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DATE

Friday, Oct. 23, 2026

CALL PARTICIPANTS

  • Senior Vice President, Investor Relations and Capital Markets - Doug Bettisworth
  • Chief Executive Officer - Laura Elizabeth Clark
  • Chief Operating Officer - John Nahas
  • Executive Vice President and Chief Financial Officer - Michael Fitzmaurice

TAKEAWAYS

  • Core FFO per Diluted Share -- $0.60, reflecting lower general and administrative expenses and capital recycling benefits offset by lower same property performance.
  • Net Income per Diluted Share -- $0.07, driven by $71.8 million in non-cash impairment charges related to shortened holding periods for assets targeted for disposition.
  • Same Property Occupancy -- 96.9%, representing a 200 basis point sequential increase driven by 3.7 million square feet of quarterly leasing activity.
  • Total Leasing Volume -- 3.7 million square feet, marking the second highest quarterly volume in the history of the company.
  • Portfolio Realignment Sale -- $1.2 billion, representing the disposition of a 22-property portfolio totaling 5.2 million square feet.
  • Year-to-Date Dispositions -- $1.5 billion, reflecting significant progress toward the $2 billion portfolio realignment objective.
  • Full Year Core FFO Guidance -- $2.41 to $2.44 per diluted share, representing a $0.02 increase at the midpoint due to higher leasing activity and lower assumed bad debt.
  • Full Year Same Property Occupancy Guidance -- 95.8% to 96.0%, representing a 40 basis point increase at the midpoint.
  • Cash Same Property NOI Growth Guidance -- 0.25% to 0.75%, representing a 75 basis point increase at the midpoint.
  • Debt Repayment -- $485 million, including $425 million of 2027 maturities to eliminate the requirement for refinancing at current interest rates.
  • Net Debt to Adjusted EBITDAre -- 3.8 times, down from 4.5 times as of June 30, 2026.
  • Stock Repurchases -- 10.9 million shares for $408.7 million, executed at a weighted average price of $37.59 per share.
  • Liquidity -- $1.7 billion, comprised of cash on hand and available capacity under the unsecured revolving credit facility.
  • Cash Re-leasing Spreads -- negative 3.0%, reflecting the impact of renewing leases that were originally signed at market peaks.
  • Repositioning and Development Leasing -- 599,369 square feet, which is expected to generate $14 million in annualized cash NOI.
  • General and Administrative Expenses -- 30% year-over-year reduction, driven by efforts to improve operational efficiency.
  • Total Portfolio Occupancy -- 91.3%, reflecting the impact of properties currently held in the repositioning and development pipeline.
  • Remaining Disposition Guidance -- $500 million, with the majority expected to be under contract or closed by the end of the year.
  • Market Rent Growth -- marginal increase in the third quarter, representing the first quarterly increase for the market since 2023.
  • Annual Contractual Rent Increases -- 3.5%, maintained on new lease signings to drive embedded portfolio growth.

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RISKS

  • Fitzmaurice stated, "Over the next couple years, we do expect cash re-leasing spreads to average in the negative low to mid teens area," due to the upcoming expiration of leases signed at market peaks in 2022 and 2023.
  • Clark noted that "recent increases in treasury rates are impacting the cost of capital for certain buyers," which has introduced more selectivity to the transaction market.

SUMMARY

Rexford Industrial Realty, Inc. (REXR +6.70%) management reported on a quarter focused on portfolio realignment and capital redeployment to drive long-term per-share value. The company executed the largest disposition in its history, a $1.2 billion portfolio sale, while simultaneously reducing leverage and repurchasing common stock. Management stated that Southern California infill industrial fundamentals showed signs of stabilization, including positive net absorption and the first quarterly market rent increase since 2023. Operational priorities shifted toward maximizing occupancy and the capture of tenant demand, particularly for Class A and functional Class B space.

  • CEO Clark stated, "The market recorded its second consecutive quarter of positive net absorption, driven by rising tenant demand."
  • CFO Fitzmaurice indicated the company repaid $425 million of $1 billion in 2027 maturities to avoid refinancing at current interest rates.
  • COO Nahas reported that approximately 87% of expiring space was renewed or backfilled during the third quarter.
  • Management noted that the $1.2 billion portfolio sale achieved an estimated 2027 cash NOI yield of approximately 5.5%.
  • Management indicated that approximately $500 million in dispositions remain under the current realignment initiative.

