UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

 

FORM 8-K  

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

August 5, 2014 

 

REXFORD INDUSTRIAL REALTY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Registrant’s telephone number, including area code: (310) 966-1680

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

 

 

 

 

 

 

 

 

 

 

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ITEM 8.01 OTHER EVENTS

On January 22, 2014, Rexford Industrial Realty, Inc. (the “Company”), through its operating partnership, Rexford Industrial Realty, L.P. (the “Operating Partnership”), acquired the property located at 14723-14825 Oxnard Street (“Oxnard”) located in Van Nuys, California from an unaffiliated third-party seller for a purchase price of $8.875 million using proceeds from our revolving credit facility.  The property consists of six multi-tenant buildings totaling 78,000 rentable square feet situated on 3.25 acres of land.  

On February 12, 2014, the Company, through its Operating Partnership, acquired the property located at 845, 855 and 865 Milliken Avenue and 4317 and 4319 Santa Ana Street (“Ontario”) located in Ontario, California from an unaffiliated third-party seller for a purchase price of $8.55 million as part of a 1031 exchange using proceeds from the disposition of the property located at 1335 Park Center Drive.  The property consists of a five-building multi-tenant industrial business park totaling 113,612 square feet situated on 5.74 acres of land.

 On June 24, 2014, the Company, through its Operating Partnership, acquired the property located at 4051 Santa Ana Street and 701 Dupont Avenue (“Dupont”) located in Ontario, California from an unaffiliated third-party seller for a purchase price of $10.2 million using proceeds from our revolving credit facility.  The property consists of a two-building multi-tenant industrial business park totaling 111,890 square feet situated on 5.7 acres of land.

On July 24, 2014, the Company, through its Operating Partnership, acquired the Chatsworth Industrial Park located at 21019-21051 Osborne Street, 9035 Independence Avenue and 21026-21040 Nordhoff Street (“Chatsworth”) in Chatsworth, CA for a contract price of $16.8 million using funds from our revolving credit facility.  The property consists of seven buildings totaling 153,212 square feet situated on 7.4 acres of land.

Set forth in Item 9.01 are financial statements prepared pursuant to Rule 3-14 of Regulation S-X relating to the acquisition of each of Oxnard, Ontario, Dupont and Chatsworth, each of which individually is not considered significant within the meaning of Rule 3-14.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto authorized.

 

 

Exhibit 99.1

Table of Contents

 

 

 

 

 

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Report of Independent Auditors

The Board of Directors and Stockholders of Rexford Industrial Realty, Inc.

We have audited the accompanying statement of revenues and certain expenses (“the financial statement”) of the 14723-14825 Oxnard Street property (“the Property”) for the year ended December 31, 2013, and the related notes to the financial statement.

Management’s Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates, made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses as described in Note 1 of the Property’s financial statement for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

Basis of Accounting

As described in Note 1 to the financial statement, the statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

Los Angeles, California

August 4, 2014

 

2

 

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14723-14825 OXNARD STREET

STATEMENT OF REVENUES AND CERTAIN EXPENSES

YEAR ENDED DECEMBER 31, 2013

(in thousands)

 

 

 

 

3

 

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14723-14825 OXNARD STREET

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

 

 

The accompanying statement of revenues and certain expenses present the results of operations of the industrial property complex located at 14723-14825 Oxnard Street (the “Property”) for the year ended December 31, 2013.  The Property, which is located in Van Nuys, California, consists of six multi-tenant industrial buildings totaling 78,000 rentable square feet (unaudited) situated on 3.25 acres (unaudited) of land.  The Property was acquired by Rexford Industrial Realty, Inc., through its operating partnership, Rexford Industrial Realty, L.P. from a third-party seller on January 22, 2014 for approximately $8.875 million.

  

The accompanying statement of revenues and certain expenses has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statement is not representative of the actual operations for the period presented as revenues and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred through the future operations of the Property, have been excluded. Such items include depreciation, amortization, interest expense, interest income, management fee expense, and amortization of above and below market leases.

 

2. SIGNIFICANT ACCOUNTING POLICES

 

Revenue Recognition

The Property recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset.  

Use of Estimates

A number of estimates and assumptions have been made relating to the reporting and disclosure of revenues and certain expenses during the reporting period to prepare the statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates.

