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) |
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)) |
99.1 | Press Release dated August 3, 2016 |
99.2 | Second Quarter 2016 Supplemental Financial Report |
Rexford Industrial Realty, Inc. | |
August 3, 2016 | /s/ Michael S. Frankel |
Michael S. Frankel Co-Chief Executive Officer (Principal Executive Officer) | |
Rexford Industrial Realty, Inc. | |
August 3, 2016 | /s/ Howard Schwimmer |
Howard Schwimmer Co-Chief Executive Officer (Principal Executive Officer) |
Exhibit Number | Description | |
99.1 | Press Release dated August 3, 2016 | |
99.2 | Second Quarter 2016 Supplemental Financial Report |
• | Net Income attributable to common stockholders of $0.19 per diluted share for the quarter ended June 30, 2016. |
• | Core Funds From Operations (FFO) of $0.22 per diluted share for the quarter ended June 30, 2016. Adjusting for non-core expenses, FFO was $0.21 per diluted share for the quarter ended June 30, 2016. |
• | Total rental revenues of $30.5 million, which represents an increase of 36.9% year-over-year. Property Net Operating Income (NOI) of $22.5 million, which represents an increase of 37.4% year-over-year. |
• | Same Property Portfolio NOI increased 6.9% in the second quarter of 2016 compared to the second quarter of 2015, driven by a 5.3% increase in Same Property Portfolio total rental revenue and a 1.0% increase in Same Property Portfolio operating expenses. Same Property Portfolio Cash NOI increased 9.1% compared to the second quarter of 2015. |
• | Signed new and renewal leases totaling 1,075,159 rentable square feet. Rental rates on new and renewal leases were 23.5% higher than prior rents on a GAAP basis and 11.0% higher on a cash basis. |
• | Stabilized Same Property Portfolio occupancy was 95.7%, which represents an increase of 440 basis points year-over-year. Same Property Portfolio occupancy was 92.5%, which represents an increase of 350 basis points year-over-year. |
• | At June 30, 2016, the consolidated portfolio including repositioning assets was 90.1% occupied, which represents an increase of 170 basis points year-over-year. At June 30, 2016, the consolidated portfolio, excluding repositioning assets aggregating 905,708 rentable square feet, was 96.5% occupied. |
• | During the second quarter of 2016, the Company acquired 11 industrial properties for an aggregate purchase price of $206.2 million. Additionally, the Company sold three industrial properties for an aggregate sales price of $21.7 million. Year to date, including properties acquired after the end of the second quarter 2016, the Company has acquired 14 properties for an aggregate cost of $256.4 million. |
• | Issued 10.35 million additional shares of its common stock, for net proceeds of approximately $174.4 million. |
• | Exercised the $100.0 million accordion on the seven-year term loan facility. |
June 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Land | $ | 605,694 | $ | 492,704 | |||
Buildings and improvements | 745,968 | 650,075 | |||||
Tenant improvements | 33,873 | 28,977 | |||||
Furniture, fixtures, and equipment | 175 | 188 | |||||
Construction in progress | 23,714 | 16,822 | |||||
Total real estate held for investment | 1,409,424 | 1,188,766 | |||||
Accumulated depreciation | (117,590 | ) | (103,623 | ) | |||
Investments in real estate, net | 1,291,834 | 1,085,143 | |||||
Cash and cash equivalents | 29,177 | 5,201 | |||||
Restricted cash | 17,979 | — | |||||
Rents and other receivables, net | 3,010 | 3,040 | |||||
Deferred rent receivable, net | 9,585 | 7,827 | |||||
Deferred leasing costs, net | 6,531 | 5,331 | |||||
Deferred loan costs, net | 1,146 | 1,445 | |||||
Acquired lease intangible assets, net | 37,789 | 30,383 | |||||
Acquired indefinite-lived intangible | 5,271 | 5,271 | |||||
Other assets | 5,589 | 5,523 | |||||
Acquisition related deposits | 400 | — | |||||
Investment in unconsolidated real estate entities | 4,203 | 4,087 | |||||
Total Assets | $ | 1,412,514 | $ | 1,153,251 | |||
LIABILITIES & EQUITY | |||||||
Liabilities | |||||||
Notes payable | $ | 500,608 | $ | 418,154 | |||
Interest rate swap liability | 7,551 | 3,144 | |||||
Accounts payable, accrued expenses and other liabilities | 10,877 | 12,631 | |||||
Dividends payable | 9,212 | 7,806 | |||||
Acquired lease intangible liabilities, net | 4,346 | 3,387 | |||||
Tenant security deposits | 13,769 | 11,539 | |||||
Prepaid rents | 3,367 | 2,846 | |||||
Total Liabilities | 549,730 | 459,507 | |||||
Equity | |||||||
Rexford Industrial Realty, Inc. stockholders' equity | |||||||
Common Stock, $0.01 par value 490,000,000 authorized and 66,035,732 and 55,598,684 outstanding as of June 30, 2016 and December 31, 2015, respectively | 657 | 553 | |||||
Additional paid in capital | 897,991 | 722,722 | |||||
Cumulative distributions in excess of earnings | (50,733 | ) | (48,103 | ) | |||
Accumulated other comprehensive loss | (7,328 | ) | (3,033 | ) | |||
Total stockholders' equity | 840,587 | 672,139 | |||||
Noncontrolling interests | 22,197 | 21,605 | |||||
Total Equity | 862,784 | 693,744 | |||||
Total Liabilities and Equity | $ | 1,412,514 | $ | 1,153,251 |
Three Months Ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
RENTAL REVENUES | |||||||||||||||
Rental revenues | $ | 26,119 | $ | 19,275 | $ | 49,618 | $ | 37,832 | |||||||
Tenant reimbursements | 4,119 | 2,844 | 7,677 | 5,028 | |||||||||||
Other income | 259 | 162 | 572 | 352 | |||||||||||
TOTAL RENTAL REVENUES | 30,497 | 22,281 | 57,867 | 43,212 | |||||||||||
Management, leasing and development services | 111 | 161 | 245 | 293 | |||||||||||
Interest income | — | 280 | — | 557 | |||||||||||
TOTAL REVENUES | 30,608 | 22,722 | 58,112 | 44,062 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Property expenses | 7,959 | 5,874 | 15,502 | 11,645 | |||||||||||
General and administrative | 4,521 | 3,740 | 8,123 | 7,286 | |||||||||||
Depreciation and amortization | 12,610 | 10,490 | 23,824 | 20,374 | |||||||||||
TOTAL OPERATING EXPENSES | 25,090 | 20,104 | 47,449 | 39,305 | |||||||||||
OTHER EXPENSES | |||||||||||||||
Acquisition expenses | 635 | 847 | 1,110 | 1,080 | |||||||||||
Interest expense | 3,716 | 1,658 | 6,970 | 3,484 | |||||||||||
TOTAL OTHER EXPENSES | 4,351 | 2,505 | 8,080 | 4,564 | |||||||||||
TOTAL EXPENSES | 29,441 | 22,609 | 55,529 | 43,869 | |||||||||||
Equity in income from unconsolidated real estate entities | 62 | 12 | 123 | 13 | |||||||||||
Gain on extinguishment of debt | — | 71 | — | 71 | |||||||||||
Gains on sale of real estate | 11,563 | — | 11,563 | — | |||||||||||
NET INCOME | 12,792 | 196 | 14,269 | 277 | |||||||||||
Less: net income attributable to noncontrolling interest | (418 | ) | (8 | ) | (470 | ) | (12 | ) | |||||||
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC. | 12,374 | 188 | 13,799 | 265 | |||||||||||
Less: earnings attributable to participating securities | (75 | ) | (49 | ) | (153 | ) | (99 | ) | |||||||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 12,299 | $ | 139 | $ | 13,646 | $ | 166 | |||||||
Net income available to common stockholders per share - basic and diluted | $ | 0.19 | $ | — | $ | 0.23 | $ | — |
Same Property Portfolio Occupancy: | |||||||||||
June 30, 2016 | June 30, 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 | 91.8% | 94.8% | 88.9% | 91.2% | 2.9% | 3.6% | |||||
Orange County | 86.1% | 97.9% | 83.6% | 96.2% | 2.5% | 1.7% | |||||
San Bernardino County | 98.2% | 98.2% | 96.7% | 96.7% | 1.5% | 1.5% | |||||
San Diego County | 97.0% | 97.0% | 86.9% | 86.9% | 10.1% | 10.1% | |||||
Ventura County | 92.9% | 92.9% | 90.8% | 90.8% | 2.1% | 2.1% | |||||
Total/Weighted Average | 92.5% | 95.7% | 89.0% | 91.3% | 3.5% | 4.4% |
(1) | Reflects the occupancy of our Same Property Portfolio adjusted for space aggregating 318,464 rentable square feet at six properties that were in various stages of repositioning or lease-up as of June 30, 2016. |
Same Property Portfolio NOI and Cash NOI | |||||||||||||||||||||||||||
Three Months Ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
2016 | 2015 | $ Change | % Change | 2016 | 2015 | $ Change | % Change | ||||||||||||||||||||
Rental income | $ | 19,230 | $ | 17,891 | $ | 1,339 | 7.5% | $ | 38,253 | $ | 35,782 | $ | 2,471 | 6.9% | |||||||||||||
Tenant reimbursements | 2,558 | 2,818 | (260 | ) | (9.2)% | 5,195 | 5,008 | 187 | 3.7% | ||||||||||||||||||
Other income | 178 | 143 | 35 | 24.5% | 352 | 320 | 32 | 10.0% | |||||||||||||||||||
Total rental revenues | 21,966 | 20,852 | 1,114 | 5.3% | 43,800 | 41,110 | 2,690 | 6.5% | |||||||||||||||||||
Property expenses | 5,695 | 5,638 | 57 | 1.0% | 11,778 | 11,261 | 517 | 4.6% | |||||||||||||||||||
Same property portfolio NOI | $ | 16,271 | $ | 15,214 | $ | 1,057 | 6.9% | $ | 32,022 | $ | 29,849 | $ | 2,173 | 7.3% | |||||||||||||
Straight-line rents | (147 | ) | (394 | ) | 247 | (62.7)% | (474 | ) | (741 | ) | 267 | (36.0)% | |||||||||||||||
Amort. above/below market leases | 79 | 27 | 52 | 192.6% | 65 | 73 | (8 | ) | (11.0)% | ||||||||||||||||||
Same property portfolio cash NOI | $ | 16,203 | $ | 14,847 | $ | 1,356 | 9.1% | $ | 31,613 | $ | 29,181 | $ | 2,432 | 8.3% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Same property portfolio cash NOI | $ | 16,203 | $ | 14,847 | $ | 31,613 | $ | 29,181 | |||||||