INDUSTRY GLOSSARY

  • Basis Points: A unit of measure for interest rates and other percentages in finance, where 100 basis points equals 1 percentage point.
  • Cash NOI: A non-GAAP measure that adjusts NOI for straight-line rent and amortization of lease intangibles to reflect actual cash received.
  • Core FFO: A non-GAAP financial measure that adjusts Funds From Operations for non-comparable items to provide a more consistent comparison of operating performance.
  • Net Debt to Adjusted EBITDAre: A leverage ratio that compares a company's net debt to its earnings before interest, taxes, depreciation, and amortization for real estate.
  • Net Effective Rent: The average rent over a lease term, including the impact of rent-free periods and other concessions.
  • NOI: Net Operating Income, calculated as rental income from real estate operations less property expenses.
  • Repositioning: The process of holding properties vacant to implement capital improvements that enhance functionality, cash flow, and value.

Full Conference Call Transcript

Operator: Good morning. My name is Holly 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 26 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers 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 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I will now hand the call over to Doug Bettisworth, senior vice president, investor relations and capital markets at Rexford Industrial. Doug, please go ahead.

Doug Bettisworth: Thank you, and welcome to Rexford Industrial's Third Quarter 26 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 the federal securities laws. Which are based on certain assumptions and subject to risks and uncertainties outlined on 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 will also discuss non GAAP financial measures on today's call.

Earnings presentation and supplemental package provided GAAP reconciliations as well as an explanation of why these measures are useful to investors. Joining me today are Rexford's CEO, Laura Elizabeth Clark together with our COO, John Nahas and our CFO, Mike Fitzmorris. it is my pleasure to now introduce Laura Elizabeth Clark.

Laura Elizabeth Clark: Thank you, Doug, and thank you all for joining us today. The Rexford team delivered another quarter of strong execution. Leasing accelerated, occupancy increased meaningfully, We took a transformative step in our portfolio realignment and we redeployed capital with discipline. Together, these actions strengthen Rexford, fortified our balance sheet, and drove our third consecutive increase in core FFO per share guidance. That strong execution is being reinforced by continued improvement in fundamentals across the infill Southern California industrial market, The market recorded its second consecutive quarter of positive net absorption, driven by rising tenant demand. Market rents also showed early signs of stabilization. Posting marginal growth during the quarter and marking the first quarterly increase since 2023.

We recognize that recoveries are rarely linear, but the direction of the market is encouraging, and we are seeing that improvement translate directly into our business. During the quarter, we executed more than 3.7 million square feet of leasing. Our second highest quarter of leasing ever. Leasing momentum was broad based. Including 600 thousand square feet of repositioning development leasing in the third quarter alone. Which will generate meaningful cash flow growth as these leases commence. Same property occupancy increased by 200 basis points sequentially. As Rexford continues to outpace the broader market. That outperformance reflects the quality, functionality, and competitive positioning of our infill product. Amplified by the expertise of our vertically integrated team.

The strength of the leasing activity we are seeing today reflects the compelling fundamentals that underpin the Southern California industrial market. With more than 20 million consumers and an economy ranked as the 11th largest in the world, the region combines a diverse demand base with irreplaceable infrastructure. In addition, new supply remains near multi decade lows. While increasing restrictive regulatory requirements further limit future development. We believe the depth and durability of demand combined with substantial structural supply constraints create a powerful foundation for long term growth. Against this backdrop, we are concentrating our portfolio on the assets best positioned to capitalize on these dynamics and deliver durable growth over time.

This quarter, we advanced our $2 billion portfolio realignment initiative with a $1.2 billion portfolio sale. The largest transaction in Rexford's history. We executed with conviction and speed, completing a competitive process that generated strong buyer interest and attractive pricing. Including this transaction, we have completed $1.5 billion of dispositions year to date representing substantial progress towards our portfolio realignment objective. We have acted decisively to capitalize on a unique window to realign our portfolio prioritizing assets we believe offer the strongest long term growth and shareholder value creation. While expanding our financial flexibility and capacity to act. Looking ahead, we have $500 million of dispositions remaining under our portfolio realignment initiative.

