Rexford Rides Industrial Demand to Increased Earnings

Rexford Industrial Realty, a Los Angeles-based real estate investment trust (REIT) focused on industrial properties throughout infill areas of Southern California, reported strong second-quarter 2025 results, attributing its success to the resiliency of its business model.

Rexford reported net income attributable to common stockholders of $113.4 million, or 48 cents per diluted share, a marked rise from the $79.8 million, or 37 cents per diluted share, during the same quarter in 2024.

The company also reported core funds from operations (FFO) of $139.7 million, up 7.8 percent from the same time last year, and company share of core FFO of 59 cents per diluted share, down 1.7 percent from last year but a 1 cent increase over the previous quarter, according to Rexford Chief Financial Officer Mike Fitzmaurice.

Rexford executed 1.7 million square feet of new and renewal leases for the quarter, noting that rental rates increased by 20.9 percent compared to prior rents on a net effective basis, and increased by 8.1 percent on a cash basis.

“Healthy tenant retention and new leasing activity drove increases in same-property occupancy and positive net absorption in the quarter,” Laura Clark, Rexford’s chief operating officer, said during the company’s earnings call Thursday. “We ended the quarter with same-property occupancy at 96.1 percent, an increase of 40 basis points sequentially, and net absorption was a positive 220,000 square feet. Additionally, the strength of our tenant base and the critical nature of our infill locations was reflected in de minimis levels of bad debt in the quarter at only 6 basis points of revenue.”

The company also sold two properties last quarter for a total of $81.6 million: a 102,299-square-foot industrial building in Lake Forest, Calif., called 20 Icon, which sold in April for $50.9 million, or $497 per square foot; and a 106,311-square-foot industrial property at 2270 Camino Vida Roble in Carlsbad, Calif., which sold to MCA Realty for $30.7 million, according to Commercial Search.

On the other hand, economic uncertainty driven by several factors, including tariffs, has increased tenant uncertainty. This has had a downward effect on rents, Rexford executives said.

“While leasing activity remains steady and tenant health continues to be solid, macroeconomic and tariff uncertainty are still impacting some tenant decision-making,” said Clark. “This is putting some pressure on overall demand, impacting rent levels and lease-up time frames in the quarter. Market rents across Rexford’s portfolio declined approximately 3.5 percent sequentially and 12.8 percent year-over-year. Despite these market dynamics, our portfolio continues to exhibit relative strength when compared to the broader market.”

Clark declared that, ultimately, market forces look favorable for Rexford’s industrial portfolio.

“Over the long term, we remain confident that our irreplaceable infill Southern California portfolio will continue to benefit from persistent and growing supply constraints, coupled with demand from the nation’s largest regional zone of consumption and 11th-largest economy in the world,” said Clark. “These superior long-term fundamentals are the foundation of our value creation business model that drives shareholder value.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.