“Although we have grown our portfolio nearly four-fold since our July 2013 IPO, the sector leading total shareholder returns of 163%. Our 20.6 million square foot portfolio currently only represents about 1% market share in Southern California.” That was according to Michael Frankel, co-CEO of Rexford Industrial Realty, on the firm’s recent Q3 earnings call.
“Looking forward, we’re positioned for continued high quality accretive growth driven by the following key factors. To begin with, the quality and depth of our investment pipeline continues to increase as we leverage our extensive originations research and decades of market relationships to capitalize on the extreme size and fragmentation of our infill SoCal markets.”
Consequently about 60% to 70% of the company’s transactions continue to be generated through off-market and lightly marketed opportunities which have translated to better economic and substantially better than core unlevered cash yield, he explained. “We are also hyper focused on creating and adding value wherever possible not only do our research driven originations effort enable a substantial volume of value-add investment, we were also deploying our extensive team of construction, leasing and asset management specialists to create value at every stage of the ownership lifecycle on a space by space, property by property basis throughout our portfolio.”
The company reported strong results that demonstrated the teams continued execution of its value driven strategy, capitalizing upon the sustained strength of the infill Southern California industrial market. Specifically, Company share core FFO grew by 44% year-over-year driven by strong 26% top line revenue growth and $504 million in acquisitions completed over the prior 12 months.
Market conditions within the company’s infill Southern Californian industrial markets continue at unprecedented levels of high tenant demand and record low availability with overall market vacancy continuing at below 2%, he said.
“Our infill markets are truly differentiated as we continue to see a net reduction in supply with more products removed from the market than can feasibly be constructed over time. However, we don’t have to look far to see very different supply demand fundamentals, with cyclical new supply and availability increasing and many other major industrial markets.
With regard to tenant demand, we see no relief in sight for the deep supply demand imbalance within the infill Southern California market. Particularly as the dramatic growth in e-commerce and the push for shorter delivery time frames continue to drive sustained incremental demand growth into the foreseeable future.”