|
|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
MARYLAND
|
46-2024407
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
11620 Wilshire Boulevard, Suite 1000,
Los Angeles, California
|
90025
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
|
Trading symbols
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
|
REXR
|
|
New York Stock Exchange
|
5.875% Series A Cumulative Redeemable Preferred Stock
|
|
REXR-PA
|
|
New York Stock Exchange
|
5.875% Series B Cumulative Redeemable Preferred Stock
|
|
REXR-PB
|
|
New York Stock Exchange
|
|
|
Large accelerated filer
|
þ
|
|
Accelerated filer
|
¨
|
|
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
Land
|
$
|
1,364,738
|
|
|
$
|
1,298,957
|
|
Buildings and improvements
|
1,422,684
|
|
|
1,332,438
|
|
||
Tenant improvements
|
62,908
|
|
|
60,024
|
|
||
Furniture, fixtures and equipment
|
149
|
|
|
149
|
|
||
Construction in progress
|
20,331
|
|
|
24,515
|
|
||
Total real estate held for investment
|
2,870,810
|
|
|
2,716,083
|
|
||
Accumulated depreciation
|
(245,033
|
)
|
|
(228,742
|
)
|
||
Investments in real estate, net
|
2,625,777
|
|
|
2,487,341
|
|
||
Cash and cash equivalents
|
276,575
|
|
|
180,601
|
|
||
Rents and other receivables, net
|
4,548
|
|
|
4,944
|
|
||
Deferred rent receivable, net
|
24,290
|
|
|
22,228
|
|
||
Deferred leasing costs, net
|
14,139
|
|
|
14,002
|
|
||
Deferred loan costs, net
|
1,158
|
|
|
1,312
|
|
||
Acquired lease intangible assets, net
|
56,122
|
|
|
55,683
|
|
||
Acquired indefinite-lived intangible
|
5,156
|
|
|
5,156
|
|
||
Interest rate swap asset
|
5,896
|
|
|
8,770
|
|
||
Other assets
|
12,580
|
|
|
6,723
|
|
||
Acquisition related deposits
|
10,875
|
|
|
925
|
|
||
Total Assets
|
$
|
3,037,116
|
|
|
$
|
2,787,685
|
|
LIABILITIES & EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Notes payable
|
$
|
757,524
|
|
|
$
|
757,371
|
|
Interest rate swap liability
|
4,604
|
|
|
2,351
|
|
||
Accounts payable, accrued expenses and other liabilities
|
33,728
|
|
|
21,074
|
|
||
Dividends payable
|
19,774
|
|
|
15,938
|
|
||
Acquired lease intangible liabilities, net
|
52,426
|
|
|
52,727
|
|
||
Tenant security deposits
|
24,396
|
|
|
23,262
|
|
||
Prepaid rents
|
6,828
|
|
|
6,539
|
|
||
Total Liabilities
|
899,280
|
|
|
879,262
|
|
||
Equity
|
|
|
|
||||
Rexford Industrial Realty, Inc. stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized,
|
|
|
|
||||
5.875% series A cumulative redeemable preferred stock, 3,600,000 shares outstanding at March 31, 2019 and December 31, 2018 ($90,000 liquidation preference)
|
86,651
|
|
|
86,651
|
|
||
5.875% series B cumulative redeemable preferred stock, 3,000,000 shares outstanding at March 31, 2019 and December 31, 2018 ($75,000 liquidation preference)
|
72,443
|
|
|
72,443
|
|
||
Common Stock, $0.01 par value per share, 490,000,000 authorized and 104,028,046 and 96,810,504 shares outstanding at March 31, 2019 and December 31, 2018, respectively
|
1,038
|
|
|
966
|
|
||
Additional paid in capital
|
2,042,218
|
|
|
1,798,113
|
|
||
Cumulative distributions in excess of earnings
|
(99,715
|
)
|
|
(88,341
|
)
|
||
Accumulated other comprehensive income
|
1,261
|
|
|
6,262
|
|
||
Total stockholders’ equity
|
2,103,896
|
|
|
1,876,094
|
|
||
Noncontrolling interests
|
33,940
|
|
|
32,329
|
|
||
Total Equity
|
2,137,836
|
|
|
1,908,423
|
|
||
Total Liabilities and Equity
|
$
|
3,037,116
|
|
|
$
|
2,787,685
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
REVENUES
|
|
|
|
|
||||
Rental income
|
|
$
|
59,604
|
|
|
$
|
48,433
|
|
Management, leasing and development services
|
|
102
|
|
|
103
|
|
||
Interest income
|
|
657
|
|
|
—
|
|
||
TOTAL REVENUES
|
|
60,363
|
|
|
48,536
|
|
||
OPERATING EXPENSES
|
|
|
|
|
||||
Property expenses
|
|
13,812
|
|
|
11,960
|
|
||
General and administrative
|
|
7,344
|
|
|
6,162
|
|
||
Depreciation and amortization
|
|
21,996
|
|
|
19,452
|
|
||
TOTAL OPERATING EXPENSES
|
|
43,152
|
|
|
37,574
|
|
||
OTHER EXPENSES
|
|
|
|
|
||||
Acquisition expenses
|
|
23
|
|
|
9
|
|
||
Interest expense
|
|
6,471
|
|
|
5,852
|
|
||
TOTAL EXPENSES
|
|
49,646
|
|
|
43,435
|
|
||
Gains on sale of real estate
|
|
—
|
|
|
9,983
|
|
||
NET INCOME
|
|
10,717
|
|
|
15,084
|
|
||
Less: net income attributable to noncontrolling interest
|
|
(201
|
)
|
|
(318
|
)
|
||
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
|
|
10,516
|
|
|
14,766
|
|
||
Less: preferred stock dividends
|
|
(2,423
|
)
|
|
(2,423
|
)
|
||
Less: earnings allocated to participating securities
|
|
(114
|
)
|
|
(97
|
)
|
||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|
$
|
7,979
|
|
|
$
|
12,246
|
|
Net income attributable to common stockholders per share - basic
|
|
$
|
0.08
|
|
|
$
|
0.16
|
|
Net income attributable to common stockholders per share - diluted
|
|
$
|
0.08
|
|
|
$
|
0.15
|
|
Weighted average shares of common stock outstanding - basic
|
|
98,342,677
|
|
|
78,694,161
|
|
||
Weighted average shares of common stock outstanding - diluted
|
|
98,607,786
|
|
|
79,196,060
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
10,717
|
|
|
$
|
15,084
|
|
Other comprehensive (loss) income: cash flow hedge adjustment
|
(5,127
|
)
|
|
4,320
|
|
||
Comprehensive income
|
5,590
|
|
|
19,404
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(75
|
)
|
|
(423
|
)
|
||
Comprehensive income attributable to Rexford Industrial Realty, Inc.
