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8-K


 
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):
May 4, 2016 
 
REXFORD INDUSTRIAL REALTY, INC.
(Exact name of registrant as specified in its charter) 
 
 
Maryland
 
001-36008
 
46-2024407
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 

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

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

 





ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 4, 2016, Rexford Industrial Realty, Inc. (“Rexford Industrial”) issued a press release announcing its earnings for the quarter ended March 31, 2016 and distributed certain supplemental financial information. On May 4, 2016, Rexford Industrial also posted the supplemental financial information on its website located at www.rexfordindustrial.com.  Copies of the press release and supplemental financial information are furnished herewith as Exhibits 99.1 and 99.2, respectively.
The information included in this Current Report on Form 8-K under this Item 2.02 (including Exhibits 99.1 and 99.2 hereto) are being “furnished” and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of the Exchange Act, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 7.01 REGULATION FD DISCLOSURE  
As discussed in Item 2.02 above, Rexford Industrial issued a press release announcing its earnings for the quarter ended March 31, 2016 and distributed certain supplemental information.  On May 4, 2016, Rexford Industrial also posted the supplemental financial information on its website located at www.rexfordindustrial.com.  
The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 and 99.2 hereto) is being “furnished” and shall not be deemed to be “filed” for the purposes of the Exchange Act, or otherwise subject to the liabilities of the Exchange Act, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 and 99.2 hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)    Exhibits.
 
99.1
Press Release dated May 4, 2016
 
 
99.2
First Quarter 2016 Supplemental Financial Report





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Rexford Industrial Realty, Inc.
May 4, 2016
 
/s/ Michael S. Frankel
 
Michael S. Frankel
Co-Chief Executive Officer
(Principal Executive Officer)
 
 
 
Rexford Industrial Realty, Inc.
May 4, 2016
 
/s/ Howard Schwimmer
 
Howard Schwimmer
Co-Chief Executive Officer
(Principal Executive Officer)





EXHIBIT INDEX

Exhibit
Number
  
Description
99.1
  
Press Release dated May 4, 2016
 
 
 
99.2
  
First Quarter 2016 Supplemental Financial Report



Exhibit
Exhibit 99.1


 


REXFORD INDUSTRIAL ANNOUNCES FIRST QUARTER 2016 FINANCIAL RESULTS

- Reports Recurring FFO of $0.22 per Diluted Share for First Quarter-
- Same Property NOI Up 8.3% Compared to First Quarter 2015 -
- Stabilized Same Property Portfolio Occupancy At 95.1%, Up 320 Basis Points Year-Over-Year -



Los Angeles, California - May 4, 2016 - Rexford Industrial Realty, Inc. (the “Company” or “Rexford Industrial”) (NYSE: REXR), a real estate investment trust (“REIT”) that specializes in acquiring, owning and operating industrial properties located in Southern California infill markets, today announced financial results for the first quarter 2016.


First Quarter 2016 Financial and Operational Highlights:

•
Recurring Funds From Operations (FFO) of $0.22 per diluted share for the quarter ended March 31, 2016. Including non-recurring items, FFO was $0.22 per diluted share.
•
Total rental revenues of $27.4 million, which represents an increase of 30.8% year-over-year. Property Net Operating Income (NOI) of $19.8 million, which represents an increase of 30.8% year-over-year.
•
Same Property Portfolio NOI increased 8.3% in the first quarter of 2016 compared to the first quarter of 2015, driven by an 8.4% increase in Same Property Portfolio total rental revenue and an 8.7% increase in Same Property Portfolio operating expenses. Same Property Portfolio Cash NOI increased 8.2% compared to the first quarter 2015.
•
Signed new and renewal leases totaling 961,291 rentable square feet. Rental rates on new and renewal leases were 13.6% higher than prior rents on a GAAP basis and 5.6% higher on a cash basis.
•
Stabilized Same Property Portfolio occupancy was 95.1%, which represents an increase of 320 basis points year-over-year. Same Property Portfolio occupancy was 91.7%, which represents an increase of 100 basis points year-over-year.
•
At March 31, 2016, the consolidated portfolio including repositioning assets was 88.1% occupied, which represents a decrease of 140 basis points year-over-year. At March 31, 2016, the consolidated portfolio, excluding repositioning assets aggregating 937,420 rentable square feet, was 95.5% occupied.
•
During the first quarter 2016, the Company acquired two industrial properties for an aggregate purchase price of $24.5 million.
•
Subsequent to quarter end, the Company acquired a private REIT comprising a portfolio of nine industrial properties for a total purchase price of approximately $191.0 million.
•
Subsequent to quarter end, the Company issued 10.35 million additional shares of its common stock, for net proceeds of approximately $175.1 million.
•
Subsequent to quarter end, the Company exercised the $100.0 million accordion on the $125.0 million 7-year term loan.

“We are pleased with our strong start to 2016, measured by accretive internal and external growth,” stated Michael Frankel and Howard Schwimmer, Co-Chief Executive Officers of the Company. “During the quarter, we grew consolidated revenue by over 30% and generated an 8.3% increase in our Same Property Portfolio NOI compared to the prior year quarter. Our team leased over 961,000 rentable square feet, with rental rates on new and renewal leases increasing by 13.6%, our tenth consecutive quarter of positive double-digit leasing spreads, and we acquired two high quality industrial properties. Subsequent to quarter end, we acquired a portfolio of nine industrial properties in four of our target infill submarkets, adding in excess of 1.5 million square feet to our portfolio, which was partially funded with $175.1 million in net proceeds from our recent equity offering. Looking ahead, the Company is well-positioned to continue to enhance shareholder value as we capitalize upon our substantial internal and external growth opportunities within a strong performing infill Southern California industrial market.”





Financial Results:

The Company reported net income attributable to common stockholders of $1.3 million for the three months ended March 31, 2016, as compared to net income attributable to common stockholders of $27,000 for the three months ending March 31, 2015.

The Company reported Company share of Recurring FFO of $12.0 million, or $0.22 per diluted share of common stock, for the three months ended March 31, 2016, as compared to Company share of Recurring FFO of $10.1 million, or $0.20 per diluted share of common stock, for the three months ending March 31, 2015. Including non-recurring legal fee reimbursements of $0.6 million and acquisition expenses of $0.5 million reported during the first quarter of 2016, Company share of FFO was $12.1 million, or $0.22 per diluted share of common stock, as compared to Company share of FFO of $9.5 million, or $0.19 per diluted share of common stock, for the three months ending March 31, 2015.

Operating Results:

For the three months ended March 31, 2016, the Company’s Same Property Portfolio NOI increased 8.3% compared to the first quarter of 2015, driven by an 8.4% increase in Same Property Portfolio total rental revenue, and an 8.7% increase in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 8.2% compared to the first quarter 2015.

In the first quarter of 2016, the Company signed 126 new and renewal leases in its consolidated portfolio, totaling 961,291 rentable square feet. Average rental rates on comparable new and renewal leases were up 13.6% on a GAAP basis and up 5.6% on a cash basis. The Company signed 46 new leases for 248,520 rentable square feet, with GAAP rents up 28.8% compared to the prior in place leases. The Company signed 80 renewal leases for 712,771 rentable square feet, with GAAP rents up 11.7% compared to the prior in-place leases. For the 46 new leases, cash rents were up 15.0%, and for the 80 renewal leases, cash rents were up 4.4%, compared to the ending cash rents for the prior leases.

The Company has included in a supplemental information package the detailed results and operating statistics that reflect the activities of the Company for the three months ended March 31, 2016. See below for information regarding the supplemental information package. 

Transaction Activity:

In the first quarter 2016, the Company acquired two industrial properties, for an aggregate purchase price of $24.5 million, as detailed below.

In March 2016, the Company acquired 8525 Camino Santa Fe, a four tenant industrial building containing 59,399 square feet in the Central San Diego submarket for $8.5 million, or approximately $142 per square foot.

In March 2016, the Company acquired 28454 Livingston Avenue, a single-tenant industrial building containing 134,287 square feet in Valencia within the Los Angeles’ San Fernando Valley submarket for $16.0 million, or approximately $119 per square foot.
 
Subsequent Events:

In April 2016, the Company acquired a private REIT comprised of a portfolio of nine industrial properties for a total purchase price of approximately $191.0 million, or approximately $125 per square foot, exclusive of closing costs. The portfolio consists of nine properties located in four of the Company’s core infill Southern California industrial markets, including Orange County, Los Angeles-San Gabriel Valley, Inland Empire West, and Central San Diego, totaling approximately 1.53 million rentable square feet.

In April 2016, the Company issued 10.35 million shares of its common stock at $17.65 per share, for net proceeds of approximately $175.1 million after deducting the underwriting discount and offering expenses. In addition, the Company exercised the $100 million accordion on the $125 million 7-year term loan. The proceeds from the equity offering and the accordion expansion were used to fund the $191 million portfolio acquisition completed in April and to pay down the outstanding balance on the revolving credit facility.




Balance Sheet:
 
At March 31, 2016, the Company had $445.6 million of outstanding debt, with an average interest rate of 3.158% and an average term-to-maturity of 5.6 years. As of March 31, 2016, $160 million of the Company’s floating-rate debt has been effectively fixed at 3.461% through the use of interest rate swaps. As a result of interest rate swaps and the issuance of $100 million of fixed-rate notes last year, approximately $278.1 million, or 62%, of the Company’s outstanding debt was fixed-rate with an average interest rate of 3.86% and an average term-to-maturity of 5.5 years. The remaining $167.5 million, or 38%, of the Company’s outstanding debt was floating-rate, with an average interest rate of LIBOR + 1.55% and an average term-to-maturity of 5.6 years.

During the first quarter of 2016, the Company closed on a seven-year $125 million unsecured term loan facility. The term loan facility matures on January 14, 2023 and bears interest at LIBOR plus an applicable Eurodollar rate margin that will range from 1.50% to 2.25% per annum depending on the Company's leverage ratio. The proceeds were used to repay amounts outstanding under the Company's unsecured revolving credit facility and for general corporate purposes.

During the first quarter of 2016, the Company also executed a forward interest swap that will effectively fix the $125 million unsecured term loan facility at 1.349% plus an applicable Eurodollar rate margin from February 14, 2018 to January 14, 2022. If this interest rate swap was effective as of March 31, 2016, the Company's consolidated debt would be 90% fixed and 10% variable.

Guidance

The Company is increasing its full year 2016 guidance range for Company share of Recurring FFO to a range of $0.85 to $0.88 per diluted share of common stock. This Recurring FFO guidance refers only to the Company's in-place portfolio as of May 4, 2016 and does not include any assumptions for acquisitions or dispositions that may occur later during the year. Full year guidance otherwise remains unchanged and assumes the following: year-end Same Property Portfolio occupancy within a range of 94% to 95%, Same Property Portfolio NOI growth for the year of 5% to 7% and general & administrative expenses of $16.5 to $17.0 million dollars.

Dividend:

On May 2, 2016, the Board of Directors declared a dividend of $0.135 per share for the second quarter of 2016, payable in cash on July 15, 2016, to stockholders and unit holders of record on June 30, 2016.

Supplemental Information:

Details regarding these results can be found in the Company’s supplemental financial package available on the Company’s investor relations website at www.ir.rexfordindustrial.com.

Earnings Release, Investor Conference Webcast and Conference Call:

The Company will host a webcast and conference call on Wednesday, May 4, 2016, at 5:00 p.m. Eastern time to review first quarter results and discuss recent events. The live webcast will be available on the Company’s investor relations website at ir.rexfordindustrial.com. To participate in the call, please dial 877-407-0789 (domestic) or 201-689-8562 (international). A replay of the conference call will be available through June 4, 2016, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13634196.

About Rexford Industrial:

Rexford Industrial is a real estate investment trust focused on owning and operating industrial properties in Southern California infill markets. The Company owns interests in 131 properties with approximately 13.8 million rentable square feet and manages an additional 19 properties with approximately 1.2 million rentable square feet.

For additional information, visit www.rexfordindustrial.com.

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. 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 U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and subsequent filings with the Securities and Exchange Commission. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.
  
Definitions / Discussion of Non-GAAP Financial Measures:

Funds from Operations (FFO): We calculate FFO 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 GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and 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, other than temporary impairments of unconsolidated real estate entities, and impairment on our investment in real estate, 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. A reconciliation of FFO to net income, the nearest GAAP equivalent, is set forth below.

Recurring Funds from Operations (Recurring FFO): We calculate Recurring FFO by adjusting FFO to exclude the impact of certain items that we do not consider indicative of our on-going operating performance. These adjustments consist of non-recurring legal expenses or reimbursements related to prior litigation and acquisition expenses. Management believes that Recurring FFO is a useful supplemental measure as it provides a more meaningful and consistent comparison of operating performance and allows investors to more easily compare the Company's operating results. A reconciliation of FFO to Recurring FFO is set forth below.

Net Operating Income (NOI): Includes the revenue and expense directly attributable to our real estate properties calculated in accordance with GAAP. Calculated as total revenue from real estate operations including i) rental revenues ii) tenant reimbursements, and iii) other 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 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 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 NOI for our Same Property Portfolio to net income for our Same Property Portfolio, is set forth below.

