LOS ANGELES - Rexford Industrial Realty, Inc. (NYSE: REXR), a real estate investment trust (REIT) specializing in industrial properties in Southern California, has reported significant leasing and transaction activities for the second quarter to date. The company's leasing momentum reflects strong tenant demand within the infill Southern California market, considered the most supply-constrained in the nation.
The company has executed leases totaling 1.125 million square feet, comprising approximately 675,000 square feet of renewal leases and 450,000 square feet of new leases, with an average lease size of 16,000 square feet.
These figures indicate a 68% increase in comparable rental rates on a net effective basis and a 51% increase on a cash basis from prior rents, aligning with company expectations. Rexford Industrial also reported a slight uptick in its Same Property Portfolio occupancy to 96.5% as of May 22, 2024.
On the transaction front, Rexford Industrial has completed the purchase of two industrial properties for a combined $143 million and disposed of three properties for a total of $27 million. The acquisitions, which were funded through cash on hand and proceeds from 1031 exchanges, include a single-tenant industrial building in Fullerton, acquired for $94.3 million, and four Class-A industrial buildings in Irwindale, purchased for $48.5 million through an off-market transaction.
The properties sold include multi-tenant and single-tenant industrial buildings in Paramount and Los Angeles, with respective unlevered internal rates of return (IRR) to the company of 16.6%, 12.6%, and 9.6%.
Rexford Industrial's investment strategy focuses on creating value through the acquisition, operation, and redevelopment of industrial properties in prime infill locations. With a portfolio of 422 properties and approximately 49.5 million rentable square feet, the company caters to a diverse tenant base. The company's near-term acquisition pipeline includes approximately $40 million of new investments under contract or accepted offer.
This update comes in advance of upcoming investor meetings, and the information is based on a press release statement from Rexford Industrial Realty, Inc.
InvestingPro Insights
Rexford Industrial Realty, Inc. (REXR) has demonstrated a robust financial performance with notable metrics that underscore the company's growth and stability. InvestingPro Data reveals a healthy revenue growth of 22.02% over the last twelve months as of Q1 2024, reflecting the company's ability to capitalize on the demand for industrial properties in Southern California. Moreover, the company boasts a gross profit margin of 77.09%, indicating efficient cost management and a strong position within the industry.
Investors may also be encouraged by the company's consistent dividend increases, with Rexford raising its dividend for 11 consecutive years, a testament to its commitment to shareholder returns. Moreover, analysts remain optimistic about Rexford's future, predicting sales growth in the current year and anticipating the company to maintain profitability, as evidenced over the last twelve months.
While the company's P/E ratio stands at 39.75, suggesting a premium valuation, the high earnings multiple could be justified by its steady performance and strategic position in a supply-constrained market. Interested investors can find additional InvestingPro Tips on Rexford, which include insights on near-term earnings growth and liquidity concerns, by visiting https://www.investing.com/pro/REXR. For those considering a deeper dive into Rexford's financials and future prospects, using the coupon code PRONEWS24 will grant an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a total of 8 valuable InvestingPro Tips.
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