Rexford Industrial: On The Way To Restoring Positive Investment Spread (NYSE:REXR)

Introduction

Rexford Industrial Realty, Inc. (NYSE:REXR) has a portfolio of 371 properties totaling approximately 45 million rentable square feet mostly located in Southern California’s infill markets. The exposure to Southern California’s infill region situates the company

Table 4: Capital Structure ($ in thousands)
Form of Capital Value ($) Weight (%)
Net Debt 2,162,337 18.5
Preferred Equity
Series B and C Cumulative Redeemable Preferred Stock 161,250 1.4
4.43937% Series 1 Cumulative Redeemable Convertible Preferred Units 27,031 0.2
4.00% Series 2 Cumulative Redeemable Convertible Preferred Units 40,787 0.3
3.00% Series 3 Cumulative Redeemable Convertible Preferred Units 12,000 0.1
Common Stock and OP Units 9,291,609 79.4
Sum 11,695,014 100.0

Table 5: Cost of Equity
β 0.89
Risk-free rate 4.57%
Equity risk premium 2.66%
Cost of equity 6.94%

Table 6: Issuer Rating and Cost of Debt
Description Rating/Yield Outlook/Time Horizon
Standard & Poor’s Rating Services BBB+ Stable
Moody’s Investor Service Baa2 Stable
Fitch BBB+ Stable
Corporate (Baa/BBB) Median Yield 6.08% 10-year

Table 7: Weighted Average Cost of Capital (WACC)
Weight of Debt 18.49%
Weight of Preferred Equity 2.06%
Weight of Equity 79.45%
Cost of Debt 6.08%
Cost of Preferred Equity 5.16%
Cost of Equity 6.94%
WACC 6.74%

Table 8: Cap Rate Minus WACC
Cap Rate 6.50%
WACC 6.74%
Difference -0.24%

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