 

3.MINIMUM FUTURE LEASE RENTALS

There are various lease agreements in place with tenants to lease space at the Property. As of  December 31, 2013, the minimum future cash rents receivable under non-cancelable operating leases and month-to-month agreements in each of the next five years and thereafter are as follows (in thousands):

 

 

4

 

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14723-14825 OXNARD STREET

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

 

 

 

4.      TENANT CONCENTRATIONS

For the year ended December 31, 2013, no single tenant individually represented 10% or more of the Property’s total rental revenue.

5.       COMMITMENTS AND CONTINGENCIES

The Property is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance and the ultimate settlement of these actions will not have a material adverse effect on the Property’s results of operations.

6.       SUBSEQUENT EVENTS

Subsequent events were evaluated through August 4, 2014, the date the financial statements were available to be issued.

5

 

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Report of Independent Auditors

The Board of Directors and Stockholders of Rexford Industrial Realty, Inc.

We have audited the accompanying statement of revenues and certain expenses (“the financial statement”) of the 845, 855, 865 Milliken Avenue and 4317 and 4319 Santa Ana Street property (“the Property”) for the year ended December 31, 2013, and the related notes to the financial statement.

Management’s Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates, made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses as described in Note 1 of the Property’s financial statement for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

Basis of Accounting

As described in Note 1 to the financial statement, the statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

Los Angeles, California

August 4, 2014

 

6

 

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845, 855, 865 MILLIKEN AVENUE AND 4317, 4319 SANTA ANA STREET

STATEMENT OF REVENUES AND CERTAIN EXPENSES

YEAR ENDED DECEMBER 31, 2013

(in thousands)

 

 

 

 

 

7

 

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845, 855, 865 MILLIKEN AVENUE AND 4317, 4319 SANTA ANA STREET

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

 

 

The accompanying statement of revenues and certain expenses present the results of operations of the industrial property located at 845, 855, 865 Milliken Avenue and 4317 and 4319 Santa Ana Street in Ontario, California (the “Property”) for the year ended December 31, 2013.  The Property consists of five multi-tenant buildings with 113,612 rentable square feet (unaudited) situated on 5.74 acres (unaudited) of land.  The Property was acquired by Rexford Industrial Realty, Inc., through its operating partnership, Rexford Industrial Realty, L.P. from a third-party seller on February 12, 2014 for approximately $8.55 million.

  

The accompanying statement of revenues and certain expenses has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statement is not representative of the actual operations for the period presented as revenues and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred through the future operations of the Property, have been excluded. Such items include depreciation, amortization, interest expense, interest income, management fee expense, and amortization of above and below market leases.

 

2. SIGNIFICANT ACCOUNTING POLICES

 

Revenue Recognition

The Property recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset.  

Tenant reimbursements related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Property is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk.

Use of Estimates

A number of estimates and assumptions have been made relating to the reporting and disclosure of revenues and certain expenses during the reporting period to prepare the statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates.

3.MINIMUM FUTURE LEASE RENTALS

There are various lease agreements in place with tenants to lease space at the Property. As of December 31, 2013, the minimum future cash rents receivable under non-cancelable operating leases agreements in each of the next five years and thereafter are as follows (in thousands):

 

 

 

8

 

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845, 855, 865 MILLIKEN AVENUE AND 4317, 4319 SANTA ANA STREET

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

 

 

 

Leases generally require reimbursement of the tenant's proportional share of common area, real estate taxes and other operating expenses, which are excluded from the amounts above.

4.      TENANT CONCENTRATIONS

For the year ended December 31, 2013, two tenants represented 40.0% of the Property’s total rental revenue.

5.       COMMITMENTS AND CONTINGENCIES

The Property is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance and the ultimate settlement of these actions will not have a material adverse effect on the Property’s results of operations.

6.       SUBSEQUENT EVENTS

Subsequent events were evaluated through August 4, 2014, the date the financial statements were available to be issued.

9

 

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Report of Independent Auditors

The Board of Directors and Stockholders of Rexford Industrial Realty, Inc.

We have audited the accompanying statement of revenues and certain expenses (“the financial statement”) of the 4051 Santa Ana Street and 710 Dupont Avenue property (“the Property”) for the year ended December 31, 2013, and the related notes to the financial statement.