With the majority expected to be under contract or complete by year end. We continue to see buyer demand across our markets supported by the depth of private capital seeking exposure to Southern California. While recent increases in treasury rates are impacting the cost of capital for certain buyers, and bringing more selectivity to the transaction market, engagement around the remaining disposition assets remains constructive. We will continue to evaluate each sale based on the underlying risk profile and forward return potential as well as the relative value of the planned use of proceeds. I also want to highlight the significant progress we have made in driving greater operational rigor across the business.

We have been deliberate in prioritizing occupancy and leasing as well as improving efficiency across our cost structure. The results are tangible. Strong leasing activity alongside a 30% year-over-year reduction in G&A. We will continue to apply that focus across the business as we pursue additional efficiencies. In summary, this year has been defined by execution, and decisive action. We set clear priorities, and we are delivering on our commitments. Today, Rexford is stronger and more focused with significantly greater financial flexibility than we had at the beginning of the year. The same rigor we have brought to our operations, portfolio, and capital allocation will continue to guide our decisions as we move forward.

With 1 objective, driving long term per share value creation for our shareholders. Finally, I want to thank the entire Rexford team. Completing the largest transaction in our company's history, while continuing to deliver strong operating performance reflects the extraordinary commitment and talent of this team. I am energized by the focus and dedication they bring every day. Thank you, Laura.

John Nahas: Good morning, everyone. During the third quarter, we executed 3.7 million square feet of lease transactions across our portfolio. Reflecting our continued focus on driving occupancy and capturing demand across our infill markets. Supported by strong underlying tenant health and better than expected leasing execution approximately 87% of expiring space was either renewed or backfilled. Driving a 200 basis point increase in same property occupancy quarter over quarter. Turning to the broader market, we also saw encouraging signs that fundamentals are continuing to improve. While the recovery remains disproportionate across submarkets, size ranges, and product types, the third quarter represented another step in the right direction.

With overall positive net absorption and improving leasing activity extending into areas that had previously been slower to build momentum. Orange County is a good example. The submarket returned to positive net absorption during the quarter. Supported by growing demand for Class A space, driven in part by increased activity from corporate users. We are seeing that trend play out in Mid-Counties and San Gabriel Valley as well, with functional Class B product continuing to lease well and demand for Class A product gaining traction. In the South Bay, activity was driven by logistics. Alongside continued demand from advanced manufacturing and aerospace users seeking higher quality space with critical infrastructure.

Logistics also led activity in the IE West, most notably in spaces between 100 thousand to 250 thousand square feet. In the San Fernando Valley, activity remained healthy for functional Class B product, particularly in spaces under 100 thousand square feet with more limited demand for Class A space. While demand drivers vary across industries and user types, and many tenants remain focused on rationalizing their space needs, demand is increasingly gravitating toward highly functional infill space which aligns well with the type of product that defines the Rexford portfolio. We saw that reflected in our repositioning and development projects.

Where we executed approximately 600 thousand square feet of leases during the quarter that will contribute more than $14 million of annualized NOI once commenced. Our value creation platform remains a key differentiator for Rexford. Through repositioning, we deliver upgraded power and fire suppression systems, efficient loading, and upscaled offices that strike an effective balance between must have functionality and price. While our newly developed product offers best in class design features that maximize operating efficiencies and deliver the high quality environment that resonates with Class A tenants. Turning to capital allocation, During the quarter, we completed $1.3 billion of dispositions. Including the $1.2 billion sale of a 5.2 million square foot portfolio.

These 22 properties embodied many of the nonstrategic characteristics we identified through the asset level review conducted as part of our portfolio realignment. Including greater exposure to competitive supply and more limited growth potential. At closing, the portfolio had a weighted average remaining lease term of 2.7 years and in place rents nearly 30% above market. Resulting in an estimated 27 cash NOI yield of approximately 5.5%. Beyond the portfolio transaction, we completed 3 additional dispositions during the quarter all to owner users generating premium pricing. To close, our team remains intently focused on market cues, and we are making disciplined and strategic decisions to drive performance across the business.

