Rexford Industrial Announces First Quarter 2024 Financial Results
First Quarter 2024 Financial and Operational Highlights:
- Net income attributable to common stockholders of
$58.6 million , or$0.27 per diluted share, as compared to$57.9 million , or$0.30 per diluted share, for the prior year quarter. - Company share of Core FFO of
$123.5 million , an increase of 20.3% as compared to the prior year quarter. - Company share of Core FFO per diluted share of
$0.58 , an increase of 11.5% as compared to the prior year quarter. - Consolidated Portfolio NOI of
$163.5 million , an increase of 14.9% as compared to the prior year quarter. - Same Property Portfolio NOI increased 5.5% and Same Property Portfolio Cash NOI increased 8.5% as compared to the prior year quarter.
- Average Same Property Portfolio occupancy of 96.8%.
- Comparable rental rates increased by 17.3% compared to prior rents on a GAAP basis and by 13.2% on a cash basis on 3.2 million rentable square feet of new and renewal leases.
- Excluding the
Tireco, Inc. lease extension, comparable rental rates increased by 53.0% compared to prior rents on a GAAP basis and by 33.6% on a cash basis. - Completed 3.2 million square feet of acquisitions totaling
$1.1 billion . - Ended the quarter with a low-leverage balance sheet measured by a net debt-to-enterprise value ratio of 20.9%.
"Rexford continues to deliver exceptional value and accretive cash flow growth generated by our entrepreneurial team and value-driven strategy," stated
Financial Results:
The Company reported net income attributable to common stockholders for the first quarter of
The Company reported Core FFO for the first quarter of
In the first quarter, the Company's consolidated portfolio NOI and Cash NOI increased 14.9% and 17.5%, respectively, compared to the prior year quarter.
In the first quarter, the Company's Same Property Portfolio NOI increased 5.5% compared to the prior year quarter, driven by a 5.5% increase in Same Property Portfolio rental income and a 5.7% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 8.5% compared to the prior year quarter.
Operating Results:
First quarter 2024 leasing activity demonstrates strong tenant demand fundamentals within
|
Q1-2024 Leasing Activity |
||||||||||||
|
Releasing Spreads |
Releasing Spreads Excluding Lease Extension(1) |
|||||||||||
|
# of Leases |
SF of |
GAAP |
Cash |
GAAP |
Cash |
|||||||
|
New Leases |
50 |
830,941 |
41.3 % |
31.2 % |
41.3 % |
31.2 % |
||||||
|
Renewal Leases |
64 |
2,398,076 |
14.8 % |
11.3 % |
56.8 % |
34.4 % |
||||||
|
Total Leases |
114 |
3,229,017 |
17.3 % |
13.2 % |
53.0 % |
33.6 % |
||||||
|
(1) |
Excludes the 1.1 million square foot lease extension with Tireco, Inc. at |
As of
Transaction Activity:
During the first quarter of 2024, the Company completed
Subsequent to the first quarter of 2024, the Company acquired:
4422 Airport Drive ,Ontario , located in the Inland Empire - West submarket, for$26.7 million or$303 per square foot. The 88,283 square foot building is 100% leased to two tenants and is generating a 5.5% initial unlevered stabilized yield. According to CBRE, the vacancy rate in the 347 million square foot IE - West submarket was 5.1% at the end of the first quarter 2024.
In addition, the Company disposed of one property subsequent to the first quarter of 2024 for a sales price of
During the first quarter of 2024, the Company stabilized two repositioning projects, including two spaces totaling 38,021 square feet, representing a total investment of
Balance Sheet:
The Company ended the first quarter with
In the first quarter of 2024, the Company executed the following equity transactions:
- Completed a public offering of 17,179,318 shares of common stock to an existing long-only investor based on the
West Coast , subject to forward equity sale agreements at a public offering price of$48.95 per share for a gross offering value of$840.9 million . - Settlement of the remaining forward equity sale agreements related to its
May 2023 public offering by issuing 2,253,034 shares of common stock for net proceeds of$125.7 million . - Settlement of the outstanding forward equity sale agreements under its at-the-market equity offering program ("ATM Program") by issuing 3,010,568 shares of common stock for net proceeds of
$164.5 million .
