Rexford Industrial Realty, Inc.
For the period ended Sep 30, 2026. Filed Oct 27, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 27, 2026
REXR$37.80-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001571283-26-000040
Management’s Discussion and Analysis of Financial Condition and Results of OperationsItemCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-27.
0001571283-26-000064
Management’s Discussion and Analysis of Financial Condition and Results of OperationsItemThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 132 current paragraphs.
68 unchanged; 52 reworded; 12 added; 14 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
•risks related to our stock repurchase program, including that repurchases may not be made at the times, prices or amounts anticipated, may reduce our liquidity or may not enhance long-term stockholder value;
Current report
Our goal is to generate long-term shareholder value by owning and operating competitive, highly functional industrial properties in high-barrier to entry Southern California infill markets. We pursue this objective through (i) a disciplined capital allocation strategy, under which we evaluate dispositions, debt repayment, share repurchases, repositioning and development, and acquisitions based on their relative risk-adjusted returns and expected contribution to long-term Core FFO and net asset value, both on a per-share basis, (ii) prioritizing a strong balance sheet with low leverage and substantial liquidity and (iii) operational rigor and cost discipline. Scarcity of land and high barriers limiting new construction of industrial product contribute to favorable long-term supply/demand fundamentals within our infill Southern California markets. With our vertically integrated operating platform and value-add capabilities, we believe we are positioned to capitalize upon the opportunities in our markets to achieve our objectives.
Current report
•During the third quarter of 2026, we sold 25 properties with a combined 5,468,507 rentable square feet for a total gross sale price of $1.3 billion and recognized $23.2 million in gains on sale of real estate. Twenty-one of the properties had previously been impaired and were sold without a gain or loss.
Current report
•During the third quarter of 2026, we stabilized our repositioning project located at 14955 Salt Lake Avenue, which has 46,653 rentable square feet. We also executed six development and repositioning leases totaling 599,369 rentable square feet at our projects located at 3680-3880 Voyager Street, 24935 Avenue Kearny, 9455 Cabot Drive, 9615 Norwalk Boulevard and 950 West 190th Street. The project at 950 West 190th Street remains under construction, with completion expected in the third quarter of 2027 and lease commencement expected in the first quarter of 2028.
Current report
•During the third quarter of 2026, we repurchased 8,143,611 shares of our common stock under our stock repurchase program at a weighted average price of $37.91 per share for a total of $308.9 million, including commissions.
Current report
•Subsequent to the third quarter of 2026, we repurchased 2,727,769 shares of our common stock under our stock repurchase program at a weighted average price of $36.64 per share for a total of $100.0 million, including commissions, leaving $591.1 million available for future repurchases under the July 2026 Repurchase Program.
Current report
Financing
Current report
•In July 2026, we repaid in full the $60.0 million term loan facility (the “$60 Million Term Loan”) in advance of its October 27, 2026 maturity date.
Current report
•In September 2026, we repaid in full the $300.0 million unsecured term loan facility (the “$300 Million Term Loan”) and the $125.0 million unsecured guaranteed senior notes (the “$125 Million Notes”) in advance of their May 26, 2027 and July 13, 2027 maturity dates, respectively. In connection with the repayment of the $300 Million Term Loan, we terminated the related interest rate swaps.
Current report
Our strategy is centered on creating long-term shareholder value and per-share FFO and net asset value growth through disciplined capital allocation, targeted investment in infill Southern California industrial real estate and value-add execution across our portfolio that meet our risk-adjusted return requirements, as well as strategic capital recycling.
Current report
The Company’s investment strategy targets industrial property investments that meet our stringent risk-adjusted return requirements and demonstrate the potential for accretion in Core FFO and net asset value, on a per share basis, over the near- to longer-term. A key component of our external growth strategy is to acquire properties that provide opportunities to add value through functional or qualitative repositioning and improvements and superior leasing, marketing and operations executed by our vertically integrated team. Through various repositioning, development, and operating strategies, we seek to increase the properties’ functionality and attractiveness to prospective tenants and, over time, to stabilize the properties at increased occupancy and market rates driving increased cash flow and value.
Current report
(4)During the third quarter of 2026, leases were executed at 9615 Norwalk Blvd, 3680-3880 Voyager Street, and 24935-24955 Avenue Kearny, bringing these properties to 100% leased. The leases are expected to commence in the fourth quarter of 2026.
Removed paragraphs (14)
Previous report
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. 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 developments. 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.