We have more work to do, and I am proud of the Rexford team, what we are accomplishing and how we are doing it. Our results and the strengthening fundamentals we see in the infill Southern California market, reinforce our confidence in the competitive position of the portfolio and the long term opportunity ahead. I will now turn the call over to Fitz.

Michael Fitzmaurice: Thanks, John, and good morning, everyone. This was a defining quarter for capital allocation. We used proceeds from our portfolio realignment to both reduce debt and buy back stock. On the debt side, leverage came down 3 quarters of a turn to 3.8 times and we have already repaid $425 million of our $1 billion of 2027 maturities. With plans to pay off the rest without refinancing at today's rates. At the same time, we bought back $79 million of stock this year, at prices well below what we believe Rexford is worth. Together, these actions leave us a stronger company than we were just 90 days ago. With less leverage, more flexibility, and a higher outlook for the year.

Let me walk you through how we got there. It starts with the portfolio realignment. It has improved both the quality of our cash flows and our long term setup. By completing 1.5 billion of dispositions year to date, we removed headwinds to our growth and reduced our future capital needs. The timing of the transaction also mattered. These sales closed ahead of the recent rise in treasury rates and are funding the payoff of our 2027 maturities. We have already repaid $425 million and expect to repay the remaining $575 million at maturity in March.

Eliminating the need to refinance $1 billion of debt at today's rates roughly 6.25%, And after March, our next meaningful debt maturity is not until June 2028. We also remain opportunistic on share buybacks. During and after the third quarter, we bought back $49 million of stock. that is an implied yield in the mid-6% range on a portfolio we believe is worth well more than where our stock trades. That compares favorably with the roughly 5.5% yield on the assets we sold. Step back and the scale becomes clear. Since the second quarter of last year, we bought back nearly $1 billion of stock, about 10% of our shares outstanding. And we have done so while reducing leverage.

These buybacks are accretive to both core FFO and NAV per share. A lasting benefit to our shareholders. We ended the quarter with $1.7 billion of liquidity and remain on track to reach approximately 3.5 times net debt to EBITDA by year end. that is a balance sheet built for opportunity. With that context, let me turn to the quarterly results. Core FFO was $0.60 per share, consistent with the third quarter of last year. The favorable impact of capital recycling activities and lower G&A expense was offset by lower same property NOI and lower interest income.

Compared with last quarter, core FFO per share declined $0.03 The decline primarily reflects timing of redeploying proceeds from our portfolio realignment partially offset by lower interest expense and the accretion from share buybacks. Now to guidance. Where the momentum continues. We are raising the midpoint of our full year core FFO per share guidance by $0.02 to a range of $2.41 to $2.44 driven by better than expected leasing activity and lower full year bad debt that we previously assumed. Those same drivers are behind the 75 basis point increase in our same property NOI growth outlook at the midpoint on both a net effective and cash basis.

We are also raising our average same property occupancy outlook by 40 basis points at the midpoint to 95.9%. Before we turn to questions, here's the 1 thing we want you to walk away with. Every capital allocation decision we made this year was measured against 1 test. Does it create shareholder value on a per share basis? Selling assets with limited long term growth potential retiring debt rather than refinancing it at higher rates, and buying back stock below what we believe Rexford is worth all pass that test. Together, those actions have lowered our leverage, increased our financial flexibility and give us the capacity to act as opportunities emerge.

That discipline guides every decision we make and it is why we are so confident in where Rexford is headed. Finally, I wanna thank everyone here at Rexford. This quarter is what 1 team with 1 goal looks like. I see it. And I am grateful to work alongside every 1 of you. And with that, I will turn the call back to the operator and open the line for questions.

Operator: At this time, I would like to remind everyone in order to ask a question, press *, then the number 1 on your telephone keypad. I will now hand the call back to Doug Bettisworth to begin the question-and-answer session. Thanks. First question comes from Blaine Heck. From Wells Fargo. Blaine, please go ahead.

