Earnings call transcript: Rexford Inl Rty Q3 2025 beats forecasts, stock rises

Rexford Industrial Realty, Inc. (REXR) reported stronger-than-expected earnings for the third quarter of 2025, with earnings per share (EPS) surpassing analysts’ forecasts. The company posted an EPS of $0.37, beating the anticipated $0.31, resulting in a 19.35% positive surprise. Revenue also exceeded expectations, coming in at $253.24 million against a forecast of $245.64 million, representing a 3.09% surprise. Following these results, Rexford’s stock rose by 1.38% to $42.75 in after-hours trading. According to InvestingPro analysis, the company currently trades at a P/E ratio of 32.25, suggesting a premium valuation relative to its near-term earnings growth potential.

Key Takeaways

• Rexford’s Q3 EPS of $0.37 beat forecasts by 19.35%.
• Revenue reached $253.24 million, surpassing expectations.
• Stock price increased by 1.38% after earnings announcement.
• Portfolio occupancy rose to 96.8%.
• Executed 3.3 million square feet of leasing, a company record.

Company Performance

Rexford Industrial Realty showcased robust performance in Q3 2025, driven by record leasing activity and strategic repositioning efforts. The company’s focus on high-quality assets in prime Southern California locations continues to pay dividends, as evidenced by a 60-basis-point increase in portfolio occupancy to 96.8%. Compared to industry peers, Rexford outperformed the broader infill market, which saw a net absorption of 400,000 square feet versus Rexford’s 1.9 million square feet.

Financial Highlights

• Revenue: $253.24 million, exceeding forecasts by 3.09%.
• Earnings per share: $0.37, a 19.35% surprise over the forecast.
• Core FFO per share: $0.60, up from $0.59 last quarter.
• Total liquidity: $1.6 billion.
• Net debt to EBITDA: 4.1x.

Earnings vs. Forecast

Rexford’s Q3 earnings exceeded expectations, with EPS at $0.37 compared to the forecasted $0.31. This 19.35% beat marks a significant improvement over previous quarters, reflecting strong operational execution and strategic asset management. Revenue also outpaced projections, reaching $253.24 million against an expected $245.64 million.

Market Reaction

The positive earnings report led to a 1.38% increase in Rexford’s stock price, closing at $42.75 in after-hours trading. This movement positions the stock closer to its 52-week high of $48.48, indicating investor confidence in the company’s growth trajectory. The broader market trend has seen moderate volatility, but Rexford’s performance stands out amid sector peers, with a notable 31.87% price return over the past six months. InvestingPro subscribers can access 10+ additional exclusive insights about REXR’s market performance and valuation metrics through the platform’s comprehensive Pro Research Report.

Outlook & Guidance

Rexford raised its full-year 2025 Core FFO per share midpoint to $2.40, reflecting continued confidence in its operational strategy. The company aims to sustain its growth momentum through repositioning and redevelopment initiatives, targeting 5.5-6% of its portfolio square footage. Despite potential pressures on leasing spreads in 2026-2027, Rexford remains focused on maximizing NOI and capital recycling. Two analysts have recently revised their earnings estimates upward for the upcoming period, according to InvestingPro data, suggesting growing confidence in the company’s execution capabilities.

Executive Commentary

Laura Clark, COO, emphasized, "Our performance demonstrates three broad themes that position Rexford to generate long-term value for our shareholders." Co-CEO Howard Schwimmer added, "We have multiple levers to pull to drive our cash flow from an FFO per share perspective and create NAV." Meanwhile, Co-CEO Michael Frankel noted the challenges posed by macroeconomic uncertainty but expressed optimism about the company’s strategic direction.

Risks and Challenges

• Potential pressures on leasing spreads in 2026-2027.
• Macroeconomic and geopolitical uncertainties impacting market conditions.
• Risks associated with repositioning and redevelopment projects.
• Market saturation in key Southern California regions.
• Fluctuations in tenant demand and health.

Q&A

During the earnings call, analysts inquired about Rexford’s discussions with Elliott Investment Management, though details remained undisclosed. Questions also focused on the company’s strategic initiatives to enhance tenant health and resilience amid economic uncertainty. Rexford’s management reiterated their commitment to proactive asset management and leveraging growth opportunities.