Previous report
Management Update
Previous report
Effective April 1, 2026, Laura Clark assumed the role of Chief Executive Officer and John Nahas assumed the role of Chief Operating Officer, as part of the Company’s leadership succession plan announced in November 2025. Howard Schwimmer and Michael Frankel ceased serving as Co‑Chief Executive Officers effective March 31, 2026 and continued to serve as directors on the Board until their terms expired at the 2026 Annual Meeting of Shareholders on May 19, 2026. The Company continues to execute on operating and capital initiatives announced in connection with this transition, including changes to capital allocation priorities, a reduction in development exposure and enhanced operational rigor and synergies.
Previous report
•Subsequent to the second quarter of 2026, we sold one property with 22,667 rentable square feet for a gross sale price of $7.6 million.
Previous report
•During the second quarter of 2026, we also completed construction of four of our development properties with a combined 449,316 square feet that are now classified in the lease-up stage.
Previous report
•Subsequent to the second quarter of 2026, we executed two leases totaling 102,025 rentable square foot lease at our development project located at 3680-3880 Voyager Street and our repositioning project located at 24935 Avenue Kearny.
Previous report
•Subsequent to the second quarter of 2026, a new $1.0 billion stock repurchase program was approved, replacing and superseding our prior repurchase program, with a term through July 31, 2028.
Previous report
Our growth strategy remains centered on creating long‑term, per‑share FFO and net asset value through disciplined capital allocation, targeted industrial investment within infill Southern California, and the execution of value‑add initiatives across our industrial portfolio. While we did not complete any acquisitions during the prior year or first half of 2026, we continue to evaluate investment opportunities that we believe have the potential to be accretive to Core FFO and net asset value per share and satisfy our underwriting criteria, which reflect current market conditions and our cost of capital. We also continue to evaluate and execute repositioning and improvement initiatives within our existing portfolio to enhance property functionality, marketability, future cash flow growth and long-term value creation.
Previous report
A key component of our growth strategy has historically been to acquire properties through off-market and lightly marketed transactions that are often operating at below-market occupancy or below-market rent at the time of acquisition or that have near-term lease roll-over, or that provide opportunities to add value through functional or physical repositioning and improvements. Through various repositioning, development, and professional leasing and marketing strategies, we seek to increase the properties’ functionality and attractiveness to prospective tenants and, over time, to stabilize the properties at occupancy rates that meet or exceed market rates.
Previous report
(5)As of June 30, 2026, 14955 Salt Lake Ave is 100% leased with lease commencement expected in August 2026.
Previous report
(7)9400-9500 Santa Fe Springs Road totals 595,304 rentable square feet and the proposed repositioning project pertains to work at only one of the units, totaling 184,270 rentable square feet.
Previous report
(10)14434-14527 San Pedro Street is a low coverage site with 58,225 rentable square feet of buildings on 335,905 square feet, or 7.7 acres, of land.
Previous report
(8)Reflects our renewal leasing activity, weighted average lease term, effective rent per square foot and leasing spreads for the six months ended June 30, 2026, excluding a 1.1 million square foot lease extension with Tireco, Inc. at 10545 Production Avenue. The current lease, which was originally set to expire in January 2027, was extended through April 2030, commencing February 1, 2027. The above-market prior lease rate was reset to market, representing net effective and cash leasing spreads of (31.0)% and (33.5)%, respectively. The lease includes annual contractual increases of 2.75% and three months of free rent in 2027, in addition to a conversion to a gross lease from a NNN lease, which enables us to capture the benefit from any potential reduction in real estate property taxes. This lease extension is not expected to be indicative of our future portfolio leasing spreads given the unique size of the premises, adjacent competitive supply, and deal structure.
Reworded paragraphs (52)
Previous wording
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,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “potential,” “possible,” “predicts,” “projects,” “results,” “seeks,” “should,” “will,” 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:
Current wording
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,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “potential,” “possible,” “predicts,” “projects,” “seeks,” “should,” “will,” 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:
Previous wording
•the general level of interest rates;
Current wording
•the general level of interest rates including elevated U.S. Treasury yields, and their effect on our cost of capital, the terms on which we may refinance our indebtedness and the ability of potential buyers to finance acquisitions of our properties;
Previous wording
Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the U.S. 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, 2025.
Current wording
Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the U.S. federal securities laws, we disclaim any obligations or undertakings 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, 2025.
Previous wording
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, develop, 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 also sell assets as part of our capital allocation strategy. 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 stockholders and maintain our qualification as a REIT.
Current wording
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, develop, 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 also regularly evaluate and execute asset dispositions as an ongoing component of our capital allocation strategy. 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 stockholders and maintain our qualification as a REIT.
