Rexford Industrial Realty, Inc.

Greetings. Welcome to Rexford Industrial Realty Incorporated fourth quarter and full year 2022 earnings 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. Please note this conference is being recorded. I will now turn the conference over to Eric Chang, Senior Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

We thank you for joining Rexford Industrial's fourth 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 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 reconciliations 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 the call over to Michael.

Thank you, Eric. I'd like to welcome everyone to Rexford Industrial's fourth quarter 2022 earnings call. I will begin with a brief introduction. Howard will discuss our investment activity, followed by Laura, who will discuss our financial results and guidance for 2023. Our strong results reflect our unique position as the nation's largest pure-play, U.S.-focused industrial REIT, driven by our entrepreneurial approach to creating value within infill Southern California. For the full year 2022, Rexford increased earnings, or FFO per share, by 20%, enabled by a full 45% increase in core FFO. This brings our average earnings per share growth over the prior three years to 22%, substantially exceeding the earnings growth of all other industrial REITs, which averaged 13%. We grew consolidated NOI by 40% compared to the prior year, driven by strong internal growth, lease-up of our value-add repositionings, and accretive external growth. We completed 5.1 million square feet of lease activity during the year, achieving leasing spreads of 81% on a gap basis and 59% on a cash basis. Our team closed on a record $2.4 billion of investments for the full year, 90% of which were acquired through off-market or lightly marketed transactions, thereby enabling substantially above-market projected return on investment. Although we face a higher level of potential economic uncertainty this year, we continue to see strong tenant demand. Our infill Southern California markets are operating at well above structural full occupancy of about 1% market vacancy and with the highest year-over-year market rent growth of any major industrial market in the nation. Infill Southern California continues to experience a virtually incurable supply-demand imbalance due to an extreme scarcity of land and development constraints that prevent any material increase in new supply. In stark contrast, many other major industrial markets are experiencing increased new supply reaching record levels. Looking forward, Rexford is exceptionally well positioned with embedded internal NOI growth of 43%, equal to an incremental $200 million of NOI contribution over the next 24 months, assuming no further acquisitions and assuming today's market rents without further growth. This includes $78 million of incremental embedded NOI driven by the mark-to-market on our leases and our contractual annual rent steps, plus $48 million of incremental NOI from repositioning and redevelopment projects stabilizing over the next two years, and $74 million of incremental NOI projected over the next 24 months from recent investments closed during the fourth quarter and year-to-date. We continue to operate with a low leverage balance sheet at about 15% net debt to total enterprise value. This achieves the dual outcomes associated with protecting our business during uncertain economic times, while also positioning the company to continue to capitalize upon highly accretive internal and external growth opportunities. Thanks to the hard work of the Rexford team, we are pleased to announce an increase in our first quarter dividend to $0.38 per share. which represents a 21% increase over the prior year. With this increase, our five-year dividend per share growth averages 19%, which ranks among the highest in the REIT industry. Above all else, we acknowledge that the primary determinant of our future success is the quality of our people and our deeply collaborative entrepreneurial team. We thank Team Rexford for your extraordinary work, creativity, and dedication that continue to differentiate our great business. And now it is my pleasure to hand the call over to Howard.