Oct 23, 2026 earnings call — Portfolio realignment and capital redeployment
Completed a $1.2 billion portfolio sale as part of a $2 billion realignment.
Revenue $0.2B (est $0.2B) · EPS $0.07 (est $0.28)
Key quotes
"This quarter, we advanced our $2 billion portfolio realignment initiative with a $1.2 billion portfolio sale."
"During the third quarter, we executed 3.7 million square feet of lease transactions across our portfolio."
"On the debt side, leverage came down 3 quarters of a turn to 3.8 times and we have already repaid $425 million of our $1 billion of 2027 maturities."
Analyst Q&A 12
rent spreads outlook
Q (Blaine Heck · Wells Fargo): Analyst asked how rent spreads will trend over the next couple years — whether decline will be linear or lumpy, timing of the trough, and what market rent growth assumptions are in the outlook.
A: They expect cash re-leasing spreads to average in the negative low to mid teens over the next couple years. Management said this is about a 200 basis point improvement versus not selling noncore assets and tied their outlook to an assumption that market rent is flat, leaving upside if rents accelerate.
"Over the next couple years, we do expect cash re-leasing spreads to average in the negative low to mid teens area." — Michael Fitzmaurice (CFO)
strategy for 2027-28
Q (Craig Mailman · Citi): Analyst asked how Rexford plans to position itself in 2027–2028 now that the market is improving and the portfolio has been repositioned.
A: Management said they will keep executing the strategic priorities they set out, finish the portfolio realignment, and allocate capital to the highest risk-adjusted returns. They will focus on high-yield internal repositionings and developments, prioritize occupancy to drive leasing and revenue, and keep optimizing operations; they will give more detail around 2027 and beyond next quarter.
"We are gonna execute on the high yielding internal repositionings and developments that we have within our portfolio." — Laura Elizabeth Clark (CEO)
same-store drivers next year
Q (Samir Khanal · BofA): Analyst asked for the building blocks of same-store performance next year after the $2 billion portfolio realignment — the puts and takes and embedded rent bumps.
A: Management said the setup entering next year is better than this year's headline suggests and that the main lever they will pull is occupancy. They noted same property occupancy ended the third quarter at about 97%, they continue to sign leases with about 3.5% annual increases, the pool is cleaner after asset sales, and they believe same property NOI could accelerate.
"You know, same property occupancy, ended the third quarter at about 97%." — Michael Fitzmaurice (CFO)
who is driving demand
Q (Michael Griffin · Evercore): Analyst asked whether leasing demand is coming mainly from aerospace/defense, or from traditional industrial users like 3PL and e-commerce, and whether demand is from hesitant existing tenants or new prospects.
A: Management said this quarter leasing was driven most heavily by light manufacturing and advanced manufacturing (about a third of activity), another third by logistics/distribution/warehouse, and the final third by a mix of construction, apparel, food and beverage, health care, and entertainment. They said class A demand has increased, mainly from advanced manufacturing and logistics, and that tenant decision-making has come in waves with tenants now more decisive; the company prioritizes occupancy and uses its operating teams to move deals faster.
"Overall, our leasing activity was driven most heavily by light manufacturing and advanced manufacturing, which made up about a third of our overall leasing activity this quarter." — John Nahas (COO)
what is full occupancy
Q (Mike Mueller · JPMorgan): Analyst asked what Rexford views as 'full' occupancy for same-property and total portfolio.
A: They said same-property can get to 97% to 98% fully stabilized over the next couple years if the market cooperates. For the total portfolio, they are at about 91% today and believe it can get to 94% to 95%, with upside driven by their development and repositioning pipeline; they noted 600 thousand square feet signed and another $40 million of NOI tied to lease-up and under construction.
"For same property, we believe we can get to 97% to 98%." — Michael Fitzmaurice (CFO)
disposition pricing and bids
Q (BMO): Analyst asked how higher treasury rates are affecting bids on remaining assets — lower pricing, financing contingencies, longer timelines — and how flexible the company is to hold properties.
A: Management said they are seeing good demand and pricing that meets their expectations and the objectives of the portfolio realignment. In aggregate they expect pricing for the remaining assets to be roughly in line with the $1.2 billion transaction where they achieved 2027 cash NOI yields in the 5.5% area, while noting pricing depends on investor profile, product type, and quality and they will remain disciplined to drive NAV and FFO per share accretion.
