Rexford reports quarterly profit, revenues jumps of 32% in Q1

Rexford Industrial Realty is feeling the cash flow from its billions of dollars worth of purchases over the last two years. 

The L.A.-based industrial REIT reported $58 million in net income in the first quarter of this year, up 32 percent from the same period last year, according to a quarterly report released Thursday. 

Rexford’s revenues in the first quarter totaled $186 million, compared to $141 million in the first quarter of last year — also a 32 percent increase. 

Since the start of the pandemic, when buyers turned to online shopping and distributors raced to gobble up industrial space across Southern California, Rexford has amped up its acquisitions and its profit margins. 

Last year, Rexford spent $2.4 billion purchasing industrial properties, compared to $971 million in 2019, when it reported a yearly net income of $50.5 million — what the firm now makes in one quarter, according to filings with the Securities & Exchange Commission.

On an earnings call, co-CEO Michael Frankel dismissed concerns that demand for industrial space was waning.

“Our tenant base throughout the market is disproportionately serving regional consumption,” Frankel said on the call Thursday, adding Rexford was more insulated from national trends. 

However national trends are affecting Southern California, too. Industrial vacancy in the Inland Empire — the region’s largest industrial hub — ticked up to 2.3 percent in the first quarter, up from below 1 percent in the first quarter of 2021, according to JLL. 

Rexford said its pain from rising interest rates was muted — its debt held an average interest rate of 3.6 percent in the first quarter, more than a percentage point below the current secured overnight financing rate. 

Rexford’s profit jump comes as other public real estate firms have reported huge drops in net income, as a result of rising interest rates and a dropoff in commercial investment sales and leasing. 

Alternative investment firm Blackstone reported $85.8 million in net income in the first quarter, down from $2.5 billion in the first three months of last year — a 96 percent drop, according to a report also released Thursday. 

Prologis, which has a market cap of $116 billion — almost 10 times that of Rexford — reported $463 million in profit in the first quarter, down 60 percent from $1.2 billion in the first quarter of last year, according to an SEC filing. Explaining the drop, the San Francisco-based industrial REIT said it made “significant gains” on investment sales in 2022, but had “minimal” gains in the first quarter of this year.