As of
During the first quarter of 2024, the Company did not execute on its ATM Program. As of
In
Dividends:
On
On
Guidance:
The Company is updating its full year 2024 guidance as indicated below. The Core FFO guidance refers to the Company's in-place portfolio as of
|
2024 Outlook (1) |
Q1 2024 Updated |
Initial Guidance |
||
|
Net Income Attributable to Common Stockholders per diluted share |
|
|
||
|
Company share of Core FFO per diluted share |
|
|
||
|
Same Property Portfolio NOI Growth - GAAP |
4.25% - 5.25% |
4.0% - 5.0% |
||
|
Same Property Portfolio NOI Growth - Cash |
7.0% - 8.0% |
7.0% - 8.0% |
||
|
Average Same Property Portfolio Occupancy (Full Year) (2) |
96.5% - 97.0% |
96.5% - 97.0% |
||
|
General and Administrative Expenses (3) |
+/- |
+/- |
||
|
Net Interest Expense |
+/- |
|
|
(1) |
2024 Guidance represents the in-place portfolio as of |
|
(2) |
Our 2024 Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly owned by us for the period from |
|
(3) |
2024 General and Administrative expense guidance includes estimated non-cash equity compensation expense of |
A number of factors could impact the Company's ability to deliver results in line with its guidance, including, but not limited to, the potential impacts related to interest rates, inflation, the economy, the supply and demand of industrial real estate, the availability and terms of financing to the Company or to potential acquirers of real estate and the timing and yields for divestment and investment. There can be no assurance that the Company can achieve such results.
Supplemental Information and Updated Investor Presentation:
The Company's supplemental financial reporting package as well as an updated investor presentation are available on the Company's investor relations website at ir.rexfordindustrial.com.
Earnings Release, Investor Conference Webcast and Conference Call:
A conference call with executive management will be held on
To participate in the live telephone conference call, please access the following dial-in numbers at least five minutes prior to the start time using Conference ID 9448082.
1 (800) 715-9871 (for domestic callers)
1 (646) 307-1963 (for international callers)
A live webcast and replay of the conference call will also be available at ir.rexfordindustrial.com.
About
Forward Looking Statements:
This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described above. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the reports and other filings by the Company with the
Definitions / Discussion of Non-GAAP Financial Measures:
Funds from Operations (FFO): We calculate FFO in accordance with the standards established by the
Core Funds from Operations (Core FFO): We calculate Core FFO by adjusting FFO for non-comparable items outlined in the "Reconciliation of Net Income to Funds From Operations and Core Funds From Operations" table which is located in the Financial Statements and Reconciliations section below. We believe that Core FFO is a useful supplemental measure and that by adjusting for items that are not considered by the Company to be part of its on-going operating performance, provides a more meaningful and consistent comparison of the Company's 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" reflects Core FFO attributable to common stockholders, which excludes amounts allocable to noncontrolling interests, participating securities and preferred stockholders.
Reconciliation of Net Income Attributable to Common Stockholders per Diluted Share Guidance to Company Share of Core FFO per Diluted Share Guidance:
The following is a reconciliation of the Company's 2024 guidance range of net income attributable to common stockholders per diluted share, the most directly comparable forward-looking GAAP financial measure, to Company share of Core FFO per diluted share.
|
2024 Estimate |
|||
|
Low |
High |
||
|
Net income attributable to common stockholders |
$ 1.17 |
$ 1.20 |
|
|
Company share of depreciation and amortization |
1.17 |
1.17 |
|
|
Company share of gains on sale of real estate(1) |
(0.03) |
(0.03) |
|
|
Company share of Core FFO |
$ 2.31 |
$ 2.34 |
|
|
(1) Reflects the sale of |
Net Operating Income (NOI): NOI is a non-GAAP measure, which includes the revenue and expense directly attributable to our real estate properties. NOI is calculated as rental income from real estate operations 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 and gains (or losses) from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that NOI will be useful to investors as a basis to compare our operating performance with that of other REITs. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties (all of which have a real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable to such other REITs' NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs.
