REXR-PC — Rexford Industrial Realty, Inc.

Summary of Rexford Industrial, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Core FFO per Share: Q4 2025 core FFO per share was $0.59, consistent with expectations. Full-year core FFO per share was $2.40, at the high end of initial guidance.
• Same-Property NOI: Same-property NOI growth was impacted by a decline in market rents, which fell 1% in Q4 and 20% since early 2023.
• Occupancy Rate: Total portfolio occupancy decreased to 90.2%, down 160 basis points sequentially, primarily due to repositioning and development activities.
• Share Buybacks: The company repurchased $100 million of shares in Q4 2025, totaling $250 million for the year.

2. Strategic Updates and Business Highlights

• Leasing Activity: Executed 3 million square feet of leasing in Q4, maintaining guidance expectations.
• Development Pipeline: Identified 6 projects (850,000 square feet) for disposal to focus on higher-yielding opportunities.
• Dispositions: Sold 7 properties in 2025 for $218 million and plans to target $400 million to $500 million in dispositions for 2026.
• Operational Efficiencies: G&A as a percentage of revenue targeted below peer average, with expectations set at 6% for 2026.

3. Forward Guidance and Outlook

• 2026 Core FFO per Share Guidance: Expected to be between $2.35 and $2.40, reflecting a mix of positive and negative factors.
• Occupancy Expectations: Average occupancy projected at approximately 95% for 2026, with potential declines due to repositioning efforts.
• Market Conditions: Anticipated continued pressure on market rents and occupancy, with a focus on maintaining cash flow through strategic leasing and capital allocation.

4. Bad News, Challenges, or Points of Concern

• Market Pressures: Tenant demand is affected by macroeconomic factors, leading to increased vacancy rates and negative net absorption.
• Bad Debt: Increased to 75 basis points of revenue, up from 0.25% in earlier quarters, attributed to tenant vacates and financial difficulties.
• Occupancy Decline: Notable drop in occupancy rates due to large tenants consolidating or facing financial challenges, impacting overall cash flow.
• Re-leasing Spreads: Expected to be negative due to the early renewal of the Tireco lease, which reset above-market rents to current levels.

5. Notable Q&A Insights

• Tireco Lease Renewal: The decision to renew the Tireco lease early was strategic to preserve occupancy and cash flow amid market softness, despite a 30% roll-down on rent.
• Market Stabilization: Management noted some signs of stabilization in select submarkets, but overall market conditions remain challenging, complicating predictions for rent recovery.
• Leasing Environment: Leasing activity has moderated, with occupancy declines attributed to longer downtime for properties under repositioning and development.
• Watch List for Bad Debt: Concentration in logistics-related tenants on the watch list, with specific business issues impacting their financial stability.

Overall, Rexford Industrial is navigating a challenging market landscape while implementing strategic initiatives aimed at enhancing cash flow and shareholder value. The company remains focused on optimizing its portfolio and addressing market pressures as it moves into 2026.