Rexford Industrial Realty Inc

The following discussion should be read in conjunction with the consolidated financial statements and the related notes thereto that appear in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q. The terms “Company,” “we,” “us,” and “our” refer to Rexford Industrial Realty, Inc. and its consolidated subsidiaries except where the context otherwise requires.

Forward-Looking Statements

We make statements in this quarterly report that are forward-looking statements, which are usually identified by the use of words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “might,” “plans,” “estimates,” “projects,” “seeks,” “should,” “will,” “result” and variations of such words or similar expressions. Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:

•the competitive environment in which we operate;

•real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;

•decreased rental rates or increasing vacancy rates;

•potential defaults on or non-renewal of leases by tenants;

•potential bankruptcy or insolvency of tenants or our borrower;

•acquisition risks, including failure of such acquisitions to perform in accordance with expectations;

•the timing of acquisitions and dispositions;

•risks associated with redevelopment and repositioning activities, including the possibility that costs may exceed original estimates, the time to complete a project or to lease up the completed project may be greater than originally anticipated or changes in entitlements or laws may impact or prevent execution of intended projects;

•potential natural disasters such as earthquakes, wildfires or floods;

•the consequence of any future security alerts and/or terrorist attacks;

•national, international, regional and local economic conditions, including impacts and uncertainty from trade disputes and tariffs on goods imported to the United States and goods exported to other countries;

•the general level of interest rates;

•potential impacts of inflation;

•potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or REIT tax laws, and potential increases in real property tax rates;

•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;

•lack of or insufficient amounts of insurance;

•our failure to complete acquisitions;

•our failure to successfully integrate acquired properties;

•our ability to qualify and maintain our qualification as a REIT;

•our ability to maintain our current investment grade rating by Fitch Ratings (“Fitch”), Moody’s Investors Services (“Moody’s”) or from Standard and Poor’s Ratings Services (“S&P”);

•litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes;

•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us;

•an epidemic or pandemic, and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities may implement to address it, which may precipitate or exacerbate one or more of the above-mentioned factors and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period; and

•other events outside of our control.

Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should carefully review our financial statements and the notes thereto, as well as the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Company Overview

Rexford Industrial Realty, Inc. is a self-administered and self-managed full-service REIT focused on owning and operating industrial properties in Southern California infill markets. We were formed as a Maryland corporation on January 18, 2013, and Rexford Industrial Realty, L.P. (the “Operating Partnership”), of which we are the sole general partner, was formed as a Maryland limited partnership on January 18, 2013. Through our controlling interest in our Operating Partnership and its subsidiaries, we acquire, own, improve, reposition, redevelop, lease and manage industrial real estate principally located in Southern California infill markets, and, from time to time, acquire or provide mortgage debt secured by industrial zoned property or property suitable for industrial development. We are organized and conduct our operations to qualify as a REIT under the Code and generally are not subject to federal taxes on our income to the extent we distribute our income to our shareholders and maintain our qualification as a REIT.

As of June 30, 2024, our consolidated portfolio consisted of 422 properties with approximately 49.7 million rentable square feet.

Our goal is to generate attractive risk-adjusted returns for our stockholders by providing superior access to industrial property investments in high-barrier Southern California infill markets. Periodically we also engage in mortgage debt investments secured by industrial zoned property or property suitable for industrial development within these markets. Our target markets provide us with opportunities to acquire both stabilized properties generating favorable cash flow, as well as properties or land parcels where we can enhance returns through value-add repositioning and redevelopments. Scarcity of available space and high barriers limiting new construction of for-lease product all contribute to create superior long-term supply/demand fundamentals within our target infill Southern California industrial property markets. With our vertically integrated operating platform and extensive value-add investment and management capabilities, we believe we are positioned to capitalize upon the opportunities in our markets to achieve our objectives.

2024 Year to Date Highlights

Financial and Operational Highlights

•Net income attributable to common stockholders increased by 26.5% to $138.4 million for the six months ended June 30, 2024, compared to the prior year.

•Core funds from operations (Core FFO)(1) attributable to common stockholders increased by 19.9% to $253.1 million for the six months ended June 30, 2024, compared to the prior year.

•Net operating income (NOI)(1) increased by 18.0% to $344.6 million for the six months ended June 30, 2024, compared to the prior year.