NOI should not be used as a substitute for cash flow from operating activities in accordance with GAAP. We use NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. A calculation of NOI for our Same Property Portfolio, as well as a reconciliation of net income to NOI for our Same Property Portfolio, is set forth below in the Financial Statements and Reconciliations section.
Cash NOI: Cash NOI is a non-GAAP measure, which we calculate by adding or subtracting 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 rent 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. We use Cash NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. A calculation of Cash NOI for our Same Property Portfolio, as well as a reconciliation of net income to Cash NOI for our Same Property Portfolio, is set forth below in the Financial Statements and Reconciliations section.
Same Property Portfolio: Our 2024 Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly owned by us for the period from
Properties and Space Under Repositioning: Typically defined as properties or units where a significant amount of space is held vacant in order to implement capital improvements that improve the functionality (not including basic refurbishments, i.e., paint and carpet), cash flow and value of that space. A repositioning is generally considered complete once the investment is fully or nearly fully deployed and the property is available for occupancy. We consider a repositioning property to be stabilized at the earlier of the following: (i) upon reaching 90% occupancy or (ii) one year from the date of completion of repositioning construction work.
Net Debt to Enterprise Value: As of
Contact:
investorrelations@rexfordindustrial.com
Financial Statements and Reconciliations:
|
|
|||
|
|
|
||
|
(unaudited) |
|||
|
ASSETS |
|||
|
Land |
$ 7,568,720 |
$ 6,815,622 |
|
|
Buildings and improvements |
4,260,512 |
3,933,379 |
|
|
Tenant improvements |
172,707 |
167,251 |
|
|
Furniture, fixtures, and equipment |
132 |
132 |
|
|
Construction in progress |
258,413 |
240,010 |
|
|
Total real estate held for investment |
12,260,484 |
11,156,394 |
|
|
Accumulated depreciation |
(827,576) |
(782,461) |
|
|
Investments in real estate, net |
11,432,908 |
10,373,933 |
|
|
Cash and cash equivalents |
336,960 |
33,444 |
|
|
Loan receivable, net |
122,899 |
122,784 |
|
|
Rents and other receivables, net |
17,896 |
17,494 |
|
|
Deferred rent receivable, net |
130,694 |
123,325 |
|
|
Deferred leasing costs, net |
61,017 |
59,351 |
|
|
Deferred loan costs, net |
3,069 |
3,426 |
|
|
Acquired lease intangible assets, net |
223,698 |
153,670 |
|
|
Acquired indefinite-lived intangible |
5,156 |
5,156 |
|
|
Interest rate swap asset |
16,737 |
9,896 |
|
|
Other assets |
22,114 |
25,225 |
|
|
Acquisition related deposits |
7,975 |
2,125 |
|
|
Total Assets |
$ 12,381,123 |
$ 10,929,829 |
|
|
LIABILITIES & EQUITY |
|||
|
Liabilities |
|||
|
Notes payable |
$ 3,349,120 |
$ 2,225,914 |
|
|
Accounts payable, accrued expenses and other liabilities |
148,920 |
128,842 |
|
|
Dividends and distributions payable |
94,356 |
83,733 |
|
|
Acquired lease intangible liabilities, net |
171,687 |
147,561 |
|
|
Tenant security deposits |
91,034 |
84,872 |
|
|
Tenant prepaid rents |
110,727 |
115,002 |
|
|
Total Liabilities |
3,965,844 |
2,785,924 |
|
|
Equity |
|||
|
|
|||
|
Preferred stock, |
|||
|