Cash NOI: Cash NOI is a non-GAAP measure, which we calculate by adding or subtracting from NOI i) fair value lease revenue and ii) straight-line rent adjustment. 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 Cash NOI for our Same Property Portfolio to net income for our Same Property Portfolio, is set forth below.

Same Property Portfolio: Our Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly-owned by us as of January 1, 2015 and still owned by us as of March 31, 2016. Therefore, we excluded from our Same Properties Portfolio any properties that were acquired or sold during the period from January 1, 2015 through March 31, 2016. The Company’s computation of same property performance may not be comparable to other REITs.

Stabilized Same Property Portfolio: Our Stabilized Same Property Portfolio represents the properties included in our Same Property Portfolio, adjusted to exclude space at properties that were in various stages of repositioning or lease-up. As of March 31, 2016, space aggregating 350,176 rentable square feet at six of our Same Property Portfolio properties were in various stages of repositioning or lease-up.

Contact:
Investor Relations:

Stephen Swett
424 256 2153 ext 401
investorrelations@rexfordindustrial.com




Rexford Industrial Realty, Inc.
Consolidated Balance Sheets (In thousands)
 
 
March 31, 2016
 
December 31, 2015
 
(unaudited)
 
 
ASSETS
 
 
 
Land
$
501,972

 
$
492,704

Buildings and improvements
667,675

 
650,075

Tenant improvements
30,305

 
28,977

Furniture, fixtures, and equipment
188

 
188

Construction in progress
17,662

 
16,822

Total real estate held for investment
1,217,802

 
1,188,766

Accumulated depreciation
(111,167
)
 
(103,623
)
Investments in real estate, net
1,106,635

 
1,085,143

Cash and cash equivalents
6,402

 
5,201

Rents and other receivables, net
2,939

 
3,040

Deferred rent receivable, net
8,670

 
7,827

Deferred leasing costs, net
6,001

 
5,331

Deferred loan costs, net
1,296

 
1,445

Acquired lease intangible assets, net
28,802

 
30,383

Acquired indefinite-lived intangible
5,271

 
5,271

Other assets
5,580

 
5,523

Acquisition related deposits
400

 
—

Investment in unconsolidated real estate entities
4,144

 
4,087

Total Assets
$
1,176,140

 
$
1,153,251

LIABILITIES & EQUITY
 
 
 
Liabilities
 
 
 
Notes payable
$
444,010

 
$
418,154

Interest rate swap liability
4,949

 
3,144

Accounts payable, accrued expenses and other liabilities
14,897

 
12,631

Dividends payable
7,814

 
7,806

Acquired lease intangible liabilities, net
3,307

 
3,387

Tenant security deposits
11,995

 
11,539

Prepaid rents
2,667

 
2,846

Total Liabilities
489,639

 
459,507

Equity
 
 
 
Rexford Industrial Realty, Inc. stockholders' equity
 
 
 
Common Stock, $0.01 par value 490,000,000 authorized and 55,657,428 and 55,598,684 outstanding as of March 31, 2016 and December 31, 2015, respectively
554

 
553

Additional paid in capital
723,074

 
722,722

Cumulative distributions in excess of earnings
(54,192
)
 
(48,103
)
Accumulated other comprehensive loss
(4,728
)
 
(3,033
)
Total stockholders' equity
664,708

 
672,139

Noncontrolling interests
21,793

 
21,605

Total Equity
686,501

 
693,744

Total Liabilities and Equity
$
1,176,140

 
$
1,153,251




Rexford Industrial Realty, Inc.
Consolidated Statements of Operations (Unaudited and in thousands)


 
Three Months Ended March 31,
 
 
2016
 
2015
 
RENTAL REVENUES
 
 
 
 
Rental revenues
$
23,499

 
$
18,557

 
Tenant reimbursements
3,558

 
2,184

 
Other income
313

 
190

 
TOTAL RENTAL REVENUES
27,370

 
20,931

 
Management, leasing and development services
134

 
132

 
Interest income
—

 
277

 
TOTAL REVENUES
27,504

 
21,340

 
OPERATING EXPENSES
 
 
 
 
Property expenses
7,543

 
5,771

 
General and administrative
3,602

 
3,546

 
Depreciation and amortization
11,214

 
9,884

 
TOTAL OPERATING EXPENSES
22,359

 
19,201

 
OTHER EXPENSE
 
 
 
 
Acquisition expenses
475

 
233

 
Interest expense
3,254

 
1,826

 
TOTAL OTHER EXPENSE
3,729

 
2,059

 
TOTAL EXPENSES
26,088

 
21,260

 
Equity in income from unconsolidated real estate entities
61

 
1

 
NET INCOME
1,477

 
81

 
Less: net income attributable to noncontrolling interest
(52
)
 
(4
)
 
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
1,425

 
77

 
Less: earnings attributable to participating securities
(78
)
 
(50
)
 
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
1,347

 
$
27

 
Net income available to common stockholders per share - basic and diluted
$
0.02

 
$
—

 



Rexford Industrial Realty, Inc.
Same Property Portfolio Statements of Operations and NOI Reconciliation (Unaudited and in thousands)
 
 
Same Property Portfolio Statement of Operations:
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
 
$ Change
 
% Change
 
Rental Revenues
 
 
 
 
 
 
 
 
Rental income
$
19,253

 
$
18,092

 
$
1,161

 
6.4%
 
Tenant reimbursements
2,652

 
2,214

 
438

 
19.8%
 
Other income
299

 
176

 
123

 
69.9%
 
Total Rental Revenues
22,204

 
20,482

 
1,722

 
8.4%
 
Interest income
—

 
—

 
—

 
0.0%
 
Total Revenues
22,204

 
20,482

 
1,722

 
8.4%
 
Operating Expenses
 
 
 
 
 
 
 
 
Property expenses
6,170

 
5,678

 
492

 
8.7%
 
Depreciation and amortization
8,841

 
9,457

 
(616
)
 
(6.5)%
 
Total Operating Expenses
15,011

 
15,135

 
(124
)
 
(0.8)%
 
Other Expense
 
 
 
 
 
 
 
 
Interest expense
(205
)
 
533

 
(738
)
 
(138.5)%
 
Total Other Expense
(205
)
 
533

 
(738
)
 
(138.5)%
 
Total Expenses
14,806

 
15,668

 
(862
)
 
(5.5)%
 
Net Income
$
7,398

 
$
4,814

 
$
2,584

 
53.7%
 
 
 
 
 
 
 
 
 
 
Same Property Portfolio NOI Reconciliation:
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
NOI
2016
 
2015
 
$ Change
 
% Change
 
Net Income
7,398

 
4,814

 
 
 
 
 
Add:
 
 
 
 
 
 
 
 
Interest expense
(205
)
 
533

 
 
 
 
 
Depreciation and amortization
8,841

 
9,457

 
 
 
 
 
Deduct:
 
 
 
 
 
 
 
 
Interest income
—

 
—

 
 
 
 
 
NOI
$
16,034

 
$
14,804

 
$
1,230

 
8.3%
 
Straight-line rents
(315
)
 
(337
)
 
 
 
 
 
Amort. above/below market leases
(14
)
 
46

 
 
 
 
 
Cash NOI
$
15,705

 
$
14,513

 
$
1,192

 
8.2%
 
 
 
 
 
.



Same Property Portfolio NOI Reconciliation Continued:
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
 
$ Change
 
% Change
 
Rental income
$
19,253

 
$
18,092

 
$
1,161

 
6.4%
 
Tenant reimbursements
2,652

 
2,214

 
438

 
19.8%
 
Other income
299

 
176

 
123

 
69.9%
 
Total rental revenues
22,204

 
20,482

 
1,722

 
8.4%
 
Property expenses
6,170

 
5,678

 
492

 
8.7%
 
NOI
$
16,034

 
$
14,804

 
$
1,230

 
8.3%
 
Straight-line rents
(315
)
 
(337
)
 
22
 
(6.5)%
 
Amort. above/below market leases
(14
)
 
46

 
(60)
 
(130.4)%
 
Cash NOI
$
15,705

 
14,513

 
$
1,192

 
8.2%
 
 

Same Property Portfolio Occupancy:
 
 
 
 
 
 
 
March 31, 2016
 
March 31, 2015
 
Change (ppt)
 
Same Property
Portfolio
 
Stabilized Same Property Portfolio(1)
 
Same Property
Portfolio
 
Stabilized Same Property Portfolio(1)
 
Same Property
Portfolio
 
Stabilized Same Property Portfolio(1)
Occupancy:
 
 
 
 
 
 
 
 
 
 
 
Los Angeles County
90.9%
 
94.5%
 
89.4%
 
90.6%
 
1.5%
 
3.9%
Orange County
86.5%
 
98.4%
 
92.2%
 
97.7%
 
(5.7)%
 
0.7%
San Bernardino County
97.7%
 
97.7%
 
96.3%
 
96.3%
 
1.4%
 
1.4%
Ventura County
92.3%
 
92.3%
 
91.8%
 
91.8%
 
0.5%
 
0.5%
San Diego County
94.7%
 
94.7%
 
88.7%
 
88.7%
 
6.0%
 
6.0%
Total/Weighted Average
91.7%
 
95.1%
 
90.7%
 
91.9%
 
1.0%
 
3.2%
 
(1)
Reflects the occupancy of our Same Property Portfolio adjusted for space aggregating 350,176 rentable square feet at six properties that were in various stages of repositioning or lease-up as of March 31, 2016.




Rexford Industrial Realty, Inc.
Funds From Operations (Unaudited and in thousands)
 
 
Three Months Ended March 31,
 
2016
 
2015
Funds From Operations (FFO)
 

 
 

Net income
$
1,477

 
$
81

Add:
 
 
 
Depreciation and amortization
11,214

 
9,884

Depreciation and amortization from unconsolidated joint ventures(1)
5

 
28

FFO
$
12,696

 
$
9,993

Less: Noncontrolling interest(2)
(449
)
 
(409
)
Less: Participating securities(3)
(124
)
 
(71
)
Company share of FFO
$
12,123

 
$
9,513

 
 
 
 
FFO
$
12,696

 
$
9,993

Add:
 
 
 
Non-recurring legal fees (reimbursements)
(643
)
 
369

Acquisition expenses
475

 
233

Recurring FFO
$
12,528

 
$
10,595

Less: Noncontrolling interest(2)
(443
)
 
(435
)
Less: Participating securities(3)
(123
)
 
(75
)
Company share of Recurring FFO
$
11,962

 
$
10,085

 
 
 
 
Weighted-average shares outstanding - basic and diluted
55,269,598

 
50,683,528

Weighted-average diluted shares and units
57,296,240

 
52,989,102

 
(1)
Amount represents our 15% ownership interest in a joint venture that owns the property located at 3233 Mission Oaks Boulevard.
(2)
Noncontrolling interest represent holders of outstanding common units of the Company's operating partnership that are owned by unit holders other than the Company.
(3)
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units.


Exhibit
Exhibit 99.2

 
 
 
 
 
Rexford Industrial Realty, Inc.
NYSE: REXR
11620 Wilshire Blvd
Suite 1000
Los Angeles, CA 90025
310-966-1680
www.RexfordIndustrial.com
 
 
 
 
 


Table of Contents
 
 
 
 
 
Section
Page
 
 
Corporate Data:
 
Investor Company Summary
3
Financial and Portfolio Highlights and Common Stock Data
4
Consolidated Financial Results:
 
Consolidated Balance Sheets
5
Consolidated Statement of Operations
6-7
Non‐GAAP FFO and AFFO Reconciliations
8-9
Statement of Operations Reconciliations
10-11
Same Property Portfolio Performance
12-13
Joint Venture Financial Summary
14-15
Capitalization Summary
16
Debt Summary
17
Debt Covenants
18
Portfolio Data:
 
Portfolio Overview
19
Occupancy and Leasing Trends
20
Leasing Statistics
21
Top Tenants and Lease Segmentation
22
Capital Expenditure Summary
23
Properties and Space Under Repositioning
24
Current Year Acquisitions Summary
25
Net Asset Value Components
26
Fixed Charge Coverage Ratio
27
Definitions / Discussion of Non‐GAAP Financial Measures
28-29
Disclosures:
Forward Looking Statements: This supplemental package contains “forward‐looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We caution investors that any forward‐looking statements presented herein are based on management’s beliefs and assumptions and information currently available to management. Such statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the market value of our properties, the inability to enter into or renew leases at favorable rates, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); risks associated with the disruption of credit markets or a global economic slowdown; risks associated with the potential loss of key personnel (most importantly, members of senior management); risks associated with our failure to maintain our status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended; possible adverse changes in tax and environmental laws; litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes, and potential liability for uninsured losses and environmental contamination.
For a further discussion of these and other factors that could cause our future results to differ materially from any forward‐looking statements, see Item 1A. Risk Factors in our 2015 Annual Report on Form 10‐K, which was filed with the Securities and Exchange Commission (“SEC”) on February 25, 2016. We disclaim any obligation to publicly update or revise any forward‐looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

First Quarter 2016
Page 2
Supplemental Financial Reporting Package
 

Investor Company Summary
 
 
 
 
 
Senior Management Team
Howard Schwimmer
 
Co‐Chief Executive Officer, Director
Michael S. Frankel
 
Co‐Chief Executive Officer, Director
Adeel Khan
 
Chief Financial Officer
David Lanzer
 
General Counsel
Patrick Schlehuber
 
Senior Vice President, Acquisitions
Bruce Herbkersman
 
Senior Vice President, Development & Construction
Shannon Lewis
 
Senior Vice President, Leasing
Ashley Arthur
 
Vice President, Operations
Board of Directors
Richard Ziman
 
Chairman
Howard Schwimmer
 
Co‐Chief Executive Officer, Director
Michael S. Frankel
 
Co‐Chief Executive Officer, Director
Robert L. Antin
 
Director
Steven C. Good
 
Director
Peter Schwab
 
Director
Tyler H. Rose
 
Director
Company Contact Information
11620 Wilshire Blvd, Suite 1000
Los Angeles, CA 90025
 310‐966‐1680
 www.RexfordIndustrial.com
Investor Relations Information
ICR
Stephen Swett
www.icrinc.com
212-849-3882
Equity Research Coverage
Bank of America Merrill Lynch
 
Juan C. Sanabria
Capital One
 
Thomas J. Lesnick, CFA
Citigroup Investment Research
 
Emmanuel Korchman
D.A Davidson
 
Barry Oxford
J.P. Morgan
 
Michael W. Mueller, CFA
Jefferies LLC
 
Jonathan Petersen
Stifel Nicolaus & Co.
 