Previous wording
As of June 30, 2026, our consolidated portfolio consisted of 409 properties with approximately 49.9 million rentable square feet.
Current wording
As of September 30, 2026, our consolidated portfolio consisted of 384 properties with approximately 44.5 million rentable square feet.
Previous wording
•Net loss attributable to common stockholders was $419.0 million for the six months ended June 30, 2026, compared to net income attributable to common stockholders of $181.8 million for the prior-year period.
Current wording
•Net loss attributable to common stockholders was $404.4 million for the nine months ended September 30, 2026, compared to net income attributable to common stockholders of $268.9 million for the prior-year period.
Previous wording
•Recognized impairment charges of $631.6 million for the six months ended June 30, 2026, including $624.8 million recognized during the second quarter of 2026, primarily related to certain properties identified for potential disposition as part of our ongoing portfolio review.
Current wording
•Recognized impairment charges of $703.4 million for the nine months ended September 30, 2026, primarily related to properties sold or identified for potential disposition as part of our ongoing portfolio review.
Previous wording
•Core funds from operations (Core FFO)(1) attributable to common stockholders increased by 0.2% to $281.2 million for the six months ended June 30, 2026, compared to the prior-year period.
Current wording
•Core funds from operations (Core FFO)(1) attributable to common stockholders decreased by 2.0% to $413.9 million for the nine months ended September 30, 2026, compared to the prior-year period.
Previous wording
•Net operating income (NOI)(1) decreased by 2.0% to $372.2 million for the six months ended June 30, 2026, compared to the prior-year period.
Current wording
•Net operating income (NOI)(1) decreased by 3.1% to $551.0 million for the nine months ended September 30, 2026, compared to the prior-year period.
Previous wording
•Total portfolio occupancy at June 30, 2026 was 90.0%.
Current wording
•Total portfolio occupancy at September 30, 2026 was 91.3%.
Previous wording
•Same Property Portfolio(2) NOI increased by 0.3% to $328.5 million and Same Property Portfolio Cash NOI(1) increased by 0.6% to $306.0 million for the six months ended June 30, 2026, compared to the prior-year period.
Current wording
•Same Property Portfolio(2) NOI decreased by 0.1% to $436.3 million and Same Property Portfolio Cash NOI(1) increased by 0.9% to $407.2 million for the nine months ended September 30, 2026, compared to the prior-year period.
Previous wording
•Same Property Portfolio average occupancy for the six months ended June 30, 2026 was 96.0% and ending occupancy at June 30, 2026 was 95.1%.
Current wording
•Same Property Portfolio average occupancy for the nine months ended September 30, 2026 was 95.9% and ending occupancy at September 30, 2026 was 96.9%.
Previous wording
•Executed a total of 261 new and renewal leases with a combined 6.2 million rentable square feet, with leasing spreads of (7.7)% on a net effective basis and (14.0)% on a cash basis. Excluding one lease extension covering 1.1 million rentable square feet, leasing spreads were 1.7% on a net effective basis and (6.1)% on a cash basis.
Current wording
•Executed a total of 377 new and renewal leases with a combined 10.0 million rentable square feet, with leasing spreads of (3.2)% on a net effective basis and (10.7)% on a cash basis.
Previous wording
•During the first quarter of 2026, we sold five properties with a combined 314,693 rentable square feet for a total gross sale price of $127.4 million and recognized $26.3 million in gains on sale of real estate. Three of the properties had been previously impaired and were sold without a gain or loss.
Current wording
•During the first quarter of 2026, we sold five properties with a combined 314,693 rentable square feet for a total gross sale price of $127.4 million and recognized $26.3 million in gains on sale of real estate. Three of the properties had previously been impaired and were sold without a gain or loss.
Previous wording
•During the second quarter of 2026, we sold seven properties with a combined 571,708 rentable square feet for a total gross sale price of $137.9 million and recognized $21.9 million in gains on sale of real estate. Four of the properties had been previously impaired and were sold without a gain or loss.
Current wording
•During the second quarter of 2026, we sold seven properties with a combined 571,708 rentable square feet for a total gross sale price of $137.9 million and recognized $21.9 million in gains on sale of real estate. Four of the properties had previously been impaired and were sold without a gain or loss.
Previous wording
•During the second quarter of 2026, we stabilized our development projects located at 3211 Mission Oaks Boulevard and 19900 Plummer Street, which have a combined 196,391 rentable square feet. We also leased our 46,653 rentable square foot repositioning project located at 14955 Salt Lake Avenue which will stabilize in the third quarter of 2026 upon lease commencement.
