Rexford Industrial Realty, Inc.

Good morning and welcome to Rexford Industrial's second quarter 2025 earnings call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at this time, you will need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Michaela Lynch, Director of Investor Relations and Capital Markets. Please go ahead.

Thank you and welcome to Rexford Industrial's second quarter 2025 earnings conference call. In addition to yesterday's earnings release, we posted a supplemental package and earnings presentation in the investor relations section on our website to support today's remarks. As a reminder, Management's remarks and responses to your questions may contain forward-looking statements, as defined by federal securities laws, which are based on certain assumptions and subject to risks and uncertainties outlined in our 10-K and other SEC filings. As such, actual results may differ, and we assume no obligation to update any forward-looking statements in the future. We'll also discuss non-GAAP financial measures on today's call. Our earnings presentation and supplemental package provide gap reconciliations, as well as an explanation of why these measures are useful to investors. Joining me today are our Chief Operating Officer, Laura Clark, and Chief Financial Officer, Mike Fitzmaurice. Our co-CEOs, Michael Frankel and Howard Schwimmer, will join us for the Q&A session following prepared remarks. It's my pleasure to now introduce Laura Clark. Laura?

Thank you, Michaela, and thank you all for joining us today. I'd like to start by thanking our Rexford team for your exceptional work and for delivering strong second quarter results in line with our expectations. In the quarter, we executed 1.7 million square feet of leases, including lease up of four repositioning and redevelopment projects. Net effective and cash leasing spreads for comparable leases were in line with expectations at 21% and 8% respectively. Embedded rent steps in our executed leases averaged 3.7%, up 10 basis points from last quarter. Healthy tenant retention and new leasing activity drove increased same property occupancy and positive net absorption in the quarter. We ended the quarter with same property occupancy at 96.1%, an increase of 40 basis points sequentially, and net absorption was a positive 220,000 square feet. Additionally, the strength of our tenant base and the critical nature of our infill locations was reflected in de minimis levels of bad debt in the quarter at only six basis points of revenue. In regard to the current market environment, while leasing activity remains steady and tenant health continues to be solid, macroeconomic and tariff uncertainty are still impacting some tenant decision making. This is putting some pressure on overall demand, impacting rent levels and lease-up timeframes. In the quarter, market rents across Rexford's portfolio declined approximately 3.5% sequentially and 12.8% year-over-year. Despite these market dynamics, our portfolio continues to exhibit relative strength when compared to the broader markets. The standout quality of our portfolio and the operational excellence of our team is positioning us to capture incremental demand in the near and long term. By way of example, we continue to execute on the lease up of repositioning and redevelopment projects, unlocking significant embedded growth. In the quarter and subsequent to quarter end, we executed 520,000 square feet of leases out of repositioning and redevelopment projects, which includes Turnbull Canyon Road in the San Gabriel Valley, Balboa Avenue in San Diego, and Coronado Street in North Orange County. This brings total year-to-date repositioning and redevelopment lease-up activity to over 900,000 square feet, representing over $16 million of annualized NOI. Year-to-date, we have stabilized seven repositioning and redevelopment projects, achieving a 7.4% unleveraged stabilized yield on total investment. In addition, further demonstrating the demand for our highly functional and superior quality portfolio, we currently have leasing activity on approximately 80% of our vacant spaces. This is consistent with prior quarter and up significantly when compared to a year ago when activity on our vacant spaces was about 60%. In regard to transaction activity, we sold two properties totaling $82 million bringing year-to-date dispositions to $134 million at a weighted average cap rate in the low 4% range, achieving an unlevered IRR of 11.9%. Looking forward, we have approximately $54 million of dispositions under contract or accepted offer, which are subject to customary closing conditions. Separately, While we have no acquisitions under contract or accepted offer today, we are actively pursuing a range of potential near-term opportunities to accretively recycle disposition proceeds. In closing, over the long term, we remain confident that our irreplaceable infill Southern California portfolio will continue to benefit from persistent and growing supply constraints, coupled with demand from the nation's largest regional zone of consumption, and 11th largest economy in the world. These superior long-term fundamentals are the foundation of our value creation business model that drives shareholder value. And with that, I'll turn the call over to Fitz.