Straight-line rents | 147 | 394 | 474 | 741 | |||||||||||
Amort. above/below market leases | (79 | ) | (27 | ) | (65 | ) | (73 | ) | |||||||
Same property portfolio NOI | 16,271 | 15,214 | 32,022 | 29,849 | |||||||||||
Non-comparable property operating revenues | 8,531 | 1,429 | 14,067 | 2,102 | |||||||||||
Non-comparable property expenses | (2,264 | ) | (236 | ) | (3,724 | ) | (384 | ) | |||||||
Total consolidated portfolio NOI | 22,538 | 16,407 | 42,365 | 31,567 | |||||||||||
Add: | |||||||||||||||
Management, leasing and development services | 111 | 161 | 245 | 293 | |||||||||||
Interest income | — | 280 | — | 557 | |||||||||||
Equity in income from unconsolidated real estate entities | 62 | 12 | 123 | 13 | |||||||||||
Gains on sale of real estate | 11,563 | — | 11,563 | — | |||||||||||
Gain on extinguishment of debt | — | 71 | — | 71 | |||||||||||
Deduct: | |||||||||||||||
General and administrative | 4,521 | 3,740 | 8,123 | 7,286 | |||||||||||
Depreciation and amortization | 12,610 | 10,490 | 23,824 | 20,374 | |||||||||||
Acquisition expenses | 635 | 847 | 1,110 | 1,080 | |||||||||||
Interest expense | 3,716 | 1,658 | 6,970 | 3,484 | |||||||||||
Net income | $ | 12,792 | $ | 196 | $ | 14,269 | $ | 277 |
Three Months Ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 12,792 | $ | 196 | $ | 14,269 | $ | 277 | |||||||
Add: | |||||||||||||||
Depreciation and amortization | 12,610 | 10,490 | 23,824 | 20,374 | |||||||||||
Depreciation and amortization from unconsolidated joint ventures(1) | 5 | 20 | 10 | 48 | |||||||||||
Deduct: | |||||||||||||||
Gains on sale of real estate | 11,563 | — | 11,563 | — | |||||||||||
Funds From Operations (FFO) | $ | 13,844 | $ | 10,706 | $ | 26,540 | $ | 20,699 | |||||||
Less: FFO attributable to noncontrolling interest(2) | (421 | ) | (410 | ) | (870 | ) | (818 | ) | |||||||
Less: FFO attributable to participating securities(3) | (114 | ) | (76 | ) | (238 | ) | (147 | ) | |||||||
Company share of FFO | $ | 13,309 | $ | 10,220 | $ | 25,432 | $ | 19,734 | |||||||
FFO | $ | 13,844 | $ | 10,706 | $ | 26,540 | $ | 20,699 | |||||||
Add: | |||||||||||||||
Legal fees (reimbursements) | — | 64 | (643 | ) | 433 | ||||||||||
Acquisition expenses | 635 | 847 | 1,110 | 1,080 | |||||||||||
Core FFO | $ | 14,479 | $ | 11,617 | $ | 27,007 | $ | 22,212 | |||||||
Less: Core FFO attributable to noncontrolling interest(2) | (440 | ) | (446 | ) | (883 | ) | (880 | ) | |||||||
Less: Core FFO attributable to participating securities(3) | (119 | ) | (82 | ) | (242 | ) | (157 | ) | |||||||
Company share of Core FFO | $ | 13,920 | $ | 11,089 | $ | 25,882 | $ | 21,175 | |||||||
Weighted-average shares outstanding - basic and diluted | 64,063,337 | 54,963,093 | 59,666,468 | 52,835,132 | |||||||||||
Weighted-average diluted shares and units | 66,075,055 | 57,220,536 | 61,685,648 | 55,116,508 |
(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. |
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, Core 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 | 24-25 |
Current Year Acquisitions and Dispositions Summary | 26 |
Net Asset Value Components | 27 |
Fixed Charge Coverage Ratio | 28 |
Definitions / Discussion of Non‐GAAP Financial Measures | 29-30 |
Second 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 | |
National Securities Corporation | John R. Benda | |
Stifel Nicolaus & Co. | John W. Guinee | |
Wells Fargo Securities | Blaine Heck | |
Wunderlich Securities | Craig Kucera |
Second 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 | ||||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||||
Financial Results: | ||||||||||||||||||||
Total rental revenues | $ | 30,497 | $ | 27,370 | $ | 26,059 | $ | 23,335 | $ | 22,281 | ||||||||||
Net income | $ | 12,792 | $ | 1,477 | $ | 1,056 | $ | 617 | $ | 196 | ||||||||||
Net income per common share-basic and diluted | $ | 0.19 | $ | 0.02 | $ | 0.02 | $ | 0.01 | $ | 0.00 | ||||||||||
Company share of Core FFO | $ | 13,920 | $ | 11,962 | $ | 11,870 | $ | 11,201 | $ | 11,089 | ||||||||||
Core FFO per common share-basic and diluted | $ | 0.22 | $ | 0.22 | $ | 0.21 | $ | 0.20 | $ | 0.20 | ||||||||||
Company share of FFO | $ | 13,309 | $ | 12,123 | $ | 11,365 | $ | 10,780 | $ | 10,220 | ||||||||||
FFO per share-basic and diluted | $ | 0.21 | $ | 0.22 | $ | 0.21 | $ | 0.20 | $ | 0.19 | ||||||||||
Adjusted EBITDA | $ | 19,679 | $ | 17,074 | $ | 16,385 | $ | 14,607 | $ | 14,066 | ||||||||||
Dividend declared per common share | $ | 0.135 | $ | 0.135 | $ | 0.135 | $ | 0.135 | $ | 0.12 | ||||||||||
Portfolio Statistics: | ||||||||||||||||||||
Portfolio SF - consolidated | 13,640,820 | 12,152,138 | 11,955,455 | 11,078,912 | 10,649,768 | |||||||||||||||
Ending occupancy - consolidated portfolio | 90.1 | % | 88.1 | % | 89.2 | % | 88.8 | % | 88.4 | % | ||||||||||
Leased percentage - consolidated portfolio | 90.3 | % | 88.4 | % | 89.3 | % | 90.5 | % | 90.0 | % | ||||||||||
Leasing spreads-cash | 11.0 | % | 5.6 | % | 6.4 | % | 5.4 | % | 7.0 | % | ||||||||||
Leasing spreads-GAAP | 23.5 | % | 13.6 | % | 12.9 | % | 16.3 | % | 15.4 | % | ||||||||||
Same Property Performance: | ||||||||||||||||||||
Same Property Portfolio SF | 9,643,837 | 9,828,422 | 6,083,359 | 6,083,359 | 6,083,359 | |||||||||||||||
Total rental revenue growth | 5.3 | % | 8.4 | % | 2.8 | % | 5.0 | % | 5.5 | % | ||||||||||
Total property expense growth | 1.0 | % | 8.7 | % | -2.2 | % | -3.2 | % | 3.8 | % | ||||||||||
NOI growth | 6.9 | % | 8.3 | % | 4.8 | % | 8.4 | % | 6.2 | % | ||||||||||
Cash NOI growth | 9.1 | % | 8.2 | % | 7.5 | % | 7.1 | % | 8.0 | % | ||||||||||
Same Property Portfolio ending occupancy | 92.5 | % | 91.7 | % | 94.4 | % | 93.7 | % | 92.6 | % | ||||||||||
Stabilized Same Property Portfolio ending occupancy | 95.7 | % | 95.1 | % | 95.6 | % | 94.8 | % | 94.0 | % | ||||||||||
Same Property Portfolio occupancy growth (ppt) (2) | 3.5 | % | 1.0 | % | 1.6 | % | 2.4 | % | 2.3 | % | ||||||||||
Capitalization: | ||||||||||||||||||||
Common stock price at quarter end | $ | 21.09 | $ | 18.16 | $ | 16.36 | $ | 13.79 | $ | 14.58 | ||||||||||
Common shares issued and outstanding | 65,679,483 | 55,276,567 | 55,265,243 | 55,198,780 | 55,051,832 | |||||||||||||||
Total shares and units issued and outstanding at period end (3) | 67,679,046 | 57,303,209 | 57,291,885 | 57,265,484 | 57,229,405 | |||||||||||||||
Weighted average shares outstanding ‐ basic and diluted | 64,063,337 | 55,269,598 | 55,244,664 | 55,145,963 | 54,963,093 | |||||||||||||||
Total equity market capitalization | $ | 1,427,351 | $ | 1,040,626 | $ | 937,295 | $ | 789,691 | $ | 834,405 | ||||||||||
Total consolidated debt | $ | 503,009 | $ | 445,611 | $ | 418,698 | $ | 335,904 | $ | 296,715 | ||||||||||
Total combined market capitalization (debt and equity) | $ | 1,901,183 | $ | 1,479,835 | $ | 1,350,792 | $ | 1,120,512 | $ | 1,121,132 | ||||||||||
Ratios: | ||||||||||||||||||||
Net debt to total combined market capitalization | 24.9 | % | 29.7 | % | 30.6 | % | 29.5 | % | 25.6 | % | ||||||||||
Net debt to Adjusted EBITDA (quarterly results annualized) | 6.0x | 6.4x | 6.3x | 5.7x | 5.1x |
(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: 1,999,563 (Jun 30, 2016), 2,026,642 (Mar 31, 2016), 2,026,642 (Dec 31, 2015), 2,066,704 (Sep 30, 2015) and 2,177,573 (Jun 30, 2015). Excludes the following number of shares of unvested restricted stock: 356,249 (Jun 30, 2016), 380,861 (Mar 31, 2016), 333,441 (Dec 31, 2015), 389,123 (Sep 30, 2015) and 407,463 (Jun 30, 2015). Excludes 166,669 unvested LTIP Units and 315,998 unvested performance units granted during Q4-15. |
Second Quarter 2016 | Page 4 | |
Supplemental Financial Reporting Package |
Consolidated Balance Sheets | ||
(unaudited and in thousands) |
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Assets | |||||||||||||||||||
Land | $ | 605,694 | $ | 501,972 | $ | 492,704 | $ | 445,454 | $ | 420,349 | |||||||||
Buildings and improvements | 745,968 | 667,675 | 650,075 | 620,341 | 586,178 | ||||||||||||||
Tenant improvements | 33,873 | 30,305 | 28,977 | 26,539 | 25,008 | ||||||||||||||
Furniture, fixtures, and equipment | 175 | 188 | 188 | 188 | 188 | ||||||||||||||
Construction in progress | 23,714 | 17,662 | 16,822 | 14,265 | 13,181 | ||||||||||||||
Total real estate held for investment | 1,409,424 | 1,217,802 | 1,188,766 | 1,106,787 | 1,044,904 | ||||||||||||||
Accumulated depreciation | (117,590 | ) | (111,167 | ) | (103,623 | ) | (96,403 | ) | (89,539 | ) | |||||||||
Investments in real estate, net | 1,291,834 | 1,106,635 | 1,085,143 | 1,010,384 | 955,365 | ||||||||||||||
Cash and cash equivalents | 29,177 | 6,402 | 5,201 | 5,083 | 9,988 | ||||||||||||||
Restricted cash | 17,979 | — | — | — | — | ||||||||||||||
Notes receivable | — | — | — | — | 13,137 | ||||||||||||||
Rents and other receivables, net | 3,010 | 2,939 | 3,040 | 2,221 | 2,210 | ||||||||||||||
Deferred rent receivable | 9,585 | 8,670 | 7,827 | 7,009 | 6,067 | ||||||||||||||
Deferred leasing costs, net | 6,531 | 6,001 | 5,331 | 5,044 | 4,526 | ||||||||||||||
Deferred loan costs, net | 1,146 | 1,296 | 1,445 | 1,595 | 1,745 | ||||||||||||||