Full transcript - Rexford Inl Rty (REXR) Q3 2025:

Lacey, Conference Operator: Good afternoon. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rexford Industrial Realty, Inc. third quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. Thank you. I will now hand the call over to Mikayla Lynch, Director of Investor Relations and Capital Markets at Rexford Industrial Realty, Inc. Mikayla, please go ahead.

Mikayla Lynch, Director of Investor Relations and Capital Markets, Rexford Industrial Realty, Inc.: Thank you, and welcome to Rexford Industrial Realty, Inc.’s third quarter 2025 earnings conference call. In addition to yesterday’s earnings release, we posted a supplemental package and earnings presentation in the Investor Relations section on our website to support today’s remarks. As a reminder, management’s remarks and responses to your questions may contain forward-looking statements as defined by Federal Securities Laws, which are based on certain assumptions and subject to risks and uncertainties outlined in our 10-K and other SEC filings. As such, actual results may differ, and we assume no obligation to update any forward-looking statements in the future. We’ll also discuss non-GAAP financial measures on today’s call. Our earnings presentation and supplemental package provide GAAP reconciliations as well as an explanation of why these measures are useful to investors.

Joining me today are our Chief Operating Officer, Laura Clark, and Chief Financial Officer, Mike Fitzmaurice. Our Co-Chief Executive Officers, Michael Frankel and Howard Schwimmer, will join us for the Q&A session following prepared remarks. It’s my pleasure to now introduce Laura Clark. Laura.

Laura Clark, Chief Operating Officer, Rexford Industrial Realty, Inc.: Thank you, Mikayla, and thank you all for joining us today. I’d like to start by recognizing the Rexford team for their hard work and strong execution of our strategy. Third quarter results, which were ahead of expectations, are a testament to the strength of our business model and our focus on driving value. We executed 3.3 million square feet of leasing, nearly double last quarter, and healthy leasing spreads. Our performance demonstrates three broad themes that position Rexford to generate long-term value for our shareholders. One, our irreplaceable and high-quality infill Southern California portfolio. Two, our ability to drive outperformance through strategic asset management powered by our vertically integrated team. Three, our focus on a creative capital allocation. Starting with the performance of our portfolio and current market dynamics, Rexford’s portfolio continues to outperform the broader infill market, and we are encouraged by improving tenant sentiment in the quarter.

However, uncertainty around the overall macroeconomic environment and tariff policy remains, which could continue to impact tenant demand in an unpredictable manner. For the overall 1.8 billion square foot infill Southern California market, net absorption was nominally positive at 400,000 square feet in the quarter, according to CBRE. In comparison, net absorption in Rexford’s portfolio was a positive 1.9 million square feet, equal to 380 basis points of positive net absorption. This reflects the solid execution by our team and the superior quality and functionality of our assets relative to the overall market that is generally comprised of older vintage inferior properties. Strong new leasing activity and healthy retention levels throughout the portfolio drove same property ending occupancy to 96.8%, a 60 basis point increase compared to the prior quarter.

Leasing spreads for comparable leases were 26% and 10% on a net effective and cash basis, respectively, and in line with expectations. Additionally, bad debt levels are below historical averages at 30 basis points as a percentage of revenue year to date, underscoring the health and quality of our diverse tenant base. As it relates to market rents, Rexford’s portfolio experienced a decline of 1% sequentially compared to the overall market decline of 2%. Notably, this quarter marks an improvement with respect to sequential rent change compared to recent quarters within the Rexford Industrial Realty, Inc. portfolio, as well as the overall infill Southern California market. While we cannot predict when market rents will reach an inflection point, the underlying supply-demand dynamics in our market remain strong, with supply growth severely limited by scarce developable land and highly restrictive development regulations.

These supply constraints, combined with demand from the nation’s largest regional zone of population and consumption and key growth sectors, including aerospace, defense, manufacturing, consumer products, and construction, to name a few, will continue to support favorable long-term industrial fundamentals. Turning to our strategic approach to asset management that drives outperformance and value creation, our vertically integrated team’s on-the-ground presence and expertise enable us to proactively identify opportunities to capture tenant demand and drive occupancy. Through strategic asset management, we continually evaluate each property to determine the optimal value creation strategy, whether that be repositioning or redevelopment, leasing as is, or disposing of an asset that strengthens and de-risk our future cash flows and capital requirements. For example, during the quarter, our team procured tenants and executed leases at two properties in the San Gabriel Valley, totaling 556,000 square feet.

