KEY CALLOUTS
Ticker/Company: Rexford Industrial Realty, Inc. (REXR)
Headline: Notes from 1Q21 earnings call
Key Takeaways:
- SoCal logistics portfolio is overlaid on top of perhaps the fastest growing submarkets in the U.S. – relative lack of developable land + high cost / barriers to new construction + unprecedented tenant demand = Los Angeles rental rates growing ~2.5x other major markets outside of Southern California over the next 4-5 years
- Internal growth – projects approximately ~18% embedded NOI growth (~$54 million) within the existing portfolio from contractual rent bumps + commencing leases over the next 18-24 months
- External growth – 2021 guidance does not include additional acquisition activity, however there is over ~$450 million of potential deals under LOI or under contract currently following ~$190 million executed to-date. Assuming a ~5.0% average yield and that 70% of the pipeline converts to completed deals, could translate to potentially $7-10 million of incremental NOI in 2021 depending on timing of close
- It appears that REXR will achieve roughly ~70% retention on its 20 largest 2021 lease expirations totaling just over 2msf, with the unleased portion (675ksf) to be placed into redevelopment / repositioning
- Very likely that 2021 guidance will be raised gradually throughout the year given the pace of market asking rent increases + external acquisition activity, brining Core FFO growth above +8% at the midpoint currently. By comparison, larger peer PLD is forecasting just over ~12% Core FFO growth at the midpoint
Please call or email with any questions
Rob Simone, CFA
Managing Director
Mobile:
@HedgeyeREITs