Blaine Heck: Great. Thanks. Good thanks to everyone. Can you just talk about how we should think about the trend in rent spreads over the next couple of years? Will it be a linear gradual decline in recovery? Or is it likely to be somewhat lumpy based on mix? How should we think about the timing of the trough given where you are in the cycle right now and the recovery you are seeing? And then maybe, you know, talk about what sort of market rent growth assumptions might be baked into your outlook?

Michael Fitzmaurice: Sure. Good morning, Blaine. This is Fitz. Look. We continue to be very clear eyed and direct. On our expectations for releasing spreads over the next couple of years as we work through leases. That were signed at the peak in 2022 and 2023. So over the next couple years, we do expect cash re-leasing spreads to average in the negative low to mid teens area. That is about a 200 basis point improvement, though, better than if we had not sold our noncore assets. that is roughly about 1.5 million of NOI per 30 basis points added to our same property NOI growth profile over those few years.

You know, our expectations are tied to assumption that the market rent is flat throughout the next couple of years, so there could be some upside if rents accelerate.

Operator: Our next question comes from Craig Mailman from Citi. Craig, please go ahead.

Craig Mailman: Hey, good morning, everyone. Laura, appreciate the comments. And clearly, LA here is seeing some early signs of improvement. I am just kind of curious as I think you characterized it could be a little bit of an uneven recovery here, but you guys are you know, positioning yourself with asset sales and getting leverage down. How should we think about the posture in 27 to 28 from a strategic standpoint, Now that, you know, you are getting a little bit of a market improvement, you have repositioned the portfolio, at least got a big chunk of what you want to get sold, and the balance sheet's in good shape.

Like, how should we think about the next step in the evolution of your of your tenure?

Laura Elizabeth Clark: Hey, Craig. Thanks so much for joining us today. You know, our focus is at this point in time, is going to be to continue execution of the strategic priorities that we have in front of us. Since we laid out those priorities in November, we have executed swiftly and decisively. And what you have seen and will continue to see is that we will not sit idle. We are gonna control what we can control, and we believe that is gonna improve our growth prospects as the market continues to inflect. So we are focusing on the completion of our portfolio realignment. It is truly transforming this company.

We are gonna allocate that capital to the highest risk-adjusted returns as we move forward. We are gonna execute on the high yielding internal repositionings and developments that we have within our portfolio. We are gonna continue to prior. prioritize occupancy, as that is going to drive leasing execution and revenue. And lastly, we are gonna continue to optimize the efficiencies across the operations as we have been doing. We look forward to providing an outlook on our focus areas around 2027 and beyond when we report earnings next quarter.

Operator: Our next question comes from Samir Khanal from BofA. Samir, please go ahead.

Samir Khanal: Thank you, and good morning, everybody. I guess my just maybe expanding kind of on the first question there. I wanted to ask about sort of the building blocks of same store into next year, right, especially after this let's call it, $2 billion portfolio realignment. You know, the puts and takes on that, You talked about the rent roll downs, but you are also generating embedded rent bumps right, and kind of that 3.5%. So walk us through kind of the building blocks as to kind the focus I think for investors have turned into kind of next year and how to think about same store? Thanks.

Michael Fitzmaurice: Yes, Simmer. Good morning. Appreciate the question. Look. The setup is better than this year's headline numbers suggest, number 1. And the. And then lever, the main lever that we are pulling here next year, and we continue to pull is occupancy. You know, same property occupancy, ended the third quarter at about 97%. You know, above our 2026 average outlook of about 96%. So we enter 2027 at a higher run rate. Rent steps, we continue to sign leases with about 3.5% annual increases and look. The pool's cleaner. We sold many of the assets facing in the steep steepest rent resets. We do believe same property NOI could accelerate where we are at today.

Operator: Next question comes from Michael Griffin from Evercore ISI. Michael, please go ahead.

Michael Griffin: Greg, thanks. I am wondering if you could expand a little bit more on the tenant demand that you are seeing in the market. I mean, is this typically being driven by your aerospace and defense type tenants? I know those have been busier in the South Bay, which seems to be 1 of the better submarkets. Or are you starting to see more of the traditional industrial users, the 3PL, e commerce start to take space? And then in your conversations with tenants, is it more folks who had been a little bit hesitant to sign leases that are finally getting over the finish line? Or has the demand been broader based toward new prospects in the portfolio?