These properties had been previously slated for near-term repositioning and redevelopment. We also opportunistically disposed of a 76,000 square foot property in the San Gabriel Valley, which would have otherwise been a near-term redevelopment, unlocking an accretive capital recycling opportunity at an implied exit cap rate of 3.7%. The execution of our strategy on these assets afforded us the flexibility to generate near-term NOI, avoid additional capital investment and downtime, while capitalizing on an accretive disposition. Turning now to our capital allocation priorities, we continue to focus on allocating capital to drive the highest risk-adjusted returns while remaining cognizant of market conditions. We are pleased with our progress on repositionings and redevelopments, which continue to yield double-digit incremental returns.

In the quarter, we executed 845,000 square feet of repositioning and redevelopment leases, bringing total year-to-date lease up of our repositioning and redevelopments to 1.5 million square feet, representing $27 million of annualized incremental NOI. Regarding dispositions, we sold three properties totaling $54 million in the quarter, bringing year-to-date dispositions to $188 million at a weighted average exit cap rate of 4.2%, with proceeds being redeployed into accretive share repurchases. We currently have $160 million of dispositions under contract or accepted offer. We have not closed any acquisitions year to date and have none under contract or accepted offer. In summary, we’re pleased with our performance in the quarter and are encouraged by improved leasing activity across our portfolio. We remain focused on strengthening our cash flow, accretive allocation of capital, and expanding our operating leverage while maintaining a low-lever, flexible balance sheet.

We appreciate your continued support, and now I’ll turn the call over to Fitz.

Mike Fitzmaurice, Chief Financial Officer, Rexford Industrial Realty, Inc.: Thanks, Laura. Third quarter core FFO was $0.60 per share, up one penny from last quarter, driven by higher occupancy and accretive capital recycling from dispositions and the share repurchases. Total portfolio occupancy, including repositioning and redevelopment, was up 260 basis points sequentially. Notable rent commencements included 500,000 square feet at 1601 Mission, as well as 191,000 square feet at 218 Turnbull Canyon, and 123,000 square feet at 8888 Balboa, the latter two being recently repositioned or redeveloped properties. Turning to guidance, we are raising our full-year 2025 core FFO per share midpoint to $2.40, up $0.01 compared to last quarter. The increase is driven by strong leasing activity, accretive capital recycling from dispositions and the share repurchases, and higher capitalized interest. This is partially offset by projected lease-up delays related to repositioning and redevelopment projects.

We also increased our same property cash NOI midpoint to 4%, up 150 basis points from last quarter, primarily due to lower concessions within our same property pool. We continue to allocate capital with a focus on FFO and NAV per share accretion while preserving healthy levels of liquidity, totaling $1.6 billion as of quarter end, and maintaining a low net debt to EBITDA of 4.1 times. During the third quarter, we executed $150 million of share repurchases funded by disposition proceeds, capturing a 200 basis point spread between the weighted average exit cap rate and implied FFO yield. Our board also authorized a new $500 million share repurchase program, which provides us renewed capacity and the ability to remain opportunistic.

Turning to repositioning and redevelopment NOI, as of the third quarter, we have approximately $65 million of projected annualized NOI, of which $41 million is tied to projects that stabilized during the quarter or are in lease up, with an additional $24 million related to properties under construction. This is offset by about $25 million of annualized NOI expected to come offline as future projects commence construction in late 2025 and throughout 2026. Importantly, these projects are expected to deliver incremental cash flow upon stabilization. The offline impacts are largely driven by four assets: the Hertz site at 9000 Airport Boulevard, 9400 Santa Fe Springs Road, along with two obsolete office buildings: Herbalife at 950 West 190th Street and 600 Vermont Avenue.

As we move forward, we will continue to evaluate the full range of strategic value creation opportunities for our assets, be it reinvestment, leasing as is, or selling, while remaining disciplined and responsive to evolving market conditions and our cost of capital. This discipline has led us to release or sell certain assets that had otherwise been slated for repositioning or redevelopment, reducing future capital spend by about $40 million. In closing, I want to thank our team for their commitment to excellence, execution, and a winning attitude, which continue to be the foundation of Rexford’s success. With that, I’ll turn the call back to the operator and open the line for questions.

