Rexford Industrial, months into its Laura Clark-era, posts a $507 million loss — mostly due to write-downs — for the second quarter, compared to a $113 million profit for the same period last year.
The net loss in the second quarter includes about $625 million of impairments, which “primarily reflect certain assets designated for disposition whose expected holding periods were shortened in connection with the company’s increased disposition guidance,” the Brentwood-based real estate investment trust said in its earnings release. Basically, the REIT is selling some real estate sooner than it thought it would, so that real estate is worth less than what its books said, and it had to fix that.
Funds from operations, a measure REITs prefer, increased one percent year over year to $141 million in the second quarter.
Rexford earlier indicated plans to sell lots of real estate — part of its changed capital allocation strategy post-Elliott Investment’s activist stake. But the target was around $500 million for 2026. Now the REIT wants to sell off around $1.5 billion to $2 billion of real estate, per its latest earnings release.
Clark said the disposition of “non-core assets” will “enhance cash flow durability and increase financial flexibility” in Thursday’s release.
The industrial outfit inked $138 million in sales across seven properties during the second quarter: three in the South Bay, two in Orange County, one in San Gabriel Valley and another in Los Angeles’ mid-counties area. The priciest was 18455 Figueroa Street at an about $35 million price tag.
The REIT is “encouraged by the continued improvement we are seeing in fundamentals across the infill Southern California industrial market, including increasing tenant demand, positive net absorption and declining vacancy — all early signs of strengthening market conditions,” Clark said.
Rexford executed 2 million square feet of new and renewal leases, but rent comps decreased close to three percent.
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