Rexford Industrial's Q2 2024 earnings call was this morning. They operate exclusively within the infill industrial market of Southern California which is the 4th largest and highest value market in the world, and largest and highest value market in the nation. Total vacancy within infill So Cal Industrial averaging 3.9%. Oversupply risk is one of the lowest in the nation. Highest is Austin, then Savannah, Phoenix, Charleston, Inland Empire East (not considered infill, yet!), Atlanta and Dallas. Adding to that, that the total volatility is one of the lowest in the nation, roughly half of other major markets. That said, more volatility is on the horizon. Though lease up is also accelerating modestly at the same time. Market Rent Growth Quarter over Quarter Q1 2024 to Q2 2024 Greater LA: -1.5% Orange County: -0.5% Inland Empire West: -5.5% San Diego: 1.0% I'm paraphrasing here: Rexford's focus on smaller and medium size spaces within infill Southern California provide for a portfolio with superior tenant demand fundamentals, substantial opportunities to add value. With a portfolio of 26,000 SF average space size with a fundamentally different market than the big box investors. They focus on a larger (quantity) segment of the tenant market, with higher barrier to entry and an infill tenant base more stable through cycles compared to big box tenants. Rexford continues to see a distinct bifurcation of performance of high quality, high functional smaller to medium size spaces versus older vintage, less functional, underutilized property. Part of the imbedded value in their portfolio is their value add property improvements strategy meaning that short term volatility is blunted by the creation of more functional property. Tenants know rents will be up in the future and are acting accordingly by engaging earlier in the lease renewal process. This is given a portfolio of 422 properties, including 722 buildings, 50 million square feet, over 1,600 customers. Great results and a bright future as we work through this mixed market. Happy 20th anniversary! We're excited to see you continue to grow. Grant La Bounty Chris Vassilian Will O'Neil Ben Romeo
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