John W. Guinee
Wells Fargo Securities
 
Brendan Maiorana, CFA
Wunderlich Securities
 
Craig Kucera
Disclaimer: This list may not be complete and is subject to change as firms add or delete coverage of our company. Please note that any opinions, estimates, forecasts or predictions regarding our historical or predicted performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Rexford Industrial Realty, Inc. or its management. We are providing this listing as a service to our stockholders and do not by listing these firms imply our endorsement of, or concurrence with, such information, conclusions or recommendations. Interested persons may obtain copies of analysts' reports on their own; we do not distribute these reports.

First Quarter 2016
Page 3
Supplemental Financial Reporting Package
 

Financial and Portfolio Highlights and Common Stock Data (1)
 
 
(in thousands except share and per share data and portfolio statistics)

 
Three Months Ended
 
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
 
Financial Results:
 
 
 
 
 
 
 
 
 
 
Total rental revenues
$
27,370

 
$
26,059

 
$
23,335

 
$
22,281

 
$
20,931

 
Net income
$
1,477

 
$
1,056

 
$
617

 
$
196

 
$
81

 
Net income per common share-basic and diluted
$
0.02

 
$
0.02

 
$
0.01

 
$
0.00

 
$
0.00

 
Company share of Recurring FFO
$
11,962

 
$
11,870

 
$
11,201

 
$
11,089

 
$
10,085

 
Recurring FFO per common share-basic and diluted
$
0.22

 
$
0.21

 
$
0.20

 
$
0.20

 
$
0.20

 
Company share of FFO
$
12,123

 
$
11,365

 
$
10,780

 
$
10,220

 
$
9,513

 
FFO per share-basic and diluted
$
0.22

 
$
0.21

 
$
0.20

 
$
0.19

 
$
0.19

 
Adjusted EBITDA
$
17,074

 
$
16,385

 
$
14,607

 
$
14,066

 
$
12,927

 
Dividend declared per common share
$
0.135

 
$
0.135

 
$
0.135

 
$
0.12

 
$
0.12

 
Portfolio Statistics:
 
 
 
 
 
 
 
 
 
 
Portfolio SF - consolidated
12,152,138

 
11,955,455

 
11,078,912

 
10,649,768

 
10,253,580

 
Ending occupancy - consolidated portfolio
88.1
%
 
89.2
 %
 
88.8
 %
 
88.4
%
 
89.5
 %
 
Leased percentage - consolidated portfolio
88.4
%
 
89.3
 %
 
90.5
 %
 
90.0
%
 
90.8
 %
 
Leasing spreads-cash
5.6
%
 
6.4
 %
 
5.4
 %
 
7.0
%
 
4.5
 %
 
Leasing spreads-GAAP
13.6
%
 
12.9
 %
 
16.3
 %
 
15.4
%
 
11.6
 %
 
Same Property Performance:
 
 
 
 
 
 
 
 
 
 
Same Property Portfolio SF
9,828,422

 
6,083,359

 
6,083,359

 
6,083,359

 
6,083,359

 
Total rental revenue growth
8.4
%
 
2.8
 %
 
5.0
 %
 
5.5
%
 
4.2
 %
 
Total property expense growth
8.7
%
 
-2.2
 %
 
-3.2
 %
 
3.8
%
 
-3.4
 %
 
NOI growth
8.3
%
 
4.8
 %
 
8.4
 %
 
6.2
%
 
7.4
 %
 
Cash NOI growth
8.2
%
 
7.5
 %
 
7.1
 %
 
8.0
%
 
7.3
 %
 
Same Property Portfolio ending occupancy
91.7
%
 
94.4
 %
 
93.7
 %
 
92.6
%
 
92.4
 %
 
Stabilized Same Property Portfolio ending occupancy
95.1
%
 
95.6
 %
 
94.8
 %
 
94.0
%
 
94.9
 %
 
Same Property Portfolio occupancy growth (ppt) (2)
1.0
%
 
1.6
 %
 
2.4
 %
 
2.3
%
 
2.1
 %
 
Capitalization:
 
 
 
 
 
 
 
 
 
 
Common stock price at quarter end
$
18.16

 
$
16.36

 
$
13.79

 
$
14.58

 
$
15.81

 
Common shares issued and outstanding
55,276,567

 
55,265,243

 
55,198,780

 
55,051,832

 
54,909,083

 
Total shares and units issued and outstanding at period end (3)
57,303,209

 
57,291,885

 
57,265,484

 
57,229,405

 
57,205,769

 
Weighted average shares outstanding ‐ basic and diluted
55,269,598

 
55,244,664

 
55,145,963

 
54,963,093

 
50,683,528

 
Total equity market capitalization
$
1,040,626

 
$
937,295

 
$
789,691

 
$
834,405

 
$
904,423

 
Total consolidated debt
$
445,611

 
$
418,698

 
$
335,904

 
$
296,715

 
$
269,879

 
Total combined market capitalization (debt and equity)
$
1,479,835

 
$
1,350,792

 
$
1,120,512

 
$
1,121,132

 
$
1,126,761

 
Ratios:
 
 
 
 
 
 
 
 
 
 
Net debt (pro‐rata) to total combined market capitalization
29.7
%
 
30.6
 %
 
29.5
 %
 
25.6
%
 
19.7
 %
 
Net debt (pro‐rata) to adjusted EBITDA (quarterly results annualized)
6.4x

 
6.3x

 
5.7x

 
5.1x

 
4.3x

 
(1)For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
Represents the year over year percentage point change in ending occupancy of the Same Property Portfolio for the reported period. See page 13 for a summary of our current period Same Property Portfolio and page 19 for a definition of Same Property Portfolio. For prior periods ending in 2015, the Same Property Portfolio includes all properties that were wholly‐owned by us as of January 1, 2014 and still owned by us as of the reporting date.
(3) 
Includes the following number of OP Units held by noncontrolling interests: 2,026,642 (Mar 31, 2016), 2,026,642 (Dec 31, 2015), 2,066,704 (Sep 30, 2015), 2,177,573 (Jun 30, 2015) and 2,296,686 (Mar 31, 2015). Excludes the following number of shares of unvested restricted stock: 380,861 (Mar 31, 2016), 333,441 (Dec 31, 2015), 389,123 (Sep 30, 2015), 407,463 (Jun 30, 2015) and 420,280 (Mar 31, 2015). Excludes 166,669 unvested LTIP Units and 315,998 unvested performance units granted during Q4-15.

First Quarter 2016
Page 4
Supplemental Financial Reporting Package
 

Consolidated Balance Sheets
 
 
 
 
(unaudited and in thousands)
 
Rexford Industrial Realty, Inc.
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Assets
 
 
 
 
 
 
 
 
 
Land
$
501,972

 
$
492,704

 
$
445,454

 
$
420,349

 
$
392,594

Buildings and improvements
667,675

 
650,075

 
620,341

 
586,178

 
557,382

Tenant improvements
30,305

 
28,977

 
26,539

 
25,008

 
22,417

Furniture, fixtures, and equipment
188

 
188

 
188

 
188

 
188

Construction in progress
17,662

 
16,822

 
14,265

 
13,181

 
13,306

  Total real estate held for investment
1,217,802

 
1,188,766

 
1,106,787

 
1,044,904

 
985,887

Accumulated depreciation
(111,167
)
 
(103,623
)
 
(96,403
)
 
(89,539
)
 
(83,140
)
Investments in real estate, net
1,106,635

 
1,085,143

 
1,010,384

 
955,365

 
902,747

Cash and cash equivalents
6,402

 
5,201

 
5,083

 
9,988

 
47,541

Notes receivable
—

 
—

 
—

 
13,137

 
13,135

Rents and other receivables, net
2,939

 
3,040

 
2,221

 
2,210

 
1,892

Deferred rent receivable
8,670

 
7,827

 
7,009

 
6,067

 
5,520

Deferred leasing costs, net
6,001

 
5,331

 
5,044

 
4,526

 
3,744

Deferred loan costs, net
1,296

 
1,445

 
1,595

 
1,745

 
1,895

Acquired lease intangible assets, net(1)
28,802

 
30,383

 
27,838

 
28,580

 
26,504

Indefinite‐lived intangible
5,271

 
5,271

 
5,271

 
5,271

 
5,271

Other assets
5,580

 
5,523

 
5,491

 
5,221

 
5,534

Acquisition related deposits
400

 
—

 
1,250

 
1,400

 
250

Investment in unconsolidated real estate entities
4,144

 
4,087

 
4,056

 
4,018

 
4,013

Total Assets
$
1,176,140

 
$
1,153,251

 
$
1,075,242

 
$
1,037,528

 
$
1,018,046

Liabilities
 
 
 
 
 
 
 
 
 
Notes payable
$
444,010

 
$
418,154

 
$
335,058

 
$
296,333

 
$
269,541

Interest rate swap liability
4,949

 
3,144

 
4,716

 
2,960

 
3,279

Accounts payable and accrued expenses
14,897

 
12,631

 
13,886

 
9,257

 
11,566

Dividends payable
7,814

 
7,806

 
7,504

 
6,655

 
6,639

Acquired lease intangible liabilities, net(2)
3,307

 
3,387

 
2,700

 
2,579

 
2,903

Tenant security deposits
11,995

 
11,539

 
10,523

 
9,711

 
9,112

Prepaid rents
2,667

 
2,846

 
1,935

 
2,517

 
1,144

Total Liabilities
489,639

 
459,507

 
376,322

 
330,012

 
304,184

Equity
 
 
 
 
 
 
 
 
 
Common stock
554

 
553

 
552

 
550

 
549

Additional paid in capital
723,074

 
722,722

 
722,102

 
720,583

 
719,199

Cumulative distributions in excess of earnings
(54,192
)
 
(48,103
)
 
(41,613
)
 
(34,702
)
 
(28,235
)
Accumulated other comprehensive loss
(4,728
)
 
(3,033
)
 
(4,546
)
 
(2,847
)
 
(3,147
)
Total stockholders' equity
664,708

 
672,139

 
676,495

 
683,584

 
688,366

Noncontrolling interests
21,793

 
21,605

 
22,425

 
23,932

 
25,496

Total Equity
686,501

 
693,744

 
698,920

 
707,516

 
713,862

Total Liabilities and Equity
$
1,176,140

 
$
1,153,251

 
$
1,075,242

 
$
1,037,528

 
$
1,018,046

(1) 
Includes net above-market tenant lease intangibles of $5,818 (March 31, 2016), $6,225 (Dec. 31, 2015), $5,621 (Sept. 30, 2015), $5,725 (June 30, 2015) and $3,312 (March 31, 2015).
(2) 
Includes net below-market tenant lease intangibles of $3,102 (March 31, 2016), $3,174 (Dec. 31, 2015), $2,479 (Sept. 30, 2015), $2,350 (June 30, 2015) and $2,666 (March 31, 2015).