Management’s Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedaures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates, made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses as described in Note 1 of the Property’s financial statement for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

Basis of Accounting

As described in Note 1 to the financial statement, the statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ Ernst & Young LLP

Los Angeles, California

August 4, 2014

 

10

 

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4051 SANTA ANA STREET AND 710 DUPONT AVENUE

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

THREE-MONTHS ENDED MARCH 31, 2014 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 2013

(in thousands)

 

 

 

 

 

 

 

11

 

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4051 SANTA ANA STREET AND 710 DUPONT AVENUE

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

 

 

The accompanying statements of revenues and certain expenses present the results of operations of the industrial property located at 4051 Santa Ana Street and 710 Dupont Avenue (the “Property”) for the three months ended March 31, 2014 (unaudited) and the year ended December 31, 2013.  The Property, which is located in Ontario, California, consists of two multi-tenant buildings with 111,890 rentable square feet (unaudited) situated on 5.7 acres (unaudited) of land.  The Property was acquired by Rexford Industrial Realty, Inc., through its operating partnership, Rexford Industrial Realty, L.P. from a third-party seller on June 24, 2014 for approximately $10.2 million.

  

The accompanying statements of revenues and certain expenses has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual operations for the periods presented as revenues and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred through the future operations of the Property, have been excluded. Such items include depreciation, amortization, interest expense, interest income, management fee expense, and amortization of above and below market leases.

Unaudited Interim Financial Information

The accompanying interim unaudited statement of revenues and certain expenses for the three-months ended March 31, 2014 has been prepared by the Property’s management pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) may have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading. The unaudited statement of revenues and certain expenses for the three-months ended March 31, 2014, include, in the opinion of management, 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 ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ended December 31, 2014.

 

 

2. SIGNIFICANT ACCOUNTING POLICES

 

Revenue Recognition

The Property recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset.  

Tenant reimbursements related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Property is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk.

 

12

 

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4051 SANTA ANA STREET AND 710 DUPONT AVENUE

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

 

 

Use of Estimates

A number of estimates and assumptions have been made relating to the reporting and disclosure of revenues and certain expenses during the reporting period to prepare the statement of revenues and certain expenses in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates.

 

3.MINIMUM FUTURE LEASE RENTALS

There are various lease agreements in place with tenants to lease space at the Property. As of March 31, 2014, the minimum future cash rents receivable under non-cancelable operating leases agreements in each of the next five years and thereafter are as follows (unaudited and in thousands):

 

 

Leases generally require reimbursement of the tenant's proportional share of common area, real estate taxes and other operating expenses, which are excluded from the amounts above.

4.      TENANT CONCENTRATIONS

For the three months ended March 31, 2014 and the year ended December 31, 2013, two of five total tenants represented 61.0% (unaudited) and 74.2%, respectively, of the Property’s rental revenue.

5.       COMMITMENTS AND CONTINGENCIES

The Property is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance and the ultimate settlement of these actions will not have a material adverse effect on the Property’s results of operations.

6.       SUBSEQUENT EVENTS

Subsequent events were evaluated through August 4, 2014, the date the financial statements were available to be issued.

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Report of Independent Auditors

 

The Board of Directors and Stockholders of Rexford Industrial Realty, Inc.

 

We have audited the accompanying statement of revenues and certain expenses (“the financial statement”) of the Chatsworth Industrial Park property (“the Property”) for the year ended December 31, 2013, and the related notes to the financial statement.

 

Management’s Responsibility for the Financial Statement

 

Management is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free of material misstatement, whether due to fraud or error.

 

Auditor’s Responsibility

 

Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates, made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

 

In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses as described in Note 1 of the Property’s financial statement for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

 

Basis of Accounting

 

As described in Note 1 to the financial statement, the statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion is not modified with respect to this matter.

 

/s/ Ernst & Young LLP

 

Los Angeles, California

August 4, 2014

 

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CHATSWORTH INDUSTRIAL PARK

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

THREE-MONTHS ENDED MARCH 31, 2014 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 2013

(in thousands)

 

 

 

 

 

 

 

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CHATSWORTH INDUSTRIAL PARK

NOTES TO THE STATEMENTS OF REVENUES AND CERTAIN EXPENSES

 

 

 

The accompanying statements of revenues and certain expenses present the results of operations of Chatsworth Industrial Park (the “Property”) for the three months ended March 31, 2014 (unaudited) and the year ended December 31, 2013.  The Property which is located at 21026-21040 Nordhoff Street, 9035 Independence Avenue, and 21019, 21021, 21025, 21029, 21045-21051 Osborne Street in Chatsworth, CA consists of seven single- and multi-tenant buildings with 153,212 rentable square feet (unaudited).  The Property was acquired by Rexford Industrial Realty, Inc., through its operating partnership, Rexford Industrial Realty, L.P. from a third-party seller on July 24, 2014 for approximately $16.8 million.