Acquired lease intangible assets, net(1) | 37,789 | 28,802 | 30,383 | 27,838 | 28,580 | ||||||||||||||
Indefinite‐lived intangible | 5,271 | 5,271 | 5,271 | 5,271 | 5,271 | ||||||||||||||
Other assets | 5,589 | 5,580 | 5,523 | 5,491 | 5,221 | ||||||||||||||
Acquisition related deposits | 400 | 400 | — | 1,250 | 1,400 | ||||||||||||||
Investment in unconsolidated real estate entities | 4,203 | 4,144 | 4,087 | 4,056 | 4,018 | ||||||||||||||
Total Assets | $ | 1,412,514 | $ | 1,176,140 | $ | 1,153,251 | $ | 1,075,242 | $ | 1,037,528 | |||||||||
Liabilities | |||||||||||||||||||
Notes payable | $ | 500,608 | $ | 444,010 | $ | 418,154 | $ | 335,058 | $ | 296,333 | |||||||||
Interest rate swap liability | 7,551 | 4,949 | 3,144 | 4,716 | 2,960 | ||||||||||||||
Accounts payable and accrued expenses | 10,877 | 14,897 | 12,631 | 13,886 | 9,257 | ||||||||||||||
Dividends and distributions payable | 9,212 | 7,814 | 7,806 | 7,504 | 6,655 | ||||||||||||||
Acquired lease intangible liabilities, net(2) | 4,346 | 3,307 | 3,387 | 2,700 | 2,579 | ||||||||||||||
Tenant security deposits | 13,769 | 11,995 | 11,539 | 10,523 | 9,711 | ||||||||||||||
Prepaid rents | 3,367 | 2,667 | 2,846 | 1,935 | 2,517 | ||||||||||||||
Total Liabilities | 549,730 | 489,639 | 459,507 | 376,322 | 330,012 | ||||||||||||||
Equity | |||||||||||||||||||
Common stock | 657 | 554 | 553 | 552 | 550 | ||||||||||||||
Additional paid in capital | 897,991 | 723,074 | 722,722 | 722,102 | 720,583 | ||||||||||||||
Cumulative distributions in excess of earnings | (50,733 | ) | (54,192 | ) | (48,103 | ) | (41,613 | ) | (34,702 | ) | |||||||||
Accumulated other comprehensive loss | (7,328 | ) | (4,728 | ) | (3,033 | ) | (4,546 | ) | (2,847 | ) | |||||||||
Total stockholders’ equity | 840,587 | 664,708 | 672,139 | 676,495 | 683,584 | ||||||||||||||
Noncontrolling interests | 22,197 | 21,793 | 21,605 | 22,425 | 23,932 | ||||||||||||||
Total Equity | 862,784 | 686,501 | 693,744 | 698,920 | 707,516 | ||||||||||||||
Total Liabilities and Equity | $ | 1,412,514 | $ | 1,176,140 | $ | 1,153,251 | $ | 1,075,242 | $ | 1,037,528 |
(1) | Includes net above-market tenant lease intangibles of $6,348 (June 30, 2016), $5,818 (March 31, 2016), $6,225 (December 31, 2015), $5,621 (September 30, 2015) and $5,725 (June 30, 2015). |
(2) | Includes net below-market tenant lease intangibles of $4,149 (June 30, 2016), $3,102 (March 31, 2016), 3,174 (December 31, 2015), $2,479 (September 30, 2015) and $2,350 (June 30, 2015). |
Second 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 | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Revenues | |||||||||||||||||||
Rental income | $ | 26,119 | $ | 23,499 | $ | 22,665 | $ | 20,617 | $ | 19,275 | |||||||||
Tenant reimbursements | 4,119 | 3,558 | 3,074 | 2,377 | 2,844 | ||||||||||||||
Other income | 259 | 313 | 320 | 341 | 162 | ||||||||||||||
Total Rental Revenues | 30,497 | 27,370 | 26,059 | 23,335 | 22,281 | ||||||||||||||
Management, leasing, and development services | 111 | 134 | 105 | 186 | 161 | ||||||||||||||
Interest income | — | — | — | 153 | 280 | ||||||||||||||
Total Revenues | 30,608 | 27,504 | 26,164 | 23,674 | 22,722 | ||||||||||||||
Operating Expenses | |||||||||||||||||||
Property expenses | 7,959 | 7,543 | 7,118 | 6,237 | 5,874 | ||||||||||||||
General and administrative | 4,521 | 3,602 | 3,952 | 3,778 | 3,740 | ||||||||||||||
Depreciation and amortization | 12,610 | 11,214 | 10,821 | 10,642 | 10,490 | ||||||||||||||
Total Operating Expenses | 25,090 | 22,359 | 21,891 | 20,657 | 20,104 | ||||||||||||||
Other Expenses | |||||||||||||||||||
Acquisition expenses | 635 | 475 | 528 | 528 | 847 | ||||||||||||||
Interest expense | 3,716 | 3,254 | 2,724 | 2,245 | 1,658 | ||||||||||||||
Total Other Expenses | 4,351 | 3,729 | 3,252 | 2,773 | 2,505 | ||||||||||||||
Total Expenses | 29,441 | 26,088 | 25,143 | 23,430 | 22,609 | ||||||||||||||
Equity in income from unconsolidated real estate entities | 62 | 61 | 35 | 45 | 12 | ||||||||||||||
Gain from early repayment of note receivable | — | — | — | 581 | — | ||||||||||||||
(Loss) gain on extinguishment of debt | — | — | — | (253 | ) | 71 | |||||||||||||
Gains on sale of real estate | 11,563 | — | — | — | — | ||||||||||||||
Net Income | 12,792 | 1,477 | 1,056 | 617 | 196 | ||||||||||||||
Less: net income attributable to noncontrolling interest | (418 | ) | (52 | ) | (40 | ) | (24 | ) | (8 | ) | |||||||||
Net income attributable to Rexford Industrial Realty, Inc. | 12,374 | 1,425 | 1,016 | 593 | 188 | ||||||||||||||
Less: earnings allocated to participating securities | (75 | ) | (78 | ) | (71 | ) | (53 | ) | (49 | ) | |||||||||
Net income attributable to common stockholders | $ | 12,299 | $ | 1,347 | $ | 945 | $ | 540 | $ | 139 | |||||||||
Earnings per Common Share ‐ Basic and Diluted | |||||||||||||||||||
Net income attributable to common stockholders | $ | 0.19 | $ | 0.02 | $ | 0.02 | $ | 0.01 | $ | 0.00 | |||||||||
Weighted average shares outstanding ‐ basic and diluted | 64,063,337 | 55,269,598 | 55,244,664 | 55,145,963 | 54,963,093 |
Second Quarter 2016 | Page 6 | |
Supplemental Financial Reporting Package |
Consolidated Statements of Operations | ||
Quarterly Results | (unaudited and in thousands) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Rental Revenues | |||||||||||||||
Rental income | $ | 26,119 | $ | 19,275 | $ | 49,618 | $ | 37,832 | |||||||
Tenant reimbursements | 4,119 | 2,844 | 7,677 | 5,028 | |||||||||||
Other income | 259 | 162 | 572 | 352 | |||||||||||
Total Rental Revenues | 30,497 | 22,281 | 57,867 | 43,212 | |||||||||||
Management, leasing, and development services | 111 | 161 | 245 | 293 | |||||||||||
Interest income | — | 280 | — | 557 | |||||||||||
Total Revenues | 30,608 | 22,722 | 58,112 | 44,062 | |||||||||||
Operating Expenses | |||||||||||||||
Property expenses | 7,959 | 5,874 | 15,502 | 11,645 | |||||||||||
General and administrative | 4,521 | 3,740 | 8,123 | 7,286 | |||||||||||
Depreciation and amortization | 12,610 | 10,490 | 23,824 | 20,374 | |||||||||||
Total Operating Expenses | 25,090 | 20,104 | 47,449 | 39,305 | |||||||||||
Other Expense | |||||||||||||||
Acquisition expenses | 635 | 847 | 1,110 | 1,080 | |||||||||||
Interest expense | 3,716 | 1,658 | 6,970 | 3,484 | |||||||||||
Total Other Expense | 4,351 | 2,505 | 8,080 | 4,564 | |||||||||||
Total Expenses | 29,441 | 22,609 | 55,529 | 43,869 | |||||||||||
Equity in income from unconsolidated real estate entities | 62 | 12 | 123 | 13 | |||||||||||
Gain on extinguishment of debt | — | 71 | — | 71 | |||||||||||
Gains on sale of real estate | 11,563 | — | 11,563 | — | |||||||||||
Net Income | 12,792 | 196 | 14,269 | 277 | |||||||||||
Less: net income attributable to noncontrolling interest | (418 | ) | (8 | ) | (470 | ) | (12 | ) | |||||||
Net income attributable to Rexford Industrial Realty, Inc. | 12,374 | 188 | 13,799 | 265 | |||||||||||
Less: earnings allocated to participating securities | (75 | ) | (49 | ) | (153 | ) | (99 | ) | |||||||
Net income attributable to common stockholders | $ | 12,299 | $ | 139 | $ | 13,646 | $ | 166 | |||||||
Second Quarter 2016 | Page 7 | |
Supplemental Financial Reporting Package |
Non-GAAP FFO and Core FFO Reconciliations(1) | ||
(unaudited and in thousands, except share and per share data) |
Rexford Industrial Realty, Inc. | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Net Income | $ | 12,792 | $ | 1,477 | $ | 1,056 | $ | 617 | $ | 196 | |||||||||
Add: | |||||||||||||||||||
Depreciation and amortization | 12,610 | 11,214 | 10,821 | 10,642 | 10,490 | ||||||||||||||
Depreciation and amortization from unconsolidated joint ventures | 5 | 5 | 5 | 4 | 20 | ||||||||||||||
Deduct: | |||||||||||||||||||
Gains on sale of real estate | 11,563 | — | — | — | — | ||||||||||||||
Funds From Operations (FFO) (2) | 13,844 | 12,696 | 11,882 | 11,263 | 10,706 | ||||||||||||||
Less: FFO attributable to noncontrolling interests(3) | (421 | ) | (449 | ) | (418 | ) | (407 | ) | (410 | ) | |||||||||
Less: FFO attributable to participating securities(4) | (114 | ) | (124 | ) | (99 | ) | (76 | ) | (76 | ) | |||||||||
Company share of FFO (3)(4) | $ | 13,309 | $ | 12,123 | $ | 11,365 | $ | 10,780 | $ | 10,220 | |||||||||
FFO per share‐basic and diluted | $ | 0.21 | $ | 0.22 | $ | 0.21 | $ | 0.20 | $ | 0.19 | |||||||||
FFO | $ | 13,844 | $ | 12,696 | $ | 11,882 | $ | 11,263 | $ | 10,706 | |||||||||
Add: | |||||||||||||||||||
Legal fees (reimbursements)(5) | — | (643 | ) | — | (88 | ) | 64 | ||||||||||||
Acquisition expenses | 635 | 475 | 528 | 528 | 847 | ||||||||||||||
Core FFO (2) | 14,479 | 12,528 | 12,410 | 11,703 | 11,617 | ||||||||||||||
Less: Core FFO attributable to noncontrolling interests(3) | (440 | ) | (443 | ) | (437 | ) | (423 | ) | (446 | ) | |||||||||
Less: Core FFO attributable to participating securities(4) | (119 | ) | (123 | ) | (103 | ) | (79 | ) | (82 | ) | |||||||||
Company share of Core FFO | $ | 13,920 | $ | 11,962 | $ | 11,870 | $ | 11,201 | $ | 11,089 | |||||||||
Core FFO per share‐basic and diluted | $ | 0.22 | $ | 0.22 | $ | 0.21 | $ | 0.20 | $ | 0.20 | |||||||||
Weighted‐average shares outstanding‐basic and diluted | 64,063,337 | 55,269,598 | 55,244,664 | 55,145,963 | 54,963,093 | ||||||||||||||