Current wording
•During the second quarter of 2026, we stabilized our development projects located at 3211 Mission Oaks Boulevard and 19900 Plummer Street, which have a combined 196,391 rentable square feet.
Previous wording
The infill Southern California industrial real estate sector continues to exhibit favorable long-term supply-demand fundamentals. These high-barrier infill markets are characterized by a relative scarcity of highly functional product, coupled with the limited ability to introduce new supply over the long-term due to high land and development costs, increasing regulatory hurdles with restrictive development constraints and a dearth of developable land. That said, we expect some ongoing volatility within our markets through the near term, principally driven by general macroeconomic and political uncertainty including recent changes in trade and tariff policy, an uncertain interest rate environment, persistent inflation and global geopolitical unrest. According to third-party market data, market rent growth within our infill Southern California markets has decreased approximately 24% from the peak levels reached in mid-2023. This decline follows an average increase of approximately 80% during the pandemic years of 2020 through 2022. Based on the same third-party market data, overall market rents remain approximately 40% above pre-pandemic levels.
Current wording
The infill Southern California industrial real estate sector continues to exhibit favorable long-term supply-demand fundamentals. These high-barrier infill markets are characterized by a relative scarcity of highly functional product, coupled with the limited ability to introduce new supply over the long term due to high land and development costs, increasing regulatory hurdles with restrictive development constraints and a dearth of developable land. That said, we expect some ongoing volatility within our markets through the near term, principally driven by general macroeconomic and political uncertainty including recent changes in a higher interest rate environment, persistent inflation and global geopolitical unrest. According to third-party market data, market rent growth within our infill Southern California markets has decreased approximately 23% from the peak levels reached in mid-2023. This decline follows an average increase of approximately 80% during the pandemic years of 2020 through 2022. Based on the same third-party market data, overall market rents remain approximately 37% above pre-pandemic levels.
Previous wording
Leasing activity across our portfolio was healthy during the first half of 2026. In the second quarter, market vacancy decreased and net absorption was positive, however, performance across submarkets, size ranges and quality varies. We recognize that heightened macroeconomic and tariff uncertainty may continue to weigh on tenant decision-making and may influence tenant demand going forward.
Current wording
Leasing activity across our portfolio was healthy during the quarter. Market vacancy increased slightly and net absorption was positive. Performance across submarkets, size ranges and quality continues to vary. We recognize that heightened macroeconomic uncertainty, including a higher interest rate environment, may impact tenant demand going forward.
Previous wording
Tenant demand has been driven by a wide range of sectors, from consumer products, healthcare and medical products, advanced manufacturing, food and beverage, construction and logistics, e-commerce, among other sectors. Our portfolio, which we believe represents prime locations with superior functionality within the largest last-mile logistics distribution market in the nation, is well-positioned to continue to serve our diverse tenant base and attract tenant demand over the long-term.
Current wording
Tenant demand has been driven by a wide range of sectors, from consumer products, healthcare and medical products, advanced manufacturing, food and beverage, construction, distribution and logistics, and e-commerce, among other sectors. Our portfolio, which we believe represents prime locations with superior functionality within the largest last-mile logistics distribution market in the nation, is well-positioned to continue to serve our diverse tenant base and attract tenant demand over the long term.
Previous wording
We believe our portfolio’s leasing performance during the second quarter of 2026 has generally outpaced that of the infill markets within which we operate. We believe this performance has been driven by our business model focused on acquiring and improving industrial property in superior locations so that our portfolio reflects a higher level of quality and functionality, on average, as compared to typical available product within the markets within which we operate. We believe that our portfolio, comprised of smaller space sizes averaging 28,000 square feet located entirely within last-mile, infill Southern California locations is well positioned to serve regional consumption and may be less susceptible to changes in global trade flows as compared to large warehouses located within non-infill submarkets. We also believe the quality and approach demonstrated by our team of real estate professionals actively managing our properties and our tenants enables the potential to outcompete within our markets. Additionally, supply under construction is far below recent historical levels, and coupled with the increasingly restrictive regulatory environment, the near and long term opportunity to create value through repositioning existing assets is robust.
Current wording
We believe our portfolio’s leasing performance during the third quarter of 2026 has generally outpaced that of the infill markets within which we operate. We believe this performance has been driven by our business model focused on owning and improving industrial property in superior locations so that our portfolio reflects a higher level of quality and functionality, on average, as compared to typical available product within the markets within which we operate. We believe that our portfolio, comprised of smaller space sizes averaging 25,000 square feet located entirely within dense, last-mile, infill Southern California locations is well positioned to serve regional consumption and may be less susceptible to changes in global trade flows as compared to large warehouses located within non-infill submarkets. We also believe the quality and approach demonstrated by our team of real estate professionals actively managing our properties and our tenants enables the potential to outcompete within our markets. Additionally, supply under construction is far below recent historical levels, and coupled with the increasingly restrictive regulatory environment, the near and long term opportunity to create value through repositioning existing assets is favorable.
