SEC Filing | Rexford Industrial Realty, Inc.

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rexr-20220930

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 September 30, 2022


☐			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

Rexford Industrial Realty, Inc.

(Exact name of registrant as specified in its charter)


Maryland			46-2024407
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

11620 Wilshire Boulevard, Suite 1000	Los Angeles	California	90025
(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

Common Stock, $0.01 par value

REXR

New York Stock Exchange

5.875% Series B Cumulative Redeemable Preferred Stock

REXR-PB

New York Stock Exchange

5.625% Series C Cumulative Redeemable Preferred Stock

REXR-PC

New York Stock Exchange

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, 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.

Large accelerated filer

☑

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 October 19, 2022 was 183,492,816.

REXFORD INDUSTRIAL REALTY, INC.

QUARTERLY REPORT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	3
		Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	4
		Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	5
		Consolidated Statements of Changes in Equity for the Three and Nine Months Ended Septemb er 30, 2022 and 2021 (unaudited)	6
		Consolidated Statements of Cash Flows for the Nine Months Ended Septemb er 30, 2022 and 2021 (unaudited)	10
		Notes to the Consolidated Financial Statements	11
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	72
	Item 4.	Controls and Procedures	73
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	74
	Item 1A.	Risk Factors	74
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
	Item 3.	Defaults Upon Senior Securities	75
	Item 4.	Mine Safety Disclosures	76
	Item 5.	Other Information	76
	Item 6.	Exhibits	77
	Signatures		78

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)


	September 30, 2022		December 31, 2021
ASSETS
Land	$	5,559,795	$	4,143,021
Buildings and improvements	3,275,572		2,588,836
Tenant improvements	141,413		127,708
Furniture, fixtures and equipment	132		132
Construction in progress	88,545		71,375
Total real estate held for investment	9,065,457		6,931,072
Accumulated depreciation	(576,004)		(473,382)
Investments in real estate, net	8,489,453		6,457,690
Cash and cash equivalents	37,141		43,987
Restricted cash	—		11

Rents and other receivables, net	12,592		11,027
Deferred rent receivable, net	81,867		61,511
Deferred leasing costs, net	42,758		32,940
Deferred loan costs, net	5,184		1,961
Acquired lease intangible assets, net	175,913		132,158
Acquired indefinite-lived intangible	5,156		5,156
Interest rate swap asset	12,565		—
Other assets	27,868		19,066
Acquisition related deposits	8,200		8,445

Assets associated with real estate held for sale	—		7,213
Total Assets	$	8,898,697	$	6,781,165
LIABILITIES & EQUITY
Liabilities
Notes payable	$	1,934,082	$	1,399,565
Interest rate swap liability	—		7,482
Accounts payable, accrued expenses and other liabilities	113,770		65,833
Dividends and distributions payable	59,926		40,143
Acquired lease intangible liabilities, net	154,851		127,017
Tenant security deposits	69,756		57,370
Prepaid rents	19,992		15,829
Liabilities associated with real estate held for sale	—		231
Total Liabilities	2,352,377		1,713,470
Equity
Rexford Industrial Realty, Inc. stockholders’ equity
Preferred stock, $0.01 par value per share, 10,050,000 shares authorized:

5.875% series B cumulative redeemable preferred stock, 3,000,000 shares outstanding at September 30, 2022 and December 31, 2021 ($75,000 liquidation preference)	72,443		72,443
5.625% series C cumulative redeemable preferred stock, 3,450,000 shares outstanding at September 30, 2022 and December 31, 2021 ($86,250 liquidation preference)	83,233		83,233
Common Stock, $0.01 par value per share, 489,950,000 authorized and 182,576,706 and 160,511,482 shares outstanding at September 30, 2022 and December 31, 2021, respectively	1,826		1,605
Additional paid-in capital	6,254,853		4,828,292
Cumulative distributions in excess of earnings	(237,135)		(191,120)
Accumulated other comprehensive loss	9,223		(9,874)
Total stockholders’ equity	6,184,443		4,784,579
Noncontrolling interests	361,877		283,116
Total Equity	6,546,320		5,067,695
Total Liabilities and Equity	$	8,898,697	$	6,781,165

The accompanying notes are an integral part of these consolidated financial statements.