5.875% series B cumulative redeemable preferred stock, 3,000,000 shares |
72,443 |
72,443 |
|
|
5.625% series C cumulative redeemable preferred stock, 3,450,000 shares |
83,233 |
83,233 |
|
|
Common Stock, |
2,178 |
2,123 |
|
|
Additional paid in capital |
8,233,127 |
7,940,781 |
|
|
Cumulative distributions in excess of earnings |
(370,720) |
(338,835) |
|
|
Accumulated other comprehensive loss |
13,922 |
7,172 |
|
|
Total stockholders' equity |
8,034,183 |
7,766,917 |
|
|
Noncontrolling interests |
381,096 |
376,988 |
|
|
Total Equity |
8,415,279 |
8,143,905 |
|
|
Total Liabilities and Equity |
$ 12,381,123 |
$ 10,929,829 |
|
|
|
|||
|
Three Months Ended |
|||
|
2024 |
2023 |
||
|
REVENUES |
|||
|
Rental income |
$ 210,990 |
$ 185,164 |
|
|
Management and leasing services |
132 |
190 |
|
|
Interest income |
2,974 |
882 |
|
|
TOTAL REVENUES |
214,096 |
186,236 |
|
|
OPERATING EXPENSES |
|||
|
Property expenses |
47,482 |
42,825 |
|
|
General and administrative |
19,980 |
18,197 |
|
|
Depreciation and amortization |
66,278 |
59,429 |
|
|
TOTAL OPERATING EXPENSES |
133,740 |
120,451 |
|
|
OTHER EXPENSES |
|||
|
Other expenses |
1,408 |
647 |
|
|
Interest expense |
14,671 |
13,701 |
|
|
TOTAL EXPENSES |
149,819 |
134,799 |
|
|
Gains on sale of real estate |
— |
12,133 |
|
|
NET INCOME |
64,277 |
63,570 |
|
|
Less: net income attributable to noncontrolling interests |
(2,906) |
(3,064) |
|
|
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC. |
61,371 |
60,506 |
|
|
Less: preferred stock dividends |
(2,314) |
(2,314) |
|
|
Less: earnings attributable to participating securities |
(418) |
(320) |
|
|
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS |
$ 58,639 |
$ 57,872 |
|
|
Net income attributable to common stockholders per share – basic |
$ 0.27 |
$ 0.30 |
|
|
Net income attributable to common stockholders per share – diluted |
$ 0.27 |
$ 0.30 |
|
|
Weighted-average shares of common stock outstanding – basic |
214,402 |
195,367 |
|
|
Weighted-average shares of common stock outstanding – diluted |
214,438 |
195,779 |
|
|
|
|||||
|
Same Property Portfolio Occupancy: |
|||||
|
|
|||||
|
2024 |
2023 |
Change (basis |
|||
|
Quarterly Weighted Average Occupancy:(1) |
|||||
|
|
96.9 % |
97.5 % |
(60) bps |
||
|
|
99.6 % |
98.8 % |
80 bps |
||
|
|
94.8 % |
93.4 % |
140 bps |
||
|
|
98.4 % |
98.9 % |
(50) bps |
||
|
|
96.4 % |
99.6 % |
(320) bps |
||
|
Same Property Portfolio Weighted Average Occupancy |
96.8 % |
97.0 % |
(20) bps |
||
|
Ending Occupancy: |
96.4 % |
97.0 % |
(60) bps |
||
|
(1) |
Calculated by averaging the occupancy rate at the end of each month in 1Q-2024 and |
|
Same Property Portfolio NOI and Cash NOI: |
|||||||
|
Three Months Ended |
|||||||
|
2024 |
2023 |
$ Change |
% Change |
||||
|
Rental income |
$ 171,557 |
$ 162,571 |
$ 8,986 |
5.5 % |
|||
|
Property expenses |
38,928 |
36,840 |
2,088 |
5.7 % |
|||
|
Same Property Portfolio NOI |
$ 132,629 |
$ 125,731 |
$ 6,898 |
5.5 % |
|||
|
Straight line rental revenue adjustment |
(4,753) |
(6,924) |
2,171 |
(31.4) % |
|||
|
Above/(below) market lease revenue adjustments |
(5,642) |
(6,196) |
554 |
(8.9) % |
|||
|
Same Property Portfolio Cash NOI |
$ 122,234 |
$ 112,611 |
$ 9,623 |
8.5 % |
|||
|
|
|||
|
Three Months Ended |
|||
|
2024 |
2023 |
||
|
Net income |
$ 64,277 |
$ 63,570 |
|
|
General and administrative |
19,980 |
18,197 |
|
|
Depreciation and amortization |
66,278 |
59,429 |