Previous wording
The following general market conditions have been sourced from third-party market data and do not necessarily reflect the results of our portfolio. For our portfolio specific results see “—Rental Revenues” and “—Results of Operations” below.
Current wording
The following general market conditions have been sourced from third-party market data and do not necessarily reflect the results of our portfolio. Certain third-party market statistics may not be directly comparable to those presented in prior periods due to changes in the composition of the underlying market data. For our portfolio specific results see “—Rental Revenues” and “—Results of Operations” below.
Previous wording
In Los Angeles County, vacancy decreased quarter-over-quarter to 5.0% and average asking lease rates declined quarter-over-quarter.
Current wording
In Los Angeles County, vacancy increased quarter-over-quarter to 5.0% and average asking lease rates increased quarter-over-quarter.
Previous wording
In Orange County, vacancy increased quarter-over-quarter to 5.5% and average asking lease rates declined quarter-over-quarter.
Current wording
In Orange County, vacancy was unchanged quarter-over-quarter at 5.5% and average asking lease rates increased quarter-over-quarter.
Previous wording
In the Inland Empire West, which contains infill markets in which we operate, vacancy decreased quarter-over-quarter to 5.9% and average taking lease rates decreased quarter-over-quarter. We generally do not focus on properties located within the non-infill Inland Empire East sub-market where there is excess land available for development.
Current wording
In the Inland Empire West, which contains infill markets in which we operate, vacancy was unchanged quarter-over-quarter at 5.9% and average taking lease rates decreased quarter-over-quarter. We generally do not focus on properties located within the non-infill Inland Empire East sub-market where there is excess land available for development.
Previous wording
In San Diego, vacancy decreased quarter-over-quarter to 6.6% and average asking lease rates declined quarter-over-quarter.
Current wording
In San Diego, vacancy increased quarter-over-quarter to 6.3% and average asking lease rates increased quarter-over-quarter.
Previous wording
In Ventura County, vacancy decreased quarter-over-quarter to 4.2% and average asking lease rates declined quarter-over-quarter.
Current wording
In Ventura County, vacancy increased quarter-over-quarter to 4.6% and average asking lease rates decreased quarter-over-quarter.
Previous wording
Consistent with the capital allocation strategy announced in November 2025 and following a comprehensive portfolio review completed during 2026, we currently anticipate approximately $1.5 billion to $2.0 billion of dispositions in 2026. Properties identified for potential disposition are generally those that we believe offer lower long-term risk-adjusted returns relative to alternative uses of capital. Our disposition strategy reflects our efforts to enhance portfolio quality, improve capital efficiency and reallocate capital toward opportunities that we believe offer the most attractive long-term risk-adjusted returns. We currently intend to use net proceeds from dispositions primarily to reduce outstanding indebtedness, fund value-add repositioning and development activity within our existing portfolio and repurchase shares of our common stock. We believe these actions will further align our portfolio and capital allocation with our longstanding focus on infill Southern California industrial real estate, a market that we believe continues to offer attractive long-term fundamentals.
Current wording
Consistent with the capital allocation strategy announced in November 2025 and our comprehensive portfolio review in 2026, during the nine months ended September 30, 2026, we completed approximately $1.5 billion of dispositions and currently anticipate total dispositions of approximately $1.7 billion to $2.0 billion for 2026. Our disposition strategy reflects our efforts to enhance portfolio quality and cash flow durability, improve capital efficiency and reallocate capital toward opportunities that we believe offer the most attractive long-term risk-adjusted returns and strengthen shareholder value. Properties identified for potential disposition are generally those that we believe do not meet our strategic objectives and offer lower long-term risk-adjusted returns relative to alternative uses of capital. We have used and intend to continue to use net proceeds from dispositions primarily to repay outstanding indebtedness, including our 2027 debt maturities, fund select value-add repositioning and development activity within our existing portfolio and repurchase shares of our common stock. We believe these actions will strengthen our balance sheet, reduce our near-term refinancing requirements, enhance financial flexibility and further align our portfolio and capital allocation with our longstanding focus on infill Southern California industrial real estate, a market that we believe continues to offer attractive long-term fundamentals.