Weighted-average diluted shares and units | 66,075,055 | 57,296,240 | 57,289,069 | 57,257,186 | 57,220,536 |
(1) | For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(2) | FFO and Core 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 Core 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) | 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. |
Second 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 | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Funds From Operations(2) | $ | 13,844 | $ | 12,696 | $ | 11,882 | $ | 11,263 | $ | 10,706 | |||||||||
Add: | |||||||||||||||||||
Amortization of deferred financing costs | 264 | 221 | 194 | 200 | 209 | ||||||||||||||
Net fair value lease revenue (expense) | 60 | (4 | ) | 48 | 69 | 46 | |||||||||||||
Non‐cash stock compensation | 953 | 934 | 494 | 443 | 467 | ||||||||||||||
Straight line corporate office rent expense adjustment | (11 | ) | (1 | ) | (1 | ) | 21 | 37 | |||||||||||
Loss (gain) on extinguishment of debt | — | — | — | 253 | (71 | ) | |||||||||||||
Deduct: | |||||||||||||||||||
Straight line rental revenue adjustment(3) | 922 | 1,095 | 1,409 | 1,039 | 612 | ||||||||||||||
Capitalized payments(4) | 735 | 795 | 651 | 548 | 497 | ||||||||||||||
Note receivable discount amortization | — | — | — | 38 | 71 | ||||||||||||||
Note payable premium amortization | 59 | 59 | 33 | 33 | 33 | ||||||||||||||
Gain from early repayment of note receivable | — | — | — | 581 | — | ||||||||||||||
Recurring capital expenditures(5) | 848 | 586 | 1,346 | 921 | 871 | ||||||||||||||
2nd generation tenant improvements and leasing commissions(6) | 1,483 | 461 | 762 | 701 | 893 | ||||||||||||||
Unconsolidated joint venture AFFO adjustments | 9 | 3 | 4 | 5 | (4 | ) | |||||||||||||
Adjusted Funds From Operations (AFFO) | $ | 11,054 | $ | 10,847 | $ | 8,412 | $ | 8,383 | $ | 8,421 |
(1) | For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(2) | A reconciliation of net income to Funds From Operations is set forth on page 9 of this report. |
(3) | The straight line rental revenue adjustment includes concessions of $767, $848, $727, $870, and $485 for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 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 $5,430, $4,238, $4,018, $4,222, and $3,312 for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively. |
(6) | Excludes 1st generation tenant improvements and leasing commissions of $1,064, $989, $418, $624 and $996 for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively. |
Second Quarter 2016 | Page 9 | |
Supplemental Financial Reporting Package |
Statement of Operations Reconciliations - NOI and Cash NOI(1) | ||
(unaudited and in thousands) |
Rexford Industrial Realty, Inc. | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Rental income | $ | 26,119 | $ | 23,499 | $ | 22,665 | $ | 20,617 | $ | 19,275 | |||||||||
Tenant reimbursements | 4,119 | 3,558 | 3,074 | 2,377 | 2,844 | ||||||||||||||
Other income | 259 | 313 | 320 | 341 | 162 | ||||||||||||||
Total Rental Revenues | 30,497 | 27,370 | 26,059 | 23,335 | 22,281 | ||||||||||||||
Property Expenses | 7,959 | 7,543 | 7,118 | 6,237 | 5,874 | ||||||||||||||
Net Operating Income (NOI) | $ | 22,538 | $ | 19,827 | $ | 18,941 | $ | 17,098 | $ | 16,407 | |||||||||
Net fair value lease revenue (expense) | 60 | (4 | ) | 48 | 69 | 46 | |||||||||||||
Straight line rental revenue adjustment | (922 | ) | (1,095 | ) | (1,409 | ) | (1,039 | ) | (612 | ) | |||||||||
Cash NOI | $ | 21,676 | $ | 18,728 | $ | 17,580 | $ | 16,128 | $ | 15,841 | |||||||||
Net Income | $ | 12,792 | $ | 1,477 | $ | 1,056 | $ | 617 | $ | 196 | |||||||||
Add: | |||||||||||||||||||
General and administrative | 4,521 | 3,602 | 3,952 | 3,778 | 3,740 | ||||||||||||||
Depreciation and amortization | 12,610 | 11,214 | 10,821 | 10,642 | 10,490 | ||||||||||||||
Acquisition expenses | 635 | 475 | 528 | 528 | 847 | ||||||||||||||
Interest expense | 3,716 | 3,254 | 2,724 | 2,245 | 1,658 | ||||||||||||||
Loss (gain) on extinguishment of debt | — | — | — | 253 | (71 | ) | |||||||||||||
Subtract: | |||||||||||||||||||
Management, leasing, and development services | 111 | 134 | 105 | 186 | 161 | ||||||||||||||
Interest income | — | — | — | 153 | 280 | ||||||||||||||
Equity in income from unconsolidated real estate entities | 62 | 61 | 35 | 45 | 12 | ||||||||||||||
Gain from early repayment of note receivable | — | — | — | 581 | — | ||||||||||||||
Gains on sale of real estate | 11,563 | — | — | — | — | ||||||||||||||
NOI | $ | 22,538 | $ | 19,827 | $ | 18,941 | $ | 17,098 | $ | 16,407 | |||||||||
Net fair value lease revenue (expense) | 60 | (4 | ) | 48 | 69 | 46 | |||||||||||||
Straight line rental revenue adjustment | (922 | ) | (1,095 | ) | (1,409 | ) | (1,039 | ) | (612 | ) | |||||||||
Cash NOI | $ | 21,676 | $ | 18,728 | $ | 17,580 | $ | 16,128 | $ | 15,841 |
(1) | For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 29 of this report. |
Second Quarter 2016 | Page 10 | |
Supplemental Financial Reporting Package |
Statement of Operations Reconciliations - EBITDA and Adjusted EBITDA (1) | ||
(unaudited and in thousands) |
Rexford Industrial Realty, Inc. | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Net income | $ | 12,792 | $ | 1,477 | $ | 1,056 | $ | 617 | $ | 196 | |||||||||
Interest expense | 3,716 | 3,254 | 2,724 | 2,245 | 1,658 | ||||||||||||||
Depreciation and amortization | 12,610 | 11,214 | 10,821 | 10,642 | 10,490 | ||||||||||||||
Proportionate share of real estate related depreciation and | |||||||||||||||||||
amortization from unconsolidated joint ventures | 5 | 5 | 5 | 4 | 20 | ||||||||||||||
EBITDA | $ | 29,123 | $ | 15,950 | $ | 14,606 | $ | 13,508 | $ | 12,364 | |||||||||
Stock‐based compensation amortization | 953 | 934 | 494 | 443 | 467 | ||||||||||||||
Gains on sale of real estate | (11,563 | ) | — | — | — | — | |||||||||||||
Loss (gain) on extinguishment of debt | — | — | — | 253 | (71 | ) | |||||||||||||
Gain from early repayment of note receivable | — | — | — | (581 | ) | — | |||||||||||||
Legal fees (reimbursements)(2) | — | (643 | ) | — | (88 | ) | 64 | ||||||||||||
Acquisition expenses | 635 | 475 | 528 | 528 | 847 | ||||||||||||||
Pro forma effect of acquisitions(3) | 567 | 358 | 757 | 544 | 395 | ||||||||||||||
Pro forma effect of dispositions(4) | (36 | ) | — | — | — | — | |||||||||||||
Adjusted EBITDA | $ | 19,679 | $ | 17,074 | $ | 16,385 | $ | 14,607 | $ | 14,066 |
(1) | For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(2) | 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 Q2’16 acquisitions as if they had been acquired April 1, 2016, 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 and Q2’15 acquisitions as if they had been acquired April 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. |
(4) | Represents the impact on Q2’16 EBITDA of Q2’16 dispositions as if they had been sold as of April 1, 2016. See page 26 for a detail of disposition properties. |
Second Quarter 2016 | Page 11 | |
Supplemental Financial Reporting Package |
Same Property Portfolio Performance (1) | ||
NOI and Cash NOI and Reconciliation to Net Income | (unaudited and in thousands) |
Same Property Portfolio NOI and Cash NOI: | |||||||||||||||||||||||||||
Three Months Ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
2016 | 2015 | $ Change | % Change | 2016 | 2015 | $ Change | % Change | ||||||||||||||||||||
Rental income | $ | 19,230 | $ | 17,891 | $ | 1,339 | 7.5% | $ | 38,253 | $ | 35,782 | $ | 2,471 | 6.9% | |||||||||||||
Tenant reimbursements | 2,558 | 2,818 | (260 | ) | (9.2)% | 5,195 | 5,008 | 187 | 3.7% | ||||||||||||||||||
Other income | 178 | 143 | 35 | 24.5% | 352 | 320 | 32 | 10.0% | |||||||||||||||||||
Total rental revenues | 21,966 | 20,852 | 1,114 | 5.3% | 43,800 | 41,110 | 2,690 | 6.5% | |||||||||||||||||||
Property expenses | 5,695 | 5,638 | 57 | 1.0% | 11,778 | 11,261 | 517 | 4.6% | |||||||||||||||||||
Same property portfolio NOI | $ | 16,271 | $ | 15,214 | $ | 1,057 | 6.9% | $ | 32,022 | $ | 29,849 | $ | 2,173 | 7.3% | |||||||||||||
Straight-line rents | (147 | ) | (394 | ) | 247 | (62.7)% | (474 | ) | (741 | ) | 267 | (36.0)% | |||||||||||||||
Amort. above/below market leases | 79 | 27 | 52 | 192.6% | 65 | 73 | (8 | ) | (11.0)% | ||||||||||||||||||
Same property portfolio Cash NOI | $ | 16,203 | $ | 14,847 | $ | 1,356 | 9.1% | $ | 31,613 | $ | 29,181 | $ | 2,432 | 8.3% | |||||||||||||
Reconciliation of Same Property Cash NOI and Same Property Portfolio NOI to Net Income: | |||||||||||||||||||||||||||
Three Months Ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
2016 | 2015 | $ Change | % Change | 2016 | 2015 | $ Change | % Change | ||||||||||||||||||||
Same property portfolio cash NOI | $ | 16,203 | 14,847 | $ | 31,613 | 29,181 | |||||||||||||||||||||
Straight-line rents | 147 | 394 | 474 | 741 | |||||||||||||||||||||||
Amort. above/below market leases | (79 | ) | (27 | ) | (65 | ) | (73 | ) | |||||||||||||||||||
Same property portfolio NOI | $ | 16,271 | $ | 15,214 | $ | 1,057 | 6.9% | $ | 32,022 | $ | 29,849 | $ | 2,173 | 7.3% | |||||||||||||
Non-comparable property operating revenues | 8,531 | 1,429 | 14,067 | 2,102 | |||||||||||||||||||||||
Non-comparable property expenses | (2,264 | ) | (236 | ) | (3,724 | ) | (384 | ) | |||||||||||||||||||