First Quarter 2016
Page 5
Supplemental Financial Reporting Package
 

Consolidated Statements of Operations
 
 
Quarterly Results
 
(unaudited and in thousands, except share and per share data)

 
Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Revenues
 
 
 
 
 
 
 
 
 
Rental income
$
23,499

 
$
22,665

 
$
20,617

 
$
19,275

 
$
18,557

Tenant reimbursements
3,558

 
3,074

 
2,377

 
2,844

 
2,184

Other income
313

 
320

 
341

 
162

 
190

Total Rental Revenues
27,370

 
26,059

 
23,335

 
22,281

 
20,931

Management, leasing, and development services
134

 
105

 
186

 
161

 
132

Interest income
—

 
—

 
153

 
280

 
277

Total Revenues
27,504

 
26,164

 
23,674

 
22,722

 
21,340

Operating Expenses
 
 
 
 
 
 
 
 
 
Property expenses
7,543

 
7,118

 
6,237

 
5,874

 
5,771

General and administrative
3,602

 
3,952

 
3,778

 
3,740

 
3,546

Depreciation and amortization
11,214

 
10,821

 
10,642

 
10,490

 
9,884

Total Operating Expenses
22,359

 
21,891

 
20,657

 
20,104

 
19,201

Other Expense
 
 
 
 
 
 
 
 
 
Acquisition expenses
475

 
528

 
528

 
847

 
233

Interest expense
3,254

 
2,724

 
2,245

 
1,658

 
1,826

Total Other Expense
3,729

 
3,252

 
2,773

 
2,505

 
2,059

Total Expenses
26,088

 
25,143

 
23,430

 
22,609

 
21,260

Equity in income from unconsolidated real estate entities
61

 
35

 
45

 
12

 
1

Gain from early repayment of note receivable
—

 
—

 
581

 
—

 
—

(Loss) gain on extinguishment of debt
—

 
—

 
(253
)
 
71

 
—

Net Income
1,477

 
1,056

 
617

 
196

 
81

 Less: net income attributable to noncontrolling interest
(52
)
 
(40
)
 
(24
)
 
(8
)
 
(4
)
Net income attributable to Rexford Industrial Realty, Inc.
1,425

 
1,016

 
593

 
188

 
77

 Less: earnings allocated to participating securities
(78
)
 
(71
)
 
(53
)
 
(49
)
 
(50
)
Net income attributable to common stockholders
$
1,347

 
$
945

 
$
540

 
$
139

 
$
27

 
 
 
 
 
 
 
 
 
 
Earnings per Common Share ‐ Basic and Diluted
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
$
0.02

 
$
0.02

 
$
0.01

 
$
0.00

 
$
0.00

Weighted average shares outstanding ‐ basic and diluted
55,269,598
 
55,244,664
 
55,145,963
 
54,963,093
 
50,683,528
 


First Quarter 2016
Page 6
Supplemental Financial Reporting Package
 

Consolidated Statements of Operations
 
 
Quarterly Results
 
(unaudited and in thousands)
 
Three Months Ended March 31,
 
 
2016
 
2015
 
Rental Revenues
 
 
 
 
Rental income
$
23,499

 
$
18,557

 
Tenant reimbursements
3,558

 
2,184

 
Other income
313

 
190

 
Total Rental Revenues
27,370

 
20,931

 
Management, leasing, and development services
134

 
132

 
Interest income
—

 
277

 
Total Revenues
27,504

 
21,340

 
Operating Expenses
 
 
 
 
Property expenses
7,543

 
5,771

 
General and administrative
3,602

 
3,546

 
Depreciation and amortization
11,214

 
9,884

 
Total Operating Expenses
22,359

 
19,201

 
Other Expense
 
 
 
 
Acquisition expenses
475

 
233

 
Interest expense
3,254

 
1,826

 
Total Other Expense
3,729

 
2,059

 
Total Expenses
26,088

 
21,260

 
Equity in income from unconsolidated real estate entities
61

 
1

 
Net Income
1,477

 
81

 
 Less: net income attributable to noncontrolling interest
(52
)
 
(4
)
 
Net income attributable to Rexford Industrial Realty, Inc.
1,425

 
77

 
 Less: earnings allocated to participating securities
(78
)
 
(50
)
 
Net income attributable to common stockholders
$
1,347

 
$
27

 
 
 
 
 
 

First Quarter 2016
Page 7
Supplemental Financial Reporting Package
 

Non-GAAP FFO Reconciliation(1)
 
 
 
 
(unaudited and in thousands, except share and per share data)
 
Rexford Industrial Realty, Inc.
 
Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Funds From Operations (FFO)
 
 
 
 
 
 
 
 
 
Net Income
$
1,477

 
$
1,056

 
$
617

 
$
196

 
$
81

Add:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
11,214

 
10,821

 
10,642

 
10,490

 
9,884

Depreciation and amortization from unconsolidated joint ventures
5

 
5

 
4

 
20

 
28

FFO (2)
12,696

 
11,882

 
11,263

 
10,706

 
9,993

Less: FFO attributable to noncontrolling interests(3)
(449
)
 
(418
)
 
(407
)
 
(410
)
 
(409
)
Less: FFO attributable to participating securities(4)
(124
)
 
(99
)
 
(76
)
 
(76
)
 
(71
)
Company share of FFO (3)(4)
$
12,123

 
$
11,365

 
$
10,780

 
$
10,220

 
$
9,513

 
 
 
 
 
 
 
 
 
 
FFO per share‐basic and diluted
$
0.22

 
$
0.21

 
$
0.20

 
$
0.19

 
$
0.19

 
 
 
 
 
 
 
 
 
 
FFO
$
12,696

 
$
11,882

 
$
11,263

 
$
10,706

 
$
9,993

Add:
 
 
 
 
 
 
 
 
 
Non‐recurring legal fees (reimbursements)(5)
(643
)
 
—

 
(88
)
 
64

 
369

Acquisition expenses
475

 
528

 
528

 
847

 
233

Recurring FFO (2)
12,528

 
12,410

 
11,703

 
11,617

 
10,595

Less: Recurring FFO attributable to noncontrolling interests(3)
(443
)
 
(437
)
 
(423
)
 
(446
)
 
(435
)
Less: Recurring FFO attributable to participating securities(4)
(123
)
 
(103
)
 
(79
)
 
(82
)
 
(75
)
Company share of Recurring FFO
$
11,962

 
$
11,870

 
$
11,201

 
$
11,089

 
$
10,085

 
 
 
 
 
 
 
 
 
 
Recurring FFO per share‐basic and diluted
$
0.22

 
$
0.21

 
$
0.20

 
$
0.20

 
$
0.20

 
 
 
 
 
 
 
 
 
 
Weighted‐average shares outstanding‐basic and diluted
55,269,598

 
55,244,664

 
55,145,963

 
54,963,093

 
50,683,528

Weighted-average diluted shares and units
57,296,240

 
57,289,069

 
57,257,186

 
57,220,536

 
52,989,102

(1) 
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
FFO and Recurring FFO for the three months ended September 30, 2015, includes the following: (i) $581 gain from the early repayment of the Calle Perfecto note receivable and (ii) $253 loss on extinguishment of debt. FFO and Recurring FFO for the three months ended June 30, 2015, includes a $71 gain on extinguishment of debt.
(3) 
Noncontrolling interests represent holders of outstanding common units of the Company's operating partnership that are owned by unit holders other than us.
(4) 
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units.
(5) 
Non-recurring legal fees (reimbursements) relate to prior litigation of the Company. For more information, see Item 3. Legal Proceedings in our 2014 Annual Report on Form 10-K.

First Quarter 2016
Page 8
Supplemental Financial Reporting Package
 

Non-GAAP AFFO Reconciliation(1)
 
 
 
 
(unaudited and in thousands, except share and per share data)
 
Rexford Industrial Realty, Inc.
 
Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
March 31, 2015(2)
 
December 31, 2014(2)
Adjusted Funds From Operations (AFFO)
 
 
 
 
 
 
 
 
 
Funds From Operations
$
12,696

 
$
11,882

 
$
11,263

 
$
10,706

 
$
9,993

Add:
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs
221

 
194

 
200

 
209

 
209

Net fair value lease revenue (expense)
(4
)
 
48

 
69

 
46

 
39

Non‐cash stock compensation
934

 
494

 
443

 
467

 
348

Straight line corporate office rent expense adjustment
(1
)
 
(1
)
 
21

 
37

 
24

Loss (gain) on extinguishment of debt
—

 
—

 
253

 
(71
)
 
—

Deduct:
 
 
 
 
 
 
 
 
 
Straight line rental revenue adjustment(3)
1,095

 
1,409

 
1,039

 
612

 
365

Capitalized payments(4)
795

 
651

 
548

 
497

 
344

Note receivable discount amortization
—

 
—

 
38

 
71

 
69

Note payable premium amortization
59

 
33

 
33

 
33

 
92

Gain from early repayment of note receivable
—

 
—

 
581

 
—

 
—

Recurring capital expenditures(5)
586

 
1,346

 
921

 
871

 
392

2nd generation tenant improvements and leasing commissions(6)
461

 
762

 
701

 
893

 
706

Unconsolidated joint venture AFFO adjustments
3

 
4

 
5

 
(4
)
 
(9
)
AFFO
$
10,847

 
$
8,412

 
$
8,383

 
$
8,421

 
$
8,654


(1) 
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
For comparability, prior period amounts have been reclassified to conform to current period presentation.
(3) 
The straight line rental revenue adjustment includes concessions of $848, $727, $870, $485, and $358 for the three months ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. The straight line rental revenue adjustment includes $245 and $554 of free rent under a license agreement at one of our properties for the three months ended March 31, 2016 and December 31, 2015, respectively.
(4) 
Includes capitalized interest, and leasing and construction development compensation.
(5) 
Excludes nonrecurring capital expenditures of $4,238, $4,018, $4,222, $3,312, and $2,920 for the three months ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively.
(6) 
Excludes 1st generation tenant improvements and leasing commissions of $989, $418, $624, $996 and $236 for the three months ended March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively.

First Quarter 2016
Page 9
Supplemental Financial Reporting Package
 

Statement of Operations Reconciliations (1)
 
 
 
 
(unaudited and in thousands)
 
Rexford Industrial Realty, Inc.
 
Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
Rental income
$
23,499

 
$
22,665

 
$
20,617

 
$
19,275

 
$
18,557

Tenant reimbursements
3,558

 
3,074

 
2,377

 
2,844

 
2,184

Other income
313

 
320

 
341

 
162

 
190

Total Rental Revenues
27,370

 
26,059

 
23,335

 
22,281

 
20,931

 
 
 
 
 
 
 
 
 
 
Property Expenses
7,543

 
7,118

 
6,237

 
5,874

 
5,771

NOI
$
19,827


$
18,941


$
17,098


$
16,407


$
15,160

Net fair value lease revenue (expense)
(4
)
 
48

 
69

 
46

 
39

Straight line rental revenue adjustment
(1,095
)
 
(1,409
)
 
(1,039
)
 
(612
)
 
(365
)
Cash NOI
$
18,728

 
$
17,580

 
$
16,128

 
$
15,841

 
$
14,834

 
 
 
 
 
 
 
 
 
 
Net Income
$
1,477

 
$
1,056

 
$
617

 
$
196

 
$
81

Add:
 
 
 
 
 
 
 
 
 
General and administrative
3,602

 
3,952

 
3,778

 
3,740

 
3,546

Depreciation and amortization
11,214

 
10,821

 
10,642

 
10,490

 
9,884

Acquisition expenses
475

 
528

 
528

 
847

 
233

Interest expense
3,254

 
2,724

 
2,245

 
1,658

 
1,826

Loss (gain) on extinguishment of debt
—

 
—

 
253

 
(71
)
 
—

Subtract:
 
 
 
 
 
 
 
 
 
Management, leasing, and development services
134

 
105

 
186

 
161

 
132

Interest income
—

 
—

 
153

 
280

 
277

Equity in income from unconsolidated real estate entities
61

 
35

 
45

 
12

 
1

Gain from early repayment of note receivable
—

 
—

 
581

 
—

 
—

NOI
$
19,827


$
18,941


$
17,098


$
16,407


$
15,160

Net fair value lease revenue (expense)
(4
)
 
48

 
69

 
46

 
39

Straight line rental revenue adjustment
(1,095
)
 
(1,409
)
 
(1,039
)
 
(612
)
 
(365
)
Cash NOI
$
18,728

 
$
17,580

 
$
16,128

 
$
15,841

 
$
14,834

(1) 
For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 28 of this report.

First Quarter 2016
Page 10
Supplemental Financial Reporting Package
 

Statement of Operations Reconciliations (1)
 
 
 
 
(unaudited and in thousands)
 
Rexford Industrial Realty, Inc.
 
Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Net income
$
1,477

 
$
1,056

 
$
617

 
$
196

 
$
81

Interest expense
3,254

 
2,724

 
2,245

 
1,658

 
1,826

Depreciation and amortization
11,214

 
10,821

 
10,642

 
10,490

 
9,884

Proportionate share of real estate related depreciation and
 
 
 
 
 
 
 
 
 
amortization from unconsolidated joint ventures
5

 
5

 
4

 
20

 
28

EBITDA
$
15,950

 
$
14,606

 
$
13,508

 
$
12,364

 
$
11,819

Stock‐based compensation amortization
934

 
494

 
443

 
467

 
348

Loss (gain) on extinguishment of debt
—

 
—

 
253

 
(71
)
 
—

Gain from early repayment of note receivable
—

 
—

 
(581
)
 
—

 
—

Non‐recurring legal fees (reimbursements)(2)
(643
)
 
—

 
(88
)
 
64

 
369

Acquisition expenses
475

 
528

 
528

 
847

 
233

Pro forma effect of acquisitions(3)
358

 
757

 
544

 
395

 
158

Adjusted EBITDA
$
17,074

 
$
16,385

 
$
14,607

 
$
14,066

 
$
12,927

(1) 
For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
Non-recurring legal fees (reimbursements) relate to prior litigation of the Company. For more information, see Item 3. Legal Proceedings in our 2014 Annual Report on Form 10-K.
(3) 
Represents the estimated impact on EBITDA of Q1'16 acquisitions as if they had been acquired January 1, 2016, Q4'15 acquisitions as if they had been acquired October 1, 2015, Q3'15 acquisitions as if they had been acquired July 1, 2015, Q2'15 acquisitions as if they had been acquired April 1, 2015 and Q1'15 acquisitions as if they had been acquired January 1, 2015. We have made a number of assumptions in such estimates and there can be no assurance that we would have generated the projected levels of EBITDA had we owned the acquired entities as of the beginning of each period.


