Rexford Posts Strongest Leasing Activity Since Q1 2024 Amid Economic Turmoil
The SoCal warehousing REIT has seen tenants delay their leasing amid uncertainty, but says its users are relatively insulated from negative effects to global trade flow
By Nick Trombola April 17, 2025 5:55 pm
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Despite a slowdown in demand for industrial space, and a volatile economic landscape, to say the least, Rexford Industrial Realty’s executives argue that the company focused on Southern California is well situated to weather the storm.
“Our tenants are clearly sensitive about the prospect of what tariffs could bring,” Michael Frankel, Rexford’s co-CEO, said Thursday during the company’s latest earnings call. “There’s a range of potential impacts. To the extent they drive a change in trade flows, our tenant base is relatively insulated. Nobody’s perfectly insulated, but … our tenants are disproportionately serving regional consumption, and [Southern California] is the largest zone of consumption in the country.”
After spending more than $1 billion a year buying industrial properties throughout the region after the pandemic, the Los Angeles-based real estate investment trust has significantly slowed down its warehouse acquisitions, with just about $30 million worth of deals currently under contract or accepted offer, and zero purchases under contract.
The REIT also posted nearly $252.3 million in revenue for the first quarter of 2025, per the earnings report, a notable bump from the $214.1 million reported in the first quarter of 2024.
Rexford recorded its highest level of leasing volume, nearly 2.4 million square feet, of any point over the past 12 months, according to its latest earnings figures. That’s head and shoulders above the roughly 1 million square feet it posted at the end of last year, and the 1.6 million square feet it posted the quarter before that. Yet, volume is still down year-over-year, compared with the 3.2 million square feet it posted in the first quarter of 2024.
Rexford also reported 125,000 square feet of positive absorption this past quarter. The REIT this past quarter, by way of example, stabilized five assets with a combined 560,225 square feet. The company is also seeing leasing activity at about 80 percent of its vacant spaces, Clark said.
“Our portfolio continues to be well positioned over the medium to longer term,” Laura Clark, Rexford’s chief operating officer, told investors on the call. “We own a high-quality portfolio located in infill Southern California, where the long-term supply-demand imbalance will continue to persist, making our portfolio even more valuable into the future. … This is in contrast to larger format industrial product, where demand is more closely linked to global trade flows.”
That’s not to say that Rexford won’t be affected by the currently unpredictable global economic situation, driven by a persistently high interest rate environment and President Donald Trump’s sweeping tariff policy. The REIT expects “relative volatility” within the Southern California industrial markets in the near term due to those factors, and has seen some tenants delay their lease activity amid that uncertainty, Clark said.
In terms of sales and acquisition activity, Rexford this past quarter sold a vacant, single-tenant building at 1055 Sandhill Avenue in L.A.’s South Bay for $52.5 million. The buyer of the nearly 128,000-square-foot property was a corporation that shares an address with freight and logistics company B.Y. International, according to property records. The deal was a solid payout for Rexford, which acquired the property in 2020 for $14.4 million. Following the end of quarter, the REIT sold another single-tenant building dubbed 20 Icon in Foothill Ranch, Calif., for about $51 million. The name of the buyer was not immediately available.
Rexford ended the first quarter of this year with about $505 million in cash on hand, with another $50.1 million in restricted cash and close to $1 billion under its unsecured revolver. Rexford’s current debt obligations stand at $3.4 billion, with an average maturity timeline of over three years and no “significant” maturities until next year.
During the Q&A segment, a representative for Deutsche Bank also asked Rexford’s leadership about Asia-based third-party logistics (3PL) exposure within the REIT’s portfolio, given that such firms have gobbled up space in big industrial markets recently in anticipation of Trump’s tariffs. Yet 3PLs make up relatively little of Rexford’s stable, Howard Schwimmer, the REIT’s other co-CEO, said during the call.
Although Rexford is currently negotiating a 190,000-square-foot lease with a well-established Chinese 3PL, Schwimmer said, Rexford views deals with such companies as risky, due to their often limited credit profiles.
“We’re very thorough in our credit analysis,” Schwimmer said. “And to be honest with you, we turned down many, many tenants that we don’t actually want to bring into the portfolio. … What you hear in the marketplace are some of these 3PLs coming to the market that have no credit. And people, because they have vacancy and are in dire need [of] occupancy, are taking some of those. [But] those are highly risky and are not the type of uses that we’re going to ever put into the retro portfolio.”
Nick Trombola can be reached at ntrombola@commercialobserver.com.
