebtedness, and (iii) a default in compliance with the covenants set forth in the debt agreement, the principal and accrued and unpaid interest on the outstanding debt may be declared immediately due and payable at the option of the administrative agent, lenders, trustee and/or noteholders, as applicable, and in the event of bankruptcy and other insolvency defaults, the principal and accrued and unpaid interest on the outstanding debt will become immediately due and payable. In addition, we are required to maintain at all times a credit rating on the Senior Notes from either S&P, Moody’s or Fitch.
We were in compliance with all of our required quarterly financial debt covenants as of March 31, 2026.
Cash Flows
Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
The following table summarizes the changes in net cash flows associated with our operating, investing, and financing activities for the three months ended March 31, 2026 and 2025 (in thousands):
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| Cash provided by operating activities | $ | 141,166 | $ | 152,551 | $ | (11,385) | ||||||||||||||
Cash provided by (used in) investing activities | $ | 59,707 | $ | (29,043) | $ | 88,750 | ||||||||||||||
Cash (used in) provided by financing activities | $ | (314,937) | $ | 375,205 | $ | (690,142) | ||||||||||||||
Net cash provided by operating activities. Net cash provided by operating activities decreased by $11.4 million to $141.2 million for the three months ended March 31, 2026, compared to $152.6 million for the three months ended March 31, 2025. The decrease was primarily attributable to lower Cash NOI from our consolidated portfolio and changes in working capital, partially offset by a decrease in cash interest paid compared to the prior-year period.
Net cash provided by (used in) investing activities. Net cash provided by investing activities was $59.7 million for the three months ended March 31, 2026, compared to net cash used in investing activities of $29.0 million for the three months ended March 31, 2025. The increase in net cash flows was primarily attributable to a $72.6 million increase in proceeds from the sale of real estate for comparable periods and a $16.1 million decrease in cash paid for construction costs, including costs related to repositioning/development projects.
Net cash (used in) provided by financing activities. Net cash used in financing activities was $314.9 million for the three months ended March 31, 2026, compared to net cash provided by financing activities of $375.2 million for the three months ended March 31, 2025. The $690.1 million decrease in net cash flows was primarily attributable to a $477.6 million decrease in net cash proceeds from issuances of common stock, as no shares were issued during the first quarter of 2026, and $200.1 million of cash used for the repurchase of common stock during the first quarter of 2026, with no comparable activity in the prior-year period.
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Inflation
We do not believe that inflation has historically had a material impact on the Company. Significant inflation in recent years, together with current higher fuel and energy costs driven by geopolitical instability and volatility in global energy markets, may result in increased operating expenses and capital expenditures which could have a material impact on our financial position or results of operations. The majority of our leases are either triple net or provide for tenant reimbursement for costs related to real estate taxes and operating expenses. In addition, most of the leases provide for fixed rent increases. We believe that inflationary increases to real estate taxes, utility expenses and other operating expenses may be partially offset by the contractual rent increases and tenant payment of taxes and expenses described above.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk refers to the risk of loss from adverse changes in market prices and interest rates. A key market risk we face is interest rate risk. We are exposed to interest rate changes primarily as a result of using variable-rate debt to satisfy various short-term and long-term liquidity needs, which have interest rates based upon SOFR. We use interest rate swaps to manage, or hedge, interest rate risks related to our borrowings. Because actual interest rate movements over time are uncertain, our swaps pose potential interest rate risks, notably if interest rates fall. We also expose ourselves to credit risk, which we attempt to minimize by contracting with highly-rated banking financial counterparties. For a summary of our outstanding debt, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” under Item 2 of this Form 10-Q. For a summary of our interest rate swaps and recent transactions, see “Note 8 – Interest Rate Derivatives” to our consolidated financial statements.
As of March 31, 2026, we had total consolidated indebtedness, excluding unamortized debt issuance costs and premiums/discounts, of $3.27 billion. As of March 31, 2026, 100% of this consolidated indebtedness is fixed-rate debt under the terms of the loan or through the use of interest rate swaps. As such, as of March 31, 2026, if SOFR were to increase or decrease, there would be no impact to interest expense or future earnings and cash flows until the applicable interest rate swaps mature.
Interest risk amounts are our management’s estimates and are determined by considering the effect of hypothetical interest rates on our financial instruments. We calculate interest sensitivity by multiplying the amount of variable rate debt outstanding by the respective change in rate. The sensitivity analysis does not take into consideration the possibility of future changes in the balances or fair value of our floating rate debt or the effect of any change in overall economic activity that could occur in that environment. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in our financial structure.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026, the end of the period covered by this report.
Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. There have been no significant changes that occurred during the period covered by this report in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are party to various lawsuits, claims and legal proceedings that arise in the ordinary course of business. We are not currently a party to any legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition or results of operations.
Item 1A. Risk Factors
Please refer to our Risk Factors as set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the risk factors as set forth in that document.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Unregistered Sales of Equity Securities
None.
(b) Use of Proceeds
None.
(c) Issuer Purchases of Equity Securities
| Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (Or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)(2) | ||||||||||||||||||||||
January 1, 2026 to January 31, 2026 | 35,862 | $ | 40.98 | — | $349,927 | |||||||||||||||||||||
February 1, 2026 to February 28, 2026 | 2,671,008 | $ | 37.45 | 2,670,227 | $399,947 | |||||||||||||||||||||
March 1, 2026 to March 31, 2026 | 2,880,073 | $ | 34.92 | 2,864,130 | $299,889 | |||||||||||||||||||||
| 5,586,943 | $ | 36.17 | 5,534,357 | |||||||||||||||||||||||
(1)Includes 52,586 shares of common stock that were tendered by certain of our employees to satisfy tax withholding obligations related to the vesting of restricted shares of common stock.
(2)On August 29, 2025, our Board authorized a stock repurchase program pursuant to which we could repurchase up to $500.0 million of our outstanding common stock (the “August 2025 Repurchase Program”). The January 2026 information reflected in the table above relates solely to the remaining authorization under the August 2025 Repurchase Program, as no shares were repurchased during that month. On February 2, 2026, the Board authorized the February 2026 Repurchase Program, which replaced and superseded the August 2025 Repurchase Program. All purchases of equity securities during February and March 2026 were made pursuant to the February 2026 Repurchase Program. On April 21, 2026, the Board terminated the February 2026 Repurchase Program and authorized a new stock repurchase program pursuant to which we may repurchase up to $500.0 million of our outstanding common stock (the April 2026 Repurchase Program). No shares were repurchased under the April 2026 Repurchase Program during the period covered by the table above.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
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Item 5. Other Information
(a). None
(b). None
(c). During the three months ended March 31, 2026, no director or officer of the Company adopted terminated
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Item 6. Exhibits
| Exhibit | |||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
3.3 | |||||||||||
3.4 | |||||||||||
3.5 | |||||||||||
10.1 | |||||||||||
| 22.1* | |||||||||||
| 31.1* | |||||||||||
| 31.2* | |||||||||||
| 32.1* | |||||||||||
| 32.2* | |||||||||||
| 101.1* | The registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to the Consolidated Financial Statements (unaudited) that have been detail tagged. | ||||||||||
| 104.1* | Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | ||||||||||
* Filed herein
69
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto authorized.
| Rexford Industrial Realty, Inc. | ||||||||
| April 27, 2026 | /s/ Laura Clark | |||||||
Laura Clark | ||||||||
Chief Executive Officer (Principal Executive Officer) | ||||||||
| April 27, 2026 | /s/ Michael Fitzmaurice | |||||||
| Michael Fitzmaurice | ||||||||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||||||||
70