First Quarter 2016
Page 11
Supplemental Financial Reporting Package
 

Same Property Portfolio Performance (1)
 
 
Statement of Operations and NOI Reconciliation
 
(unaudited and in thousands)
Same Property Portfolio Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
 
$ Change
 
% Change
 
Rental Revenues
 
 
 
 
 
 
 
 
Rental income
$
19,253

 
$
18,092

 
$
1,161

 
6.4%
 
Tenant reimbursements
2,652

 
2,214

 
438

 
19.8%
 
Other income
299

 
176

 
123

 
69.9%
 
Total Rental Revenues
22,204


20,482


1,722

 
8.4%
 
Interest income
—

 
—

 
—

 
0.0%
 
Total Revenues
22,204


20,482


1,722

 
8.4%
 
Operating Expenses
 
 
 
 

 
 
 
Property expenses
6,170

 
5,678

 
492

 
8.7%
 
Depreciation and amortization
8,841

 
9,457

 
(616
)
 
(6.5)%
 
Total Operating Expenses
15,011


15,135


(124
)
 
(0.8)%
 
Other Expense
 
 
 
 

 
 
 
Interest expense
(205
)
 
533

 
(738
)
 
(138.5)%
 
Total Other Expense
(205
)

533


(738
)
 
(138.5)%
 
Total Expenses
14,806


15,668


(862
)
 
(5.5)%
 
Net Income
$
7,398


$
4,814


$
2,584

 
53.7%
 
 
 
 
 
 
 
 
 
 
Same Property Portfolio NOI Reconciliation:
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
NOI
2016
 
2015
 
$ Change
 
% Change
 
Net Income
$
7,398

 
$
4,814

 
 
 
 
 
Add:
 
 
 
 
 
 
 
 
Interest expense
(205
)
 
533

 
 
 
 
 
Depreciation and amortization
8,841

 
9,457

 
 
 
 
 
NOI
$
16,034


$
14,804

 
$
1,230

 
8.3%
 
Straight-line rents
(315
)
 
(337
)
 
 
 
 
 
Amort. above/below market leases
(14
)
 
46

 
 
 
 
 
Cash NOI
$
15,705

 
$
14,513

 
$
1,192

 
8.2%
 

(1) 
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 28 of this report.



First Quarter 2016
Page 12
Supplemental Financial Reporting Package
 

Same Property Portfolio Performance (1)
 
 
NOI Reconciliation, Portfolio Summary and Occupancy
 
(unaudited and dollars in thousands)
Same Property Portfolio NOI Reconciliation Continued:
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
 
$ Change
 
% Change
 
Rental income
$
19,253

 
$
18,092

 
$
1,161

 
6.4%
 
Tenant reimbursements
2,652

 
2,214

 
438

 
19.8%
 
Other income
299

 
176

 
123

 
69.9%
 
Total rental revenues
22,204


20,482

 
1,722

 
8.4%
 
Property expenses
6,170

 
5,678

 
492

 
8.7%
 
NOI
$
16,034


$
14,804

 
$
1,230

 
8.3%
 
Straight-line rents
(315
)
 
(337
)
 
22
 
(6.5)%
 
Amort. above/below market leases
(14
)
 
46

 
(60)
 
(130.4)%
 
Cash NOI
$
15,705


14,513

 
$
1,192

 
8.2%
 
 
 
 
 
 
 
 
 
 
Same Property Portfolio Summary:
 
Same Property Portfolio
 
Stabilized Same
Property Portfolio(2)
 
Number of properties
98
 
92
 
Square Feet
9,828,422
 
9,478,246
 
Same Property Portfolio Occupancy:
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
March 31, 2015
 
Change (ppt)
 
Same Property
Portfolio
 
Stabilized Same Property Portfolio(2)
 
Same Property
Portfolio
 
Stabilized Same Property Portfolio(2)
 
Same Property
Portfolio
 
Stabilized Same Property Portfolio(2)
Occupancy:
 
 
 
 
 
 
 
 
 
 
 
Los Angeles County
90.9%
 
94.5%
 
89.4%
 
90.6%
 
1.5%
 
3.9%
Orange County
86.5%
 
98.4%
 
92.2%
 
97.7%
 
(5.7)%
 
0.7%
San Bernardino County
97.7%
 
97.7%
 
96.3%
 
96.3%
 
1.4%
 
1.4%
Ventura County
92.3%
 
92.3%
 
91.8%
 
91.8%
 
0.5%
 
0.5%
San Diego County
94.7%
 
94.7%
 
88.7%
 
88.7%
 
6.0%
 
6.0%
Total/Weighted Average
91.7%
 
95.1%
 
90.7%
 
91.9%
 
1.0%
 
3.2%

(1) 
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
Reflects the square footage and occupancy of our Same Property Portfolio adjusted for space aggregating 350,176 rentable square feet at six of our properties that were classified as repositioning or lease-up as of March 31, 2016. For additional details, refer to page 24 of this report.

First Quarter 2016
Page 13
Supplemental Financial Reporting Package
 

Joint Venture Financial Summary
 
 
Balance Sheet
 
(unaudited and in thousands)
 
Mission Oaks (1)
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Assets:
 
 
 
 
 
 
 
 
 
Investments in real estate, net
$
21,416

 
$
21,558

 
$
21,153

 
$
20,690

 
$
20,635

Cash and cash equivalents
2,837

 
2,474

 
2,631

 
2,891

 
2,573

Rents and other receivables, net
61

 
34

 
5

 
183

 
220

Deferred rent receivable
65

 
61

 
39

 
2

 
—

Deferred leasing costs and acquisition related intangible assets, net
177

 
140

 
152

 
74

 
164

Acquired above-market leases, net
—

 
—

 
—

 
—

 
44

Other assets
14

 
13

 
16

 
22

 
28

Total Assets
$
24,570

 
$
24,280

 
$
23,996

 
$
23,862

 
$
23,664

 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
$
603

 
$
646

 
$
686

 
$
836

 
$
930

Deferred rent payable
—

 
—

 
—

 
—

 
4

Tenant security deposits
436

 
436

 
429

 
429

 
292

Prepaid rents
43

 
168

 
130

 
177

 
129

Total Liabilities
1,082

 
1,250

 
1,245

 
1,442

 
1,355

 
 
 
 
 
 
 
 
 
 
Equity:
 
 
 
 
 
 
 
 
 
Equity
8,202

 
8,202

 
8,202

 
8,202

 
8,202

Accumulated deficit and distributions
15,286

 
14,828

 
14,549

 
14,218

 
14,107

Total Equity
23,488

 
23,030

 
22,751

 
22,420

 
22,309

 
 
 
 
 
 
 
 
 
 
Total Liabilities and Equity
$
24,570

 
$
24,280

 
$
23,996

 
$
23,862

 
$
23,664

 
 
 
 
 
 
 
 
 
 
Rexford Industrial Realty, Inc. Ownership %:
15%
 
15%
 
15%
 
15%
 
15%

(1) 
These financial statements represent amounts attributable to the joint venture entities and do not represent our 15% proportionate share.

First Quarter 2016
Page 14
Supplemental Financial Reporting Package
 

Joint Venture Financial Summary(1)
 
 
Statement of Operations
 
(unaudited and in thousands)
 
 
 
Statement of Operations
 
 
 
Mission Oaks (2)
 
Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Income Statement
 
 
 
 
 
 
 
 
 
Rental revenues
$
549

 
$
526

 
$
502

 
$
373

 
$
348

Tenant reimbursements
80

 
106

 
191

 
312

 
315

Other operating revenues
3

 
(2
)
 
2

 
—

 
—

Total revenue
632

 
630

 
695

 
685

 
663

 
 
 
 
 
 
 
 
 
 
Total operating expense
121

 
288

 
334

 
423

 
425

NOI
$
511

 
$
342

 
$
361

 
$
262

 
$
238

 
 
 
 
 
 
 
 
 
 
General and administrative
19

 
36

 
3

 
13

 
12

Depreciation and amortization
34

 
27

 
27

 
138

 
185

Total expense
174

 
351

 
364

 
574

 
622

Net Income
$
458

 
$
279

 
$
331

 
$
111

 
$
41

 
 
 
 
 
 
 
 
 
 
EBITDA
 
 
 
 
 
 
 
 
 
Net income
$
458

 
$
279

 
$
331

 
$
111

 
$
41

Depreciation and amortization
34

 
27

 
27

 
138

 
185

EBITDA
$
492

 
$
306

 
$
358

 
$
249

 
$
226

 
 
 
 
 
 
 
 
 
 
Rexford Industrial Realty, Inc. Ownership %:
15%
 
15%
 
15%
 
15%
 
15%
 
 
 
 
 
 
 
 
 
 
Reconciliation - Equity Income in Joint Venture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
458

 
$
279

 
$
331

 
$
111

 
$
41

 
 
 
 
 
 
 
 
 
 
Rexford Industrial Realty, Inc. Ownership %:
15
%
 
15
%
 
15
%
 
15
%
 
15
%
Company share
69

 
42

 
50

 
17

 
6

Intercompany eliminations/basis adjustments
(8
)
 
(7
)
 
(5
)
 
(5
)
 
(5
)
Equity in net income from unconsolidated real estate entities
$
61

 
$
35

 
$
45

 
$
12

 
$
1

(1) 
For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
These financial statements represent amounts attributable to the joint venture entities and do not represent our 15% proportionate share.

First Quarter 2016
Page 15
Supplemental Financial Reporting Package
 

Capitalization Summary
 
 
 
 
(unaudited and in thousands, except share and per share data)
 
 
 
Capitalization as of March 31, 2016
 
 

Description
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Common shares outstanding (1)
 
55,276,567

 
55,265,243

 
55,198,780

 
55,051,832

 
54,909,083

Operating partnership units outstanding(2)
 
2,026,642

 
2,026,642

 
2,066,704

 
2,177,573

 
2,296,686

Total shares and units outstanding at period end
 
57,303,209

 
57,291,885

 
57,265,484

 
57,229,405

 
57,205,769

Share price at end of quarter
 
$
18.16

 
$
16.36

 
$
13.79

 
$
14.58

 
$
15.81

Total Equity Market Capitalization
 
$
1,040,626

 
$
937,295

 
$
789,691

 
$
834,405

 
$
904,423

 
 
 
 
 
 
 
 
 
 
 
Total Debt
 
$
445,611

 
$
418,698

 
$
335,904

 
$
296,715

 
$
269,879

Less: Cash and cash equivalents
 
(6,402
)
 
(5,201
)
 
(5,083
)
 
(9,988
)
 
(47,541
)
Net Debt
 
$
439,209

 
$
413,497

 
$
330,821

 
$
286,727

 
$
222,338

 
 
 
 
 
 
 
 
 
 
 
Total Combined Market Capitalization (Debt and Equity)
 
$
1,479,835

 
$
1,350,792

 
$
1,120,512

 
$
1,121,132

 
$
1,126,761

 
 
 
 
 
 
 
 
 
 
 
Net debt to total combined market capitalization
 
29.7
%
 
30.6
%
 
29.5
%
 
25.6
%
 
19.7
%
Net debt to adjusted EBITDA (quarterly results annualized)(3)
 
6.4x

 
6.3x

 
5.7x

 
5.1x

 
4.3x

 
 
 
 
 
 
 
 
 
 
 

(1) 
Excludes the following number of shares of unvested restricted stock: 380,861 (March 31, 2016), 333,441 (December 31, 2015), 389,123 (September 30, 2015), 407,463 (June 30, 2015) and 420,280 (March 31, 2015).
(2) 
Represents outstanding common units of the Company' s operating partnership, Rexford Industrial Realty, LP, that are owned by unit holders other than Rexford Industrial Realty, Inc. Represents the noncontrolling interest in our operating partnership. Excludes 166,669 unvested LTIP Units and 315,998 unvested performance units which were granted during Q4-15.
(3) 
For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 28 of this report.