|
$
|
5,515
|
|
|
$
|
18,981
|
|
|
Preferred Stock
|
|
Number of
Shares
|
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Cumulative Distributions in Excess of Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||||
Balance at January 1, 2019
|
$
|
159,094
|
|
|
96,810,504
|
|
|
$
|
966
|
|
|
$
|
1,798,113
|
|
|
$
|
(88,341
|
)
|
|
$
|
6,262
|
|
|
$
|
1,876,094
|
|
|
$
|
32,329
|
|
|
$
|
1,908,423
|
|
Cumulative effect of adoption of ASC 842
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(222
|
)
|
|
—
|
|
|
(222
|
)
|
|
—
|
|
|
(222
|
)
|
||||||||
Issuance of common stock
|
—
|
|
|
7,148,746
|
|
|
71
|
|
|
248,323
|
|
|
—
|
|
|
—
|
|
|
248,394
|
|
|
—
|
|
|
248,394
|
|
||||||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,974
|
)
|
|
—
|
|
|
—
|
|
|
(3,974
|
)
|
|
—
|
|
|
(3,974
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
86,919
|
|
|
1
|
|
|
510
|
|
|
—
|
|
|
—
|
|
|
511
|
|
|
2,102
|
|
|
2,613
|
|
||||||||
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock
|
—
|
|
|
(23,090
|
)
|
|
—
|
|
|
(791
|
)
|
|
—
|
|
|
—
|
|
|
(791
|
)
|
|
—
|
|
|
(791
|
)
|
||||||||
Conversion of units to common stock
|
—
|
|
|
4,967
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
(37
|
)
|
|
—
|
|
||||||||
Net income
|
2,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,093
|
|
|
—
|
|
|
10,516
|
|
|
201
|
|
|
10,717
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,001
|
)
|
|
(5,001
|
)
|
|
(126
|
)
|
|
(5,127
|
)
|
||||||||
Preferred stock dividends
|
(2,423
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,423
|
)
|
|
—
|
|
|
(2,423
|
)
|
||||||||
Common stock dividends ($0.185 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,245
|
)
|
|
—
|
|
|
(19,245
|
)
|
|
—
|
|
|
(19,245
|
)
|
||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(529
|
)
|
|
(529
|
)
|
||||||||
Balance at March 31, 2019
|
$
|
159,094
|
|
|
104,028,046
|
|
|
$
|
1,038
|
|
|
$
|
2,042,218
|
|
|
$
|
(99,715
|
)
|
|
$
|
1,261
|
|
|
$
|
2,103,896
|
|
|
$
|
33,940
|
|
|
$
|
2,137,836
|
|
|
Preferred Stock
|
|
Number of
Shares
|
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Cumulative Distributions in Excess of Earnings
|
|
Accumulated
Other Comprehensive Income |
|
Total
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||||
Balance at January 1, 2018
|
$
|
159,713
|
|
|
78,495,882
|
|
|
$
|
782
|
|
|
$
|
1,239,810
|
|
|
$
|
(67,058
|
)
|
|
$
|
6,799
|
|
|
$
|
1,340,046
|
|
|
$
|
25,208
|
|
|
$
|
1,365,254
|
|
Issuance of common stock
|
—
|
|
|
2,085,663
|
|
|
21
|
|
|
58,430
|
|
|
—
|
|
|
—
|
|
|
58,451
|
|
|
—
|
|
|
58,451
|
|
||||||||
Offering costs
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(1,048
|
)
|
|
—
|
|
|
—
|
|
|
(1,080
|
)
|
|
—
|
|
|
(1,080
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
79,427
|
|
|
1
|
|
|
409
|
|
|
—
|
|
|
—
|
|
|
410
|
|
|
2,604
|
|
|
3,014
|
|
||||||||
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock
|
—
|
|
|
(15,287
|
)
|
|
—
|
|
|
(418
|
)
|
|
—
|
|
|
—
|
|
|
(418
|
)
|
|
—
|
|
|
(418
|
)
|
||||||||
Conversion of units to common stock
|
—
|
|
|
22,104
|
|
|
—
|
|
|
208
|
|
|
—
|
|
|
—
|
|
|
208
|
|
|
(208
|
)
|
|
—
|
|
||||||||
Net income
|
2,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,343
|
|
|
—
|
|
|
14,766
|
|
|
318
|
|
|
15,084
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,215
|
|
|
4,215
|
|
|
105
|
|
|
4,320
|
|
||||||||
Preferred stock dividends
|
(3,010
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,010
|
)
|
|
—
|
|
|
(3,010
|
)
|
||||||||
Common stock dividends ($0.160 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,907
|
)
|
|
—
|
|
|
(12,907
|
)
|
|
—
|
|
|
(12,907
|
)
|
||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(387
|
)
|
|
(387
|
)
|
||||||||
Balance at March 31, 2018
|
$
|
159,094
|
|
|
80,667,789
|
|
|
$
|
804
|
|
|
$
|
1,297,391
|
|
|
$
|
(67,622
|
)
|
|
$
|
11,014
|
|
|
$
|
1,400,681
|
|
|
$
|
27,640
|
|
|
$
|
1,428,321
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
10,717
|
|
|
$
|
15,084
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for doubtful accounts
|
177
|
|
|
221
|
|
||
Depreciation and amortization
|
21,996
|
|
|
19,452
|
|
||
Amortization of (below) above market lease intangibles, net
|
(1,751
|
)
|
|
(1,116
|
)
|
||
Gain on sale of real estate
|
—
|
|
|
(9,983
|
)
|
||
Amortization of debt issuance costs
|
344
|
|
|
312
|
|
||
Amortization of discount on notes payable
|
1
|
|
|
1
|
|
||
Equity based compensation expense
|
2,579
|
|
|
2,963
|
|
||
Straight-line rent
|
(2,067
|
)
|
|
(1,969
|
)
|
||
Change in working capital components:
|
|
|
|
||||
Rents and other receivables
|
219
|
|
|
128
|
|
||
Deferred leasing costs
|
(1,413
|
)
|
|
(1,843
|
)
|
||
Other assets
|
533
|
|
|
59
|
|
||
Accounts payable, accrued expenses and other liabilities
|
3,936
|
|
|
2,529
|
|
||
Tenant security deposits
|
753
|
|
|
179
|
|
||
Prepaid rents
|
160
|
|
|
(817
|
)
|
||
Net cash provided by operating activities
|
36,184
|
|
|
25,200
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Acquisition of investments in real estate
|
(145,253
|
)
|
|
(52,753
|
)
|
||
Capital expenditures
|
(9,712
|
)
|
|
(14,861
|
)
|
||
Payments for deposits on real estate acquisitions
|
(10,475
|
)
|
|
(2,050
|
)
|
||
Proceeds from sale of real estate
|
—
|
|
|
24,896
|
|
||
Net cash used in investing activities
|
(165,440
|
)
|
|
(44,768
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Issuance of stock, net
|
244,420
|
|
|
57,371
|
|
||
Proceeds from notes payable
|
—
|
|
|
59,000
|
|
||
Repayment of notes payable
|
(38
|
)
|
|
(68,232
|
)
|
||
Debt issuance costs
|
—
|
|
|
(450
|
)
|
||
Dividends paid to preferred stockholders
|
(2,423
|
)
|
|
(3,010
|
)
|
||
Dividends paid to common stockholders
|
(15,490
|
)
|
|
(11,382
|
)
|
||
Distributions paid to common unitholders
|
(448
|
)
|
|
(345
|
)
|
||
Repurchase of common shares to satisfy employee tax withholding requirements
|
(791
|
)
|
|
(418
|
)
|
||
Net cash provided by financing activities
|
225,230
|
|
|
32,534
|
|
||
Increase in cash, cash equivalents and restricted cash
|
95,974
|
|
|
12,966
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
180,601
|
|
|
6,870
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
276,575
|
|
|
$
|
19,836
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest (net of capitalized interest of $629 and $371 for the three months ended March 31, 2019 and 2018, respectively)
|
$
|
6,940
|
|
|
$
|
6,663
|
|
Supplemental disclosure of noncash investing and financing transactions:
|
|
|
|
||||
Operating lease right-of-use assets obtained in exchange for lease liabilities upon adoption of ASC 842 on January 1, 2019
|
$
|
3,262
|
|
|
$
|
—
|
|
Operating lease right-of-use assets obtained in exchange for lease liabilities subsequent to January 1, 2019
|
$
|
3,457
|
|
|
$
|
—
|
|
Accrual for capital expenditures
|
$
|
5,481
|
|
|
$
|
2,455
|
|
Accrual of dividends
|
$
|
19,774
|
|
|
$
|
13,294
|
|
1.
|
Organization
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Investments in Real Estate
|
Property
|
|
Submarket
|
|
Date of Acquisition
|
|
Rentable Square Feet
|
|
Number of Buildings
|
|
Contractual Purchase Price
(1)
(in thousands)
|
||||
12821 Knott Street
(2)
|
|
Orange County - West
|
|
1/15/2019
|
|
120,800
|
|
|
1
|
|
|
$
|
19,800
|
|
28510 Industry Drive
(2)
|
|
Los Angeles - San Fernando Valley
|
|
1/17/2019
|
|
46,778
|
|
|
1
|
|
|
7,765
|
|
|
Conejo Spectrum Business Park
(2)
|
|
Ventura
|
|
1/28/2019
|
|
531,378
|
|
|
9
|
|
|
106,250
|
|
|
2455 Ash Street
(2)
|
|
San Diego - North County
|
|
3/5/2019
|
|
42,508
|
|
|
1
|
|
|
6,680
|
|
|
25413 Rye Canyon Road
(2)
|
|
Los Angeles - San Fernando Valley
|
|
3/12/2019
|
|
48,075
|
|
|
1
|
|
|
5,529
|
|
|
Total 2019 Wholly-Owned Property Acquisitions
|
|
|
|
789,539
|
|
|
13
|
|
|
$
|
146,024
|
|
(1)
|
Represents the gross contractual purchase price before prorations, closing costs and other acquisition related costs.
|
(2)
|
This acquisition was funded with available cash on hand.
|
|
|
2019 Acquisitions
|
||
Assets:
|
|
|
||
Land
|
|
$
|
65,781
|
|
Buildings and improvements
|
|
76,403
|
|
|
Tenant improvements
|
|
926
|
|
|
Acquired lease intangible assets
(1)
|
|
5,051
|
|
|
Other acquired assets
(2)
|
|
99
|
|
|
Total assets acquired
|
|
148,260
|
|
|
|
|
|
||
Liabilities:
|
|
|
||
Acquired lease intangible liabilities
(3)
|
|
1,840
|
|
|
Other assumed liabilities
(2)
|
|
642
|
|
|
Total liabilities assumed
|
|
2,482
|
|
|
Net assets acquired
|
|
$
|
145,778
|
|
(1)
|
Acquired lease intangible assets is comprised of
$4.0 million
of in-place lease intangibles with a weighted average amortization period of
7.7
years and
$1.0 million
of above-market lease intangibles with a weighted average amortization period of
5.6
years.
|
(2)
|
Includes other working capital assets acquired and liabilities assumed, at the time of acquisition.
|
(3)
|
Represents below-market lease intangibles with a weighted average amortization period of
14.3
years.
|
4.