"In aggregate, we expect that pricing for the remaining assets will be roughly in line with the $1.2 billion transaction where we achieved 2027 cash NOI yields in the 5.5% area." — Laura Elizabeth Clark (CEO)
portfolio sale and occupancy
Q (Rich Anderson · Cantor): Analyst asked whether the portfolio sale included assets they would not have wanted to sell to sweeten the package, and whether sales influenced the sequential occupancy improvement.
A: Management said the realignment was driven by asset-level decisions to own the right real estate in the right markets, improve portfolio quality and cash flow durability, improve the balance sheet, and deploy capital to higher risk-adjusted returns; they expect to largely complete the realignment by the end of the year. Management also said the roughly 200 basis point sequential same-property occupancy increase had nothing to do with the asset sales and was driven by leasing progress — including 3.7 million square feet signed, 87% tenant retention, leasing pull-forward, and two Inland Empire tenants totalling about 415 thousand square feet taking occupancy in early September.
"It had nothing to do with the asset sales, everything to do with the leasing progress that we have made," — Michael Fitzmaurice (CFO)
Hertz development plan
Q (Greg McGinniss · Scotiabank): Analyst asked whether improved South Bay demand changed the scope or underwriting of the Hertz development and for latest build-out thoughts.
A: Management said their strategy for the Hertz project remains unchanged and they continue to focus on the asset's unique nature and differentiated product. They said the building is well positioned for advanced manufacturing and other industrial users near LAX, the project will start next month, and they are excited to deliver it into a market performing well.
"And we look forward to delivering it, into a market that continues to perform pretty well." — John Nahas (COO)
leasing concessions trend
Q (Jonathan Petersen · Jefferies): Analyst asked whether higher net absorption reflects landlords giving more concessions, since tenant improvements and leasing commissions were higher this quarter.
A: Management said concessions were up slightly this quarter versus last quarter, driven largely by increased overall WALT and the mix of leasing — particularly some new deals with longer terms. They said they are still seeing about 1 month of free rent on average and on average 5-year deals, while renewals had a slight reduction in concessions based on deal mix.
"So our concessions were up slightly this quarter as compared to last quarter." — John Nahas (COO)
future redevelopment starts
Q (Green Street): Analyst asked if Rexford expects additional redevelopment projects to break ground in 2027 beyond the four projects starting over the next two quarters, or if they will pause.
A: Management said the pipeline reflects what they expect to commence and they will be selective based on capital allocation thresholds, required spreads over stabilized cap rate, and cost of capital. They also said development opportunities will be more limited due to increasing regulation reducing new supply, and they will add projects only when they materially improve the competitive landscape; they are excited to start the projects already planned.
"We are gonna be pretty selective about where we undertake development starting with, you know, our capital allocation thresholds." — John Nahas (COO)
repositioning returns and NOI
Q (Raymond James): Analyst asked how returns on the redevelopment and repositioning projects are tracking to revised expectations, how demand looks in that subset (is 20% leasing a quarter realistic), and what NOI the 600 thousand square feet contributed.
A: Management said the 600 thousand square feet produced $14 million of NOI on an annualized basis. They said demand is concentrated in class A and for highly functional product that their repositionings deliver; yields will fluctuate by mix — development yields are up due to stabilized projects and preleasing, and Salt Lake stabilized at a 13.8% yield and is no longer in that bucket. They also said tenant activity remains sustained into the fourth quarter.
"The NOI contribution was $14 million on an annualized basis." — John Nahas (COO)
acquisitions in capital plan
Q (Deutsche Bank): Analyst asked how acquisitions fit into Rexford's broader capital allocation going forward.
A: Management said acquisitions remain an important part of long-term value creation but must compete with other uses of capital. Today they view the most compelling uses outside delevering as share repurchases when public price and intrinsic value diverge and high-yield internal repositioning and development; they will stay disciplined, patient, and only pursue acquisitions when the real estate aligns with strategy and expected return is superior to alternatives.
"Today, the most compelling uses of capital outside of delevering the balance sheet are share repurchases when we see that disconnect between public market value and intrinsic value, and also our high yielding internal repositioning and development opportunities." — Laura Elizabeth Clark (CEO)