First Quarter 2016
Page 16
Supplemental Financial Reporting Package
 

Debt Summary
 
 
 
 
(unaudited and dollars in thousands)
 
 
 
Debt Detail:
 
 
As of March 31, 2016
 
 
Debt Description
 
Maturity Date
 
Stated Interest Rate
 
Effective
Interest Rate(1)
 
Principal Balance
 
Maturity Date of Effective Swaps
Secured Debt:
 
 
 
 
 
 
 
 
 
 
$60M Term Loan
 
    8/1/2019(2)
 
LIBOR + 1.90%
 
3.818%
 
$
60,000

 
2/15/2019
Gilbert/La Palma
 
3/1/2031
 
5.125%
 
5.125%
 
3,011

 
--
12907 Imperial Highway
 
4/1/2018
 
5.950%
 
5.950%
 
5,271

 
--
1065 Walnut St
 
    2/1/2019(3)
 
4.550%
 
4.550%
 
9,829

 
--
Unsecured Debt:
 
 
 
 
 
 
 
 
 
 
$100M Term Loan Facility
 
6/11/2019
 
LIBOR +1.35%(4)
 
3.248%
 
100,000

 
12/14/2018
$200M Revolving Credit Facility(5)
 
    6/11/2018(2)
 
LIBOR +1.40%(4)
 
1.837%
 
42,500

 
--
$125M Term Loan Facility(6)
 
1/14/2023
 
LIBOR +1.60%(4)
 
2.037%
 
125,000

 
--
$100M Senior Notes
 
8/6/2025
 
4.290%
 
4.290%
 
100,000

 
--
Total Consolidated:
 
 
 
 
 
3.158%
 
$
445,611

 
 
(1)
Includes the effect of interest rate swaps effective as of March 31, 2016, and excludes the effect of discounts/premiums, deferred loan costs and the unused commitment fee.
(2)
One additional one‐year extension is available, provided that certain conditions are satisfied.
(3)
One additional five‐year extension is available, provided that certain conditions are satisfied.
(4)
The applicable LIBOR margin will range from 1.30% to 1.90% for the revolving credit facility, 1.25% to 1.85% for the $100M term loan facility and 1.50% to 2.25% for the $125M term loan facility depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value, which is measured on a quarterly basis. As a result, the effective interest rate will fluctuate from period to period.
(5)
The credit facility is subject to an unused commitment fee which is calculated as 0.30% or 0.20% of the daily unused commitment if the balance is under $100M or over $100M, respectively.
(6)
We have executed a forward interest swap that will effectively fix this $125M term loan at 1.349% plus the applicable LIBOR margin from 2/14/18 to 1/14/22.
Debt Composition:
 
 
 
 
 
 
 
 
 
 
Category
 
Avg. Term Remaining (yrs)(1)
 
Stated
Interest Rate
 
Effective Interest Rate
 
Balance
 
% of Total
Fixed(2)
 
5.5
 
3.86%
 
3.86%
 
$278,111
 
62%
Variable(2)
 
5.6
 
LIBOR + 1.55%
 
1.99%
 
$167,500
 
38%
Secured
 
3.6
 
 
 
4.10%
 
$78,111
 
18%
Unsecured
 
6.0
 
 
 
2.96%
 
$367,500
 
82%
(1)
The weighted average remaining term to maturity of our consolidated debt is 5.6 years.
(2)
If all of our interest rate swaps were effective as of March 31, 2016, our consolidated debt would be 90% fixed and 10% variable. See footnote (6) above.
Debt Maturity Schedule:
 
 
 
 
 
 
 
 
 
 
Year
 
Secured
 
Unsecured Debt
 
Total
 
% Total
 
Interest Rate
2016-2017
 
$
—

 
$
—

 
$
—

 
—
%
 
—
%
2018
 
5,271

 
42,500

 
47,771

 
11
%
 
2.291
%
2019
 
69,829

 
100,000

 
169,829

 
38
%
 
3.524
%
Thereafter
 
3,011

 
225,000

 
228,011

 
51
%
 
3.066
%
Total
 
$
78,111

 
$
367,500

 
$
445,611

 
100
%
 
3.158
%

First Quarter 2016
Page 17
Supplemental Financial Reporting Package
 

Debt Covenants
 
 
 
 
(unaudited results)
 
 
 
Unsecured Revolving Credit Facility and Term Loan Facility Covenants(1)
 
 
 
Covenant
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
Maximum Leverage Ratio
less than 60%
 
37.8%
 
36.3%
 
30.2%
 
28.1%
 
Maximum Secured Leverage Ratio
less than 45%
 
6.6%
 
5.9%
 
6.2%
 
15.1%
 
Maximum Secured Recourse Debt(2)
less than 15%
 
—%
 
—%
 
—%
 
—%
 
Maximum Recourse Debt(2)
less than 15%
 
--
 
--
 
--
 
1.0%
 
Minimum Tangible Net Worth
$582,432,000
 
$755,296,000
 
$753,641,000
 
$755,982,000
 
$756,231,000
 
Minimum Fixed Charge Coverage Ratio
at least 1.50 to 1.00
 
4.42 to 1.00
 
4.72 to 1.00
 
5.26 to 1.00
 
8.47 to 1.00
 
Unencumbered Leverage Ratio
less than 60%
 
35.4%
 
33.6%
 
27.1%
 
17.1%
 
Unencumbered Interest Coverage Ratio
at least 1.75 to 1.00
 
3.15 to 1.00
 
3.31 to 1.00
 
3.87 to 1.00
 
5.96 to 1.00
 
 
 
 
 
 
 
 
 
 
 
 
(1) 
Our actual performance for each covenant is calculated based on the definitions set forth in the loan agreement.
(2) 
On July 15, 2015, we amended our credit agreement. The amendment provides for, among other things, the replacement of the maximum recourse debt covenant with a maximum secured recourse debt covenant.


First Quarter 2016
Page 18
Supplemental Financial Reporting Package
 

Portfolio Overview
 
 
at 3/31/16
 
(unaudited results)
 
 
 
Consolidated Portfolio:
 
 
 
 
 
 
Rentable Square Feet
 
Occupancy
 
Annualized Base Rent
Market
 
# Properties
 
Same Properties Portfolio
 
Non-Same Properties Portfolio
 
Total Portfolio
 
Same Properties Portfolio
 
Non-Same Properties Portfolio
 
Total Portfolio
 
Total Portfolio Excluding Repositioning(1)
 
Total
(in thousands)(2)
 
per SF
Greater San Fernando Valley
 
24
 
2,465,431

 
284,550

 
2,749,981

 
88.0
%
 
47.2
%
 
83.8
%
 
91.2
%
 
$
21,695

 
$9.41
San Gabriel Valley
 
12
 
1,213,095

 
116,119

 
1,329,214

 
99.3
%
 
100.0
%
 
99.3
%
 
99.3
%
 
10,591

 
$8.02
Central LA
 
4
 
238,153

 
149,157

 
387,310

 
80.1
%
 
100.0
%
 
87.7
%
 
100.0
%
 
3,449

 
$10.15
Mid-Counties
 
10
 
522,430

 
302,740

 
825,170

 
98.9
%
 
79.1
%
 
91.6
%
 
99.2
%
 
5,599

 
$7.41
South Bay
 
13
 
652,275

 
337,082

 
989,357

 
84.0
%
 
100.0
%
 
89.4
%
 
96.5
%
 
8,059

 
$9.11
Los Angeles County
 
63
 
5,091,384

 
1,189,648

 
6,281,032

 
90.9
%
 
82.1
%
 
89.3
%
 
95.4
%
 
49,393

 
$8.81
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North Orange County
 
6
 
579,446

 
64,570

 
644,016

 
98.2
%
 
100.0
%
 
98.4
%
 
98.4
%
 
5,926

 
$9.35
West Orange County
 
2
 
170,865

 
114,912

 
285,777

 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
2,263

 
$7.92
South Orange County
 
1
 
46,178

 
—

 
46,178

 
100.0
%
 
—
%
 
100.0
%
 
100.0
%
 
371

 
$8.04
OC Airport
 
6
 
511,270

 
—

 
511,270

 
67.4
%
 
—
%
 
67.4
%
 
97.7
%
 
3,373

 
$9.78
Orange County
 
15
 
1,307,759

 
179,482

 
1,487,241

 
86.5
%
 
100.0
%
 
88.1
%
 
98.6
%
 
11,933

 
$9.11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inland Empire West
 
11
 
961,184

 
209,699

 
1,170,883

 
97.5
%
 
92.0
%
 
96.5
%
 
96.5
%
 
8,248

 
$7.30
Inland Empire East
 
2
 
85,282

 
—

 
85,282

 
100.0
%
 
—
%
 
100.0
%
 
100.0
%
 
556

 
$6.52
San Bernardino County
 
13
 
1,046,466

 
209,699

 
1,256,165

 
97.7
%
 
92.0
%
 
96.7
%
 
96.7
%
 
8,804

 
$7.24
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ventura
 
11
 
1,057,367

 
87,181

 
1,144,548

 
92.3
%
 
83.0
%
 
91.6
%
 
91.6
%
 
8,759

 
$8.35
Ventura County
 
11
 
1,057,367

 
87,181

 
1,144,548

 
92.3
%
 
83.0
%
 
91.6
%
 
91.6
%
 
8,759

 
$8.35
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North County San Diego
 
6
 
584,258

 
—

 
584,258

 
94.9
%
 
—
%
 
94.9
%
 
94.9
%
 
5,221

 
$9.42
Central San Diego
 
12
 
664,487

 
657,706

 
1,322,193

 
98.2
%
 
41.8
%
 
70.2
%
 
97.8
%
 
10,436

 
$11.25
South County San Diego
 
1
 
76,701

 
—

 
76,701

 
63.2
%
 
—
%
 
63.2
%
 
63.2
%
 
446

 
$9.21
San Diego County
 
19
 
1,325,446

 
657,706

 
1,983,152

 
94.7
%
 
41.8
%
 
77.2
%
 
95.1
%
 
16,104

 
$10.52
CONSOLIDATED TOTAL / WTD AVG
 
121
 
9,828,422

 
2,323,716

 
12,152,138

 
91.7
%
 
73.0
%
 
88.1
%
 
95.5
%
 
$
94,992

 
$8.87
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated Joint Ventures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ventura
 
1
 
68,370

 
—

 
68,370

 
55.0
%
 
0.0
%
 
55.0
%
 
55.0
%
 
$
314

 
$8.33
UNCONSOLIDATED TOTAL / WTD AVG
 
1
 
68,370

 
—

 
68,370

 
55.0
%
 
0.0
%
 
55.0
%
 
55.0
%
 
$
314

 
$8.33
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GRAND TOTAL / WTD AVG
 
122
 
9,896,792

 
2,323,716

 
12,220,508

 
91.5
%
 
73.0
%
 
88.0
%
 
95.3
%
 
$
95,306

 
$8.87

(1) 
Excludes space aggregating 937,420 square feet at 10 of our properties that were in various stages of repositioning or lease-up as of March 31, 2016. See page 24 for additional details on these properties.
(2) 
Calculated for each property as monthly contracted base rent per the terms of the lease(s) at such property, as of March 31, 2016, multiplied by 12 and then multiplied by our ownership interest for such property, and then aggregated by market. Excludes billboard and antenna revenue and rent abatements.

First Quarter 2016
Page 19
Supplemental Financial Reporting Package
 

Occupancy and Leasing Trends
 
 
 
 
(unaudited results, data represents consolidated portfolio only)
 
 
 
Occupancy by County:
 
 
 
 
Mar 31, 2016(1)
 
Dec 31, 2015
 
Sep 30, 2015
 
June 30, 2015
 
Mar 31, 2015
Occupancy:
 
 
 
 
 
 
 
 
 
 
Los Angeles County
 
89.3%
 
91.4%
 
86.1%
 
87.7%
 
87.1%
Orange County
 
88.1%
 
86.4%
 
85.1%
 
84.4%
 
92.6%
San Bernardino County
 
96.7%
 
97.0%
 
97.2%
 
96.7%
 
96.3%
Ventura County
 
91.6%
 
95.3%
 
94.7%
 
90.8%
 
91.8%
San Diego County
 
77.2%
 
75.8%
 
91.7%
 
87.5%
 
89.0%
Total/Weighted Average
 
88.1%
 
89.2%
 
88.8%
 
88.4%
 
89.5%
 
 
 
 
 
 
 
 
 
 
 
Consolidated Portfolio SF
 
12,152,138
 
11,955,455
 
11,078,912
 
10,649,768
 
10,253,580
Leasing Activity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Mar 31, 2016
 
Dec 31, 2015
 
Sep 30, 2015
 
June 30, 2015
 
Mar 31, 2015
Leasing Activity (SF): (2)
 
 
 
 
 
 
 
 
 
 
New leases
 
248,520
 
343,876
 
216,499
 
283,695
 
458,301
Renewal
 
712,771
 
237,935
 
323,085
 
442,019
 
319,849
Gross leasing
 
961,291
 
581,811
 
539,584
 
725,714
 
778,150
 
 
 
 
 
 
 
 
 
 
 
Expiring leases
 
1,071,075
 
378,694
 
455,677
 
857,483
 
625,534
Net absorption
 
(109,784)
 
203,117
 
83,907
 
(131,769)(3)
 
152,616
Retention rate
 
67%
 
63%
 
71%
 
52%(3)
 
51%
Weighted Average New/Renewal Leasing Spreads:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Mar 31, 2016
 
Dec 31, 2015
 
Sep 30, 2015
 
June 30, 2015
 
Mar 31, 2015
Cash Rent Change
 
5.6%
 
6.4%
 
5.4%
 
7.0%
 
4.5%
GAAP Rent Change
 
13.6%
 
12.9%
 
16.3%
 
15.4%
 
11.6%
(1) 
See page 19 for the occupancy by county of our total consolidated portfolio excluding repositioning space.
(2) 
Excludes month-to-month tenants.
(3) 
Excluding the effect of two move-outs aggregating 146,133 square feet at two of our repositioning properties, Birch and Frampton, our net absorption was 14,364 square feet and our retention rate was 62%, respectively.