|
Intangible Assets
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Acquired Lease Intangible Assets:
|
|
|
|
||||
In-place lease intangibles
|
$
|
123,533
|
|
|
$
|
119,517
|
|
Accumulated amortization
|
(72,821
|
)
|
|
(68,481
|
)
|
||
In-place lease intangibles, net
|
$
|
50,712
|
|
|
$
|
51,036
|
|
|
|
|
|
||||
Above-market tenant leases
|
$
|
12,161
|
|
|
$
|
11,125
|
|
Accumulated amortization
|
(6,751
|
)
|
|
(6,478
|
)
|
||
Above-market tenant leases, net
|
$
|
5,410
|
|
|
$
|
4,647
|
|
Acquired lease intangible assets, net
|
$
|
56,122
|
|
|
$
|
55,683
|
|
Acquired Lease Intangible Liabilities:
|
|
|
|
|
|
||
Below-market tenant leases
|
$
|
(68,228
|
)
|
|
$
|
(66,388
|
)
|
Accumulated accretion
|
15,802
|
|
|
13,778
|
|
||
Below-market tenant leases, net
|
$
|
(52,426
|
)
|
|
$
|
(52,610
|
)
|
|
|
|
|
||||
Above-market ground lease
(1)
|
$
|
—
|
|
|
$
|
(290
|
)
|
Accumulated accretion
(1)
|
—
|
|
|
173
|
|
||
Above-market ground lease, net
(1)
|
$
|
—
|
|
|
$
|
(117
|
)
|
Acquired lease intangible liabilities, net
|
$
|
(52,426
|
)
|
|
$
|
(52,727
|
)
|
(1)
|
In connection with the adoption of ASC 842 on January 1, 2019, we derecognized the net above-market ground lease intangible liability of
$0.1 million
and adjusted the carrying amount of the ground lease right-of-use asset by a corresponding amount. See Note 2 for additional details related to the adoption of ASC 842.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
In-place lease intangibles
(1)
|
$
|
4,339
|
|
|
$
|
5,191
|
|
Net below-market tenant leases
(2)
|
$
|
(1,751
|
)
|
|
$
|
(1,108
|
)
|
Above-market ground lease
(3)
|
$
|
—
|
|
|
$
|
(8
|
)
|
(1)
|
The amortization of in-place lease intangibles is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented.
|
(2)
|
The amortization of net below-market tenant leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented.
|
(3)
|
The accretion of the above-market ground lease is recorded as a decrease to property expenses in the consolidated statements of operations for the periods presented.
|
5.
|
Notes Payable
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Principal amount
|
|
$
|
761,077
|
|
|
$
|
761,116
|
|
Less: unamortized discount and debt issuance costs
(1)
|
|
(3,553
|
)
|
|
(3,745
|
)
|
||
Carrying value
|
|
$
|
757,524
|
|
|
$
|
757,371
|
|
(1)
|
Excludes unamortized debt issuance costs related to our unsecured revolving credit facility, which are presented in the line item “Deferred loan costs, net” in the consolidated balance sheets.
|
|
March 31, 2019
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||||||||
|
Principal Amount
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Principal Amount
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Contractual
Maturity Date
|
|
Stated
Interest
Rate
(1)
|
|
Effective Interest Rate
(2)
|
|
||||||||||
Secured Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$60M Term Loan
|
$
|
58,499
|
|
|
$
|
(217
|
)
|
|
$
|
58,499
|
|
|
$
|
(230
|
)
|
|
8/1/2023
|
(3)
|
LIBOR+1.70%
|
|
|
4.28
|
%
|
|
Gilbert/La Palma
(4)
|
2,578
|
|
|
(127
|
)
|
|
2,617
|
|
|
(129
|
)
|
|
3/1/2031
|
|
5.125
|
%
|
|
5.45
|
%
|
|
||||
Unsecured Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$100M Term Loan Facility
|
100,000
|
|
|
(239
|
)
|
|
100,000
|
|
|
(260
|
)
|
|
2/14/2022
|
|
LIBOR+1.20%
|
|
(5)
|
3.05
|
%
|
(6)
|
||||
Revolving Credit Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/12/2021
|
(7)
|
LIBOR+1.10%
|
|
(5)(8)
|
3.59
|
%
|
|
||||
$225M Term Loan Facility
|
225,000
|
|
|
(1,383
|
)
|
|
225,000
|
|
|
(1,476
|
)
|
|
1/14/2023
|
|
LIBOR+1.20%
|
|
(5)
|
2.74
|
%
|
(9)
|
||||
$150M Term Loan Facility
|
150,000
|
|
|
(987
|
)
|
|
150,000
|
|
|
(1,028
|
)
|
|
5/22/2025
|
|
LIBOR+1.50%
|
|
(5)
|
4.10
|
%
|
|
||||
$100M Notes
|
100,000
|
|
|
(481
|
)
|
|
100,000
|
|
|
(500
|
)
|
|
8/6/2025
|
|
4.290
|
%
|
|
4.37
|
%
|
|
||||
$125M Notes
|
125,000
|
|
|
(119
|
)
|
|
125,000
|
|
|
(122
|
)
|
|
7/13/2027
|
|
3.930
|
%
|
|
3.94
|
%
|
|
||||
Total
|
$
|
761,077
|
|
|
$
|
(3,553
|
)
|
|
$
|
761,116
|
|
|
$
|
(3,745
|
)
|
|
|
|
|
|
|
|
(1)
|
Reflects the contractual interest rate under the terms of the loan, as of
March 31, 2019
.
|
(2)
|
Reflects the effective interest rate as of
March 31, 2019
, which includes the effect of the amortization of discounts and debt issuance costs and the effect of interest rate swaps that are effective as of
March 31, 2019
.
|
(3)
|
One
24
-month extension is available at the borrower’s option, subject to certain terms and conditions.
|
(4)
|
Monthly payments of interest and principal are based on a
20
-year amortization table.
|
(5)
|
The LIBOR margin will range from
1.20%
to
1.70%
per annum for the
$100.0 million
term loan facility,
1.10%
to
1.50%
per annum for the unsecured revolving credit facility,
1.20%
to
1.70%
per annum for the
$225.0 million
term loan facility and
1.50%
to
2.20%
per annum for the
$150 million
term loan facility, depending on the leverage ratio, which is the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value which is measured on a quarterly basis.
|
(6)
|
As of
March 31, 2019
, interest on the
$100.0 million
term loan facility has been effectively fixed through the use of an interest rate swap. See Note 7 for details.
|
(7)
|
Two
additional
six
-month extensions are available at the borrower’s option, subject to certain terms and conditions.
|
(8)
|
The unsecured revolving credit facility is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. The applicable facility fee will range from
0.15%
to
0.30%
per annum depending upon our leverage ratio.
|
(9)
|
As of
March 31, 2019
, interest on the
$225.0 million
term loan facility has been effectively fixed through the use of
two
interest rate swaps. See Note 7 for details.
|
April 1, 2019 - December 31, 2019
|
$
|
119
|
|
2020
|
166
|
|
|
2021
|
566
|
|
|
2022
|
100,967
|
|
|
2023
|
282,518
|
|
|
Thereafter
|
376,741
|
|
|
Total
|
$
|
761,077
|
|
•
|
Maintaining a ratio of total indebtedness to total asset value of not more than
60%
;
|
•
|
For the Credit Facility, the $225 Million Term Loan Facility and the $150 Million Term Loan Facility, maintaining a ratio of secured debt to total asset value of not more than
45%
;
|
•
|
For the $100 Million Notes and the $125 Million Notes, maintaining a ratio of secured debt to total asset value of not more than
40%
;
|
•
|
Maintaining a ratio of total secured recourse debt to total asset value of not more than
15%
;
|
•
|
Maintaining a minimum tangible net worth of at least the sum of (i)
$760,740,750
, and (ii) an amount equal to at least
75%
of the net equity proceeds received by the Company after September 30, 2016;
|
•
|
Maintaining a ratio of adjusted EBITDA (as defined in each of the loan agreements) to fixed charges of at least
1.5
to
1.0
;
|
•
|
Maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than
60%
; and
|
•
|
Maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least
1.75
to
1.00
.
|
6.
|
Operating Leases
|
(1)
|
Amounts are included in “General and administrative” and “Property expenses” in the accompanying consolidated statement of operations.
|
(2)
|
Amount is included in “Rental income” in the accompanying consolidated statement of operations.
|
Other Information (in thousands)
|
Three Months Ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
239
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
(1)
|
$
|
6,720
|
|
(1)
|
Includes
$3.3 million
for operating leases existing on January 1, 2019 and
$3.5 million
for operating lease modifications that occurred during the three months ended
March 31, 2019
.
|
Lease Term and Discount Rate
|
March 31, 2019
|
|
Weighted-average remaining lease term
|
19 years
|
|
Weighted-average discount rate
(1)
|
4.59
|
%
|
(1)
|
Because the rate implicit in each of our leases was not readily determinable, we used our incremental borrowing rate. In determining our incremental borrowing rate for each lease, we considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to our creditworthiness, the impact of collateralization and the term of each of our lease agreements.
|
April 1, 2019 - December 31, 2019
|
$
|
772
|
|
2020
|
949
|
|
|
2021
|
1,032
|
|
|
2022
|
923
|
|
|
2023
|
951
|
|
|
Thereafter
|
6,426
|
|
|
Total undiscounted lease payments
|
$
|
11,053
|
|
Less imputed interest
|
(4,237
|
)
|
|
Total lease liabilities
|
$
|
6,816
|
|
|
|
Office Leases
|
|
Ground Lease
|
||||
2019
|
|
$
|
668
|
|
|
$
|
144
|
|
2020
|
|
257
|
|
|
144
|
|
||
2021
|
|
167
|
|
|
144
|
|
||
2022
|
|
—
|
|
|
144
|
|
||
2023
|
|
—
|
|
|
144
|
|
||
Thereafter
|
|
—
|
|
|
5,532
|
|
||
Total
|
|
$
|
1,092
|
|
|
$
|
6,252
|
|
7.