Total consolidated portfolio NOI | $ | 22,538 | $ | 16,407 | $ | 6,131 | 37.4% | $ | 42,365 | $ | 31,567 | $ | 10,798 | 34.2% | |||||||||||||
Add: | |||||||||||||||||||||||||||
Management, leasing and development services | 111 | 161 | 245 | 293 | |||||||||||||||||||||||
Interest income | — | 280 | — | 557 | |||||||||||||||||||||||
Equity in income from unconsolidated real estate entities | 62 | 12 | 123 | 13 | |||||||||||||||||||||||
Gains on sale of real estate | 11,563 | — | 11,563 | — | |||||||||||||||||||||||
Gain on extinguishment of debt | — | 71 | — | 71 | |||||||||||||||||||||||
Deduct: | |||||||||||||||||||||||||||
General and administrative | 4,521 | 3,740 | 8,123 | 7,286 | |||||||||||||||||||||||
Depreciation and amortization | 12,610 | 10,490 | 23,824 | 20,374 | |||||||||||||||||||||||
Acquisition expenses | 635 | 847 | 1,110 | 1,080 | |||||||||||||||||||||||
Interest expense | 3,716 | 1,658 | 6,970 | 3,484 | |||||||||||||||||||||||
Net income | $ | 12,792 | $ | 196 | $ | 12,596 | 6,426.5% | $ | 14,269 | $ | 277 | $ | 13,992 | 5,051.3% |
Second Quarter 2016 | Page 12 | |
Supplemental Financial Reporting Package |
Same Property Portfolio Performance (1) | ||
Portfolio Summary and Occupancy | (unaudited and dollars in thousands) |
Same Property Portfolio Summary: | ||||
Same Property Portfolio(2) | Stabilized Same Property Portfolio(3) | |||
Number of properties | 96 | 90 | ||
Square Feet | 9,643,837 | 9,325,373 |
Same Property Portfolio Occupancy: | |||||||||||
June 30, 2016 | June 30, 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 | 91.8% | 94.8% | 88.9% | 91.2% | 2.9% | 3.6% | |||||
Orange County | 86.1% | 97.9% | 83.6% | 96.2% | 2.5% | 1.7% | |||||
San Bernardino County | 98.2% | 98.2% | 96.7% | 96.7% | 1.5% | 1.5% | |||||
San Diego County | 97.0% | 97.0% | 86.9% | 86.9% | 10.1% | 10.1% | |||||
Ventura County | 92.9% | 92.9% | 90.8% | 90.8% | 2.1% | 2.1% | |||||
Total/Weighted Average | 92.5% | 95.7% | 89.0% | 91.3% | 3.5% | 4.4% |
(1) | For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(2) | The Same Property Portfolio statistics reflect the disposition of properties aggregating 183,111 rentable square feet. See page 26 for a detail of disposition properties. |
(3) | Reflects the square footage and occupancy of our Same Property Portfolio adjusted for space aggregating 318,464 rentable square feet at six of our properties that were classified as repositioning or lease-up as of June 30, 2016. For additional details, refer to pages 24 -25 of this report. |
Second Quarter 2016 | Page 13 | |
Supplemental Financial Reporting Package |
Joint Venture Financial Summary | ||
Balance Sheet | (unaudited and in thousands) |
Mission Oaks (1) | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Assets: | |||||||||||||||||||
Investments in real estate, net | $ | 21,532 | $ | 21,416 | $ | 21,558 | $ | 21,153 | $ | 20,690 | |||||||||
Cash and cash equivalents | 2,702 | 2,837 | 2,474 | 2,631 | 2,891 | ||||||||||||||
Rents and other receivables, net | 100 | 61 | 34 | 5 | 183 | ||||||||||||||
Deferred rent receivable | 85 | 65 | 61 | 39 | 2 | ||||||||||||||
Deferred leasing costs and acquisition related intangible assets, net | 156 | 177 | 140 | 152 | 74 | ||||||||||||||
Other assets | 4 | 14 | 13 | 16 | 22 | ||||||||||||||
Total Assets | $ | 24,579 | $ | 24,570 | $ | 24,280 | $ | 23,996 | $ | 23,862 | |||||||||
Liabilities: | |||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 157 | $ | 603 | $ | 646 | $ | 686 | $ | 836 | |||||||||
Tenant security deposits | 436 | 436 | 436 | 429 | 429 | ||||||||||||||
Prepaid rents | 33 | 43 | 168 | 130 | 177 | ||||||||||||||
Total Liabilities | 626 | 1,082 | 1,250 | 1,245 | 1,442 | ||||||||||||||
Equity: | |||||||||||||||||||
Equity | 8,202 | 8,202 | 8,202 | 8,202 | 8,202 | ||||||||||||||
Accumulated deficit and distributions | 15,751 | 15,286 | 14,828 | 14,549 | 14,218 | ||||||||||||||
Total Equity | 23,953 | 23,488 | 23,030 | 22,751 | 22,420 | ||||||||||||||
Total Liabilities and Equity | $ | 24,579 | $ | 24,570 | $ | 24,280 | $ | 23,996 | $ | 23,862 | |||||||||
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. |
Second 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 | |||||||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Income Statement | |||||||||||||||||||
Rental revenues | $ | 526 | $ | 549 | $ | 526 | $ | 502 | $ | 373 | |||||||||
Tenant reimbursements | 121 | 80 | 106 | 191 | 312 | ||||||||||||||
Other operating revenues | 9 | 3 | (2 | ) | 2 | — | |||||||||||||
Total revenue | 656 | 632 | 630 | 695 | 685 | ||||||||||||||
Total operating expense | 160 | 121 | 288 | 334 | 423 | ||||||||||||||
NOI | $ | 496 | $ | 511 | $ | 342 | $ | 361 | $ | 262 | |||||||||
General and administrative | (2 | ) | 19 | 36 | 3 | 13 | |||||||||||||
Depreciation and amortization | 33 | 34 | 27 | 27 | 138 | ||||||||||||||
Total expense | 191 | 174 | 351 | 364 | 574 | ||||||||||||||
Net Income | $ | 465 | $ | 458 | $ | 279 | $ | 331 | $ | 111 | |||||||||
EBITDA | |||||||||||||||||||
Net income | $ | 465 | $ | 458 | $ | 279 | $ | 331 | $ | 111 | |||||||||
Depreciation and amortization | 33 | 34 | 27 | 27 | 138 | ||||||||||||||
EBITDA | $ | 498 | $ | 492 | $ | 306 | $ | 358 | $ | 249 | |||||||||
Rexford Industrial Realty, Inc. Ownership %: | 15% | 15% | 15% | 15% | 15% | ||||||||||||||
Reconciliation - Equity Income in Joint Venture | |||||||||||||||||||
Net income | $ | 465 | $ | 458 | $ | 279 | $ | 331 | $ | 111 | |||||||||
Rexford Industrial Realty, Inc. Ownership %: | 15 | % | 15 | % | 15 | % | 15 | % | 15 | % | |||||||||
Company share | 69 | 69 | 42 | 50 | 17 | ||||||||||||||
Intercompany eliminations/basis adjustments | (7 | ) | (8 | ) | (7 | ) | (5 | ) | (5 | ) | |||||||||
Equity in net income from unconsolidated real estate entities | $ | 62 | $ | 61 | $ | 35 | $ | 45 | $ | 12 |
(1) | For a definition and discussion of non-GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(2) | These financial statements represent amounts attributable to the joint venture entities and do not represent our 15% proportionate share. |
Second Quarter 2016 | Page 15 | |
Supplemental Financial Reporting Package |
Capitalization Summary | ||
(unaudited and in thousands, except share and per share data) | ||
Capitalization as of June 30, 2016 |
Description | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | |||||||||||||||
Common shares outstanding (1) | 65,679,483 | 55,276,567 | 55,265,243 | 55,198,780 | 55,051,832 | |||||||||||||||
Operating partnership units outstanding(2) | 1,999,563 | 2,026,642 | 2,026,642 | 2,066,704 | 2,177,573 | |||||||||||||||
Total shares and units outstanding at period end | 67,679,046 | 57,303,209 | 57,291,885 | 57,265,484 | 57,229,405 | |||||||||||||||
Share price at end of quarter | $ | 21.09 | $ | 18.16 | $ | 16.36 | $ | 13.79 | $ | 14.58 | ||||||||||
Total Equity Market Capitalization | $ | 1,427,351 | $ | 1,040,626 | $ | 937,295 | $ | 789,691 | $ | 834,405 | ||||||||||
Total Debt | $ | 503,009 | $ | 445,611 | $ | 418,698 | $ | 335,904 | $ | 296,715 | ||||||||||
Less: Cash and cash equivalents | (29,177 | ) | (6,402 | ) | (5,201 | ) | (5,083 | ) | (9,988 | ) | ||||||||||
Net Debt | $ | 473,832 | $ | 439,209 | $ | 413,497 | $ | 330,821 | $ | 286,727 | ||||||||||
Total Combined Market Capitalization (Debt and Equity) | $ | 1,901,183 | $ | 1,479,835 | $ | 1,350,792 | $ | 1,120,512 | $ | 1,121,132 | ||||||||||
Net debt to total combined market capitalization | 24.9 | % | 29.7 | % | 30.6 | % | 29.5 | % | 25.6 | % | ||||||||||
Net debt to Adjusted EBITDA (quarterly results annualized)(3) | 6.0x | 6.4x | 6.3x | 5.7x | 5.1x | |||||||||||||||
(1) | Excludes the following number of shares of unvested restricted stock: 356,249 (June 30, 2016), 380,861 (March 31, 2016), 333,441 (December 31, 2015), 389,123 (September 30, 2015) and 407,463 (June 30, 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 29 of this report. |
Second Quarter 2016 | Page 16 | |
Supplemental Financial Reporting Package |
Debt Summary | ||
(unaudited and dollars in thousands) | ||
Debt Detail: | ||
As of June 30, 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% | 2,977 | -- | |||||||
12907 Imperial Highway | 4/1/2018 | 5.950% | 5.950% | 5,242 | -- | |||||||
1065 Walnut St | 2/1/2019(3) | 4.550% | 4.550% | 9,790 | -- | |||||||
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) | 1.865% | — | -- | |||||||
$225M Term Loan Facility(6) | 1/14/2023 | LIBOR +1.60%(4) | 2.065% | 225,000 | -- | |||||||
$100M Senior Notes | 8/6/2025 | 4.290% | 4.290% | 100,000 | -- | |||||||
Total Consolidated: | 3.059% | $ | 503,009 |
(1) | Includes the effect of interest rate swaps effective as of June 30, 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 $225M 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 two interest rate swaps that will effectively fix this $225M term loan as follows: (i) $125M at 1.349% plus the applicable LIBOR margin from 2/14/18 to 1/14/22 and (ii) $100M at 1.406% plus the applicable LIBOR margin from 8/14/18 to 1/14/22. |
Debt Composition: | ||||||||||
Category | Avg. Term Remaining (yrs)(1) | Stated Interest Rate | Effective Interest Rate | Balance | % of Total | |||||
Fixed(2) | 5.3 | 3.86% | 3.86% | $278,009 | 55% | |||||