Lacey, Conference Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. I will now hand the call back to Mikayla Lynch to begin the Q&A session.

Go ahead. Our first question comes from Samir Khanal from Bank of America. Samir, please go ahead.

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Good afternoon, everybody. Mike, you talked about the 3.3 million square feet in the third quarter. How should we think about the run rate of that? How much of that is sort of carryover from 2Q, being that 2Q is low? Just help us think about the run rate and what’s sustainable. Thanks.

Laura Clark, Chief Operating Officer, Rexford Industrial Realty, Inc.: Hey, Samir. Thanks so much for your question. Yeah, we had a great quarter of leasing, 3.3 million square feet. The highest, actually, leasing quarter in our history. Strong, positive net absorption, the highest ever as well. As we’re seeing improved tenant decision-making across the portfolio and strong retention levels, you know, as we look at activity across our portfolio today, we have activity on about 80% of our vacant spaces. That’s in line with activity levels at this time in the second quarter. We are certainly encouraged by what we’re seeing in the market. As I mentioned in my remarks, though, there continues to be a lot of uncertainty around the macroeconomic picture, volatility, and tariffs. It’s challenging to predict the go-forward demand and what that could look like, but we are certainly encouraged by signs we’re seeing in the market today.

Thank you, Samir. Our next question comes from Michael Griffin from Evercore ISI. Please go ahead.

Great, thanks. I want to circle back, Laura, just to your comments on leasing and really, you know, I think driving occupancy as we saw with a sequential uptick this quarter relative to last. You know, how should we think about the trade-off of, you know, boosting that occupancy maybe at the expense of some elevated concessions or the rent side? Or maybe walk us through those two pieces to how you solve for revenue growth going forward.

Yeah, thanks so much for your question. We have, and we’ve been communicating, you know, our strategy has been a focus on driving occupancy, driving cash flow, and NOI. In some cases where we’re able to capture immediate NOI from either dropping rate or other terms of the deal, concessions, TIs, we’re going to take that approach. In some cases, we are able to sign shorter lease terms, which allows us to get back to that space sooner. Across the board, the focus is on driving NOI and driving occupancy. I think most importantly, though, our buildings are of higher quality in the market, and our team is proactively driving demand today. Both of those factors are what are contributing to our overall leasing success that we’ve seen this year and certainly in the quarter.

Thanks, Griff. Our next question comes from Mike Mueller from J.P. Morgan. Please go ahead.

Yeah, hi. I guess going back to the redevelopment pipeline, when you sit there and look at everything today that’s there, how much of it do you think could be sold off, as you previously referenced? On a go-forward basis, how are you thinking about what’s the right level to have either under construction and then process it at any given time?

Howard Schwimmer, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Hi, Mike. Nice to hear your voice. It’s Howard.

Yep.

As far as I think you’re asking about dispositions, we continually assess our portfolio in the market for those opportunities, really where we can strengthen the quality and the growth profile and reduce risk. We’ve been leaning into dispositions as we’re achieving very attractive spreads there. We currently have about $160 million under contract or accepted LOI. On top of that, we’ve already closed a significant amount of acquisitions year to date, which in total would bring us to about $350 million. There are opportunities in the portfolio well into the future that allow us to recycle capital at attractive spreads.

Laura Clark, Chief Operating Officer, Rexford Industrial Realty, Inc.: Yeah, and in regards to repositioning and redevelopment and the future pipeline, as I mentioned in my remarks, we evaluate multiple paths for every asset through our strategic planning process. We’re focused on taking the right path forward that’s going to drive cash flow and position the portfolio for long-term growth. As we assess repositioning and redevelopment, we’re assessing moving forward with those projects today, potentially pausing those projects. Should we lease a property as is, or should we sell a property? That optionality is what’s allowing us to drive the optimal value creation strategy. It really comes back to we’re going to continue to evaluate that ongoing forward strategy with our capital allocation framework in mind and to allocate capital to the highest risk-adjusted returns.