|
Interest Rate Swaps
|
|
|
|
|
|
|
|
|
Current Notional Value
(1)
|
|
Fair Value of Interest Rate
Derivative Assets /(Derivative Liabilities)
(2)
|
|||||||||||||
Derivative Instrument
|
|
Effective Date
|
|
Maturity Date
|
|
LIBOR Interest Strike Rate
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2019
|
|
December 31, 2018
|
|||||||||
Interest Rate Swap
|
|
1/15/2015
|
|
2/15/2019
|
|
1.8260
|
%
|
|
$
|
—
|
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
$
|
25
|
|
Interest Rate Swap
|
|
7/15/2015
|
|
2/15/2019
|
|
2.0100
|
%
|
|
$
|
—
|
|
|
$
|
28,108
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Interest Rate Swap
|
|
2/14/2018
|
|
1/14/2022
|
|
1.3490
|
%
|
|
$
|
125,000
|
|
|
$
|
125,000
|
|
|
$
|
2,797
|
|
|
$
|
3,974
|
|
Interest Rate Swap
|
|
8/14/2018
|
|
1/14/2022
|
|
1.4060
|
%
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
2,089
|
|
|
$
|
3,023
|
|
Interest Rate Swap
|
|
12/14/2018
|
|
8/14/2021
|
|
1.7640
|
%
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
1,010
|
|
|
$
|
1,731
|
|
Interest Rate Swap
(3)
|
|
7/22/2019
|
|
11/22/2024
|
|
2.7625
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4,604
|
)
|
|
$
|
(2,351
|
)
|
(1)
|
Represents the notional value of swaps that are effective as of the balance sheet date presented.
|
(2)
|
The fair value of derivative assets are included in the line item “Interest rate swap asset” in the accompanying consolidated balance sheets and the fair value of (derivative liabilities) are included in the line item “Interest rate swap liability” in the accompanying consolidated balance sheets.
|
(3)
|
On December 6, 2018, we entered into this interest rate swap to hedge the variable-rate interest payments associated with the $150 Million Term Loan Facility. This interest rate swap has a notional value of
$150.0 million
with an effective date of July 22, 2019, and a maturity date of November 22, 2024.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Interest Rate Swaps in Cash Flow Hedging Relationships:
|
|
|
|
||||
Amount of gain (loss) recognized in AOCI on derivatives
|
$
|
(4,275
|
)
|
|
$
|
4,246
|
|
Amount of gain (loss) reclassified from AOCI into earnings under “Interest expense”
|
$
|
852
|
|
|
$
|
(74
|
)
|
Total interest expense presented in the Consolidated Statement of Operations in which the effects of cash flow hedges are recorded (line item “Interest expense”)
|
$
|
6,471
|
|
|
$
|
5,852
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
||||||||
Offsetting of Derivative Assets
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts of Assets Presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
|
5,896
|
|
|
—
|
|
|
5,896
|
|
|
—
|
|
|
—
|
|
|
5,896
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
|
8,770
|
|
|
—
|
|
|
8,770
|
|
|
—
|
|
|
—
|
|
|
8,770
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
||||||||
Offsetting of Derivative Liabilities
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts of Assets Presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
|
(4,604
|
)
|
|
—
|
|
|
(4,604
|
)
|
|
—
|
|
|
—
|
|
|
(4,604
|
)
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
|
(2,351
|
)
|
|
—
|
|
|
(2,351
|
)
|
|
—
|
|
|
—
|
|
|
(2,351
|
)
|
8.
|
Fair Value Measurements
|
|
|
Fair Value Measurement Using
|
||||||||||||||
|
|
Total Fair Value
|
|
Quoted Price in Active
Markets for Identical
Assets and Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap Asset
|
|
$
|
5,896
|
|
|
$
|
—
|
|
|
$
|
5,896
|
|
|
$
|
—
|
|
Interest Rate Swap Liability
|
|
$
|
(4,604
|
)
|
|
$
|
—
|
|
|
$
|
(4,604
|
)
|
|
$
|
—
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap Asset
|
|
$
|
8,770
|
|
|
$
|
—
|
|
|
$
|
8,770
|
|
|
$
|
—
|
|
Interest Rate Swap Liability
|
|
$
|
(2,351
|
)
|
|
$
|
—
|
|
|
$
|
(2,351
|
)
|
|
$
|
—
|
|
|
|
Fair Value Measurement Using
|
|
|
||||||||||||||||
Liabilities
|
|
Total Fair Value
|
|
Quoted Price in Active
Markets for Identical
Assets and Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
|
Carrying Value
|
||||||||||
Notes Payable at:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2019
|
|
$
|
766,181
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
766,181
|
|
|
$
|
757,524
|
|
December 31, 2018
|
|
$
|
759,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
759,491
|
|
|
$
|
757,371
|
|
9.
|
Related Party Transactions
|
10.
|
Commitments and Contingencies
|
11.
|
Equity
|
|
Unvested Awards
|
|||||||
|
Restricted
Common Stock
|
|
LTIP Units
|
|
Performance Units
|
|||
Balance at January 1, 2019
|
200,398
|
|
|
327,048
|
|
|
591,767
|
|
Granted
|
93,809
|
|
|
59,515
|
|
|
—
|
|
Forfeited
|
(6,890
|
)
|
|
—
|
|
|
—
|
|
Vested
(1)
|
(63,841
|
)
|
|
(52,385
|
)
|
|
—
|
|
Balance at March 31, 2019
|
223,476
|
|
|
334,178
|
|
|
591,767
|
|
(1)
|
During the
three
months ended
March 31, 2019
,
23,090
shares of the Company’s common stock were tendered in accordance with the terms of the Plan to satisfy minimum statutory tax withholding requirements associated with the vesting of restricted shares of common stock.
|
|
Unvested Awards
|
|||||||
|
Restricted
Common Stock |
|
LTIP Units
|
|
Performance Units
(1)
|
|||
April 1, 2019 - December 31, 2019
|
18,240
|
|
|
156,009
|
|
|
199,000
|
|
2020
|
77,263
|
|
|
120,001
|
|
|
188,250
|
|
2021
|
61,033
|
|
|
49,950
|
|
|
204,517
|
|
2022
|
44,053
|
|
|
5,660
|
|
|
—
|
|
2023
|
22,887
|
|
|
2,558
|
|
|
—
|
|
Total
|
223,476
|
|
|
334,178
|
|
|
591,767
|
|
(1)
|
Represents the maximum number of Performance Units that would become earned and vested on December 28, 2019 and December 14, 2020, in the event that the specified maximum total shareholder return (“TSR”) hurdles are achieved over the three-year performance period from December 29, 2016 through December 28, 2019 and the three-year performance period from December 15, 2017 through December 14, 2020, respectively, and the maximum number of Performance Units that would become earned and vested on December 31, 2021 in the event that the specified maximum TSR and FFO per share growth hurdles are achieved over the three-year performance period from January 1, 2019 through December 31, 2021.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Expensed share-based compensation
(1)
|
|
$
|
2,579
|
|
|
$
|
2,963
|
|
Capitalized share-based compensation
(2)
|
|
34
|
|
|
51
|
|
||
Total share-based compensation
|
|
$
|
2,613
|
|
|
$
|
3,014
|
|
(1)
|
Amounts expensed are included in “General and administrative” and “Property expenses” in the accompanying consolidated statements of operations.
|
(2)
|
For the three months ended
March 31, 2018
, amounts capitalized relate to employees who provide construction and leasing services, and are included in “Building and improvements” and “Deferred leasing costs, net” in the consolidated balance sheets. For the three months ended
March 31, 2019
, amounts capitalized only relate to employees who provide construction services, and are included in “Building and improvements” in the consolidated balance sheets.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Accumulated other comprehensive income - beginning balance
|
|
$
|
6,262
|
|
|
$
|
6,799
|
|
Other comprehensive (loss) income before reclassifications
|
|
(4,275
|
)
|
|
4,246
|
|
||
Amounts reclassified from accumulated other comprehensive income to interest expense
|
|
(852
|
)
|
|
74
|
|
||
Net current period other comprehensive (loss) income
|
|
(5,127
|
)
|
|
4,320
|
|
||
Less other comprehensive loss (income) attributable to noncontrolling interests
|
|
126
|
|
|
(105
|
)
|
||
Other comprehensive (loss) income attributable to common stockholders
|
|
(5,001
|
)
|
|
4,215
|
|
||
Accumulated other comprehensive income - ending balance
|
|
$
|
1,261
|
|
|
$
|
11,014
|
|
12.