•Total portfolio occupancy at June 30, 2024 was 93.7%.

•Same Property Portfolio(2) average occupancy for the six months ended June 30, 2024 was 97.0% and ending occupancy at June 30, 2024 was 97.3%.

•Executed a total of 243 new and renewal leases with a combined 5.5 million rentable square feet, with leasing spreads of 35.3% on a GAAP basis and 26.3% on a cash basis. Excluding one lease extension executed in the first quarter of 2024 on a 1.1 million rentable square foot lease, leasing spreads were 61.7% on a GAAP basis and 42.7% on a cash basis.

(1) See “Non-GAAP Supplemental Measures: Funds From Operations” and “Non-GAAP Supplemental Measures: NOI and Cash NOI” included under Item 2 of this Form 10-Q for a definition and reconciliation of Core FFO and NOI from net income and a discussion of why we believe Core FFO and NOI are useful supplemental measures of operating performance.

(2) For a definition of “Same Property Portfolio,” see “Results of Operations” included under Item 2 of this Form 10-Q.

•During the first quarter of 2024, we completed $1.1 billion in total investments representing 49 properties with 3.2 million rentable square feet of buildings on 158 acres of land.

•During the second quarter of 2024, we completed $169.5 million in total investments representing three properties with 0.5 million rentable square feet of buildings on 23 acres of land.

Dispositions

•During the second quarter of 2024, we sold four properties with a combined 144,678 rentable square feet for a total gross sale price of $37.0 million and recognized $16.3 million in gains on sale of real estate.

Repositioning & Redevelopment

•During the first quarter of 2024, we stabilized two of our repositioning projects located at 9755 Distribution Avenue and 8902-8940 Activity Road, with two spaces totaling 38,021 square feet.

•During the second quarter of 2024, we stabilized two of our repositioning projects located at 444 Quay Avenue and 263-321 Gardena Boulevard, which have a combined 84,998 rentable square feet.

•As of the date of this filing, our repositioning projects located at 17311 Nichols Lane, 12907 Imperial Highway and 20851 Currier Road were 100% leased and our redevelopment project located at 12752-12822 Monarch was 93% leased. These projects have a combined 428,538 rentable square feet and are expected to reach 100% occupancy during the second half of 2024.

•During the first quarter of 2024, we completed the construction of four repositioning/redevelopment properties located at 500 Dupont Avenue, 11308-11350 Penrose Street, 4039 Calle Platino and 3071 Coronado Street. During the second quarter of 2024, we completed the construction of two additional redevelopment properties located at 1901 Via Burton and 2390-2444 American Way. As of June 30, 2024 these six properties were in the lease-up stage.

Equity

•During the first quarter of 2024, we issued 5,263,602 shares of common stock for total net proceeds of $290.2 million through the following equity transactions:

◦We settled the forward equity sale agreement that was outstanding as of December 31, 2023 under our 2023 at-the-market equity offering program by issuing 3,010,568 shares of our common stock for net proceeds of $164.5 million, based on a weighted average forward price of $54.65 per share at settlement.

◦We settled the remaining forward equity sale agreements related to our May 2023 underwritten public offering by issuing 2,253,034 shares of common stock for net proceeds of $125.7 million, based on a weighted average forward price of $55.79 per share at settlement.

•In March 2024, we completed a public offering of 17,179,318 shares of common stock to an existing long-only investor based on the West Coast, subject to a forward equity sale agreement, at a price of $48.95 per share for a gross offering value of $840.9 million.

•Subsequent to June 30, 2024, through the date of this filing, we partially settled the above mentioned forward equity sale agreement by issuing 1,650,916 shares of common stock for net proceeds of $80.0 million.

•As of the date of this filing, we had approximately $752.5 million of forward net proceeds remaining for settlement prior to March 27, 2025, based on a weighted average forward sale price of $48.46 per share.

Financing

•In March 2024, we completed the issuance of three-year $575.0 million exchangeable senior notes with a 4.375% coupon and a 30% conversion premium and five-year $575.0 million exchangeable senior notes with a 4.125% coupon and a 30% conversion premium. Net proceeds were approximately $1.126 billion after deducting the initial purchasers’ discounts and commissions and offering expenses.