Rexford raises core FFO outlook to $2.41–2.44 a share
Key Facts
Rexford Industrial raised its 2026 core funds from operations guidance to $2.41–2.44 per diluted share, according to its third-quarter earnings release, supported by improved leasing and bad debt expense estimates. The company had previously forecast the supplemental non-GAAP measure at between $2.38 and $2.43 per diluted share for the full year. In its supplemental financial report, it linked the guidance increase to higher expected average occupancy resulting from leasing activity it described as "better than expected". The company also cited "lower expected bad debt expense" among the reasons for revising its annual core funds from operations range. Meanwhile, it revised its projected annual accounting loss to $1.52–1.55 per diluted share, compared with its previous loss estimate of between $1.27 and $1.32.
Rexford's total revenue in the third quarter of 2026 was about $239.103 million, compared with $253.242 million in the corresponding quarter of 2025, according to financial statements accompanying the earnings release. Core funds from operations per diluted share held steady at $0.60 for the quarter, unchanged from the year-earlier period. The company said capital recycling and lower general and administrative expenses supported that performance, while weaker same-property income and lower interest income offset those factors. For its quarterly accounting results, the company reported net income attributable to common stockholders of $14.6 million. The quarter's results also included real estate impairment losses of $71.8 million, according to the company's statement.
In the breakdown of same-property performance, the supplemental financial report showed net operating income fell 2.6% in the third quarter from the same period a year earlier. On a cash basis, same-property net operating income declined 1.1% year on year during the same quarter. Rexford attributed weaker operating income at these properties to pressure on effective rents, lower average occupancy and higher bad debt expense during the quarter. For leases executed during the third quarter, comparable rents rose 7.1% on a net effective rent basis, according to the supplemental report. On a cash basis, comparable rents on executed leases fell 3.0%, contrasting with the increase on a net effective rent basis.
The results follow Rexford's completion of the sale of an industrial property portfolio on September 17, 2026, according to a separate company statement announcing the transaction's closing. The portfolio sold for about $1.2 billion, as part of transactions the company announced before the end of the third quarter. The portfolio was acquired by an affiliate of EQT Real Estate, according to Rexford's statement. The company said in-place rents at the properties sold were 28% above prevailing market rents at closing. Rexford focuses exclusively on industrial properties in infill locations in Southern California, according to the company's description of its business.
At quarter-end on September 30, 2026, Rexford's same-property occupancy stood at 96.9%, according to its quarterly earnings release. On leverage, its ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortization for real estate fell to 3.8 times. The company ended the same period with total liquidity of approximately $1.7 billion, according to figures released with its results. Senior management is scheduled to hold its third-quarter earnings conference call on Friday, October 23, 2026, according to the schedule announced by the company. The call begins at 11 a.m. U.S. Eastern time to present and discuss the quarterly results with management.