|
Earnings Per Share
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
10,717
|
|
|
$
|
15,084
|
|
Less: Preferred stock dividends
|
(2,423
|
)
|
|
(2,423
|
)
|
||
Less: Net income attributable to noncontrolling interests
|
(201
|
)
|
|
(318
|
)
|
||
Less: Net income attributable to participating securities
|
(114
|
)
|
|
(97
|
)
|
||
Net income attributable to common stockholders
|
$
|
7,979
|
|
|
$
|
12,246
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average shares of common stock outstanding – basic
|
98,342,677
|
|
|
78,694,161
|
|
||
Effect of dilutive securities - performance units
|
265,109
|
|
|
501,899
|
|
||
Weighted average shares of common stock outstanding – diluted
|
98,607,786
|
|
|
79,196,060
|
|
||
|
|
|
|
||||
Earnings per share
—
Basic
|
|
|
|
|
|||
Net income attributable to common stockholders
|
$
|
0.08
|
|
|
$
|
0.16
|
|
Earnings per share
—
Diluted
|
|
|
|
||||
Net income attributable to common stockholders
|
$
|
0.08
|
|
|
$
|
0.15
|
|
13.
|
Subsequent Events
|
•
|
the competitive environment in which we operate;
|
•
|
real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;
|
•
|
decreased rental rates or increasing vacancy rates;
|
•
|
potential defaults on or non-renewal of leases by tenants;
|
•
|
potential bankruptcy or insolvency of tenants;
|
•
|
acquisition risks, including failure of such acquisitions to perform in accordance with expectations;
|
•
|
the timing of acquisitions and dispositions;
|
•
|
potential natural disasters such as earthquakes, wildfires or floods;
|
•
|
the consequence of any future security alerts and/or terrorist attacks;
|
•
|
national, international, regional and local economic conditions;
|
•
|
the general level of interest rates;
|
•
|
potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or real estate investment trust (“REIT”) tax laws, and potential increases in real property tax rates;
|
•
|
financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
|
•
|
lack of or insufficient amounts of insurance;
|
•
|
our failure to complete acquisitions;
|
•
|
our failure to successfully integrate acquired properties;
|
•
|
our ability to qualify and maintain our qualification as a REIT;
|
•
|
our ability to maintain our current investment grade rating by Fitch;
|
•
|
litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes; and
|
•
|
possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.
|
•
|
During the first quarter of 2019, we completed the acquisition of
five
properties with a combined
0.8 million
rentable square feet, for an aggregate purchase price of
$146.0 million
.
|
•
|
Subsequent to
March 31, 2019
, we completed the acquisition of
12
properties with a combined
1.5 million
rentable square feet, for an aggregate purchase price of
$265.5 million
.
|
•
|
During the first quarter of 2019, we stabilized four of our properties located at 1998 Surveyor Avenue, 14748-14750 Nelson Avenue, 15401 Figueroa Street and 1332-1340 Rocky Point, with a combined
0.4 million
rentable square feet.
|
•
|
During the first quarter of 2019, we sold
7,148,746
shares of common stock under our at-the-market equity offering program for gross proceeds of
$248.4 million
, or approximately
$34.75
per share.
|
•
|
During the first quarter of 2019, we declared a common stock dividend of $0.185 per share, up 15.6% over the prior period.
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Construction Period
(1)
|
|
|
||
Property (Submarket)
|
|
Market
|
|
Same Properties Portfolio
(2)
|
|
Total Property Rentable Square Feet
|
|
Vacant Rentable Square Feet
Under Repositioning/ Lease-up
|
|
Estimated New Development Rentable Square Feet
|
|
Start
|
|
Completion
|
|
Total Property Leased % at 3/31/19
|
Current Repositioning:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28901-28903 Avenue Paine - Development (SF Valley)
|
|
LA
|
|
N
|
|
—
|
|
—
|
|
115,817
|
|
2Q-2019
|
|
1Q-2020
|
|
—%
|
851 Lawrence Drive (Ventura)
(3)
|
|
VC
|
|
N
|
|
49,976
|
|
49,976
|
|
39,294
|
|
2Q-2018
|
|
2Q-2020
|
|
—%
|
29003 Avenue Sherman (SF Valley)
|
|
LA
|
|
N
|
|
68,123
|
|
68,123
|
|
—
|
|
3Q-2018
|
|
2Q-2019
|
|
—%
|
16121 Carmenita Road (Mid-Counties)
|
|
LA
|
|
N
|
|
108,500
|
|
108,500
|
|
—
|
|
1Q-2019
|
|
3Q-2019
|
|
—%
|
12821 Knott Street (West OC)
|
|
OC
|
|
N
|
|
120,800
|
|
120,800
|
|
39,847
|
|
1Q-2019
|
|
3Q-2020
|
|
—%
|
2455 Conejo Spectrum Street (Ventura)
(4)
|
|
VC
|
|
N
|
|
98,218
|
|
98,218
|
|
—
|
|
1Q-2019
|
|
4Q-2019
|
|
—%
|
25413 Rye Canyon Road (SF Valley)
|
|
LA
|
|
N
|
|
28,970
|
|
28,970
|
|
—
|
|
1Q-2019
|
|
4Q-2019
|
|
40%
|
3233 Mission Oaks Boulevard - Unit 3233 (Ventura)
(5)
|
|
VC
|
|
Y
|
|
461,210
|
|
109,129
|
|
—
|
|
2Q-2017
|
|
2Q-2019
|
|
73%
|
7110 E. Rosecrans Avenue - Unit B (South Bay)
|
|
LA
|
|
Y
|
|
73,439
|
|
36,000
|
|
—
|
|
1Q-2019
|
|
2Q-2019
|
|
51%
|
Total
|
|
|
|
|
|
1,009,236
|
|
619,716
|
|
194,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease-up Stage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2722 Fairview Street (OC Airport)
|
|
OC
|
|
Y
|
|
116,575
|
|
58,802
|
|
—
|
|
1Q-2018
|
|
4Q-2018
|
|
50%
|
1580 West Carson Street (South Bay)
|
|
LA
|
|
N
|
|
43,787
|
|
43,787
|
|
—
|
|
2Q-2018
|
|
4Q-2018
|
|
—%
|
Total
|
|
|
|
|
|
160,362
|
|
102,589
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future Repositioning:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9615 Norwalk Boulevard (Mid-Counties)
(6)
|
|
LA
|
|
Y
|
|
38,362
|
|
—
|
|
201,808
|
|
3Q-2018
|
|
2020
|
|
69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Repositioning, Lease-up Stage and Future Repositioning
|
|
|
|
|
|
|
|
722,305
|
|
396,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stabilized:
(7)
|
|
|
|
|
|
Stabilized Rentable Square Feet
|
|
|
|
|
|
Stabilized Period
|
|
|
||
1998 Surveyor Avenue (Ventura)
|
|
VC
|
|
N
|
|
56,306
|
|
—
|
|
—
|
|
1Q-2019
|
|
100%
|
||
1332-1340 Rocky Pt. Dr. (North SD)
|
|
SD
|
|
N
|
|
73,747
|
|
—
|
|
—
|
|
1Q-2019
|
|
100%
|
||
14748-14750 Nelson Avenue - (San Gabriel Valley)
|
|
LA
|
|
Y
|
|
201,990
|
|
—
|
|
—
|
|
1Q-2019
|
|
92%
|
||
15401 Figueroa Street (South Bay)
|
|
LA
|
|
Y
|
|
38,584
|
|
—
|
|
—
|
|
1Q-2019
|
|
100%
|
||
Total 2019 Stabilized
|
|
|
|
|
|
370,627
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
3233 Mission Oaks Boulevard - Unit H (Ventura)
(5)
|
|
VC
|
|
Y
|
|
43,927
|
|
—
|
|
—
|
|
1Q-2018
|
|
73%
|
||
1601 Alton Parkway (OC Airport)
|
|
OC
|
|
Y
|
|
124,988
|
|
—
|
|
—
|
|
3Q-2018
|
|
87%
|
||
301-445 Figueroa Street (South Bay)
|
|
LA
|
|
Y
|
|
133,650
|
|
—
|
|
—
|
|
3Q-2018
|
|
100%
|
||
28903 Avenue Paine - Repositioning (SF Valley)
|
|
LA
|
|
Y
|
|
111,935
|
|
—
|
|
—
|
|
4Q-2018
|
|
100%
|
||
Total 2018 Stabilized
|
|
|
|
|
|
414,500
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The estimated construction period is subject to change as a result of a number of factors including but not limited to permit requirements, delays in construction, changes in scope, and other unforeseen circumstances.
|
(2)
|
Our “Same Properties Portfolio” is a subset of our consolidated portfolio and includes all properties that were wholly-owned by us as of January 1, 2018, and still owned by us as of
March 31, 2019
. A property with a “Y” indicates its inclusion in the Same Properties Portfolio and a property with a “N” indicates its exclusion from the Same Properties Portfolio.
|
(3)
|
We expect to demolish the existing
49,976
rentable square foot building at 851 Lawrence Drive and construct a new
89,270
rentable square foot multi-unit building.
|
(4)
|
We acquired Conejo Spectrum Business Park, a nine-building property during the first quarter of 2019. Information presented in this table relates to one of the nine buildings, located at 2455 Conejo Spectrum Street.
|
(5)
|
As of March 31, 2019, we are repositioning space aggregating
109,129
rentable square feet at 3233 Mission Oaks. During the first quarter of 2018, we completed the repositioning of a 43,927 rentable square foot unit at 3233 Mission Oaks.
|
(6)
|
9615 Norwalk is a 10.26 acres storage-yard with three buildings totaling
38,362
rentable square feet. In January 2019, we converted the tenant’s month to month land lease to a term lease with an expiration date of June 30, 2020. We will demolish the existing buildings and construct a new 201,808 rentable square foot building upon termination of the land lease.
