Rexford Industrial Realty: A Hidden Gem in Southern California Industrial Real Estate
Rexford Industrial Realty, Inc. (REXR), a real estate investment trust (REIT) based in El Segundo, California, has been flying under the radar despite its strong fundamentals and promising growth prospects. The company specializes in the acquisition, development, and management of industrial properties in Southern California, with a focus on versatile warehouses in supply-constrained markets.
Strong Fundamentals and Versatile Warehouses
REXR’s portfolio consists of approximately 12.3 million rentable square feet of industrial properties, with a concentration in the Inland Empire and South Bay submarkets of Southern California. The company’s warehouses cater to a diverse range of industries, including manufacturing, logistics, and e-commerce, making them highly versatile and resilient to economic cycles.
Solid Leasing Activity and Rent Growth
Rexford Industrial Realty’s strategic location and focus on versatile warehouses have resulted in strong leasing activity and rent growth. In 2021, the company reported net lease commencements of 1.2 million square feet, representing a 15% increase compared to the previous year. Additionally, the company achieved a 10% increase in rental rates year-over-year.
2025: A “Reset” Year with Modest NOI Growth and Extended Lease-Up Times
Looking ahead, 2025 is expected to be a “reset” year for REXR, with modest net operating income (NOI) growth and extended lease-up times. This is due to the completion of several large development projects, which will add significant new supply to the market. However, the long-term upside for REXR is substantial, with an embedded NOI potential of $280 million.
Strong Credit Ratings and Safe Balance Sheet
REXR’s strong credit ratings and safe balance sheet make it an attractive investment for both value and income investors. The company has a BBB+ credit rating from Standard & Poor’s and a Baa2 rating from Moody’s, reflecting its solid financial position. Additionally, REXR offers a well-covered 4.3% dividend yield, providing a stable source of income for investors.
Impact on Individual Investors
- Strong fundamentals and growth prospects make REXR an attractive investment for value and income investors
- Diversified portfolio of versatile warehouses reduces risk and increases resilience to economic cycles
- Modest NOI growth and extended lease-up times in 2025 should be considered in investment decisions
- Strong credit ratings and safe balance sheet provide a stable source of income and peace of mind
Impact on the World
- REXR’s focus on versatile warehouses in Southern California contributes to the region’s economic growth and job creation
- The company’s development projects add new supply to the market, increasing competition and driving innovation
- REXR’s strong financial position and growth prospects contribute to the overall stability of the industrial real estate sector
Conclusion
Rexford Industrial Realty, Inc. is a hidden gem in the Southern California industrial real estate market, offering strong fundamentals, growth prospects, and a stable source of income for investors. Despite a modest NOI growth period in 2025, the long-term upside for REXR is substantial, with an embedded NOI potential of $280 million. The company’s focus on versatile warehouses in supply-constrained markets, strong credit ratings, and safe balance sheet make it an attractive investment for both value and income investors. Additionally, REXR’s contributions to the Southern California economy and the industrial real estate sector as a whole make it an important player in the industry.
For individual investors, REXR’s strong fundamentals, diversified portfolio, and stable income make it an attractive investment opportunity. For the world, REXR’s focus on versatile warehouses and contributions to the Southern California economy and industrial real estate sector make it an important player in the industry. Overall, REXR is a company worth watching for its growth prospects and impact on the industrial real estate market.