Variable(2) | 6.5 | LIBOR + 1.60% | 2.07% | $225,000 | 45% | |||||
Secured | 3.4 | 4.10% | $78,009 | 16% | ||||||
Unsecured | 6.3 | 2.87% | $425,000 | 84% |
(1) | The weighted average remaining term to maturity of our consolidated debt is 5.8 years. |
(2) | If all of our interest rate swaps were effective as of June 30, 2016, our consolidated debt would be 100% fixed and 0% variable. See footnote (6) above. |
Debt Maturity Schedule: | ||||||||||||||||||
Year | Secured | Unsecured Debt | Total | % Total | Effective Interest Rate | |||||||||||||
2016-2017 | $ | — | $ | — | $ | — | — | % | — | % | ||||||||
2018 | 5,242 | — | 5,242 | 1 | % | 5.950 | % | |||||||||||
2019 | 69,790 | 100,000 | 169,790 | 34 | % | 3.524 | % | |||||||||||
Thereafter | 2,977 | 325,000 | 327,977 | 65 | % | 2.771 | % | |||||||||||
Total | $ | 78,009 | $ | 425,000 | $ | 503,009 | 100 | % | 3.059 | % |
Second Quarter 2016 | Page 17 | |
Supplemental Financial Reporting Package |
Debt Covenants | ||
(unaudited results) | ||
Unsecured Revolving Credit Facility and Term Loan Facility Covenants(1) |
Covenant | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | ||||||
Maximum Leverage Ratio | less than 60% | 36.2% | 37.8% | 36.3% | 30.2% | |||||
Maximum Secured Leverage Ratio | less than 45% | 5.6% | 6.6% | 5.9% | 6.2% | |||||
Maximum Secured Recourse Debt | less than 15% | —% | —% | —% | —% | |||||
Minimum Tangible Net Worth | $582,432,000 | $913,570,000 | $755,296,000 | $753,641,000 | $755,982,000 | |||||
Minimum Fixed Charge Coverage Ratio | at least 1.50 to 1.00 | 4.40 to 1.00 | 4.42 to 1.00 | 4.72 to 1.00 | 5.26 to 1.00 | |||||
Unencumbered Leverage Ratio | less than 60% | 34.1% | 35.4% | 33.6% | 27.1% | |||||
Unencumbered Interest Coverage Ratio | at least 1.75 to 1.00 | 3.20 to 1.00 | 3.15 to 1.00 | 3.31 to 1.00 | 3.87 to 1.00 |
(1) | Our actual performance for each covenant is calculated based on the definitions set forth in the loan agreement. |
Second Quarter 2016 | Page 18 | |
Supplemental Financial Reporting Package |
Portfolio Overview | ||
at 6/30/16 | (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 | |||||||||||||||||||
Central LA | 4 | 238,153 | 149,157 | 387,310 | 80.1 | % | 100.0 | % | 87.7 | % | 100.0 | % | $ | 3,449 | $10.15 | ||||||||||||||
Greater San Fernando Valley | 25 | 2,450,458 | 347,953 | 2,798,411 | 90.7 | % | 56.8 | % | 86.5 | % | 92.8 | % | 22,735 | $9.39 | |||||||||||||||
Mid-Counties | 9 | 369,350 | 302,740 | 672,090 | 98.4 | % | 79.1 | % | 89.7 | % | 99.0 | % | 5,762 | $9.56 | |||||||||||||||
San Gabriel Valley | 14 | 1,213,095 | 520,969 | 1,734,064 | 98.6 | % | 100.0 | % | 99.0 | % | 99.0 | % | 12,568 | $7.32 | |||||||||||||||
South Bay | 12 | 635,741 | 337,082 | 972,823 | 83.4 | % | 100.0 | % | 89.1 | % | 96.4 | % | 7,975 | $9.20 | |||||||||||||||
Los Angeles County | 64 | 4,906,797 | 1,657,901 | 6,564,698 | 91.8 | % | 87.1 | % | 90.6 | % | 96.1 | % | 52,489 | $8.83 | |||||||||||||||
North Orange County | 6 | 579,446 | 64,570 | 644,016 | 98.0 | % | 100.0 | % | 98.2 | % | 98.2 | % | 5,996 | $9.48 | |||||||||||||||
OC Airport | 8 | 511,270 | 243,371 | 754,641 | 66.8 | % | 100.0 | % | 77.5 | % | 98.1 | % | 5,443 | $9.31 | |||||||||||||||
South Orange County | 3 | 46,178 | 283,280 | 329,458 | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 2,793 | $8.48 | |||||||||||||||
West Orange County | 3 | 170,865 | 322,865 | 493,730 | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 4,283 | $8.68 | |||||||||||||||
Orange County | 20 | 1,307,759 | 914,086 | 2,221,845 | 86.1 | % | 100.0 | % | 91.8 | % | 98.9 | % | 18,514 | $9.07 | |||||||||||||||
Inland Empire East | 2 | 85,282 | — | 85,282 | 100.0 | % | — | % | 100.0 | % | 100.0 | % | 558 | $6.54 | |||||||||||||||
Inland Empire West | 13 | 961,184 | 568,109 | 1,529,293 | 98.1 | % | 97.3 | % | 97.8 | % | 97.8 | % | 10,465 | $7.00 | |||||||||||||||
San Bernardino County | 15 | 1,046,466 | 568,109 | 1,614,575 | 98.2 | % | 97.3 | % | 97.9 | % | 97.9 | % | 11,023 | $6.97 | |||||||||||||||
Ventura | 11 | 1,057,369 | 87,181 | 1,144,550 | 92.9 | % | 78.9 | % | 91.8 | % | 91.8 | % | 8,845 | $8.42 | |||||||||||||||
Ventura County | 11 | 1,057,369 | 87,181 | 1,144,550 | 92.9 | % | 78.9 | % | 91.8 | % | 91.8 | % | 8,845 | $8.42 | |||||||||||||||
Central San Diego | 13 | 664,487 | 769,706 | 1,434,193 | 97.7 | % | 50.4 | % | 72.3 | % | 97.8 | % | 11,567 | $11.15 | |||||||||||||||
North County San Diego | 6 | 584,258 | — | 584,258 | 96.0 | % | — | % | 96.0 | % | 96.0 | % | 5,370 | $9.58 | |||||||||||||||
South County San Diego | 1 | 76,701 | — | 76,701 | 99.4 | % | — | % | 99.4 | % | 99.4 | % | 705 | $9.25 | |||||||||||||||
San Diego County | 20 | 1,325,446 | 769,706 | 2,095,152 | 97.0 | % | 50.4 | % | 79.9 | % | 97.3 | % | 17,642 | $10.54 | |||||||||||||||
CONSOLIDATED TOTAL / WTD AVG | 130 | 9,643,837 | 3,996,983 | 13,640,820 | 92.5 | % | 84.3 | % | 90.1 | % | 96.5 | % | $ | 108,513 | $8.83 | ||||||||||||||
Unconsolidated Joint Ventures: | |||||||||||||||||||||||||||||
Ventura | 1 | 68,370 | — | 68,370 | 55.0 | % | 0.0 | % | 55.0 | % | 55.0 | % | $ | 317 | $8.43 | ||||||||||||||
UNCONSOLIDATED TOTAL / WTD AVG | 1 | 68,370 | — | 68,370 | 55.0 | % | 0.0 | % | 55.0 | % | 55.0 | % | $ | 317 | $8.43 | ||||||||||||||
Total Portfolio: | |||||||||||||||||||||||||||||
GRAND TOTAL / WTD AVG | 131 | 9,712,207 | 3,996,983 | 13,709,190 | 92.3 | % | 84.3 | % | 89.9 | % | 96.3 | % | $ | 108,830 | $8.83 |
(1) | Excludes space aggregating 905,708 square feet at 10 of our properties that were in various stages of repositioning or lease-up as of June 30, 2016. See pages 24 - 25 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 June 30, 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. |
Second Quarter 2016 | Page 19 | |
Supplemental Financial Reporting Package |
Occupancy and Leasing Trends | ||
(unaudited results, data represents consolidated portfolio only) | ||
Occupancy by County: |
June 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | June 30, 2015 | ||||||
Occupancy: (1) | ||||||||||
Los Angeles County | 90.6% | 89.3% | 91.4% | 86.1% | 87.7% | |||||
Orange County | 91.8% | 88.1% | 86.4% | 85.1% | 84.4% | |||||
San Bernardino County | 97.9% | 96.7% | 97.0% | 97.2% | 96.7% | |||||
Ventura County | 91.8% | 91.6% | 95.3% | 94.7% | 90.8% | |||||
San Diego County | 79.9% | 77.2% | 75.8% | 91.7% | 87.5% | |||||
Total/Weighted Average | 90.1% | 88.1% | 89.2% | 88.8% | 88.4% | |||||
Consolidated Portfolio SF | 13,640,820 | 12,152,138 | 11,955,455 | 11,078,912 | 10,649,768 |
Leasing Activity: | ||||||||||
Three Months Ended | ||||||||||
June 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | June 30, 2015 | ||||||
Leasing Activity (SF): (2) | ||||||||||
New leases | 476,858 | 248,520 | 343,876 | 216,499 | 283,695 | |||||
Renewal | 598,301 | 712,771 | 237,935 | 323,085 | 442,019 | |||||
Gross leasing | 1,075,159 | 961,291 | 581,811 | 539,584 | 725,714 | |||||
Expiring leases | 936,655 | 1,071,075 | 378,694 | 455,677 | 857,483 | |||||
Net absorption | 138,504 | (109,784) | 203,117 | 83,907 | (131,769)(3) | |||||
Retention rate | 64% | 67% | 63% | 71% | 52%(3) |
Weighted Average New/Renewal Leasing Spreads: | ||||||||||
Three Months Ended | ||||||||||
June 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | June 30, 2015 | ||||||
GAAP Rent Change | 23.5% | 13.6% | 12.9% | 16.3% | 15.4% | |||||
Cash Rent Change | 11.0% | 5.6% | 6.4% | 5.4% | 7.0% |
(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. |
Second 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 - GAAP | Rent Change - Cash | ||||||||||||||
Second Quarter 2016: | ||||||||||||||||||
New(1) | 65 | 476,858 | 4.1 | 29.1 | % | 14.8 | % | |||||||||||
Renewal (2) | 78 | 598,301 | 4.7 | 20.7 | % | 9.0 | % | |||||||||||
Total/Weighted Average | 143 | 1,075,159 | 4.4 | 23.5 | % | 11.0 | % | |||||||||||
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 | 8,796 | 179 | $ | 52,668 | 90.7 | % | $8.84 | |||||||||||
Orange County | 2,840 | 37 | 18,551 | 92.0 | % | $9.08 | ||||||||||||
San Bernardino County | 6,245 | 63 | 11,086 | 98.3 | % | $6.99 | ||||||||||||
San Diego County | 9,335 | 108 | 17,750 | 80.4 | % | $10.54 | ||||||||||||
Ventura County | — | — | 8,845 | 91.8 | % | $8.42 | ||||||||||||
Total/Weighted Average | 27,216 | $ | 387 | $ | 108,900 | 90.3 | % | $8.84 | ||||||||||
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 | — | 1,320,630 | $ | — | —% | $— | ||||||||||||
MTM Tenants | 98 | 155,044 | 2,578 | 2.4% | $16.63 | |||||||||||||
2016 | 227 | 1,434,417 | 12,064 | 11.1% | $8.41 | |||||||||||||
2017 | 382 | 2,330,082 | 20,591 | 18.9% | $8.84 | |||||||||||||
2018 | 285 | 1,582,504 | 15,012 | 13.8% | $9.49 | |||||||||||||
2019 | 150 | 1,619,727 | 13,831 | 12.7% | $8.54 | |||||||||||||
2020 | 59 | 1,481,864 | 12,425 | 11.4% | $8.38 | |||||||||||||
2021 | 63 | 1,908,303 | 16,290 | 15.0% | $8.54 | |||||||||||||
2022 | 10 | 377,542 | 2,440 | 2.2% | $6.46 | |||||||||||||
2023 | 9 | 251,599 | 2,952 | 2.7% | $11.73 | |||||||||||||
2024 | 6 | 491,018 | 3,827 | 3.5% | $7.79 | |||||||||||||
2025 | 4 | 260,467 | 2,477 | 2.3% | $9.51 | |||||||||||||
Thereafter | 6 | 427,623 | 4,413 | 4.0% | $10.32 | |||||||||||||