  

The accompanying statements of revenues and certain expenses has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual operations for the periods presented as revenues and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred through the future operations of the Property, have been excluded. Such items include depreciation, amortization, interest expense, interest income, management fee expense, and amortization of above and below market leases.

Unaudited Interim Financial Information

 

The accompanying interim unaudited statement of revenues and certain expenses for the three-months ended March 31, 2014 has been prepared by the Property’s management pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) may have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading. The unaudited statement of revenues and certain expenses for the three-months ended March 31, 2014, include, in the opinion of management, 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 ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ended December 31, 2014.

 

2. SIGNIFICANT ACCOUNTING POLICES

 

Revenue Recognition

The Property recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset.  

Tenant reimbursements related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Property is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk.

 

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CHATSWORTH INDUSTRIAL PARK

NOTES TO THE STATEMENTS OF REVENUES AND CERTAIN EXPENSES

 

 

 

Use of Estimates

A number of estimates and assumptions have been made relating to the reporting and disclosure of revenues and certain expenses during the reporting periods to prepare the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates.

 

3.MINIMUM FUTURE LEASE RENTALS

There are various lease agreements in place with tenants to lease space at the Property. As of March 31, 2014, the minimum future cash rents receivable under non-cancelable operating leases and month-to-month agreements in each of the next five years and thereafter are as follows (unaudited and in thousands):

 

 

Leases generally require reimbursement of the tenant's proportional share of common area, real estate taxes and other operating expenses, which are excluded from the amounts above.

4.      TENANT CONCENTRATIONS

For the three months ended March 31, 2014 and the year ended December 31, 2013, one tenant represented 24.7% (unaudited) and 24.9%, respectively, of the Property’s total rental revenue.

5.       COMMITMENTS AND CONTINGENCIES

The Property is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance and the ultimate settlement of these actions will not have a material adverse effect on the Property’s results of operations.

6.       SUBSEQUENT EVENTS

Subsequent events were evaluated through August 4, 2014, the date the financial statements were available to be issued.

 

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REXFORD INDUSTRIAL REALTY, INC.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

 

 

 

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2014 is based on Rexford Industrial Realty, Inc.’s (the “Company”) historical consolidated balance sheet and reflects the subsequent acquisition of (i) a nine property industrial portfolio from a single-seller (the “Portfolio”), (ii) 4051 Santa Ana Street and 701 Dupont Avenue (“Dupont”) and (iii) Chatsworth Industrial Park (“Chatsworth”) and the related borrowings on the revolving credit facility and the term loan as if such transactions had occurred on March 31, 2014.

  The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2014 and the year ended December 31, 2013 are based on the Company’s and to the extent applicable, its Predecessor’s, historical statements of operations and have been prepared to reflect the incremental effect of the Company’s initial public offering on July 24, 2013, the Company’s acquisition of the Portfolio, and the Company’s acquisition of the following properties: Dupont, Chatsworth, 845, 855 and 865 Milliken Avenue and 4317 and 4319 Santa Ana Street (“Ontario”), and 14723-14825 Oxnard Street (“Oxnard”) (collectively the “Other Properties”), as if such transactions had occurred on January 1, 2013.  

The unaudited pro forma financial information is not necessarily indicative of what the Company’s results of operations or financial condition would have been assuming the Company’s initial public offering and acquisitions of the Portfolio and the Other Properties had occurred at the beginning of the periods presented, nor is it indicative of the Company’s results of operations or financial condition for future periods. In management’s opinion, all adjustments necessary to reflect the effects of these transactions have been made. The unaudited pro forma condensed consolidated financial information and accompanying notes should be read in conjunction with the Company’s financial statements included on Form 10-K for the year ended December 31, 2013 and Quarterly Report on Form 10-Q for the three months ended March 31, 2014.

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REXFORD INDUSTRIAL REALTY, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of March 31, 2014

(in thousands – except share and per share data)

(Unaudited)

 

 

 

17

 

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REXFORD INDUSTRIAL REALTY, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2014

(in thousands – except share and per share data)

(Unaudited)

 

 

 

18

 

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REXFORD INDUSTRIAL REALTY, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2013

(in thousands – except share and per share data)

(Unaudited)

 

 

 

19

 

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REXOFRD INDUSTRIAL REALTY, INC.

NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

  

 

 

 

 

20

 

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REXOFRD INDUSTRIAL REALTY, INC.

NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

21

 

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REXOFRD INDUSTRIAL REALTY, INC.

NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

22