Howard Schwimmer, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Mike, the way we like to think about it in terms of managing the risk around it is based on square footage. Today, we have around 5.5% to 6% of our square footage in redevelopment or repositioning. Our comfort zone on that front is in terms of a range between 5% and 7.5%.

Thanks, Mike. Our next question comes from Craig Melman from Citi. Please go ahead.

Hey, everyone. Maybe just a two-parter here. Number one, you guys are ramping up share buybacks here and dispositions. Have you talked to Elliott or has there been any communication? Is this part of their feedback here? Also, on that front, how much could you sell and be able to absorb gains without having to, you know, be able to absorb it within your current dividend versus having to special out part of the proceeds?

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Hey, Craig. It’s Michael. Thanks so much for joining us today and thanks for your question. Thanks for your three-part question, I think. Yes, we have met with Elliott and we have a constructive dialogue with them, as we encourage with all of our shareholders. Addressing your question around buybacks and whatnot, actually, that’s a process that started almost a year ago. We announced it at the beginning of the year, and we were executing on it, frankly, long before there was a rumor that Elliott had even become a shareholder. Certainly not a reaction to that.

Howard Schwimmer, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Yeah, Craig, as far as dispositions go, we’re committed to being a bigger part of our fabric as we move forward in terms of capital allocation priorities. Today, we sold $180 million, and we have another $160 million under contract, as Howard alluded to. In terms of tax gains versus losses, you know, in 2025, we don’t expect to have to do a special dividend. As we continue to evaluate the portfolio and dispositions going into 2026, we’ll share more information whether or not there’ll be a special dividend or not next year.

Thanks, Craig. Our next question comes from Blaine Heck from Wells Fargo. Please go ahead.

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Great, thanks. Can you just talk about where you are with respect to credit and bad debt relative to expectations, and any visibility into how those metrics could trend throughout the rest of this year and into next? Any trends on the watchlist?

Howard Schwimmer, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Yeah, sure. From a watchlist perspective, Blaine, not much has really changed since the outset of the year. We have about 20 or so tenants on our watch and pre-watch list. The tenant health in the portfolio has been resilient and look no further than the bad debt levels that we’ve experienced over the last couple of quarters. In the second quarter, we had a negligible $100,000. This quarter was effectively zero. As we look forward into the fourth quarter, we do have a reserving of about 70 basis points, which is obviously heightened from the second and third quarter, which equates to about $1.7 million of NOI. That’s just out of an abundance of caution. There could be upside there, but we’re watching a few tenants within our watchlist that could be disruptive in the fourth quarter.

As we look out to next year, it’s a bit early to talk about, but I think there’s a possibility we can get back to more historical levels between 40% and 50% of revenue.

Thanks, Blaine. Our next question comes from Vikram Malhotra from Mizuho. Please go ahead.

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Awesome. Good morning. Thanks for the question. I guess just one clarification and a question. The asset sales you mentioned, the 4.4% cap rate, I believe some of those assets were vacant. Do you mind just giving us a sense of what the square footage and the vacant or the occupancy of those assets were? Does that play into future sales, meaning are you looking to sell vacant assets? Secondly, can you just confirm the mark-to-market? I think it’s 0% or 1% cash mark-to-market. What does that mean for rent spreads into 2026? Thank you.

Howard Schwimmer, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Sure. The occupancy on the assets that we sold during the quarter was about 67%, but the cap rates that we quote within our disclosure are based on market cap rates. We do assume a market cap rate for those vacant assets. In terms of occupancy as well, I think this is kind of where you’re going. The occupancy increase that we had sequentially, both in the same property and total portfolio, was primarily driven by net absorption. We only had about a 10 basis point pickup due to dispositions that we sold during the quarter. Your other question on mark-to-market, yes, net effective this quarter was about 10%. On a cash basis, it’s negative 1%. As we look forward, we could have pressure on our releasing spreads into 2026 and 2027, but here’s how we’re thinking about it. Here are some of the mitigants, Vikram.

One, our lease maturity profile is fairly staggered. No more than 15% of our rent level expires in any given year. We have plenty of other cash flow drivers that we can pull, starting with repositioning and redevelopment. As I noted in my prepared remarks a few minutes ago, we have $65 million of NOI tied to our repositioning and redevelopment. $12 million of that stabilized during the quarter. We have another $30 million tied to what’s in lease up, which is representative of about 1.5 million square feet. We have 75% of activity on that space, meaning we’re trading paper with tenants through LOIs and lease negotiations. We also have other mitigants like accretive capital recycling. This year, we’ve showcased our abilities on that with dispositions and the share repurchases, and we are absolutely committed to that if the opportunities arrive going forward in 2026.