Total Portfolio | 1,299 | 13,640,820 | $ | 108,900 | 100.0% | $8.84 |
(1) | The GAAP and cash rent spreads for new leases excludes 26 leases aggregating 200,762 rentable square feet for which there was no comparable lease data. Comparable leases generally exclude: (i) space that has never been occupied under our ownership, (ii) repositioned/redeveloped space, (iii) space that has been vacant for over one year, (iv) space with different lease structures (for example a change from a gross lease to a modified gross lease or a increase or decrease in the leased square footage) or (v) lease terms shorter than six months. |
(2) | The GAAP and cash rent spreads for renewal leases excludes 15 leases aggregating 122,550 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. |
Second 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 | 1.9% | $13.80 | 3/31/2026(1) | |||||
Money Mailer Holding Corporation | West Orange County | 207,953 | 1.9% | $9.71 | 12/31/2016 | |||||
Cosmetic Laboratories of America, LLC | Greater San Fernando Valley | 319,348 | 1.7% | $5.95 | 6/30/2020 | |||||
Valeant Pharmaceuticals International, Inc. | West Orange County | 170,865 | 1.3% | $8.24 | 12/31/2019 | |||||
Triumph Processing, Inc. | South Bay | 164,662 | 1.2% | $8.22 | 5/31/2030 | |||||
Senior Operations, Inc. | Greater San Fernando Valley | 130,800 | 1.1% | $8.88 | 11/30/2024 | |||||
Cox Communications California, LLC | South Orange County | 102,299 | 1.1% | $11.16 | 9/30/2021 | |||||
Biosense Webster | San Gabriel Valley | 89,920 | 1.0% | $12.63 | 10/31/2020(2) | |||||
KT's Kitchen's, Inc. | South Bay | 87,420 | 1.0% | $12.79 | 4/30/2021 | |||||
Warehouse Specialists, Inc. | San Gabriel Valley | 245,961 | 1.0% | $4.50 | 11/30/2017 | |||||
Top 10 Total / Weighted Average | 1,668,385 | 13.2% | $8.63 |
(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) 12,800 rentable square feet expiring September 30, 2017, (ii) 1,120 rentable square feet expiring September 30, 2019 and (iii) 76,000 rentable square feet expiring October 31, 2020. |
Lease Segmentation by Size: | ||||||||||||||
Square Feet | Number of Leases | Rentable SF | Leased % | Ann. Base Rent (in thousands) | % of Total Ann. Base Rent | Ann. Base Rent per SF | ||||||||
<4,999 | 905 | 2,042,060 | 91.2% | $ | 21,303 | 19.6% | $11.44 | |||||||
5,000‐9,999 | 152 | 1,108,909 | 93.6% | 10,622 | 9.7% | $10.23 | ||||||||
10,000‐24,999 | 148 | 2,532,239 | 92.1% | 21,661 | 19.9% | $9.29 | ||||||||
25,000‐49,999 | 38 | 1,529,067 | 87.4% | 12,051 | 11.1% | $9.02 | ||||||||
>50,000 | 56 | 6,428,545 | 89.5% | 43,263 | 39.7% | $7.52 | ||||||||
Total / Weighted Average | 1,299 | 13,640,820 | 90.3% | $ | 108,900 | 100.0% | $8.84 |
Second 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) | ||
Three Months Ended June 30, 2016 |
Amount | SF(1) | PSF | ||||||||
Tenant Improvements: | ||||||||||
New Leases‐1st Generation(2) | $ | 791 | 123,171 | $ | 6.42 | |||||
New Leases‐2nd Generation | $ | 659 | 263,408 | $ | 2.50 | |||||
Renewals | $ | 60 | 73,340 | $ | 0.82 | |||||
Leasing Commissions & Lease Costs: | ||||||||||
New Leases‐1st Generation | $ | 273 | 356,292 | $ | 0.77 | |||||
New Leases‐2nd Generation | $ | 602 | 335,471 | $ | 1.79 | |||||
Renewals | $ | 162 | 477,416 | $ | 0.34 | |||||
Total Recurring Capex: | ||||||||||
Recurring Capex | $ | 848 | 13,441,111 | $ | 0.06 | |||||
Recurring Capex % of NOI | 3.8 | % | ||||||||
Recurring Capex % of Operating Revenue | 2.8 | % | ||||||||
Nonrecurring Capex | $ | 5,430 | 5,594,405 | $ | 0.97 | |||||
Six months ended June 30, 2016 | ||||||||||
Amount | SF(1) | PSF | ||||||||
Tenant Improvements: | ||||||||||
New Leases ‐1st Generation | $ | 996 | 274,995 | $ | 3.62 | |||||
New Leases‐2nd Generation | $ | 782 | 360,648 | $ | 2.17 | |||||
Renewals | $ | 102 | 97,922 | $ | 1.04 | |||||
Leasing Commissions & Lease Costs: | ||||||||||
New Leases‐1st Generation | $ | 1,057 | 592,095 | $ | 1.79 | |||||
New Leases‐2nd Generation | $ | 781 | 474,824 | $ | 1.64 | |||||
Renewals | $ | 279 | 736,504 | $ | 0.38 | |||||
Total Recurring Capex: | ||||||||||
Recurring Capex | $ | 1,434 | 12,706,805 | $ | 0.11 | |||||
Recurring Capex % NOI | 3.4 | % | ||||||||
Recurring Capex % Operating Revenue | 2.5 | % | ||||||||
Nonrecurring Capex | $ | 9,668 | 5,975,269 | $ | 1.62 |
(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. |
(2) | Includes a tenant improvement allowance payment of $499 to a tenant located at 2431-2433 Impala. Excluding this allowance payment, 1st generation tenant improvements were (i) $293 for 110,702 SF or $2.65 PSF for the three months ended June 30, 2016 and (ii) $498 for 262,526 SF or $1.90 PSF for the six months ended June 30, 2016. |
Second Quarter 2016 | Page 23 | |
Supplemental Financial Reporting Package |
Properties and Space Under Repositioning | ||
As of June 30, 2016 | (unaudited results, in thousands, except square feet) |
Repositioning Properties | ||||||||||||||||||||||||||||||||||||
Est. Construction Period | Costs Incurred | |||||||||||||||||||||||||||||||||||
Property (Submarket) | Rentable Square Feet | Same Property Portfolio | Start | Target Completion | Purchase Price | Repositioning | Cumulative Investment to date(1) | Projected Total Investment(2) | Occ % 6/30/16 | Actual Cash NOI 2Q‐2016(3) | Est. Annual Stabilized Cash NOI(4) | Est.Period until Stabilized (months)(5) | ||||||||||||||||||||||||
CURRENT REPOSITIONING: | ||||||||||||||||||||||||||||||||||||
1601 Alton Pkwy. (OC Airport) | 124,000 | Y | 4Q-2014 | 3Q-2016 | $ | 13,276 | $ | 3,405 | $ | 16,681 | $ | 19,078 | 40% | $ | 93 | $ | 1,359 | 4 - 10 | ||||||||||||||||||
24105 Frampton Ave. (South Bay) | 49,841 | Y | 2Q-2015 | 3Q-2016 | $ | 3,930 | $ | 1,517 | $ | 5,447 | $ | 5,447 | 0% | $ | (22 | ) | $ | 362 | 1 - 7 | |||||||||||||||||
9615 Norwalk Blvd. (Mid-Counties)(6) | 38,362 | N | 3Q-2015 | 2Q-2018 | $ | 9,642 | $ | 184 | $ | 9,826 | $ | 23,682 | 0% | $ | 171 | $ | 1,556 | See footnote (6) | ||||||||||||||||||
2535 Midway Drive (Central SD) | 373,744 | N | 4Q-2015 | 1Q-2018 | $ | 19,295 | $ | 142 | $ | 19,437 | $ | 46,680 | 0% | $ | (113 | ) | $ | 4,189 | 27 - 32 | |||||||||||||||||
12247 Lakeland Rd. (Mid-Counties) | 24,875 | N | 1Q-2016 | 3Q-2016 | $ | 4,257 | $ | 328 | $ | 4,585 | $ | 4,925 | 0% | $ | (8 | ) | $ | 297 | 0 - 3 | |||||||||||||||||
679-691 S. Anderson St. (Central LA) | 47,490 | Y | 1Q-2016 | 3Q-2016 | $ | 6,490 | $ | 486 | $ | 6,976 | $ | 7,125 | 0% | $ | (6 | ) | $ | 585 | 3 - 9 | |||||||||||||||||
TOTAL/WEIGHTED AVERAGE | 658,312 | $ | 56,890 | $ | 6,062 | $ | 62,952 | $ | 106,937 | 8% | $ | 115 | (7) | $ | 8,348 | |||||||||||||||||||||
COMPLETED REPOSITIONING/LEASE-UP: | ||||||||||||||||||||||||||||||||||||
2610 & 2701 S. Birch St. (OC Airport)(8) | 98,230 | Y | 2Q-2015 | 4Q-2015 | $ | 11,000 | $ | 2,606 | $ | 13,606 | $ | 13,606 | 15% | $ | 67 | $ | 868 | 0 - 5 | ||||||||||||||||||
9401 De Soto Ave. (SF Valley)(8)(9) | 150,263 | N | 2Q-2015 | 1Q-2016 | $ | 14,075 | $ | 2,486 | $ | 16,561 | $ | 16,992 | 0% | $ | (34 | ) | $ | 1,007 | 0 - 5 | |||||||||||||||||
TOTAL/WEIGHTED AVERAGE | 248,493 | $ | 25,075 | $ | 5,092 | $ | 30,167 | $ | 30,598 | 6% | $ | 33 | (7) | $ | 1,875 | |||||||||||||||||||||
(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 June 30, 2016. For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(4) | Based on current management estimates. Actual results may vary materially from our estimates. The Company does not provide a reconciliation to net income on a consolidated basis, because it is unable to provide a meaningful or accurate estimation of reconciling items due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income. |
(5) | Represents the estimated remaining number of months, as of June 30, 2016, for the property to reach stabilization. Includes time to complete construction and lease-up the property. Actual number of months required to reach stabilization may vary materially from our estimates. |
(6) | 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. |
(7) | Actual NOI for the three months ended June 30, 2016, reflects the capitalization of $140 of real estate property taxes and insurance for current repositioning and $48 for completed repositioning/lease-up properties, 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. |
(8) | As of June 30, 2016, this property is in lease-up. |
(9) | As of June 30, 2016, we have substantially completed the repositioning of 9401 DeSoto Avenue. |
Second Quarter 2016 | Page 24 | |
Supplemental Financial Reporting Package |
Properties and Space Under Repositioning (Continued) | ||
As of June 30, 2016 | (unaudited results, in thousands, except square feet) |
Repositioning Space | ||||||||||||||||||||||||||||||
Construction Period | Costs Incurred | |||||||||||||||||||||||||||||
Property (Submarket) | Rentable Square Feet | Space Under Repositioning | Same Property Portfolio | Start | Target Completion | Repositioning | Projected Total Investment(1) | Occ % 6/30/16 | Actual Cash NOI 2Q‐2016(2) | Est. Annual Stabilized Cash NOI(3) | Est.Period until Stabilized (months)(4) | |||||||||||||||||||
15140 & 15148 Bledsoe St. (SF Valley)(5) | 133,356 | 39,670 | Y | 1Q-2015 | 2Q-2016 | $ | 1,256 | $ | 1,277 | 70% | $ | 101 | $ | 882 | 0 - 2 | |||||||||||||||