|
(7)
|
We consider a repositioning property to be stabilized at the earlier of the following: (i) upon reaching 90% occupancy or one year from the date of completion of repositioning construction work.
|
|
|
New Leases
|
|||||||||||||||||
Quarter
|
|
Number
of Leases |
|
Rentable Square Feet
|
|
Weighted Average Lease Term
(in years) |
|
Effective Rent Per Square Foot
(1)
|
|
GAAP Leasing Spreads
(2)(4)
|
|
Cash Leasing Spreads
(3)(4)
|
|||||||
Q1-2019
|
|
51
|
|
|
527,869
|
|
|
4.1
|
|
|
$
|
10.65
|
|
|
36.5
|
%
|
|
26.4
|
%
|
|
|
Renewal Leases
|
|
Expired Leases
|
|
Retention %
(7)
|
||||||||||||||||||||||
Quarter
|
|
Number
of Leases |
|
Rentable Square Feet
|
|
Weighted Average Lease Term
(in years) |
|
Effective Rent Per Square Foot
(1)
|
|
GAAP Leasing Spreads
(2)(5)
|
|
Cash Leasing Spreads
(3)(5)
|
|
Number
of Leases |
|
Rentable Square Feet
(6)
|
|
Rentable Square Feet
|
||||||||||
Q1-2019
|
|
52
|
|
|
604,014
|
|
|
3.7
|
|
|
$
|
12.44
|
|
|
22.0
|
%
|
|
13.5
|
%
|
|
106
|
|
|
1,049,012
|
|
|
69.7
|
%
|
(1)
|
Effective rent per square foot is the average base rent calculated in accordance with GAAP, over the term of the lease, expressed in dollars per square foot per year. Includes all new and renewal leases that were executed during the quarter.
|
(2)
|
Calculated as the change between GAAP rents for new or renewal leases and the expiring GAAP rents on the expiring leases for the same space.
|
(3)
|
Calculated as the change between starting cash rents for new or renewal leases and the expiring cash rents on the expiring leases for the same space.
|
(4)
|
The GAAP and cash re-leasing spreads for new leases executed during the
three
months ended
March 31, 2019
, exclude
13
leases aggregating
204,378
rentable square feet for which there was no comparable lease data. Of these
13
excluded leases,
four
leases aggregating
101,665
rentable square feet are leases of recently repositioned space. Comparable leases generally exclude: (i) space that has never been occupied under our ownership, (ii) recently repositioned/redeveloped space, (iii) space that has been vacant for over one year or (iv) space with lease terms shorter than six months.
|
(5)
|
The GAAP and cash re-leasing rent spreads for renewal leases executed during the
three
months ended
March 31, 2019
, exclude
two
leases for
11,942
rentable square feet for which there was no comparable lease data. Comparable leases generally exclude: (i) space with different lease structures or (ii) space with lease terms shorter than six months.
|
(6)
|
Includes
two
leases totaling
132,650
rentable square feet that expired during the
three
months ended
March 31, 2019
, for which the space was placed into repositioning after each tenant vacated.
|
(7)
|
Retention is calculated as renewal lease square footage plus relocation/expansion square footage, divided by the square footage of leases expiring during the period. Retention excludes expiring leases associated with space that is placed into repositioning after the tenant vacates.
|
Year of Lease Expiration
|
|
Number of Leases Expiring
|
|
Total Rentable Square Feet
(1)
|
|
Percentage of Total Owned Square Feet
|
|
Annualized Base Rent
(2)
|
|
Percentage of Total Annualized Base Rent
(3)
|
|
Annualized Base Rent per Square Foot
(4)
|
||||||||
Vacant
(5)
|
|
—
|
|
|
573,236
|
|
|
2.6
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
Current Repositioning
(6)
|
|
—
|
|
|
619,716
|
|
|
2.8
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
MTM Tenants
(7)
|
|
64
|
|
|
74,035
|
|
|
0.3
|
%
|
|
$
|
1,055
|
|
|
0.5
|
%
|
|
$
|
14.25
|
|
Remainder of 2019
|
|
229
|
|
|
2,040,892
|
|
|
9.2
|
%
|
|
$
|
18,744
|
|
|
9.5
|
%
|
|
$
|
9.18
|
|
2020
|
|
350
|
|
|
4,189,633
|
|
|
18.9
|
%
|
|
$
|
37,891
|
|
|
19.3
|
%
|
|
$
|
9.04
|
|
2021
|
|
310
|
|
|
4,880,636
|
|
|
22.0
|
%
|
|
$
|
43,378
|
|
|
22.1
|
%
|
|
$
|
8.89
|
|
2022
|
|
198
|
|
|
2,708,575
|
|
|
12.3
|
%
|
|
$
|
25,502
|
|
|
13.0
|
%
|
|
$
|
9.42
|
|
2023
|
|
131
|
|
|
2,420,638
|
|
|
10.9
|
%
|
|
$
|
26,120
|
|
|
13.3
|
%
|
|
$
|
10.79
|
|
2024
|
|
57
|
|
|
1,714,777
|
|
|
7.8
|
%
|
|
$
|
16,765
|
|
|
8.5
|
%
|
|
$
|
9.78
|
|
2025
|
|
13
|
|
|
364,868
|
|
|
1.6
|
%
|
|
$
|
4,004
|
|
|
2.0
|
%
|
|
$
|
10.97
|
|
2026
|
|
8
|
|
|
409,574
|
|
|
1.9
|
%
|
|
$
|
4,567
|
|
|
2.3
|
%
|
|
$
|
11.15
|
|
2027
|
|
7
|
|
|
252,538
|
|
|
1.1
|
%
|
|
$
|
2,509
|
|
|
1.3
|
%
|
|
$
|
9.94
|
|
2028
|
|
6
|
|
|
348,447
|
|
|
1.6
|
%
|
|
$
|
3,205
|
|
|
1.6
|
%
|
|
$
|
9.20
|
|
Thereafter
|
|
7
|
|
|
1,547,066
|
|
|
7.0
|
%
|
|
$
|
13,042
|
|
|
6.6
|
%
|
|
$
|
8.43
|
|
Total Consolidated Portfolio
|
|
1,380
|
|
|
22,144,631
|
|
|
100.0
|
%
|
|
$
|
196,782
|
|
|
100.0
|
%
|
|
$
|
9.39
|
|
(1)
|
Represents the contracted square footage upon expiration.
|
(2)
|
Calculated as monthly contracted base rent (before rent abatements) per the terms of such lease, as of
March 31, 2019
, multiplied by 12. Excludes billboard and antenna revenue. Amounts in thousands.
|
(3)
|
Calculated as annualized base rent set forth in this table divided by annualized base rent for the total portfolio as of
March 31, 2019
.
|
(4)
|
Calculated as annualized base rent for such leases divided by the occupied square feet for such leases as of
March 31, 2019
.
|
(5)
|
Represents vacant space (not under repositioning) as of
March 31, 2019
. Includes new leases aggregating
52,446
rentable square feet that have been signed but had not yet commenced as of
March 31, 2019
.
|
(6)
|
Represents vacant space at nine of our properties that were classified as current repositioning as of
March 31, 2019
. Refer to the table under “
Acquisitions and Value-Add Repositioning of Properties”
for a summary of these properties. Excludes stabilized properties and properties in lease-up.
|
(7)
|
Represents tenants under month-to-month (“MTM”) leases or having holdover tenancy. Of the
64
MTM leases,
59
MTM leases aggregating
63,290
rentable square feet are at our property located at 14723-14825 Oxnard Street, where due to number and the small size of spaces, we typically only enter into MTM leases.
