Rexford Industrial Announces Second Quarter 2014 Financial Results

“We are extremely pleased with the strength of our operating metrics and accretive portfolio growth that we achieved during the second quarter,” stated Michael Frankel and Howard Schwimmer, Rexford Industrial’s Co-Chief Executive Officers. “During the quarter, we executed over 570,000 square feet of new and renewal leases and recorded a 140 basis point year-over-year jump in our Same Property Portfolio occupancy to nearly 90%. On the investment front, our acquisition activity accelerated as we closed on $192.0 million of attractively positioned properties since April 2014. Since our IPO in July 2013, we have acquired 2.9 million square feet of industrial property in our target infill Southern California markets, resulting in a 52.94% expansion of our portfolio.”

Financial results for periods ending on or prior to June 30, 2013 reflect the results of Rexford Industrial’s predecessor entities.

The Company reported net income of $0.1 million ($0.1 million before non-controlling interests), or $0.00 per diluted share of common stock, for the three months ended June 30, 2014. In comparison, Rexford Industrial’s predecessor entities reported a loss of $2.3 million (a loss of $0.5 million before non-controlling interests) for the three months ended June 30, 2013.

For the six months ended June 30, 2014, the Company reported net income of $1.4 million ($1.5 million before non-controlling interests), or $0.05 per diluted share of common stock. In comparison, Rexford Industrial’s predecessor entities reported a loss of $2.0 million (income of $1.6 million before non-controlling interests) for the six months ended June 30, 2013.

The Company reported Recurring FFO of $6.1 million, or $0.24 per diluted share of common stock, for the three months ended June 30, 2014. Adjusting for non-recurring acquisition expenses of $0.7 million incurred during the second quarter, FFO was $5.5 million, or $0.22 per diluted share of common stock.

For the six months ended June 30, 2014, the Company reported Recurring FFO of $11.4 million, or $0.45 per diluted share of common stock. Adjusting for non-recurring acquisition expenses of $1.0 million incurred during the first six months of 2014, FFO was $10.5 million, or $0.41 per diluted share of common stock.

For the three months ended June 30, 2014, the Company’s Same Property Portfolio NOI increased 8.3% compared to the second quarter of 2013, driven by a 4.8% increase in Same Property Portfolio revenue, and a 4.1% decrease in Same Property Portfolio expenses. Same Property Portfolio Cash NOI increased 3.3% compared to the second quarter 2013.

In the second quarter, the Company signed 116 new and renewal leases in its consolidated portfolio, totaling 572,617 square feet. Average rental rates on comparable new and renewal leases were up 17.1% on a GAAP basis, and up 5.2% on a cash basis. The Company signed 44 new leases for 208,819 square feet, with GAAP rents up 12.9%, compared to the prior in place leases. The Company signed 72 renewal leases for 363,798 square feet, with GAAP rents up 18.9% compared to the prior in place leases. For the 44 new leases, cash rents were up 2.9%, and for the 72 renewal leases, cash rents were up 6.1%, compared to the ending cash rents for the prior leases.

The Company has included in a supplemental information package the results and operating statistics that reflect the activities of the Company for the three months ended June 30, 2014. See below for information regarding the supplemental information package.

Since April 2014, including transactions closed after June 30, 2014, the Company has acquired 17 industrial properties totaling approximately 1.77 million square feet, for an aggregate cost of $192.0 million, as detailed below.

In April 2014, the Company acquired Saturn Way, a 170,865 square foot Class “A” industrial building, for $21.1 million, or $123 per square foot. The property is located in Seal Beach, within the Orange County West submarket, and is currently 100% occupied.

In May 2014, the Company acquired 2980 San Fernando, a 130,800 square foot industrial property located on San Fernando Boulevard, Burbank for $15.4 million, or $118 per square foot. The property consists of two industrial buildings that are currently 100% occupied by a single tenant, located within the San Fernando Valley submarket.

In May 2014, the Company acquired Crescent Bay, a 46,178 square foot industrial building situated on 2.47 acres, for $6.5 million, or $140 per square foot. The Crescent Bay industrial building is located in Lake Forest, within the South Orange County submarket, and is 100% leased through 2016.

In June 2014, the Company acquired Birch Street, a 98,105 square foot industrial building along with additional land which together total 7.9 acres located in Santa Ana, for $11.0 million, or $112 per square foot. At the end of the current short-term lease, the Company intends to execute a value-add plan to renovate, modernize and reposition the property as a single-tenant or two-tenant industrial project.

In June 2014, the Company acquired Dupont Business Center, a two-building industrial complex totaling 110,890 square feet on 5.7 acres for $10.2 million, or $91 per square foot. The 100% occupied buildings are located in the Ontario / Inland Empire West submarket, and contain big box features for smaller dock high spaces.

In June 2014, the Company acquired a nine-property industrial portfolio, containing an aggregate of 817,166 square feet for $88.5 million, or $108 per square foot, across its target markets within Los Angeles County, Orange County and San Diego County. The properties include:

Subsequent to the end of the second quarter, in July 2014, the Company acquired three additional properties. The Company acquired Avenue 32, a 100,500 square foot industrial building for $11.0 million, or $109 per square foot. The property is located in the City of Los Angeles, adjacent to Burbank and Glendale within the East San Fernando Valley, which is a part of the Greater San Fernando Valley submarket. The Company also acquired Chatsworth Industrial Park, a 153,212 square foot industrial complex for $16.8 million, or $110 per square foot, located in the West San Fernando Valley. And finally the Company acquired Avenue Kearny, a 138,980 square foot industrial building for $11.5 million, or $83 per square foot, located in the North San Fernando Valley.

On August 4, 2014, the Board of Directors declared a dividend of $0.12 per share for the third quarter of 2014, payable in cash on October 15, 2014 to stockholders and unitholders of record on September 30, 2014.

Rexford Industrial is a real estate investment trust focused on owning and operating industrial properties in Southern California infill markets. The Company owns interests in 88 properties with approximately 9.5 million rentable square feet and manages an additional 20 properties with approximately 1.2 million rentable square feet.

This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the reports and other filings by the Company with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

NOI should not be used as a substitute for cash flow from operating activities in accordance with GAAP. We use NOI to help evaluate the performance of the Company as a whole, as well as the performance of our Same Property Portfolio. A calculation of NOI for our Same Property Portfolio, as well as a reconciliation of NOI for our Same Property Portfolio to net income for our Same Property Portfolio, is set forth below.

(1) Reflects the results of operations for our Predecessor for the three or six months ended June 30, 2013.

(1) Reflects the results of operations for our Predecessor for the three or six months ended June 30, 2013.

(1) Based on weighted average interest in our operating partnership of 10.59% for the three and six months ended June 30, 2013.