Rexford Industrial Realty, Inc.

My name is Lacey and I will be your conference operator today. At this time, I would like to welcome everyone to the Rexford Industrial Realty Inc. Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. Thank you. I will now hand the call over to Michaela Lynch, Director Relations and Capital Markets at Rexford Industrial. Michaela, please go ahead.

Thank you, and welcome to Rexford Industrial's third 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 GAAP 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 recognizing the Rexford team for their hard work and strong execution of our strategy. Third quarter results, which were ahead of expectations, are a testament to the strength of our business model and our focus on driving value. We executed 3.3 million square feet of leasing nearly double last quarter at healthy leasing spreads. Our performance demonstrates three broad themes that position Rexford to generate long-term value for our shareholders. One, our irreplaceable and high-quality infilled Southern California portfolio. Two, our ability to drive out performance through strategic asset management powered by our vertically integrated team. And three, our focus on accretive capital allocation. Starting with the performance of our portfolio and current market dynamics. Rexford's portfolio continues to outperform the broader infill market, and we are encouraged by improving tenant sentiment in the quarter. However, uncertainty around the overall macroeconomic environment and tariff policy remains, which could continue to impact tenant demand in an unpredictable manner. For the overall 1.8 billion square foot infill Southern California market, net absorption was nominally positive at 400,000 square feet in the quarter, according to CBRE. In comparison, net absorption in Rexford's portfolio was a positive 1.9 million square feet equal to 380 basis points of positive net absorption. This reflects the solid execution by our team and the superior quality and functionality of our assets relative to the overall market that is generally comprised of older vintage inferior properties. Strong new leasing activity and healthy retention levels throughout the portfolio drove same property ending occupancy to 96.8%, a 60 basis point increase compared to the prior quarter. Leasing spreads for comparable leases were 26% and 10% on a net effective and cash basis respectively, and in line with expectations. Additionally, bad debt levels are below historical averages at 30 basis points as a percentage of revenue year to date, underscoring the health and quality of our diverse tenant base. As it relates to market rents, RexWorks portfolio experienced a decline of 1% sequentially compared to the overall market decline of 2%. Notably, this quarter marks an improvement with respect to sequential rent change compared to recent quarters within the RexWorks portfolio as well as the overall infill Southern California market. While we cannot predict when market rents will reach an inflection point, the underlying supply-demand dynamics in our market remain strong, with supply growth severely limited by scarce developable land and highly restrictive development regulations. These supply constraints, combined with demand from the nation's largest regional zone of population and consumption, and key growth sectors, including aerospace, defense, manufacturing, consumer products, and construction, to name a few, will continue to support favorable long-term industrial fundamentals. Turning to our strategic approach to asset management that drives outperformance and value creation. Our vertically integrated teams on the ground presence and expertise enables us to proactively identify opportunities to capture tenant demand and drive occupancy. Through strategic asset management, we continually evaluate each property to determine the optimal value creation strategy, whether that be repositioning or redevelopment, leasing as is, or disposing of an asset that strengthens and de-risks our future cash flows and capital requirements. For example, during the quarter, our team procured tenants and executed leases at two properties in the San Gabriel Valley, totaling 556,000 square feet. These properties had been previously slated for near-term repositioning and redevelopment. We also opportunistically disposed of a 76,000 square foot property in the San Gabriel Valley, which would have otherwise been a near-term redevelopment. unlocking an accretive capital recycling opportunity at an implied exit cap rate of 3.7%. The execution of our strategy on these assets afforded us the flexibility to generate near-term NOI, avoid additional capital investment and downtime, while capitalizing on an accretive disposition. Turning now to our capital allocation priorities, we continue to focus on allocating capital to drive the highest risk-adjusted returns. while remaining cognizant of market conditions. We are pleased with our progress on repositions and redevelopments, which continue to yield double digit incremental returns. In the quarter, we executed 845,000 square feet of repositioning and redevelopment leases, bringing total year to date lease up of our repositioning and redevelopments to 1.5 million square feet, representing $27 million of annualized incremental NOI. Regarding dispositions, we sold three properties totaling $54 million in the quarter, bringing year-to-date dispositions to $188 million at a weighted average exit cap rate of 4.2%, with proceeds being redeployed into accretive share repurchases. We currently have $160 million of dispositions under contract or accepted offer. We have not closed any acquisitions year-to-date and have none under contract or accepted offer. In summary, we're pleased with our performance in the quarter and are encouraged by improved leasing activity across our portfolio. We remain focused on strengthening our cash flow, accretive allocation of capital, and expanding our operating leverage while maintaining a low-levered, flexible balance sheet. We appreciate your continued support, and now I'll turn the call over to Fitz.