Previous wording
The Company’s historical investment strategy targets industrial property investments demonstrating the potential for accretion in Core FFO and net asset value, both on a per share basis, over the near- to longer-term. These target investments may comprise acquiring leased, stabilized properties as well as properties with value-add opportunities to improve functionality and to deploy our value-driven asset management programs in order to increase cash flow and value. Acquisitions may comprise single property investments as well as the purchase of portfolios of properties. The Company’s geographic focus remains infill Southern California. However, from time-to-time, portfolios could be acquired comprising a critical mass of infill Southern California industrial property that could include some assets located in markets outside of infill Southern California. In general, to the extent non-infill-Southern California assets were to be acquired as part of a larger portfolio, the Company may underwrite such investments with the potential to dispose such assets over a certain period of time in order to maximize its core focus on infill Southern California. Similarly, while our focus is owning and operating industrial properties in Southern California infill markets, occasionally an acquisition may include non-industrial properties, such as office and other uses, with the intent to reposition or develop the properties into industrial use or to dispose of the non-industrial assets. In either case, we would endeavor to take appropriate steps to satisfy REIT safe harbor requirements and avoid prohibited transactions under REIT tax laws.
Current wording
External growth through acquisitions may comprise single property investments as well as the purchase of portfolios of properties. The Company’s geographic focus remains infill Southern California. However, from time-to-time, portfolios could be acquired comprising a critical mass of infill Southern California industrial property that could include some assets located in markets outside of infill Southern California. In general, to the extent non-infill Southern California assets were to be acquired as part of a larger portfolio, the Company may underwrite such investments with the potential to dispose such assets over a certain period of time in order to maximize its core focus on infill Southern California. Similarly, while our focus is owning and operating industrial properties in Southern California infill markets, occasionally an acquisition may include non-industrial properties, such as office and other uses, with the intent to reposition or develop the properties into industrial use or to dispose of the non-industrial assets. In either case, we would endeavor to take appropriate steps to satisfy REIT safe harbor requirements and avoid prohibited transactions under REIT tax laws. While we did not complete any acquisitions during the prior year or the nine months ended September 30, 2026, we continue to evaluate investment opportunities that meet our risk-adjusted return requirements, have the potential to be accretive to Core FFO and net asset value per share and satisfy our underwriting criteria that reflect current market conditions and our cost of capital.
Previous wording
Repositioning remains a central component of our value‑creation strategy, as we seek to modernize, reconfigure, and enhance existing properties to align with tenant demand and maximize risk‑adjusted returns. A repositioning can provide a range of property improvements. This may include a complete structural renovation of a property whereby we convert large underutilized spaces into a series of smaller and more functional spaces, or it may include the creation of additional square footage, the modernization of the property improvements, the elimination of functional obsolescence, the addition or enhancement of loading areas and truck access, the enhancement of fire-life-safety systems or other accretive improvements, in each case designed to improve the cash flow and value of the property.
Current wording
Repositioning is a central component of our value‑creation strategy, as we seek to modernize, reconfigure, and enhance existing properties to align with tenant demand and maximize risk‑adjusted returns. A repositioning can provide a range of property improvements. This may include a complete structural renovation of a property whereby we convert large underutilized spaces into a series of smaller and more functional spaces, or it may include the creation of additional square footage, the modernization of the property improvements, the elimination of functional obsolescence, the addition or enhancement of loading areas and truck access, the enhancement of fire-life-safety systems or other accretive improvements, in each case designed to improve the cash flow and value of the property. We continue to evaluate and execute repositioning and improvement initiatives within our existing portfolio that meet our risk-adjusted return requirements to enhance property functionality, marketability, future cash flow growth and long-term value creation.
Previous wording
We have a number of repositioning properties, which are individually presented in the tables below. A repositioning property that is considered significant is typically defined as a property where a significant amount of space is held vacant in order to implement capital improvements, the cost to complete repositioning work and lease-up is estimated to be greater than $2.5 million and the repositioning and lease-up time frame is estimated to be greater than six months. We also have a range of other spaces in repositioning, that due to their smaller size, relative scope, projected repositioning costs or relatively nominal amount of down-time, are not presented below, however, in the aggregate, may be substantial.
Current wording
We have a number of repositioning properties, which are individually presented in the tables below. A repositioning property that is considered significant is typically defined as a property where a significant amount of space is held vacant in order to implement capital improvements, the cost to complete repositioning work and lease-up is estimated to be greater than $2.5 million and the repositioning and lease-up time frame is estimated to be greater than six months. We also have a range of other spaces in repositioning, that due to their smaller size, relative scope, projected repositioning costs or relatively nominal amount of down-time, are not presented below, but that, in the aggregate, may be substantial. A repositioning is generally considered complete once the investment is fully or nearly fully deployed and the property is available for occupancy. Because each repositioning effort is unique and determined based on the property, targeted tenants and overall trends in the general market and specific submarket, the timing and effect of the repositioning on our rental revenue and occupancy levels will vary, and, as a result, will affect the comparison of our results of operations from period to period with limited predictability.