228th Street (South Bay)(6) | 88,580 | 23,093 | Y | 1Q-2016 | 3Q-2016 | $ | 325 | $ | 1,841 | 67% | $ | (8 | ) | $ | 207 | 8 - 11 | ||||||||||||||
TOTAL/WEIGHTED AVERAGE | 221,936 | 62,763 | $ | 1,581 | $ | 3,118 | 69% | $ | 93 | (7) | $ | 1,089 | ||||||||||||||||||
Completed and Leased Repositionings | ||||||||||||||||||||||||||||||
Property (Submarket) | Rentable Square Feet | Stabilized Period | Stabilized Yield | |||||||||||||||||||||||||||
7110 Rosecrans Ave. (South Bay) | 73,439 | 2Q-2015 | 7.9% | |||||||||||||||||||||||||||
7900 Nelson Rd. (SF Valley) | 202,905 | 4Q-2015 | 6.6% | |||||||||||||||||||||||||||
605 8th Street (SF Valley) | 55,715 | 4Q-2015 | 6.8% | |||||||||||||||||||||||||||
TOTAL/WEIGHTED AVERAGE | 332,059 | 6.9% | ||||||||||||||||||||||||||||
(1) | 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. |
(2) | Represents the actual net operating income for each property for the three months ended June 30, 2016. For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(3) | Based on current management estimates. Actual results may vary materially from our estimates. The Company does not provide a reconciliation to net income on a consolidated basis, because it is unable to provide a meaningful or accurate estimation of reconciling items due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income. |
(4) | Represents the estimated remaining number of months, as of June 30, 2016, for the property to reach stabilization. Includes time to complete construction and lease-up the property. Actual number of months required to reach stabilization may vary materially from our estimates. |
(5) | As of June 30, 2016, we have substantially completed the repositioning of 15140 & 15148 Bledsoe Street. |
(6) | The property located at 228th Street includes eight buildings, of which three buildings aggregating 23,093 rentable square feet were under repositioning as of June 30, 2016. The amounts presented on this page represent the actual and estimated costs and cash NOI of only these three buildings. |
(7) | Actual NOI for the three months ended June 30, 2016, reflects the capitalization of $27 for repositioning space. We will continue to capitalize real estate property taxes and insurance during the period in which construction is taking place to get each repositioning property ready for its intended use. |
Second Quarter 2016 | Page 25 | |
Supplemental Financial Reporting Package |
Current Year Acquisitions and Dispositions Summary | ||
(unaudited results, data represents consolidated portfolio only) |
2016 Acquisitions | ||||||||||||||
Acquisition Date | Property Address | County | Submarket | Rentable Square Feet | Acquisition Price ($ in MM) | Occ. % at Acquisition | Occ.% at June 30, 2016 | |||||||
3/15/2016 | 8525 Camino Santa Fe | San Diego | Central San Diego | 59,399 | $8.5 | 100% | 100% | |||||||
3/29/2016 | 28454 Livingston Ave | Valencia | Greater San Fernando Valley | 134,287 | $16.0 | 100% | 100% | |||||||
4/15/2016 | REIT Portfolio | Various(1) | Various(1) | 1,530,814 | $191.2 | 100% | 100% | |||||||
5/3/2016 | 10750-10826 Lower Azusa Road | Los Angeles | San Gabriel Valley | 79,050 | $7.7 | 92% | 100% | |||||||
6/30/2016 | 525 Park Avenue | Los Angeles | Greater San Fernando Valley | 63,403 | $7.6 | 100% | 100% | |||||||
(1) | The REIT Portfolio consists of nine properties located in four of the Company’s core infill submarkets, including Orange County, Los Angeles - San Gabriel Valley, Inland Empire West and Central San Diego. For more information, see our Form 8-K filed on April 11, 2016 with the SEC. |
2016 Dispositions | ||||||||||||||
Disposition Date | Property Address | County | Submarket | Rentable Square Feet | Sale Price ($ in MM) | Reason for Selling | ||||||||
5/2/2016 | 6010 North Paramount Boulevard | Los Angeles | South Bay | 16,534 | $2.5 | User Sale | ||||||||
5/25/2016 | 1840 Dana Street | Los Angeles | Greater San Fernando Valley | 13,497 | $4.3 | User Sale | ||||||||
6/7/2016 | 12910 East Mulberry Drive | Los Angeles | Mid-Counties | 153,080 | $15.0 | User Sale |
Second Quarter 2016 | Page 26 | |
Supplemental Financial Reporting Package |
Net Asset Value Components | ||
At 6/30/2016 | (unaudited and in thousands, except share data) |
Net Operating Income | ||||
ProForma Net Operating Income (NOI)(1) | Three Months Ended June 30, 2016 | |||
Total operating revenues | $ | 30,497 | ||
Property operating expenses | (7,959 | ) | ||
Pro forma effect of uncommenced leases(2) | 97 | |||
Pro forma effect of acquisitions(3) | 567 | |||
Pro forma effect of dispositions(4) | (36 | ) | ||
Pro forma NOI effect of properties and space under repositioning(5) | 2,586 | |||
ProForma NOI | 25,752 | |||
Fair value lease revenue | 60 | |||
Straight line rental revenue adjustment | (922 | ) | ||
ProForma Cash NOI | $ | 24,890 | ||
Balance Sheet Items | ||||
Other assets and liabilities | June 30, 2016 | |||
Cash and cash equivalents | $ | 29,177 | ||
Restricted cash | 17,979 | |||
Rents and other receivables, net | 3,010 | |||
Other assets | 5,589 | |||
Acquisition related deposits | 400 | |||
Accounts payable, accrued expenses and other liabilities | (10,877 | ) | ||
Dividends payable | (9,212 | ) | ||
Tenant security deposits | (13,769 | ) | ||
Prepaid rents | (3,367 | ) | ||
Total other assets and liabilities | $ | 18,930 | ||
Debt and Shares Outstanding | ||||
Total consolidated debt(6) | $ | 503,009 | ||
Common shares outstanding(7) | 65,679,483 | |||
Operating partnership units outstanding(8) | 1,999,563 | |||
Total common shares and operating partnership units outstanding | 67,679,046 |
(1) | For a definition and discussion of non‐GAAP financial measures, see the definitions section beginning on page 29 of this report. |
(2) | Represents the estimated incremental base rent from uncommenced leases as if they had commenced as of April 1, 2016. |
(3) | Represents the estimated incremental NOI from Q2’16 acquisitions as if they had been acquired on April 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 April 1, 2016. |
(4) | Represents the actual Q2’16 NOI for properties sold during the current quarter. See page 26 for a detail of disposition properties. |
(5) | Represents the estimated incremental NOI from the 10 properties that were classified as repositioning/lease-up properties as of June 30, 2016, assuming that all repositioning work had been completed and the properties/space were fully stabilized as of April 1, 2016. See pages 24 - 25 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 April 1, 2016. |
(6) | Excludes net deferred loan fees and net loan premium aggregating $2,401. |
(7) | Represents outstanding shares of common stock of the Company, which excludes 356,249 shares of unvested restricted stock. |
Second Quarter 2016 | Page 27 | |
Supplemental Financial Reporting Package |
Fixed Charge Coverage Ratio | ||
at 6/30/16 | (unaudited and in thousands) | |
For the Three Months Ended | ||||||||||||||
June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||
EBITDA(1) | 29,123 | 15,950 | 14,606 | 13,508 | 12,364 | |||||||||
Cash distributions from unconsolidated joint ventures | 75 | 74 | 46 | 54 | 37 | |||||||||
Fair value lease expense | 60 | (4 | ) | 48 | 69 | 46 | ||||||||
Non‐cash stock compensation | 953 | 934 | 494 | 443 | 467 | |||||||||
Straight line corporate office rent expense adjustment | (11 | ) | (1 | ) | (1 | ) | 21 | 37 | ||||||
Gains on sale of real estate | (11,563 | ) | — | — | — | — | ||||||||
Loss (gain) on extinguishment of debt | — | — | — | 253 | (71 | ) | ||||||||
Straight line rental revenue adjustment | (922 | ) | (1,095 | ) | (1,409 | ) | (1,039 | ) | (612 | ) | ||||
Capitalized payments | (292 | ) | (356 | ) | (345 | ) | (296 | ) | (311 | ) | ||||
Note receivable discount amortization | — | — | — | (38 | ) | (71 | ) | |||||||
Gain from early repayment of note receivable | — | — | — | (581 | ) | — | ||||||||
Recurring capital expenditures | (848 | ) | (586 | ) | (1,346 | ) | (921 | ) | (871 | ) | ||||
2nd generation tenant improvements and leasing commissions | (1,483 | ) | (461 | ) | (762 | ) | (701 | ) | (893 | ) | ||||
Unconsolidated joint venture AFFO adjustments | (9 | ) | (3 | ) | (4 | ) | (5 | ) | 4 | |||||
Cash flow for fixed charge coverage calculation | 15,083 | 14,452 | 11,327 | 10,767 | 10,126 | |||||||||
Cash interest expense calculation detail: | ||||||||||||||
Interest expense | 3,716 | 3,254 | 2,724 | 2,245 | 1,658 | |||||||||
Capitalized interest | 443 | 439 | 306 | 252 | 186 | |||||||||
Note payable premium amortization | 59 | 59 | 33 | 33 | 33 | |||||||||
Amortization of deferred financing costs | (264 | ) | (221 | ) | (194 | ) | (200 | ) | (209 | ) | ||||
Cash interest expense | 3,954 | 3,531 | 2,869 | 2,330 | 1,668 | |||||||||
Fixed Charge Coverage Ratio | 3.8 | x | 4.1 | x | 3.9 | x | 4.6 | x | 6.1 | x |
Second Quarter 2016 | Page 28 | |
Supplemental Financial Reporting Package |
Definitions / Discussion of Non‐GAAP Financial Measures | ||
Second Quarter 2016 | Page 29 | |
Supplemental Financial Reporting Package |
Definitions / Discussion of Non‐GAAP Financial Measures | ||
Second Quarter 2016 | Page 30 | |
Supplemental Financial Reporting Package |