Thank you.

John Nahas: Yeah. Hi, Greg. Overall, our leasing activity was driven most heavily by light manufacturing and advanced manufacturing, which made up about a third of our overall leasing activity this quarter. With another third coming from logistics you know, distribution, and warehouse, and then the remaining third was really diversified amongst construction and building materials related uses, apparel, food and beverage, health care, and a little bit of entertainment. Particularly in San Fernando Valley. The biggest change quarter over quarter that we have observed is really focused around this theme of class a demand.

And as I mentioned in the prepared remarks, that has been captured not only in our repositioning and development pipeline projects, but also just in the portfolio where we have plenty of class a buildings. The largest occupiers of class a has been around advanced manufacturing and logistics specifically. that is a trend that we saw within the Rexford portfolio as well as the broader market. Advanced manufacturing in the South Bay has continued to be strong. And we have seen a few examples of those types of requirements spilling over to other markets. 1 great example is 9.62 thousand Norwalk, which is a building that we leased from our development platform.

That was leased to an advanced manufacturer who wanted a centralized location because they are a parts distributor. But manufacturing on-site. And so we are encouraged that there is some of that demand that is gonna show up in other markets. But, again, most of it is largely concentrated in the South Bay, particularly the coastal portions of the South Bay market. For the last part of your question, you know, I think what we have seen throughout this year is the demand and the decision-making kind of comes in waves. Going back to the beginning of the year, it started off a bit slow, and then picked up towards the end of the first quarter.

And then there were some lulls and surges in demand as we have gotten to this point. So certainly coming off of a high point in activity, tenants are more decisive in terms of making decisions, but this increase in activity that we are capturing is also reflective of how we are prioritizing occupancy. Which is not just around lease rate and term negotiation. Our strategy is to resource these deals with all of the vertically integrated components that we have across our operating teams that allows us to move through negotiations more quickly, and capture the fact that tenants are increasingly focused on making decisions.

Operator: Our next question comes from Mike Mueller from JPMorgan. Mike, please go ahead.

Mike Mueller: 200 basis points of occupancy improvement. 90 days is quite a bit. Curious, how are you thinking about what is full? These days? What do you think is full occupancy?

Michael Fitzmaurice: Look. Yeah. I can answer both from a same property perspective and a total portfolio perspective? For same property, we believe we can get to 97% to 98%. Fully stabilized, over the next couple of years as long as we have the market squarely at our back. And then from a total portfolio occupancy, today we are at about 91%. We believe this portfolio can get to 94% to 95%, again, with the market squarely at our back. So significant upside there. Obviously, a lot of that is gonna be driven by the redevelopment or, I am sorry, development and repositioning pipeline. We have made a lot of stride this quarter with 600 thousand square feet signed.

So great momentum there. We got another $40 million or so of NOI. Tied to what is in lease-up and under construction. So excited about the prospects there.

Operator: Next question from comes from Eric Gordon from BMO. Eric, please go ahead.

Analyst: Great. Thanks for taking my question. My question is on disposition pricing. Just with the treasury rates a little bit higher today versus where you transacted the bulk of the portfolio, You know, how are-- the increase in the treasuries how is that showing up in the bids on the remaining assets? You know, is it lower pricing, more financing contingencies, or, you know, longer closing timelines? And then, you know, how much flexibility do you have to hold those properties if the terms are not where you want them?

Laura Elizabeth Clark: Yeah. Thanks so much for your question. So we are seeing good demand across the assets that we are selling, and pricing continues to meet our expectations. And the objective that we outlined as part of the portfolio realignment. And our increased disposition guidance this quarter reflects our confidence in overall execution there. In aggregate, we expect that pricing for the remaining assets will be roughly in line with the $1.2 billion transaction where we achieved 2027 cash NOI yields in the 5.5% area.