Previous wording
A development property is defined as a property where we plan to fully demolish an existing building(s) due to building obsolescence and/or construct a ground-up building on a property with excess or vacant land. Consistent with the capital allocation strategy announced in November 2025, we re-evaluated our near-term development pipeline at the end of 2025 to focus on opportunities that satisfy enhanced underwriting criteria. As part of this process, we evaluated alternatives including proceeding with development, postponing construction, or selling the site based on relative risk‑adjusted returns. Following this review, we determined not to proceed with six projects totaling approximately 850,000 square feet of planned development. During the first quarter of 2026, we sold three of these projects, and during the second quarter of 2026 we sold the other three projects.
Current wording
A development property is defined as a property where we plan to fully demolish an existing building(s) due to building obsolescence and/or construct a ground-up building on a property with excess or vacant land. Consistent with the capital allocation strategy announced in November 2025, we re-evaluated our near-term development pipeline at the end of 2025 to focus on opportunities that satisfy enhanced underwriting criteria and risk-adjusted return requirements. As part of this process, we evaluated alternatives including proceeding with development, postponing construction, or selling the site based on relative risk‑adjusted returns. Following this review, we determined not to proceed with six projects totaling approximately 850,000 square feet of planned development. During the first half of 2026, we sold all six of these projects.
Previous wording
As of June 30, 2026, six of our repositioning or development properties were under construction and 14 of our properties were in the lease-up stage. In addition, we have identified five properties as near-term potential future repositioning and development opportunities. The tables below set forth a summary of these properties, as well as the properties that were most recently stabilized in 2026 and 2025, as the timing of these stabilizations have a direct impact on our current and comparative results of operations. We consider a repositioning/development property to be stabilized upon the earlier of (i) reaching 90% occupancy or (ii) one year from the date construction work is completed.
Current wording
As of September 30, 2026, five of our repositioning or development properties were under construction and 12 of our properties were in the lease-up stage, including properties leased but not yet stabilized. In addition, we have identified four properties as near-term potential future repositioning and development opportunities. The tables below set forth a summary of these properties, as well as the properties that were most recently stabilized in 2026 and 2025, because the timing of these stabilizations has a direct impact on our current and comparative results of operations. We consider a repositioning/development property to be stabilized upon the earlier of (i) reaching 90% occupancy or (ii) one year from the date construction work is completed.
Previous wording
(4)Certain properties that have met our stabilization criteria, as defined in footnote (8), remain reflected in lease-up for presentation purposes because they have not yet achieved 90% occupancy. For presentation purposes, such properties are reclassified from lease-up to stabilized upon achieving 90% occupancy.
Current wording
(3)Certain properties that have met our stabilization criteria, as defined in footnote (6), remain reflected in lease-up for presentation purposes because they have not yet achieved 90% occupancy. For presentation purposes, such properties are reclassified from lease-up to stabilized upon achieving 90% occupancy.
Previous wording
(3)As of June 30, 2026, 3880 Voyager Street was 0% leased. Subsequent to quarter end, a 35,895 rentable square foot lease was executed, bringing the property to 53% leased. The lease is expected to commence in October 2026, subject to completion of construction.
Current wording
(5)During the third quarter of 2026, a 214,894 rentable square foot lease was executed at 950 West 190th Street, bringing the property to 100% leased. The lease is expected to commence in first quarter of 2028, subject to completion of construction.
Previous wording
(8)We consider a repositioning or development property to be stabilized upon the earlier of (i) reaching 90% occupancy or (ii) one year from the date construction work is completed.
Current wording
(6)We consider a repositioning or development property to be stabilized upon the earlier of (i) reaching 90% occupancy or (ii) one year from the date construction work is completed.
Previous wording
(9)As of June 30, 2026, the entire project includes 526,069 rentable square feet, comprised of: (i) 3211 Mission Oaks Boulevard, a newly constructed building totaling 116,852 rentable square feet, and (ii) 3233 Mission Oaks Boulevard, with 409,217 rentable square feet which were not redeveloped. Site improvements were completed across the entire project. The rentable square feet and property leased percentage apply only to 3211 Mission Oaks Boulevard.
