Rexford Industrial Realty, Inc. (REXR) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 20, 2023 1:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings! And welcome to Rexford Industrial Realty Inc., First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.

I would now like to turn the call over to David Lanzer, General Counsel. Thank you. You may begin.

David Lanzer

We thank you for joining Rexford Industrial’s first quarter 2023 earnings conference call. In addition to the press release distributed yesterday after market close, we posted a supplemental package and investor presentation in the Investor Relations section on our website at www.rexfordindustrial.com.

On today’s call, management’s remarks and answers to your questions may contain forward-looking statements as defined by Federal Securities Laws. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ. For more information about these risk factors, please review our 10-K and other SEC filings. Rexford Industrial assumes no obligation to update any forward-looking statements in the future.

In addition, certain financial information presented on this call represents non-GAAP financial measures. Our earnings release and supplemental package present GAAP reconciliation and an explanation of why such non-GAAP financial measures are useful to investors.

Today’s conference call is hosted by Rexford Industrial’s Co-Chief Executive Officers, Michael Frankel and Howard Schwimmer; together with Chief Financial Officer, Laura Clark. They will make some prepared remarks, and then we will open the call for your questions.

Now, I will turn the call over to Michael.

Michael Frankel

Thank you, David. I'd like to welcome everyone to Rexford Industrial’s first quarter 2023 earnings call. I will begin with a brief introduction. Howard will discuss our operations, followed by Laura, who will discuss our financial results and guidance.

Our strong first quarter results reflect our entrepreneurial approach to creating value and the strength of the infill Southern California Industrial Property Market. For the first quarter, Rexford increased earnings or FFO per share by 8%, enabled by a full 34% increase in core FFO, and we grew consolidated NOI by 33% compared to the prior year quarter, driven by strong and accretive internal and external growth.

We completed a robust 1.8 million square feet of lease activity during the quarter, achieving leasing spreads of 80% on a GAAP basis and 60% on a cash basis. Interestingly, if we exclude one legacy renewal on a lease with the County of Los Angeles, who exercise their 3% fixed option, our leasing spreads were 97% on a GAAP basis and 77% on a cash basis.