We’re going to continue to drive operating margin. We made some tough decisions earlier this year with the reduction in force, reducing some of the comp there. We also had a reorg during the quarter with our asset investment management team. We are very focused on operating margin as well. We have multiple levers to pull to drive our cash flow from an FFO per share perspective and create NAV.

Thank you, Vikram. Our next question comes from Greg McGuinness from Scotiabank. Please go ahead.

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Hey, good morning. How did the assets that stabilized in Q3 at that 4.4% yield compare to the initial underwriting when they were put into the pipeline? How have you adjusted assumptions for assets currently in the pipeline? How should we think about targeted yields going forward?

Laura Clark, Chief Operating Officer, Rexford Industrial Realty, Inc.: Yeah, thanks so much for your question. In terms of, you know, we’ve stabilized 14 properties year to date with an average yield of 5.8%. As you mentioned, in the quarter, we stabilized seven properties at a 4.4% yield. Admittedly, some of these yields are not meeting our expectations given the overall market conditions and the decline in rents that we’ve seen in the prior two years. We’re certainly very excited about the superior positioning of these properties within the markets and their prospects for outperformance over the medium to longer term. These properties are the highest quality and functionality in their submarkets. They’re unmatched when compared to the overall older vintage product in the market. Importantly, these projects are contributing an annualized $12 million of NOI. As we think forward, we’re certainly committed to allocating capital to the highest risk-adjusted returns.

As we look at yields going forward, we’re adjusting yields based on what the rents in which we can achieve to date. We’re going to make capital allocation decisions going forward based on where we can allocate capital to those highest risk-adjusted returns. If needed, we’ll pause future projects and could potentially dispose of projects if they don’t meet our criteria.

Thanks, Greg. Our next question comes from Rich Anderson from Cantor Fitzgerald. Please go ahead.

Hey, thanks. Good morning. Could you maybe hazard a guess? Let’s assume for a moment you’re bouncing at the bottom now. You know, everyone wants to see an inflection up, and consuming most of all you guys. When you take into account supply coming down, sort of flattish market rent growth sequentially, a little bit negative, tenant sentiment just generally in the marketplace, maybe some influence on China and port activity, even though you’re not a port-centric story, how quickly can we pivot from bottom flat, sort of sitting along the bottom to actually seeing a growth trajectory start to materialize? Is that, like, in your history in this market, do you see that as a year, two years, six months? I mean, what, how would you sort of characterize when we could return to a story of growth here versus sort of finding the bottom? Thanks.

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Hey, Rich. It’s Michael. Thank you so much for that good question. I think in part you answered your own question, and then I’ll add to it. It really starts with a very favorable market backdrop. Overall market vacancy is about 5%. However, and importantly, when you drill down and look at the high-quality, well-located product that’s comparable to our portfolio, that market vacancy is substantially lower. The backdrop is very strong. Overall, tenant health is holding very well. Within our 51 million square foot portfolio, for example, tenant bad debt was essentially zero for the quarter. We’re also continuing to see a range of drivers of demand that are very favorable. Obviously, there’s some pent-up demand that came back to market. More importantly, we’re seeing a lot of incremental demand from a wide range of industry sectors. Laura named several of them, just to name a few.

The interest rate environment is helping us. I think some business leaders, to your point in question, have become somewhat desensitized around the constantly changing tariff environment. Maybe they’re feeling it’s time to get on with business. I think, most importantly, and then I’ll come to your last question, tenants are driven to our portfolio for two key factors. As Laura mentioned, it’s the superior quality and functionality of our product, and it’s the entrepreneurial approach by our unique team who are proactively capturing and catalyzing incremental tenant demand and leases that enable us to outperform within our markets. I think all these things are painting a positive picture and backdrop. We’re very encouraged about what we’re seeing, etc. The ongoing macroeconomic and geopolitical uncertainty makes it really impossible to predict the forward arc of recovery or exactly when the inflection point for rents may occur.