|
|
Other expenses |
1,408 |
647 |
|
|
Interest expense |
14,671 |
13,701 |
|
|
Management and leasing services |
(132) |
(190) |
|
|
Interest income |
(2,974) |
(882) |
|
|
Gains on sale of real estate |
— |
(12,133) |
|
|
Net operating income (NOI) |
$ 163,508 |
$ 142,339 |
|
|
Straight line rental revenue adjustment |
(7,368) |
(7,628) |
|
|
Above/(below) market lease revenue adjustments(1) |
(7,591) |
(8,290) |
|
|
Cash NOI |
$ 148,549 |
$ 126,421 |
|
|
NOI |
$ 163,508 |
$ 142,339 |
|
|
Non-Same Property Portfolio rental income |
(39,433) |
(22,593) |
|
|
Non-Same Property Portfolio property expenses |
8,554 |
5,985 |
|
|
Same Property Portfolio NOI |
$ 132,629 |
$ 125,731 |
|
|
Straight line rental revenue adjustment |
(4,753) |
(6,924) |
|
|
Above/(below) market lease revenue adjustments |
(5,642) |
(6,196) |
|
|
Same Property Portfolio Cash NOI |
$ 122,234 |
$ 112,611 |
|
|
(1) |
Above/(below) market lease revenue adjustments include the write-off of |
|
|
|||
|
Three Months Ended |
|||
|
2024 |
2023 |
||
|
Net income |
$ 64,277 |
$ 63,570 |
|
|
Adjustments: |
|||
|
Depreciation and amortization |
66,278 |
59,429 |
|
|
Gains on sale of real estate |
— |
(12,133) |
|
|
Funds From Operations (FFO) |
$ 130,555 |
$ 110,866 |
|
|
Less: preferred stock dividends |
(2,314) |
(2,314) |
|
|
Less: FFO attributable to noncontrolling interests(1) |
(5,188) |
(4,833) |
|
|
Less: FFO attributable to participating securities(2) |
(570) |
(427) |
|
|
Company share of FFO |
$ 122,483 |
$ 103,292 |
|
|
Company Share of FFO per common share – basic |
$ 0.57 |
$ 0.53 |
|
|
Company Share of FFO per common share – diluted |
$ 0.57 |
$ 0.53 |
|
|
FFO |
$ 130,555 |
$ 110,866 |
|
|
Adjustments: |
|||
|
Acquisition expenses |
50 |
73 |
|
|
Impairment of right-of-use asset |
— |
188 |
|
|
Amortization of loss on termination of interest rate swaps |
59 |
59 |
|
|
Non-capitalizable demolition costs |
998 |
340 |
|
|
Write-offs of below-market lease intangibles related to unexercised renewal |
— |
(1,318) |
|
|
Core FFO |
$ 131,662 |
$ 110,208 |
|
|
Less: preferred stock dividends |
(2,314) |
(2,314) |
|
|
Less: Core FFO attributable to noncontrolling interest(1) |
(5,226) |
(4,809) |
|
|
Less: Core FFO attributable to participating securities(2) |
(575) |
(425) |
|
|
Company share of Core FFO |
$ 123,547 |
$ 102,660 |
|
|
Company share of Core FFO per common share – basic |
$ 0.58 |
$ 0.53 |
|
|
Company share of Core FFO per common share – diluted |
$ 0.58 |
$ 0.52 |
|
|
Weighted-average shares of common stock outstanding – basic |
214,402 |
195,367 |
|
|
Weighted-average shares of common stock outstanding – diluted |
214,438 |
195,779 |
|
|
(1) |
Noncontrolling interests relate to interests in the Company's operating partnership, represented by common units and preferred units (Series 1, 2 & 3 CPOP units) of partnership interests in the operating partnership that are owned by unit holders other than the Company. |
|
(2) |
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units. |
|
(3) |
Reflects the write-off of the portion of a below-market lease intangible attributable to a below-market fixed rate renewal option that was not exercised due to the termination of the lease at the end of the initial lease term. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/rexford-industrial-announces-first-quarter-2024-financial-results-302120077.html
SOURCE