Rexford Industrial Realty, Inc.

Greetings and welcome to Rexford Industrial Realty Inc. Third Quarter 2023 Earnings Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce David Lanzer, General Counsel. Thank you. You may begin.

We thank you for joining Rexford Industrial's third 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 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. Additionally, certain financial information presented on this call represents non-GAAP financial measures. Our earnings release and supplemental package present GAAP reconciliations and explanations of why such non-GAAP financial measures are useful to investors. Today's conference call is hosted by Rexford Industrial's Co-Chief Executive Officer, Michael Franklin Howard Schlemmer, 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 turn the call over to Michael.

Thank you, David, and welcome everyone to Rexford Industrial's third quarter earnings call. I'll begin with a few remarks, followed by Howard, who will provide some additional market and operational color. Then Laura will provide more detail related to our performance and financial results. To begin with, I'd like to thank our Rexford team for delivering a strong quarter across all of our value creation initiatives. Compared to the prior year quarter, our team grew FFO by 33%, and grew FFO per share by 12%, driven by strong same property pool average occupancy of 97.8%, exceptional leasing spreads of 65% on a gap basis and 51% on a cash basis, as well as the substantial cash flow per share growth generated from our investments completed over the prior year. Tenant demand within our infill Southern California industrial markets continues to demonstrate resilience, with market occupancy hovering around 98%. roughly equating to the 2019 market occupancy levels immediately preceding the pandemic. As expected, we continue to see market rent growth normalizing from the unprecedented growth we experienced during the pandemic. With regard to our RexRoot portfolio, providing high quality and prime locations within our submarkets, we continue to experience healthy, diverse tenant demand as reflected in our strong operating metrics. Although general economic conditions remain uncertain, Rexford remains well positioned. The company is currently situated with an estimated 33% embedded cash NOI growth within our existing portfolio, realizable over the next two years, assuming today's rents. Our largest driver of NOI growth derives from our repositioning and redevelopment work, which we continue to grow as we mine our in-place portfolio for incremental value creation opportunities, and as we layer in new investments that are delivering strong levels of FFO per share accretion. Looking forward, as markets nationwide normalize towards their post-pandemic levels of equilibrium and supply, we believe Rexford's entrepreneurial asset management, repositioning, and value-add investing programs will enable the company to further differentiate our performance and FFO per share growth. We also believe, over the near term, that the favorable supply-demand dynamics associated with our infill Southern California industrial markets will continue to drive the strongest tenant demand fundamentals of any major market in the nation. Further supporting Rexford's favorable outlook, we remain focused on maintaining our investment-grade low-leverage balance sheet, ending the quarter at 16.7% net debt to total enterprise value, which provides the ability to both protect the company during uncertain times while also positioning Rexford to capitalize upon accretive investment opportunities as they may arise. With that, I'd like to acknowledge our Rexford team once again for your market-leading efforts that continue to differentiate Rexford's performance. And now it is my pleasure to hand the call over to Howard.