REXFORD INDUSTRIAL REALTY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands – except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
REVENUES



Rental income	$	162,581	$	115,260	$	452,156	$	319,140
Management and leasing services	163		136		456		350
Interest income	3		7		5		36
TOTAL REVENUES	162,747		115,403		452,617		319,526
OPERATING EXPENSES
Property expenses	39,614		27,501		108,448		75,631
General and administrative	14,951		11,806		44,531		33,981
Depreciation and amortization	51,146		38,676		140,226		110,048
TOTAL OPERATING EXPENSES	105,711		77,983		293,205		219,660
OTHER EXPENSES
Other expenses	413		4		746		35
Interest expense	14,975		10,427		34,826		29,772

TOTAL EXPENSES	121,099		88,414		328,777		249,467


Loss on extinguishment of debt	—		(505)		(877)		(505)
Gains on sale of real estate	—		13,702		8,486		27,312





NET INCOME	41,648		40,186		131,449		96,866
Less: net income attributable to noncontrolling interests	(2,368)		(2,173)		(7,142)		(5,852)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.	39,280		38,013		124,307		91,014
Less: preferred stock dividends	(2,314)		(2,976)		(6,943)		(10,249)
Less: original issuance costs of redeemed preferred stock	—		(3,349)		—		(3,349)
Less: earnings allocated to participating securities	(201)		(143)		(605)		(423)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	36,765	$	31,545	$	116,759	$	76,993
Net income attributable to common stockholders per share - basic	$	0.21	$	0.23	$	0.70	$	0.57
Net income attributable to common stockholders per share - diluted	$	0.21	$	0.23	$	0.70	$	0.57
Weighted average shares of common stock outstanding - basic	171,908,895		138,762,384		165,852,466		134,922,168
Weighted average shares of common stock outstanding - diluted	172,831,173		139,630,475		166,401,434		135,429,176

The accompanying notes are an integral part of these consolidated financial statements.

REXFORD INDUSTRIAL REALTY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited and in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	41,648	$	40,186	$	131,449	$	96,866
Other comprehensive income (loss): cash flow hedge adjustments	12,694		(900)		19,861		4,806
Comprehensive income	54,342		39,286		151,310		101,672
Comprehensive income attributable to noncontrolling interests	(2,865)		(2,188)		(7,906)		(6,183)
Comprehensive income attributable to Rexford Industrial Realty, Inc.	$	51,477	$	37,098	$	143,404	$	95,489

The accompanying notes are an integral part of these consolidated financial statements.

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 (Loss) Income		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at June 30, 2022	$	155,676	171,064,419	$	1,711	$	5,556,819	$	(216,588)	$	(2,974)	$	5,494,644	$	357,054	$	5,851,698


Issuance of common stock	—		11,515,553	115		705,587		—		—		705,702		—		705,702
Offering costs	—		—	—		(8,876)		—		—		(8,876)		—		(8,876)


Share-based compensation	—		(1,274)	—		1,436		—		—		1,436		5,047		6,483
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock	—		(1,992)	—		(113)		—		—		(113)		—		(113)

Acquisition of private REIT - preferred units	—		—	—		—		—		—		—		122		122
Net income	2,314		—	—		—		36,966		—		39,280		2,368		41,648
Other comprehensive income	—		—	—		—		—		12,197		12,197		497		12,694

Preferred stock dividends ($0.367188 per series B preferred share and $0.351563 per series C preferred share)	(2,314)		—	—		—		—		—		(2,314)		—		(2,314)
Preferred unit distributions	—		—	—		—		—		—		—		(798)		(798)
Common stock dividends ($0.315 per common share)	—		—	—		—		(57,513)		—		(57,513)		—		(57,513)
Common unit distributions	—		—	—		—		—		—		—		(2,413)		(2,413)
Balance at September 30, 2022	$	155,676	182,576,706	$	1,826	$	6,254,853	$	(237,135)	$	9,223	$	6,184,443	$	361,877	$	6,546,320

The accompanying notes are an integral part of these consolidated financial statements.