Although the market has experienced some movement in cap rates from the latest increase in interest rates, pricing and demand across the market is highly dependent on a number of factors, including investor profile, product type, and quality. So we have been incredibly disciplined in our execution to date. It achieving pricing that allows us to drive NAV and FFO per share accretion, and we are gonna continue to execute with that overall objective. As we move forward.

Operator: Next question comes from Richard Anderson from Cantor. Richard, please go ahead.

Rich Anderson: Thanks. Good morning. So on the on the portfolio sale in particular, I am wondering what is it. Was there a portion of that portfolio that. Where you had to part with assets that you probably would not have wanted to, but you had to sort of sweeten the portfolio to include, you know, core assets. And as a corollary to that, to that question, how much did the asset sales have an influence on the sequential improvement in occupancy in same store, if at all? Thanks.

Laura Elizabeth Clark: Yeah. Our portfolio realignment objective was about owning the right real estate. In the right markets that are going to drive, long term growth, at Rexford. So it was, we made these decisions at the asset level. These were real estate decisions. And it was about focusing on enhancing the quality of the portfolio, the durability of our cash flows, at the same time, improving our balance sheet and deploying that capital where we see the highest risk adjusted returns. And we had incredible success in executing on that realignment to date. And we see good visibility to continue, and complete that realignment largely by the end of this year.

And that discipline around capital allocation is going to continue as we move forward. As we have taken advantage of this unique moment in time.

Michael Fitzmaurice: And, Richard, good morning. This is Fitz. In terms of the same property occupancy, a sequential increase that we experienced about 200 basis points quarter over quarter. It had nothing to do with the asset sales, everything to do with the leasing progress that we have made, you know, broadly speaking, it was it was due to the 3.7 million square feet signed, the 87% of tenants that we, retained, plus we had leasing pull forward from the fourth quarter to the third quarter. We had 2 large Inland Empire tenants, about 415 thousand square feet. Combined took occupancy in early September.

Operator: Our next question comes from Greg McGinniss from Scotiabank. Greg, please go ahead.

Greg McGinniss: Hey. Good morning. We have seen the demand in South Bay improved dramatically. This year. Has that changed the project scope or underwriting on the Hertz development? Can you give us kind of your latest thoughts there in terms of build out potential returns?

John Nahas: Yeah. Hi, Greg. Our strategy there remains the same. We have long been focused on the unique nature of that asset and what it is gonna deliver in the market, in terms of differentiated products Our strategy is to continue on, basically, as we have set out to, and that building is well set up to cater to not only the advanced manufacturing demand that we are seeing in the South Bay market, but also to just the rest of the course of industrial users that can benefit from having a significant facility in close proximity to LAX and the West LA neighborhood that are north of there. So we are pretty excited about that 1.

That project is gonna start here next month. And we look forward to delivering it, into a market that continues to perform pretty well.

Operator: Our next question comes from Jonathan Petersen from Jefferies. Jonathan, please go ahead.

Jonathan Petersen: Okay. Thank you. On the congratulations on the occupancy increase. I did wanna you know, look a little bit more at leasing cost, though. It looks like tenant improvements and leasing commissions were a bit higher this quarter. Is that, you know, is the higher net absorption in the market being driven by landlords being a little bit more aggressive on concessions?

John Nahas: Yeah. Hi, John. So our concessions were up slightly this quarter as compared to last quarter. That was largely driven by an increased overall WALT. And the leasings. And the leasing that we executed during the quarter. And that was particularly driven by some new deals that had longer term. We are still seeing about 1 month of free rent on average and on average, we are still seeing 5-year deals. And in some cases, we are executing leases with the shorter term. We think there is a strategic reason to do so. So the uptick that you are seeing is driven by some deals that we are executing in the quarter a bit longer term.

Particularly on the new side. On renewals, we actually had a slight reduction in terms of concessions on average based on the mix of deals that was flowing through.

Operator: Our next question comes from Vince Tibone from Green Street. Vince, please go ahead.

Analyst: Hi. Good morning. How should we think about redevelopment starts beyond the 4 projects you have outlined that will start over the next 2 quarters. Should we expect additional projects to break ground in 2027 beyond these 4? Or is it likely Rexford will take a bit of a pause from new projects after this, current stuff gets under underway.