Current wording
(7)The entire project includes 526,069 rentable square feet, comprised of: (i) 3211 Mission Oaks Boulevard, a newly constructed building totaling 116,852 rentable square feet, and (ii) 3233 Mission Oaks Boulevard, with 409,217 rentable square feet which were not redeveloped. Site improvements were completed across the entire project. The rentable square feet applies only to 3211 Mission Oaks Boulevard.
Previous wording
(11)Rancho Pacifica Building 5 is located at 2370-2398 Pacifica Place and comprises one building totaling 51,594 rentable square feet, out of six buildings at our Rancho Pacifica Park property, which has a total of 1,111,885 rentable square feet. We demolished the existing building and constructed a new building comprising approximately 76,553 rentable square feet in its place.
Current wording
(8)Rancho Pacifica Building 5 is located at 2370-2398 Pacifica Place and comprises one building totaling 51,594 rentable square feet, out of six buildings at our Rancho Pacifica Park property, which has a total of 1,111,885 rentable square feet. We demolished the existing building and constructed a new building comprising approximately 76,553 rentable square feet in its place.
Previous wording
Properties that are nonoperational as a result of repositioning or development activity may qualify for varying levels of interest, insurance and real estate tax capitalization during the development and construction period. An increase in our repositioning and development activities resulting from value-add acquisitions could cause an increase in the asset balances qualifying for interest, insurance and tax capitalization in future periods. We capitalized $13.4 million of interest expense and $4.3 million of insurance and real estate tax expenses during the six months ended June 30, 2026, respectively, related to our repositioning and development projects.
Current wording
Properties that are nonoperational as a result of repositioning or development activity may qualify for varying levels of interest, insurance and real estate tax capitalization during the development and construction period. An increase in our repositioning and development activities resulting from value-add acquisitions could cause an increase in the asset balances qualifying for interest, insurance and tax capitalization in future periods. We capitalized $19.7 million of interest expense and $6.9 million of insurance and real estate tax expenses during the nine months ended September 30, 2026, respectively, related to our repositioning and development projects.
Previous wording
Currently proposed trade and other political policies may lead to increased construction materials and labor costs, which when combined with longer lead times for governmental approvals and entitlements, have the potential to increase budgeted and actual construction costs and may cause delays in starting and completing certain development projects. Additional increases in costs, further delays or declining market rents could result in a lower expected yield on our development projects, which could negatively impact our future earnings.
Current wording
Currently proposed trade and other political policies, and construction activity levels in other product types may lead to increased construction materials and labor costs, which when combined with longer lead times for governmental approvals and entitlements, have the potential to increase budgeted and actual construction costs and may cause delays in starting and completing certain development projects. Additional increases in costs, further delays or declining market rents could result in a lower expected yield on our development projects, which could negatively impact our future earnings.
Previous wording
As of June 30, 2026, our consolidated portfolio, inclusive of space in repositioning as described in the subsequent paragraph, was approximately 90.0% occupied, while our stabilized consolidated portfolio exclusive of such space was approximately 94.8% occupied. Additionally, our improved land and industrial outdoor storage (IOS) sites, totaling approximately 8.3 million land square feet or 189.7 acres, were 92.8% occupied at June 30, 2026. We believe the opportunity to increase occupancy at our properties will continue to be an important driver of future revenue growth, particularly as repositioning and development projects are completed and move through the lease-up phase.
Current wording
As of September 30, 2026, our consolidated portfolio, inclusive of space in repositioning as described in the subsequent paragraph, was approximately 91.3% occupied, while our stabilized consolidated portfolio exclusive of such space was approximately 96.1% occupied. Additionally, our improved land and industrial outdoor storage (IOS) sites, totaling approximately 8.3 million land square feet or 189.7 acres, were 94.5% occupied at September 30, 2026. We believe the opportunity to increase occupancy at our properties will continue to be an important driver of future revenue growth, particularly as repositioning and development projects are completed and move through the lease-up phase.
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Previous report — wording carried elsewhere
A repositioning is generally considered complete once the investment is fully or nearly fully deployed and the property is available for occupancy. Because each repositioning effort is unique and determined based on the property, targeted tenants and overall trends in the general market and specific submarket, the timing and effect of the repositioning on our rental revenue and occupancy levels will vary, and, as a result, will affect the comparison of our results of operations from period to period with limited predictability.
Previous report — wording carried elsewhere
(6)As of June 30, 2026, 24935-24955 Avenue Kearny was 0% leased. Subsequent to quarter end, a 66,130 rentable square foot lease was executed, bringing the property to 100% leased. The lease is expected to commence in December 2026.