|
|
|
Same Properties Portfolio
|
|
Total Portfolio
|
||||||||||||||||||||||||||
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|
%
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|
%
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
|
Change
|
|
2019
|
|
2018
|
|
|
Change
|
||||||||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental income
|
|
50,555
|
|
|
47,711
|
|
|
2,844
|
|
|
6.0
|
%
|
|
59,604
|
|
|
48,433
|
|
|
11,171
|
|
|
23.1
|
%
|
||||||
Management, leasing and development services
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
102
|
|
|
103
|
|
|
(1
|
)
|
|
(1.0
|
)%
|
||||||
Interest income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
657
|
|
|
—
|
|
|
657
|
|
|
—
|
%
|
||||||
TOTAL REVENUES
|
|
50,555
|
|
|
47,711
|
|
|
2,844
|
|
|
6.0
|
%
|
|
60,363
|
|
|
48,536
|
|
|
11,827
|
|
|
24.4
|
%
|
||||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property expenses
|
|
11,818
|
|
|
11,764
|
|
|
54
|
|
|
0.5
|
%
|
|
13,812
|
|
|
11,960
|
|
|
1,852
|
|
|
15.5
|
%
|
||||||
General and administrative
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
7,344
|
|
|
6,162
|
|
|
1,182
|
|
|
19.2
|
%
|
||||||
Depreciation and amortization
|
|
17,415
|
|
|
18,790
|
|
|
(1,375
|
)
|
|
(7.3
|
)%
|
|
21,996
|
|
|
19,452
|
|
|
2,544
|
|
|
13.1
|
%
|
||||||
TOTAL OPERATING EXPENSES
|
|
29,233
|
|
|
30,554
|
|
|
(1,321
|
)
|
|
(4.3
|
)%
|
|
43,152
|
|
|
37,574
|
|
|
5,578
|
|
|
14.8
|
%
|
||||||
OTHER EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acquisition expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
23
|
|
|
9
|
|
|
14
|
|
|
155.6
|
%
|
||||||
Interest expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
6,471
|
|
|
5,852
|
|
|
619
|
|
|
10.6
|
%
|
||||||
TOTAL EXPENSES
|
|
29,233
|
|
|
30,554
|
|
|
(1,321
|
)
|
|
(4.3
|
)%
|
|
49,646
|
|
|
43,435
|
|
|
6,211
|
|
|
14.3
|
%
|
||||||
Gains on sale of real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
9,983
|
|
|
(9,983
|
)
|
|
|
||||||||
NET INCOME
|
|
$
|
21,322
|
|
|
$
|
17,157
|
|
|
$
|
4,165
|
|
|
|
|
$
|
10,717
|
|
|
$
|
15,084
|
|
|
$
|
(4,367
|
)
|
|
|
|
|
Same Properties Portfolio
|
|
Total Portfolio
|
||||||||||||||||||||||||||
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|
%
|
|
Three Months Ended March 31,
|
|
Increase/(Decrease)
|
|
%
|
||||||||||||||||||
Category
|
|
2019
|
|
2018
|
|
|
Change
|
|
2019
|
|
2018
|
|
|
Change
|
||||||||||||||||
Rental revenue
(1)
|
|
$
|
42,604
|
|
|
$
|
40,203
|
|
|
$
|
2,401
|
|
|
6.0
|
%
|
|
$
|
50,286
|
|
|
$
|
40,911
|
|
|
$
|
9,375
|
|
|
22.9
|
%
|
Tenant reimbursements
(2)
|
|
7,694
|
|
|
7,254
|
|
|
440
|
|
|
6.1
|
%
|
|
9,041
|
|
|
7,293
|
|
|
1,748
|
|
|
24.0
|
%
|
||||||
Other income
(3)
|
|
257
|
|
|
254
|
|
|
3
|
|
|
1.2
|
%
|
|
277
|
|
|
229
|
|
|
48
|
|
|
21.0
|
%
|
||||||
Rental income
|
|
50,555
|
|
|
47,711
|
|
|
2,844
|
|
|
6.0
|
%
|
|
59,604
|
|
|
48,433
|
|
|
11,171
|
|
|
23.1
|
%
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
10,717
|
|
|
$
|
15,084
|
|
Add:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
21,996
|
|
|
19,452
|
|
||
Deduct:
|
|
|
|
|
||||
Gains on sale of real estate
|
|
—
|
|
|
9,983
|
|
||
Funds From Operations (FFO)
|
|
$
|
32,713
|
|
|
$
|
24,553
|
|
Less: preferred stock dividends
|
|
(2,423
|
)
|
|
(2,423
|
)
|
||
Less: FFO attributable to noncontrolling interest
(1)
|
|
(733
|
)
|
|
(557
|
)
|
||
Less: FFO attributable to participating securities
(2)
|
|
(176
|
)
|
|
(158
|
)
|
||
FFO attributable to common stockholders
|
|
$
|
29,381
|
|
|
$
|
21,415
|
|
(1)
|
Noncontrolling interests represent holders of outstanding common units of the Company's operating partnership that are owned by unit holders other than the Company.
|
(2)
|
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Rental income
|
59,604
|
|
|
48,433
|
|
||
Property expenses
|
13,812
|
|
|
11,960
|
|
||
Net Operating Income
|
$
|
45,792
|
|
|
$
|
36,473
|
|
Amortization of (below) above market lease intangibles, net
|
(1,751
|
)
|
|
(1,116
|
)
|
||
Straight line rental revenue adjustment
|
(2,067
|
)
|
|
(1,969
|
)
|
||
Cash Net Operating Income
|
$
|
41,974
|
|
|
$
|
33,388
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
10,717
|
|
|
$
|
15,084
|
|
Add:
|
|
|
|
|
|
||
General and administrative
|
7,344
|
|
|
6,162
|
|
||
Depreciation and amortization
|
21,996
|
|
|
19,452
|
|
||
Acquisition expenses
|
23
|
|
|
9
|
|
||
Interest expense
|
6,471
|
|
|
5,852
|
|
||
Deduct:
|
|
|
|
|
|
||
Management, leasing and development services
|
102
|
|
|
103
|
|
||
Interest income
|
657
|
|
|
—
|
|
||
Gains on sale of real estate
|
—
|
|
|
9,983
|
|
||
Net Operating Income
|
$
|
45,792
|
|
|
$
|
36,473
|
|
Amortization of (below) above market lease intangibles, net
|
(1,751
|
)
|
|
(1,116
|
)
|
||
Straight line rental revenue adjustment
|
(2,067
|
)
|
|
(1,969
|
)
|
||
Cash Net Operating Income
|
$
|
41,974
|
|
|
$
|
33,388
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
10,717
|
|
|
$
|
15,084
|
|
Interest expense
|
6,471
|
|
|
5,852
|
|
||
Depreciation and amortization
|
21,996
|
|
|
19,452
|
|
||
Gains on sale of real estate
|
—
|
|
|
(9,983
|
)
|
||
EBITDA
re
|
$
|
39,184
|
|
|
$
|
30,405
|
|
|
|
Three Months Ended March 31, 2019
|
|||||||||
|
|
Total
(1)
|
|
Square Feet
(2)
|
|
Per Square Foot
(3)
|
|||||
Non-Recurring Capital Expenditures
(4)
|
|
$
|
7,779
|
|
|
11,775,369
|
|
|
$
|
0.66
|
|
Recurring Capital Expenditures
(5)
|
|
2,294
|
|
|
21,992,471
|
|
|
$
|
0.10
|
|
|
Total Capital Expenditures
|
|
$
|
10,073
|
|
|
|
|
|
(1)
|
Cost is reported in thousands. Excludes the following capitalized costs: (i) compensation costs of personnel directly responsible for and who spend their time on development, renovation and rehabilitation activity and (ii) interest, property taxes and insurance costs incurred during the development and construction periods of repositioning or development projects.
|
(2)
|
For non-recurring capital expenditures, reflects the aggregate square footage of the properties in which we incurred such capital expenditures. For recurring capital expenditures, reflects the weighted average square footage of our consolidated portfolio during the period.
|
(3)
|
Per square foot amounts are calculated by dividing the aggregate capital expenditure costs by the square footage as defined in (2) above.
|
(4)
|
Non-recurring capital expenditures are expenditures made with respect to improvements to the appearance of such property or any development or other major upgrade or renovation of such property, and further includes capital expenditures for seismic upgrades, or capital expenditures for deferred maintenance existing at the time such property was acquired.
|
(5)
|
Recurring capital expenditures are expenditures made with respect to the maintenance of such property and replacement of items due to ordinary wear and tear including, but not limited to, expenditures made for maintenance of parking lots, roofing materials, mechanical systems, HVAC systems and other structural systems.
|
|
Payments by Period
|
||||||||||||||||||||||||||
|
Total
|
|
Remainder of 2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
Principal payments and debt maturities
|
$
|
761,077
|
|
|
$
|
119
|
|
|
$
|
166
|
|
|
$
|
566
|
|
|
$
|
100,967
|
|
|
$
|
282,518
|
|
|
$
|
376,741
|
|
Interest payments - fixed-rate debt
(1)
|
70,520
|
|
|
5,926
|
|
|
9,325
|
|
|
9,316
|
|
|
9,307
|
|
|
9,298
|
|
|
27,348
|
|
|||||||
Interest payments - variable-rate debt
(2)
|
83,192
|
|
|
13,289
|
|
|
17,604
|
|
|
17,872
|
|
|
17,493
|
|
|
8,214
|
|
|
8,720
|
|
|||||||
Ground and office lease payments
|
11,053
|
|
|
772
|
|
|
949
|
|
|
1,032
|
|
|
923
|
|
|
951
|
|
|
6,426
|
|
|||||||
Contractual obligations
(3)
|
11,831
|
|
|
11,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
937,673
|
|
|
$
|
31,937
|
|
|
$
|
28,044
|
|
|
$
|
28,786
|
|
|
$
|
128,690
|
|
|
$
|
300,981
|
|
|
$
|
419,235
|
|
(1)
|
Reflects scheduled interest payments on our fixed rate debt, including the $100 million unsecured guaranteed senior notes, the $125 million unsecured guaranteed senior notes and the Gilbert/La Palma mortgage loan.
|
(2)
|
Reflects an estimate of interest payments due on variable rate debt, including the impact of interest rate swaps. For variable rate debt where interest is paid based on LIBOR plus an applicable LIBOR margin, we used the applicable LIBOR margin in effect as of
March 31, 2019
, and the one-month LIBOR rate of
2.4945%
, as of
March 31, 2019
. Furthermore, it is assumed that any maturity extension options available are not exercised.
|
(3)
|
Includes total commitments for tenant improvement and construction work related to obligations under certain tenant leases and vendor contracts. We anticipate these obligations to be paid as incurred through the remainder of 2019 and 2020, however, as the timing of these obligations is subject to a number of factors, for purposes of this table, we have included the full amount under “Remainder of 2019”.