I can tell you, and as Fitz mentioned very eloquently, we have many drivers of growth within the portfolio. Irrespective of what market rents do in the very near term or even medium term, the company’s very well positioned to capitalize on our substantial embedded NOI growth as we move forward.

Thanks, Rich. Our next question comes from Nick Gilman from Baird. Please go ahead.

Hey, good morning. Appreciate the added disclosure on the upcoming repositioning and redevelopment. Just for clarification on the mark-to-market, that excludes all redevelopment, repositioning, and future redevelopment. As we look at just the overall projected square footage of $2.3 million square feet, what is the actual amount that is currently in place as a square footage amount and the occupancy as we are looking at what’s going to be rolling out of just expirations in late 2025 and 2026?

Howard Schwimmer, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Yeah, so the negative 1% excludes anything from repositioning or development to answer your first question. The way I would think about the building blocks for repositioning or redevelopment, I’ll go back to my previous comments there, Nick, is $12 million of the $65 million that we have in future projected annualized NOI with repo and redev stabilized during the quarter. That’ll come out of line in the fourth quarter. We also have another $30 million that currently is tied to about 1.5 million square feet that is in lease up that we expect to come on in the near term. We have about $20 million, plus $20 million or so that’s related to projects that are currently under construction. It’s a bit longer dated, you know, coming online late in 2026 and 2027.

Thanks, Nick. Our next question comes from John Peterson from Jefferies. Please go ahead.

Michael Frankel, Co-Chief Executive Officer, Rexford Industrial Realty, Inc.: Oh, great. Thank you. I was hoping we could talk about G&A levels. I know as a percent of revenue, it’s a bit above the peer group. I know there’s been some efforts, though, to control that in 2025. Just curious if you can maybe give us your longer-term vision as we start to think towards 2026 and 2027, how you’re trying to trend that expense line. Hey, John. It’s Michael. Thank you so much for joining us today and for your question. This is really front and center for the company. If you look back to our transcripts or IPO, we describe this business as one that should drive significant operating leverage as we grow and scale the company. We’re super pleased that the company today is at a scale where we can really double down on that focus. I think you’ve seen great progress this year.

For example, you saw, I think, about 17% NOI growth year over year from last year with zero G&A growth this year. We’ve talked a lot this year about some of the initiatives internally. Fitz described some of them a few minutes ago. Those are really designed to continue to drive efficiency and, more importantly, effectiveness as we move forward. I think we see a lot of opportunities moving forward. Obviously, we’re not going to provide guidance into the future years around G&A, etc., but we’re pretty optimistic there.

Thank you. Our next question comes from John Kim at BMO Capital Markets. Please go ahead.

Good morning. Just to follow up on Elliott, was there any topic discussed that was maybe surprising to you or different than you’ve had with other shareholders? Are they still a major shareholder of the company today? Hi, John. It’s Michael. Thank you so much for joining and for the question. We really aren’t in a position to comment on the nature of discussions that we’re having with any of our investors. Above all else, we think they generally don’t appreciate that. I’m afraid that’s pretty much all that we can comment on.

Thanks, John. Our final question comes from Brendan Lynch from Barclays. Please go ahead.

Great. Thanks for taking my question. You mentioned that you have kind of been leaning into occupancy versus pushing rate for a while now. Maybe you can just talk about where you fall on that spectrum now relative to the past 18 to 24 months.

Laura Clark, Chief Operating Officer, Rexford Industrial Realty, Inc.: Yeah, I mean, it’s a great question. I would just say, you know, today and throughout the year, that’s been our focus. I wouldn’t say that focus has shifted more so today versus a bit at the beginning of the year. Where we can capture immediate NOI today, we’ll make those decisions. Like I said earlier, whether it’s around rate, term, TIs, you know, rent steps, we do believe that driving cash flow today is a really important focus.

Thanks, Brendan. That concludes the Q&A portion of our earnings call. I’d now like to turn the call over to Laura Clark for closing remarks.

closing, Rexford Industrial Realty, Inc.’s third quarter results underscore the strength of our platform and high-quality infill portfolio, strategic approach to value creation, and our focus on accretive capital allocation to deliver long-term shareholder value. Thank you all again for joining us today.

Lacey, Conference Operator: This concludes today’s conference call. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.