First Quarter 2016
Page 20
Supplemental Financial Reporting Package
 

Leasing Statistics
 
 
 
 
(unaudited results, data represents consolidated portfolio only)
 
 
 
Leasing Activity:
 
 

 
 
# Leases Signed
 
SF of Leasing
 
Wtd. Avg. Lease Term
 
Rent Change - Cash
 
Rent Change - GAAP
First Quarter 2016:
 
 
 
 
 
 
 
 
 
 
New(1)
 
46
 
248,520
 
4.6
 
15.0
%
 
28.8
%
Renewal (2)
 
80
 
712,771
 
3.0
 
4.4
%
 
11.7
%
Total/Weighted Average
 
126
 
961,291
 
3.4
 
5.6
%
 
13.6
%
 
 
 
 
 
 
 
 
 
 
 
Uncommenced Leases by County:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market
 
Leased SF
 
Uncommenced Leases
Annual Base Rent
(in thousands)
 
Total Pro Forma
Annualized Base Rent
(in thousands)
 
Pro Forma
Occupancy
 
Pro Forma
Annualized Base
Rent per SF
Los Angeles County
 
22,288

 
144

 
$
49,538

 
89.6
%
 

$8.80

Orange County
 
—

 
—

 
11,933

 
88.1
%
 

$9.11

San Bernardino County
 
1,728

 
26

 
8,829

 
96.9
%
 

$7.26

Ventura County
 
—

 
—

 
8,759

 
91.6
%
 

$8.35

San Diego County
 
5,777

 
118

 
16,221

 
77.5
%
 

$10.56

Total/Weighted Average
 
29,793

 
$
288

 
$
95,280

 
88.4
%
 

$8.87

 
 
 
 
 
 
 
 
 
 
 
Lease Expiration Schedule:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year of Lease Expiration
 
# of Leases Expiring
 
Total Rentable SF
 
Annualized Base Rent
(in thousands)
 
% of Annualized
Base Rent
 
Annualized Base
Rent per SF
Available
 
—
 
1,411,409
 
$
—

 
—%
 
$—
MTM Tenants
 
106
 
196,311
 
2,099

 
2.2%
 
$10.69
2016
 
321
 
2,143,852
 
17,428

 
18.3%
 
$8.13
2017
 
373
 
2,355,920
 
20,747

 
21.8%
 
$8.81
2018
 
251
 
1,511,218
 
14,179

 
14.9%
 
$9.38
2019
 
91
 
1,116,356
 
9,595

 
10.1%
 
$8.60
2020
 
55
 
1,149,052
 
10,591

 
11.1%
 
$9.22
2021
 
42
 
1,012,864
 
9,505

 
10.0%
 
$9.38
2022
 
6
 
160,854
 
864

 
0.9%
 
$5.37
2023
 
6
 
125,883
 
1,472

 
1.5%
 
$11.69
2024
 
4
 
472,125
 
3,618

 
3.8%
 
$7.66
2025
 
3
 
133,671
 
1,507

 
1.6%
 
$11.27
Thereafter
 
4
 
362,623
 
3,675

 
3.8%
 
$10.13
Total Portfolio
 
1,262
 
12,152,138
 
$
95,280

 
100.0%
 
$8.87
(1) 
The cash and GAAP rent spreads for new leases excludes 17 leases aggregating 169,108 rentable square feet for which there was no comparable lease data. Comparable leases generally exclude: (i) space under repositioning, (ii) space that has been vacant for over one year, (iii) space with different lease structures (for example a change from a gross lease to a modified gross lease or a change in the leased square footage) or (iv) lease terms shorter than six months.
(2) 
The cash and GAAP rent spreads for renewal leases excludes 10 leases aggregating 60,290 rentable square feet for which there was no comparable lease data, due to either (i) space with different lease structures or (ii) lease terms shorter than six months.

First Quarter 2016
Page 21
Supplemental Financial Reporting Package
 

Top Tenants and Lease Segmentation
 
 
 
 
(unaudited results, data represents consolidated portfolio only)
 
 
 
Top 10 Tenants:
 
 
Tenant
 
Submarket
 
Leased SF
 
% of Total Ann.
Base Rent
 
Ann. Base Rent
per SF
 
Lease Expiration
32 Cold, LLC
 
Central LA
 
149,157
 
2.2%
 
$13.80
 
3/31/2026(1)
Cosmetic Laboratories of America, LLC
 
Greater San Fernando Valley
 
319,348
 
2.0%
 
$5.95
 
6/30/2020
Valeant Pharmaceuticals International, Inc.
 
West Orange County
 
170,865
 
1.5%
 
$8.24
 
12/31/2019
Triumph Processing, Inc.
 
South Bay
 
164,662
 
1.4%
 
$8.22
 
5/31/2030
Senior Operations, Inc.
 
Greater San Fernando Valley
 
130,800
 
1.2%
 
$8.88
 
11/30/2024
Biosense Webster, Inc.
 
San Gabriel Valley
 
89,920
 
1.2%
 
$12.82
 
10/31/2020(2)
KT's Kitchen
 
South Bay
 
87,420
 
1.2%
 
$12.79
 
4/30/2021
Warehouse Specialists, Inc.
 
San Gabriel Valley
 
245,961
 
1.2%
 
$4.50
 
11/30/2017
Department of Corrections
 
Inland Empire West
 
58,781
 
1.0%
 
$18.25
 
3/31/2020
Stellar Microelectronics, Inc.
 
Greater San Fernando Valley
 
134,287
 
1.0%
 
$7.11
 
3/31/2021
Top 10 Total / Weighted Average
 
 
 
1,551,201
 
13.9%
 
$8.57
 
 
(1) 
Includes (i) 78,280 rentable square feet expiring September 30, 2025 and (ii) 70,877 rentable square feet expiring March 31, 2026.
(2) 
Includes (i) 1,120 rentable square feet expiring September 30, 2016, (ii) 12,800 rentable square feet expiring September 30, 2017 and (iii) 76,000 rentable square feet expiring October 31, 2020.

Lease Segmentation by Size:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Square Feet
 
Number of Leases
 
Leased SF
 
Ann. Base Rent
(in thousands)
 
% of Total Ann.
Base Rent
 
Ann. Base Rent
per SF
<4,999
 
891
 
1,880,929
 
$
20,298

 
21.3%
 
$10.79
5,000‐9,999
 
145
 
998,760
 
10,237

 
10.8%
 
$10.25
10,000‐24,999
 
148
 
2,331,353
 
21,943

 
23.0%
 
$9.41
25,000‐49,999
 
34
 
1,212,814
 
10,310

 
10.8%
 
$8.50
>50,000
 
44
 
4,316,873
 
32,492

 
34.1%
 
$7.53
Total / Weighted Average
 
1,262
 
10,740,729
 
$
95,280

 
100.0%
 
$8.87


First Quarter 2016
Page 22
Supplemental Financial Reporting Package
 

Capital Expenditure Summary
 
 
(unaudited results, in thousands, except square feet and per square foot data)
(data represents consolidated portfolio only)
 
 
 
Quarter Ended March 31, 2016
 
 
 
Amount
 
SF(1)
 
PSF
Tenant Improvements:
 
 
 
 
 
New Leases‐1st Generation
$
205

 
151,824

 
$
1.35

New Leases‐2nd Generation
$
123

 
97,240

 
$
1.26

Renewals
$
42

 
24,582

 
$
1.72

 
 
 
 
 
 
Leasing Commissions & Lease Costs:
 
 
 
 
 
New Leases‐1st Generation
$
784

 
235,803

 
$
3.32

New Leases‐2nd Generation
$
179

 
139,353

 
$
1.28

Renewals
$
117

 
259,088

 
$
0.45

 
 
 
 
 
 
Total Recurring Capex:
 
 
 
 
 
Recurring Capex
$
586

 
11,973,952

 
$
0.05

Recurring Capex % of NOI
3.0
%
 
 
 
 
Recurring Capex % of Operating Revenue
2.1
%
 
 
 
 
 
 
 
 
 
 
Nonrecurring Capex
$
4,238

 
3,833,818

 
$
1.11

 
 
 
 
 
 
(1) 
For tenant improvements and leasing commissions, reflects the aggregate square footage of the leases in which we incurred such costs, excluding new/renewal leases in which there were no tenant improvements and/or leasing commissions. For recurring capex, reflects the weighted average square footage of our consolidated portfolio for the period. For nonrecurring capex, reflects the aggregate square footage of the properties in which we incurred such capital expenditures.

First Quarter 2016
Page 23
Supplemental Financial Reporting Package
 

Properties and Space Under Repositioning
 
 
As of March 31, 2016
 
(unaudited results, in thousands, except square feet)
Repositioning Properties
 
 
 
 
 
 
 
 
Est. Construction Period
 
Costs Incurred
 
 
 
 
 
 
 
 
 
 
Property (Submarket)
 
Rentable
Square Feet
 
Acquisition
Date
 
Same Property Portfolio
 
Start
 
Target Completion
 
Purchase
Price
 
Repositioning
 
Cumulative
Investment
to date(1)
 
Projected Total
Investment(2)
 
Occ %
3/31/16
 
Actual Cash
NOI
1Q‐2016(3)
 
Est. Annual
Stabilized
Cash NOI
 
Est.Period until
Stabilized
(months)(4)
CURRENT REPOSITIONING/LEASE-UP:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1601 Alton Pkwy. (OC Airport)
 
124,000
 
Jun 2014
 
Y
 
4Q-2014
 
3Q-2016
 
$
13,276

 
$
2,040

 
$
15,316

 
$
19,078

 
40%
 
$
106

 
$
1,359

 
 21 - 27
24105 Frampton Ave. (South Bay)
 
49,841
 
Mar 2014
 
Y
 
2Q-2015
 
2Q-2016
 
$
3,930

 
$
795

 
$
4,725

 
$
5,447

 
0%
 
$
(21
)
 
$
362

 
 1 - 7
9615 Norwalk Blvd. (Mid-Counties)(5)
 
38,362
 
Apr 2015
 
N
 
3Q-2015
 
2Q-2017
 
$
9,642

 
$
137

 
$
9,779

 
$
23,682

 
0%
 
$
204

 
$
1,556

 
 13 - 19
2535 Midway Drive (Central SD)
 
373,744
 
Oct 2015
 
N
 
4Q-2015
 
1Q-2018
 
$
19,295

 
$
110

 
$
19,405

 
$
46,680

 
0%
 
$
(53
)
 
$
4,189

 
30 - 35
12247 Lakeland Rd. (Mid-Counties)
 
24,875
 
Dec 2015
 
N
 
1Q-2016
 
3Q-2016
 
$
4,257

 
$
12

 
$
4,269

 
$
4,925

 
0%
 
$
(5
)
 
$
297

 
 7 - 13
679-691 S. Anderson St. (Central LA)
 
47,490
 
Nov 2014
 
Y
 
1Q-2016
 
2Q-2016
 
$
6,490

 
$
225

 
$
6,715

 
$
7,125

 
0%
 
$
(15
)
 
$
585

 
 3 - 9
TOTAL/WEIGHTED AVERAGE
 
658,312
 
 
 
 
 
 
 
 
 
$
56,890

 
$
3,319

 
$
60,209

 
$
106,937

 
8%
 
$
216

(6) 
$
8,348

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMPLETED REPOSITIONING/LEASE-UP:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2610 & 2701 S. Birch St. (OC Airport)(7)
 
98,230
 
Jun 2014
 
Y
 
2Q-2015
 
4Q-2015
 
$
11,000

 
$
2,606

 
$
13,606

 
$
13,606

 
15%
 
$
(23
)
 
$
868

 
 0 - 5
9401 De Soto Ave. (SF Valley)(7)(8)
 
150,263
 
Mar 2015
 
N
 
2Q-2015
 
1Q-2016
 
$
14,075

 
$
1,923

 
$
15,998

 
$
16,992

 
0%
 
$
(47
)
 
$
1,007

 
 0 - 5
TOTAL/WEIGHTED AVERAGE
 
248,493
 
 
 
 
 
 
 
 
 
$
25,075

 
$
4,529

 
$
29,604

 
$
30,598

 
6%
 
$
(70
)
(6) 
$
1,875

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repositioning Space
 
 
 
 
 
 
 
 
Construction Period
 
 
Costs Incurred
 
 
 
 
 
 
 
 
 
 
 
Property (Submarket)
 
Rentable Square Feet
 
Space Under Repositioning
 
Same Property Portfolio
 
Start
 
Completion
 
 
 
Repositioning
 
 
 
Projected Total
Investment(2)
 
Occ %
3/31/16
 
Actual Cash
NOI
1Q‐2016(3)
 
Est. Annual
Stabilized
Cash NOI
 
Est.Period until
Stabilized
(months)(4)
15140 & 15148 Bledsoe St. (SF Valley)
 
133,356
 
72,000
 
Y
 
1Q-2015
 
    2Q-2016(3)
 
 
 
$
1,217

 
 
 
$
1,277

 
46%
 
$
91

 
$
882

 
 0 - 3
228th Street (South Bay)(9)
 
88,580
 
23,093
 
Y
 
1Q-2016
 
3Q-2016
 
 
 
$
—

 
 
 
$
1,841

 
60%
 
$
(11
)
 
$
207

 
 11 - 14
TOTAL/WEIGHTED AVERAGE
 
221,936
 
94,475
 
 
 
 
 
 
 


 
$
1,217

 
 
 
$
3,118

 
52%
 
$
80

(6) 
$
1,089

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Cumulative investment‐to‐date includes the purchase price of the property and subsequent costs incurred for nonrecurring capital expenditures.
(2)
Projected total investment includes the purchase price of the property and an estimate of total expected nonrecurring capital expenditures to be incurred on each repositioning project to reach completion.
(3)
Represents the actual net operating income for each property for the three months ended March 31, 2016. For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 28 of this report.
(4)
Represents the estimated remaining number of months, as of March 31, 2016, for the property to reach stabilization. Includes time to complete construction and lease-up the property.
(5)
9615 Norwalk has 10.26 acres of partially paved storage yard/industrial land that is currently under a short-term lease. The current projected total investment reflects the cost of designing and constructing a new building after the short-term lease ends, and assumes we do not re-lease the land on a longer term basis. If we decide to re-lease the land on a longer term basis, the projected total investment would decrease to $10,729, which reflects the cost of making improvements to the storage yard/land, including upgrading the paving and adding lighting.
(6)
Actual NOI for the three months ended March 31, 2016, reflects the capitalization of $105 of real estate property taxes and insurance for current repositioning, $82 for completed repositioning/lease-up properties and $21 for repositioning space, respectively. We will continue to capitalize real estate property taxes and insurance during the period in which construction is taking place to get each repositioning property ready for its intended use.
(7)
As of March 31, 2016, this property is in lease-up.
(8)
As of March 31, 2016, we have substantially completed the repositioning of 9401 De Soto. The remaining construction work, which consists of completing exterior improvements, is estimated to be completed in Q2-2016.
(9)
The property located at 228th Street includes eight buildings, of which three buildings aggregating 23,093 rentable square feet were under repositioning as of March 31, 2016. The amounts presented on this page represent the actual and estimated costs and cash NOI of only these three buildings.

