Rexford Industrial Realty, Inc.

Greetings, and welcome to the Rexford Industrial Realty, Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Eric Chang, Senior Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

We thank you for joining Rexford Industrial's third quarter 2022 earnings conference call. In addition to the press release distributed yesterday after market closed, we posted a supplemental package and investor presentation in the investor relations section on our website at rexfordindustrial.com. On today's call, management's remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. For more information about these risk factors, we encourage you to review our 10-K and other SEC filings. Rexford Industrial assumes no obligation to update any forward-looking statements in the future. In addition, CERN financial information presented on this call represents non-GAAP financial measures. Our earnings release and supplemental package present GAAP reconciliation and an explanation on 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. We will make some prepared remarks, and then we will open the call for your questions. Now I turn over the call to Michael.

Thank you, Eric. and thank you all for joining our Rexford Industrial third quarter 2022 earnings call. We hope you're well. Following my remarks, Howard will discuss our transaction activity, and then Laura will provide an update on our financial performance and guidance. I'd like to begin by acknowledging the Rexford team. From an operational perspective, our team contributed towards enabling one of our strongest quarterly and year-to-date performances on record. Compared to the prior year quarter, we grew core FFO by 45% and increased FFO per share by 16%. Year-to-date, we increased core FFO by 52% and grew FFO per share by over 23%, continuing a sustained level of sector-leading performance. Our infill Southern California industrial markets continue to demonstrate strong fundamentals with historically high market occupancy at 99%. The ongoing supply-demand imbalance within our infill markets is expected to persist into the foreseeable future due to a dearth of developable land and diminishing supply over time. The extraordinary pace of market rent growth moderated during the third quarter but remains strong and well above historical levels. Our portfolio continues to operate at or near full occupancy, and our leasing metrics demonstrate a robust landlord's market. Our team drove extraordinary leasing spreads of 89% on a gap basis and 63% on a cash basis, reflecting acceleration over the prior quarter. Leasing volume also accelerated to 1.7 million square feet of activity for the quarter. Our contractual annual rent increases for leases executed during the quarter increased to 4.4% on average. Irrespective of our team's extraordinary results, Today's broader economic indicators and geopolitics underscore the importance of our thoughtful approach to operations and investment. Looking forward, Rexford remains well-positioned to continue to deliver substantial NOI growth. We project embedded incremental cash NOI growth of 40% equal to $170 million within our in-place portfolio over the next 24 months based on today's market rents and assuming no further acquisitions. $77 million of this embedded incremental NOI growth derives from rolling expiring leases to higher market rents and through our contractual annual rent steps. $47 million of projected incremental NOI comes from acquisitions closed since the beginning of the third quarter, and an additional $46 million of incremental embedded NOI growth derives from our redevelopment and repositioning projects over the next two years. With regard to external growth, Rexford remains well positioned with our low leverage fortress-like balance sheet that enables us to opportunistically capitalize upon accretive investment opportunities that may result from market shifts or uncertainty. Our strong position also emanates from our exclusive focus on an infill Southern California tenant base. Our infill locations have proven through cycles to be critical to the operations of our tenants across an exceptionally diverse array of industries serving a regional economy that ranks as one of the largest in the world. Our tenants are also operating within an infill market with exceedingly scarce available space. These factors contribute to what we believe to be the strongest, most stable, and most dynamic industrial tenant base in the nation. Finally, the extraordinary quality of our entrepreneurial Rexford team represents our greatest differentiator, executing together on a unique business model driven by value creation within infill Southern California, the nation's highest barrier, lowest vacancy, and most highly sought-after industrial market. Tremendous thanks to the entire Rexford team for your continued passion and pursuit of excellence. And with that, I'm happy to turn the call over to Howard.