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 Loss		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at June 30, 2021	$	242,327	137,727,998	$	1,377	$	3,499,623	$	(182,851)	$	(12,319)	$	3,548,157	$	284,615	$	3,832,772

Issuance of common stock	—		13,688,432	137		791,129		—		—		791,266		—		791,266
Offering costs	—		—			(8,552)		—		—		(8,552)		—		(8,552)


Share-based compensation	—		16,238	—		1,000		—		—		1,000		3,596		4,596
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock	—		(609)	—		(38)		—		—		(38)		—		(38)
Conversion of OP Units to common stock	—		12,849	—		438		—		—		438		(438)		—
Net income	2,976		—	—		—		35,037				38,013		2,173		40,186
Other comprehensive income	—		—	—		—		—		(915)		(915)		15		(900)
Redemption of 5.875% series A preferred stock	(86,651)		—	—		—		(3,349)		—		(90,000)		—		(90,000)
Preferred stock dividends ($0.183594 per series A preferred share, $0.367188 per series B preferred share and $0.351563 per series C preferred share)	(2,976)		—	—		—		—		—		(2,976)		—		(2,976)
Preferred unit distributions	—		—	—		—		—		—		—		(708)		(708)
Common stock dividends ($0.24 per common share)	—		—	—		—		(36,347)		—		(36,347)		—		(36,347)
Common unit distributions	—		—	—		—		—		—		—		(1,623)		(1,623)
Balance at September 30, 2021	$	155,676	151,444,908	$	1,514	$	4,283,600	$	(187,510)	$	(13,234)	$	4,240,046	$	287,630	$	4,527,676

The accompanying notes are an integral part of these consolidated financial statements.

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 (Loss) Income		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021	$	155,676	160,511,482	$	1,605	$	4,828,292	$	(191,120)	$	(9,874)	$	4,784,579	$	283,116	$	5,067,695
Issuance of common stock	—		21,885,446	219		1,441,506		—		—		1,441,725		—		1,441,725
Offering costs	—		—	—		(20,122)		—		—		(20,122)		—		(20,122)
Issuance of OP Units	—		—	—		—		—		—		—		56,167		56,167
Issuance of 3.00% cumulative redeemable convertible preferred units	—		—	—		—		—		—		—		12,000		12,000
Share-based compensation	—		123,840	1		4,090		—		—		4,091		15,073		19,164
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock	—		(31,230)	—		(2,138)		—		—		(2,138)		—		(2,138)
Conversion of OP units to common stock	—		87,168	1		3,225		—		—		3,226		(3,226)		—
Acquisition of private REIT - preferred units	—		—	—		—		—		—		—		122		122
Net income	6,943		—	—		—		117,364		—		124,307		7,142		131,449
Other comprehensive income	—		—	—		—		—		19,097		19,097		764		19,861

Preferred stock dividends ($1.101564 per series B preferred share and $1.054689 per series C preferred share)	(6,943)		—	—		—		—		—		(6,943)		—		(6,943)
Preferred unit distributions	—		—	—		—		—		—		—		(2,319)		(2,319)
Common stock dividends ($0.945 per common share)	—		—	—		—		(163,379)		—		(163,379)		—		(163,379)
Common unit distributions	—		—	—		—		—		—		—		(6,962)		(6,962)
Balance at September 30, 2022	$	155,676	182,576,706	$	1,826	$	6,254,853	$	(237,135)	$	9,223	$	6,184,443	$	361,877	$	6,546,320

The accompanying notes are an integral part of these consolidated financial statements.

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 (Loss) Income		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	$	242,327	131,426,038	$	1,313	$	3,182,599	$	(163,389)	$	(17,709)	$	3,245,141	$	285,451	$	3,530,592


Issuance of common stock	—		19,711,131	198		1,104,244		—		—		1,104,442		—		1,104,442
Offering costs	—		—	—		(12,284)		—		—		(12,284)		—		(12,284)


Share-based compensation	—		109,029	1		2,790		—		—		2,791		10,703		13,494
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock	—		(28,943)	—		(1,403)		—		—		(1,403)		—		(1,403)
Conversion of units to common stock	—		227,653	2		7,654		—		—		7,656		(7,656)		—

Net income	10,249		—	—		—		80,765		—		91,014		5,852		96,866
Other comprehensive income	—		—	—		—		—		4,475		4,475		331		4,806
Redemption of 5.875% series A preferred stock	(86,651)		—	—		—		(3,349)		—		(90,000)		—		(90,000)
Preferred stock dividends ($0.917970 per series A preferred share, $1.101564 per series B preferred share and $1.054689 per series C preferred share)	(10,249)		—	—		—		—		—		(10,249)		—		(10,249)
Preferred unit distributions	—		—	—		—		—		—		—		(2,124)		(2,124)
Common stock dividends ($0.72 per share)	—		—	—		—		(101,537)		—		(101,537)		—		(101,537)
Common unit distributions	—		—	—		—		—		—		—		(4,927)		(4,927)
Balance at September 30, 2021	$	155,676	151,444,908	$	1,514	$	4,283,600	$	(187,510)