|
|
|
Maturity Date
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
(1)
|
|
Principal Balance
(in thousands)
(2)
|
|
Maturity Date of Effective Swaps
|
|
|||
Secured Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|||
$60M Term Loan
|
|
8/1/2023
(3)
|
|
LIBOR+1.70%
|
|
4.195
|
%
|
|
$
|
58,499
|
|
|
|
|
Gilbert/La Palma
|
|
3/1/2031
|
|
5.125%
|
|
5.125
|
%
|
|
2,578
|
|
|
|
|
|
Unsecured Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Revolver
(4)
|
|
2/12/2021
(5)
|
|
LIBOR +1.10%
(6)
|
|
3.595
|
%
|
|
—
|
|
|
|
|
|
$100M Term Loan Facility
|
|
2/14/2022
|
|
LIBOR +1.20%
(6)
|
|
2.964
|
%
|
(7)
|
100,000
|
|
|
8/14/2021
|
|
|
$225M Term Loan Facility
|
|
1/14/2023
|
|
LIBOR +1.20%
(6)
|
|
2.574
|
%
|
(8)
|
225,000
|
|
|
1/14/2022
|
|
|
$150M Term Loan Facility
|
|
5/22/2025
|
|
LIBOR +1.50%
(6)
|
|
3.995
|
%
|
|
150,000
|
|
|
|
|
|
$100M Senior Notes
|
|
8/6/2025
|
|
4.290%
|
|
4.290
|
%
|
|
100,000
|
|
|
|
|
|
$125M Senior Notes
|
|
7/13/2027
|
|
3.930%
|
|
3.930
|
%
|
|
125,000
|
|
|
|
|
|
Total Consolidated Debt
|
|
|
|
|
|
3.487
|
%
|
|
$
|
761,077
|
|
|
|
|
(1)
|
Includes the effect of interest rate swaps that were effective as of
March 31, 2019
. Assumes a 1-month LIBOR rate of
2.4945%
as of
March 31, 2019
, as applicable. Excludes the effect of amortization of debt issuance costs, discounts and the facility fee on the Revolver.
|
(2)
|
Excludes unamortized debt issuance costs and discounts totaling
$3.6 million
as of
March 31, 2019
.
|
(3)
|
One
24
-month extension is available at the borrower’s option, subject to certain terms and conditions.
|
(4)
|
The Revolver is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. The applicable facility fee will range from
0.15%
to
0.30%
depending upon our leverage ratio.
|
(5)
|
Two additional six-month extensions are available at the borrower’s option, subject to certain terms and conditions.
|
(6)
|
The LIBOR margin will range from 1.10% to 1.50% per annum for the Revolver, 1.20% to 1.70% per annum for the $100 Million Term Loan Facility, 1.20% to 1.70% per annum for the $225 Million Term Loan Facility and 1.50% to 2.20% per annum for the $150 Million Term Loan Facility, depending on our leverage ratio, which is the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value. This leverage ratio is measured on a quarterly basis, and as a result, the effective interest rate will fluctuate from period to period.
|
(7)
|
As of
March 31, 2019
, the $100 Million Term Loan Facility has been effectively fixed at 1.764% plus an applicable LIBOR margin through the use of an interest rate swap with a notional value of $100.0 million and an effective date of December 14, 2018.
|
(8)
|
As of
March 31, 2019
, the $225 Million Term Loan Facility has been effectively fixed at 1.374% plus the applicable LIBOR margin through the use of two interest rate swaps as follows: (i) $125 million with a strike rate of 1.349% and an effective date of February 14, 2018, and (ii) $100 million with a strike rate of 1.406% and an effective date of August 14, 2018, plus the applicable LIBOR margin.
|
|
|
Average Term Remaining
(in years)
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
(1)
|
|
Principal Balance
(in thousands)
(2)
|
|
% of Total
|
||
Fixed vs. Variable:
|
|
|
|
|
|
|
|
|
|
|
||
Fixed
|
|
5.1
|
|
3.27%
|
|
3.27%
|
|
$
|
552,578
|
|
|
73%
|
Variable
|
|
5.6
|
|
LIBOR + 1.56%
|
|
4.05%
|
|
$
|
208,499
|
|
|
27%
|
Secured vs. Unsecured:
|
|
|
|
|
|
|
|
|
|
|
||
Secured
|
|
4.7
|
|
|
|
4.23%
|
|
$
|
61,077
|
|
|
8%
|
Unsecured
|
|
5.3
|
|
|
|
3.42%
|
|
$
|
700,000
|
|
|
92%
|
(1)
|
Includes the effect of interest rate swaps that were effective as of
March 31, 2019
. Excludes the effect of amortization of debt issuance costs, discounts/premiums and the facility fee on the Revolver. Assumes a 1-month LIBOR rate of
2.4945%
as of
March 31, 2019
, as applicable.
|
(2)
|
Excludes unamortized debt issuance costs and discounts totaling
$3.6 million
as of
March 31, 2019
.
|
•
|
Maintaining a ratio of total indebtedness to total asset value of not more than 60%;
|
•
|
For the Credit Facility, the $225 Million Term Loan Facility and the $150 Million Term Loan Facility, maintaining a ratio of secured debt to total asset value of not more than 45%;
|
•
|
For the $100 Million Notes and the $125 Million Notes, maintaining a ratio of secured debt to total asset value of not more than 40%;
|
•
|
Maintaining a ratio of total secured recourse debt to total asset value of not more than 15%;
|
•
|
Maintaining a minimum tangible net worth of at least the sum of (i) $760,740,750, and (ii) an amount equal to at least 75% of the net equity proceeds received by the Company after September 30, 2016;
|
•
|
Maintaining a ratio of adjusted EBITDA (as defined in each of the loan agreements) to fixed charges of at least 1.50 to 1.0;
|
•
|
Maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than 60%;
|
•
|
Maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least 1.75 to 1.0.
|
•
|
Maintaining a Debt Service Coverage Ratio (as defined in the term loan agreement) of at least 1.10 to 1.00, to be tested quarterly;
|
•
|
Maintaining Unencumbered Liquid Assets (as defined in the term loan agreement) of not less than (i) $5 million, or (ii) $8 million if we elect to have Line of Credit Availability (as defined in the term loan agreement) included in the calculation, of which $2 million must be cash or cash equivalents, to be tested annually as of December 31 of each year;
|
•
|
Maintaining a minimum Fair Market Net Worth (as defined in the term loan agreement) of at least $75 million, to be tested annually as of December 31 of each year.
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
Change
|
||||||
Cash provided by operating activities
|
|
$
|
36,184
|
|
|
$
|
25,200
|
|
|
$
|
10,984
|
|
Cash used in investing activities
|
|
$
|
(165,440
|
)
|
|
$
|
(44,768
|
)
|
|
$
|
(120,672
|
)
|
Cash provided by financing activities
|
|
$
|
225,230
|
|
|
$
|
32,534
|
|
|
$
|
192,696
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of
Publicly Announced Plans or Programs
|
|
Maximum
Number (or approximate dollar value) of Shares that May Yet Be Purchased Under the Plans
or Programs
|
|||
January 1, 2019 to January 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
February 1, 2019 to February 28, 2019
(1)
|
|
4,593
|
|
|
$
|
34.55
|
|
|
N/A
|
|
N/A
|
March 1, 2019 to March 31, 2019
(1)
|
|
18,497
|
|
|
$
|
34.20
|
|
|
N/A
|
|
N/A
|
|
|
23,090
|
|
|
$
|
34.27
|
|
|
N/A
|
|
N/A
|
(1)
|
In February and March 2019, these shares were tendered by certain of our employees to satisfy minimum statutory tax withholding obligations related to the vesting of restricted shares.
|
Exhibit
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
31.1*
|
|
|
31.2*
|
|
|
31.3*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
32.3*
|
|
|
101.1*
|
|
The registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to the Consolidated Financial Statements (unaudited) that have been detail tagged.
|
*
|
Filed herein
|
|
|
Rexford Industrial Realty, Inc.
|
|
|
|
May 3, 2019
|
|
/s/ Michael S. Frankel
|
|
|
Michael S. Frankel
|
|
|
Co-Chief Executive Officer (Principal Executive Officer)
|
|
|
|
May 3, 2019
|
|
/s/ Howard Schwimmer
|
|
|
Howard Schwimmer
|
|
|
Co-Chief Executive Officer (Principal Executive Officer)
|
|
|
|
May 3, 2019
|
|
/s/ Adeel Khan
|
|
|
Adeel Khan
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rexford Industrial Realty, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
May 3, 2019
|
|
By:
|
/s/ Michael S. Frankel
|
|
|
|
Michael S. Frankel
|
|
|
|
Co-Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rexford Industrial Realty, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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May 3, 2019
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By:
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/s/ Howard Schwimmer
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Howard Schwimmer
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Co-Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Rexford Industrial Realty, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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May 3, 2019
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By:
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/s/ Adeel Khan
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Adeel Khan
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Chief Financial Officer
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(1)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Michael S. Frankel
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Michael S. Frankel
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Co-Chief Executive Officer
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May 3, 2019
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(1)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Howard Schwimmer
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Howard Schwimmer
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Co-Chief Executive Officer
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May 3, 2019
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(1)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Adeel Khan
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Adeel Khan
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Chief Financial Officer
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May 3, 2019
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