First Quarter 2016
Page 24
Supplemental Financial Reporting Package
 

Current Year Acquisitions Summary
 
 
 
 
(unaudited results, data represents consolidated portfolio only)
2016 Acquisitions
Acquisition Date
 
Property Address
 
County
 
Submarket
 
Rentable Square Feet
 
Price
($ in MM)
 
Occ. % at Acquisition
 
Occ.% at
March 31, 2016
3/15/16
 
8525 Camino Santa Fe
 
San Diego
 
Central San Diego
 
59,399
 
$8.5
 
100%
 
100%
3/29/16
 
28454 Livingston Ave
 
Valencia
 
Greater San Fernando Valley
 
134,287
 
$16.0
 
100%
 
100%


First Quarter 2016
Page 25
Supplemental Financial Reporting Package
 

Net Asset Value Components
 
 
  At 3/31/2016
 
(unaudited and in thousands, except share data)
Net Operating Income
 
 
 
For the Three Months Ended
 
ProForma Net Operating Income (NOI)(1)
March 31, 2016
 
Total operating revenues
$
27,370

 
Property operating expenses
(7,543
)
 
Pro forma effect of acquisitions(2)
358

 
Pro forma NOI effect of properties and space under repositioning(3)
2,603

 
ProForma NOI
22,788

 
Fair value lease revenue
(4
)
 
Straight line rental revenue adjustment
(1,095
)
 
ProForma Cash NOI
$
21,689

 
 
 
 
Balance Sheet Items
 
 
 
 
 
Other assets and liabilities
March 31, 2016
 
Cash and cash equivalents
$
6,402

 
Rents and other receivables, net
2,939

 
Other assets
5,580

 
Acquisition related deposits
400

 
Accounts payable, accrued expenses and other liabilities
(14,897
)
 
Dividends payable
(7,814
)
 
Tenant security deposits
(11,995
)
 
Prepaid rents
(2,667
)
 
Total other assets and liabilities
$
(22,052
)
 
 
 
 
Debt and Shares Outstanding
 
 
 
 
 
Total consolidated debt(4)
$
445,611

 
 
 
 
Common shares outstanding(5)
55,276,567

 
Operating partnership units outstanding(6)
2,026,642

 
Total common shares and operating partnership units outstanding
57,303,209

 
(1) 
For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 28 of this report.
(2) 
Represents the estimated incremental NOI from Q1'16 acquisitions as if they had been acquired on January 1, 2016. We have made a number of assumptions in such estimates and there can be no assurance that we would have generated the projected levels of NOI had we actually owned the acquired entities as of January 1, 2016.
(3) 
Represents the estimated incremental NOI from the 10 properties that were classified as repositioning/lease-up properties as of March 31, 2016, assuming that all repositioning work had been completed and the properties/space were fully stabilized as of January 1, 2016. See page 24 for the properties included. We have made a number of assumptions in such estimates and there can be no assurance that we would have generated the projected levels of NOI had these properties actually been stabilized as of January 1, 2016.
(4) 
Excludes net deferred loan fees and net loan premium aggregating $1,601.
(5) 
Represents outstanding shares of common stock of the Company, which excludes 380,861 shares of unvested restricted stock.
(6)Represents outstanding common units of the Company's operating partnership, Rexford Industrial Realty, L.P., that are owned by unit holders other than Rexford Industrial Realty, Inc.

First Quarter 2016
Page 26
Supplemental Financial Reporting Package
 


Fixed Charge Coverage Ratio
 
 
 at 3/31/16
 
(unaudited and in thousands)
 
 
 
 
For the Three Months Ended
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
EBITDA
15,950

 
14,606

 
13,508

 
12,364

 
11,819

Recurring cash distributions from unconsolidated joint ventures
74

 
46

 
54

 
37

 
34

Fair value lease expense
(4
)
 
48

 
69

 
46

 
39

Non‐cash stock compensation
934

 
494

 
443

 
467

 
348

Straight line corporate office rent expense adjustment
(1
)
 
(1
)
 
21

 
37

 
24

Loss (gain) on extinguishment of debt
—

 
—

 
253

 
(71
)
 
—

Straight line rental revenue adjustment
(1,095
)
 
(1,409
)
 
(1,039
)
 
(612
)
 
(365
)
Capitalized payments
(356
)
 
(345
)
 
(296
)
 
(311
)
 
(334
)
Note receivable discount amortization
—

 
—

 
(38
)
 
(71
)
 
(69
)
Gain from early repayment of note receivable
—

 
—

 
(581
)
 
—

 
—

Recurring capital expenditures
(586
)
 
(1,346
)
 
(921
)
 
(871
)
 
(392
)
2nd generation tenant improvements and leasing commissions
(461
)
 
(762
)
 
(701
)
 
(893
)
 
(706
)
Unconsolidated joint venture AFFO adjustments
(3
)
 
(4
)
 
(5
)
 
4

 
9

Cash flow for fixed charge coverage calculation
14,452

 
11,327

 
10,767

 
10,126

 
10,407

Cash interest expense calculation detail:
 
 
 
 
 
 
 
 
 
Interest expense
3,254

 
2,724

 
2,245

 
1,658

 
1,826

Capitalized interest
439

 
306

 
252

 
186

 
10

Note payable premium amortization
59

 
33

 
33

 
33

 
92

Amortization of deferred financing costs
(221
)
 
(194
)
 
(200
)
 
(209
)
 
(209
)
Cash interest expense
3,531

 
2,869

 
2,330

 
1,668

 
1,719

 
 
 
 
 
 
 
 
 
 
Fixed Charge Coverage Ratio
4.1
x
 
3.9
x
 
4.6
x
 
6.1
x
 
6.1
x

First Quarter 2016
Page 27
Supplemental Financial Reporting Package
 

Definitions / Discussion of Non‐GAAP Financial Measures
 
 
 

Adjusted Funds from Operations (AFFO): We calculate adjusted funds from operations, or AFFO, by adding to or subtracting from FFO (i) non‐cash operating revenues and expenses, (ii) capitalized operating expenditures such as leasing payroll, (iii) recurring capital expenditures required to maintain and re‐tenant our properties, (iv) capitalized interest costs resulting from the repositioning/redevelopment of certain of our properties, and (v) 2nd generation tenant improvements and leasing commissions. Management uses AFFO as a supplemental performance measure because it provides a performance measure that, when compared year over year, captures trends in portfolio operating results. We also believe that, as a widely recognized measure of the performance of REITs, AFFO will be used by investors as a basis to assess our performance in comparison to other REITs. However, because AFFO may exclude certain non‐recurring capital expenditures and leasing costs, the utility of AFFO as a measure of our performance is limited. Additionally, other Equity REITs may not calculate AFFO using the method we do. As a result, our AFFO may not be comparable to such other Equity REITs’ AFFO. AFFO should be considered only as a supplement to net income (as computed in accordance with GAAP) as a measure of our performance.

Annualized Base Rent: Calculated for each lease as the latest monthly contracted base rent per the terms of such lease multiplied by 12. Excludes billboard and antenna revenue and rent abatements.

Capital Expenditures, Non‐recurring: Expenditures made in respect of a property for improvement to the appearance of such property or any other major upgrade or renovation of such property, and further includes capital expenditures for seismic upgrades, or capital expenditures for deferred maintenance existing at the time such property was acquired.

Capital Expenditures, Recurring: 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 or replacement of parking lot, roofing materials, mechanical systems, HVAC systems and other structural systems. Recurring capital expenditures shall not include any of the following: (a) improvements to the appearance of such property or any other major upgrade or renovation of such property not necessary for proper maintenance or marketability of such property; (b) capital expenditures for seismic upgrades; or (c) capital expenditures for deferred maintenance for such property existing at the time such property was acquired.

Capital Expenditures, First Generation: Capital expenditures for newly acquired space, newly developed or redeveloped space, or change in use.

Cash NOI: Cash basis NOI is a non‐GAAP measure, which we calculate by adding or subtracting from NOI (i) fair value lease revenue and (ii) straight‐line rent adjustment. 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.

EBITDA and Adjusted EBITDA: We believe that EBITDA 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 industrial properties. We also use this measure in ratios to compare our performance to that of our industry peers. In addition, we believe EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of Equity REITs. However, because EBITDA is calculated before recurring cash charges including interest expense and income taxes, and is not adjusted for capital expenditures or other recurring cash requirements of our business, its utility as a measure of our liquidity is limited. Accordingly, EBITDA should not be considered an alternative to cash flow from operating activities (as computed in accordance with GAAP) as a measure of our liquidity. EBITDA should not be considered as an alternative to net income or loss as an indicator of our operating performance. Other Equity REITs may calculate EBITDA differently than we do; accordingly, our EBITDA may not be comparable to such other Equity REITs’ EBITDA. Adjusted EBITDA includes add backs of non‐cash stock based compensation expense, gain on extinguishment of debt, loss on sale of real estate, non‐recurring legal fees and the pro‐forma effects of acquisitions and assets classified as held for sale.

Investment to Date and Total: Reflects the total purchase price for a property plus additional or planned tangible investment subsequent to acquisition.

Funds from Operations (FFO): We calculate FFO before non‐controlling interest 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 GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and 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, other than temporary impairments of unconsolidated real estate entities, and impairment on our investment in real estate, 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.


First Quarter 2016
Page 28
Supplemental Financial Reporting Package
 

Definitions / Discussion of Non‐GAAP Financial Measures
 
 
 

NOI: Includes the revenue and expense directly attributable to our real estate properties calculated in accordance with GAAP. Calculated as total revenue from real estate operations including i) rental revenues ii) tenant reimbursements, and iii) other income less property expenses and other 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 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.

Proforma NOI: Proforma NOI is calculated by adding to NOI the estimated impact of current period acquisitions as if they had been acquired at the beginning of the reportable period. These estimates do not purport to be indicative of what operating results would have been had the acquisitions actually occurred at the beginning of the reportable period and may not be indicative of future operating results.

Properties Under Repositioning: Typically defined as properties where a significant amount of space is held vacant in order to implement capital improvements that improve the market rentability and leasing functionality of that space. Considered completed once investment is fully or nearly fully deployed and the property is marketable for leasing.

Recurring Funds From Operations (Recurring FFO): We calculate Recurring FFO by adjusting FFO to exclude the effect of non‐recurring expenses and acquisition expenses.

Rent Change ‐ Cash: Compares the first month cash rent excluding any abatement on new leases to the last month rent for the most recent expiring lease. Data included for comparable leases only. Comparable leases generally exclude properties under repositioning, short‐term leases, and space that has been vacant for over one year.

Rent Change ‐ GAAP: Compares GAAP rent, which straightlines rental rate increases and abatement, on new leases to GAAP rent for the most recent expiring lease. Data included for comparable leases only. Comparable leases generally exclude properties under repositioning, short‐term leases, and space that has been vacant for over one year.

Same Property Portfolio: Our Same Property Portfolio is a subset of our consolidated portfolio and includes properties that were wholly‐owned by us as of January 1, 2015 and still owned by us as of March 31, 2016. The Company’s computation of same property performance may not be comparable to other REITs.

Space Under Repositioning: Defined as space held vacant in order to implement capital improvements to change the leasing functionality of that space. Considered completed once the repositioning has been completed and the unit is marketable for leasing.

Stabilized Same Property Portfolio: Our Stabilized Same Property Portfolio represents the properties included in our Same Property Portfolio, adjusted to exclude space at properties that were in various stages of repositioning or lease-up.

Uncommenced Leases: Reflects signed leases that have not yet commenced as of the reporting date.


First Quarter 2016
Page 29
Supplemental Financial Reporting Package