John Nahas: Yeah. Hi, Vince. The pipeline's generally reflective of what we see commencing in the future. We are gonna be pretty selective about where we undertake development starting with, you know, our capital allocation thresholds. Solving for the appropriate spreads over stabilized cap rate and considering cost of capital, And we expect, in general, development in the market to be more limited in terms of opportunity going forward because of the increasing regulation that has really materially changed the ability to add new supply. So we will navigate through that to the extent we find opportunities to add to our development pipeline, we will do so.

But it is also gonna be product that we are pretty excited about to deliver into our operating portfolio. And so it is gonna have to be stuff that materially increases the competitive the competitive landscape. I would say the stuff that you see on the portfolio today fits into that exactly. We are pretty excited to start 9 thousand Airport, as I just mentioned. As well as the other projects that are gonna start over the next few months.

Operator: Next question comes from David Rodgers from Raymond James. David, please go ahead.

Analyst: Yes. Thanks, and good morning. Wanted to ask about the redevelopment and positioning portfolio that you talked about a lot. You leased over 20% of it this quarter. Curious on how those returns are coming out relative to your revised expectations as the way they lay out in the supplement. You have made a lot of comments about kind of class a versus class b, and that obviously tilts higher quality. So what is the demand look like in that subset? I mean, is kind of 20% of that space leasing up a quarter. Is that a realistic number? Was there something that outlined this quarter Any color on that would be helpful.

And also, 1 last thing, the 600 thousand square feet that you did do, what was the NOI contribution from that?

John Nahas: The NOI contribution was $14 million on an annualized basis. The demand we are seeing in the market you know, we are we are noting on class a because that is 1 of the more notable trends as compared to, certainly, prior quarters this year. But throughout the year, we have seen continued demand for highly functional product, which is the type of properties that we are delivering through our repositioning program. As we kinda work through the pipeline the yields on the development projects and repositionings that you will see on the supplemental, will fluctuate based on mix.

So, for example, our development yields are up because of projects that were stabilized versus continuing under construction, and the preleasing of our 190th asset in South Bay had an outsized impact on the under construction comportion as we were able to execute prelease there at a higher than underwritten rent And conversely, on the repositioning side, the biggest driver that you will see changing the mix of projects there was Salt Lake which we stabilized at a 13.8% yield. And is no longer in that bucket. Hey, David. I will I will just jump in here.

Just to speak about what we are seeing today in the fourth quarter, I would say that we are experiencing sustained level of tenant activity similar to what we have seen in the third quarter. And that activity continues on the remaining repositioning and development projects that we have in lease up. Including some projects that are under construction or in the future pipeline.

Operator: Last question comes from Omotayo Okusanya from Deutsche Bank. Yes.

Analyst: Good morning, everyone. Congrats on the solid quarter. Question around acquisitions. Could you talk a little bit about the how you kind of think about acquisitions as part of the broader capital allocation decisions going forward?

Laura Elizabeth Clark: Hi, Tayo. Thanks for joining us today. So our strategy around deployment aligns with our capital allocation framework that we have been executing around all year. The execution of our portfolio realignment has put us in an incredibly favorable position. Not only have we increased the quality of our portfolio and cash flow, but we have also been able to delever the balance sheet and increase liquidity. So that certainly positions Rexford to execute on compelling opportunities as they arise. Today, the most compelling uses of capital outside of delevering the balance sheet are share repurchases when we see that disconnect between public market value and intrinsic value, and also our high yielding internal repositioning and development opportunities.

So the key for us is we are gonna stay disciplined. We are gonna be patient. And we are gonna allocate capital where it creates the most long term shareholder value. In regards to acquisitions, they remain an important part of Rexford's long-term value creation strategy, but they have to compete with every other use of capital. And today, other uses of capital are more compelling. So we will consider acquisitions when the real estate number 1, aligns with our strategy, and number 2, the expected return is superior to the alternatives. We can afford to be patient, and you are gonna see us continue to do That concludes the q and a portion of our earnings remarks.

Operator: Thank you all so much for joining us today, and we look forward to speaking with you soon. This concludes today's conference call. You may now disconnect.