New Rexford Industrial Realty CEO Laura Clark On the Southern California Market

Rexford Industrial Realty’s new CEO is inheriting a company in transition, juggling activist investor pressure, co-founder departures and a major shift in strategy all at once.

In August 2025, Elliott Investment Management, a New York-based hedge fund under Paul Singer known for its activist investment approach, built a stake in Rexford — Southern California’s busiest industrial development and investment firm. A few months later, Rexford co-founders Michael Frankel and Howard Schwimmer announced plans to leave their roles as co-CEOs and on the board of directors, with Chief Operating Officer Laura Clark queued to take the reins of the multibillion-dollar real estate investment trust in one of the biggest warehousing markets in the world.

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At the same time, Rexford announced it had a new playbook that looked nothing like the old one — which had over the past half-decade steered Rexford to spend north of $2 billion per year scooping up industrial developments around Southern California. Clark has instead directed the REIT to maximize returns by acquiring shares and selling properties.

But Clark also took over one of Southern California’s most closely watched landlords at what appears to be a precarious time for the market it dominates. CBRE reported Greater L.A.’s industrial asking rents fell 8.3 percent year-over-year, and by more than 30 percent since 2023, while vacancy rose to 5.4 percent and availability climbed to 8.1 percent.

Clark officially stepped into the CEO role on April 1 while Rexford was already well into its new disciplined focus. On April 24, the firm announced record leasing and 96 percent occupancy. But most of the leasing was renewals, while the firm’s net operating income fell 4 percent, and net effective rents declined 10 percent — demonstrating the occupancy-focused strategy’s effects on the bottom line.

One renewal from tire distributor Tireco stood out, as it made up about 25 percent of Rexford’s reported leasing in the first quarter, but it came with a 30 percent negative rent spread.

Commercial Observer spoke with Clark about the company’s about-face from buying sprees to capital recycling, and why she believes infill Southern California industrial, and Rexford’s portfolio, still has significant long-term upside.

The following has been edited for length and clarity. 

Commercial Observer: Can you talk about your career path and how it led you to where you are, and the significance for you personally in taking on this major role?

Laura Clark: My career has been really focused across all real estate sectors and property types. I’ve had the opportunity to work on the principal side of the business, on the public and private sides.

My career has also included time as a research analyst at Green Street Advisors, in various leadership roles at Regency Centers, and then, most recently, I joined Rexford in 2020 as our CFO, and then in 2024, I transitioned to the role of COO. So, certainly, this collective experience has positioned me for the new role today.  

I’m incredibly proud to step into the role of CEO at Rexford, and honored to be able to lead the team that we have here. I am very passionate about our unique opportunity at Rexford and our unique business model that’s focused on value creation. 

We are in one of the largest industrial markets in the world, and we serve the 12th-largest economy of the world, and I believe that the opportunity ahead for us is significant.

You’ve mentioned a refreshed lens, and you’re taking over for the two co-founders. What’s the most important thing you want investors, tenants, and the broader industry and market to understand for this next chapter for Rexford?

At the end of last year, when we announced the transition, we also announced a reformed approach to our strategy and to capital allocation. And I would say that, as we move forward, that is the foundation that will position Rexford for the future. 

That foundation is centered around prudent capital allocation, where we can drive the highest risk-adjusted return, of course while taking into account current market dynamics, our cost of capital, and, most importantly, what allows us and enables us to produce outsized total shareholder return.

We’re also focused on continuing to improve our operational efficiencies that contribute and drive straight to the bottom line. As we move forward, our actions are going to align under this foundation, and we’ve demonstrated that over the recent months.

I have a strong conviction in our infill Southern California market focus, the ability that we have to drive value creation in this market, and the depth and expertise of our team. So, as we step into this next phase of Rexford, I believe that our opportunity to build an even better Rexford from here is significant.

What are some of the other potential avenues that you might be tapping into that are outside of honing the portfolio right now? Or is that the core of the strategy?

I believe our most significant opportunity for growth actually exists within our own portfolio today.

We have a significant amount of developments and repositionings that are in process or we’ve delivered to the market, and so the lease-up and the occupancy of those opportunities equates to about $50 million of net operating income growth.

So, our focus today is on driving occupancy across the portfolio, specifically within those developments and repositionings.

What would make this a successful first year for you as CEO? What metrics would you look at? 

We have three core strategic areas of focus this year, and I’d say success this year is executing and driving those initiatives.  

First, it’s around opportunistic decisions that allow us to reduce risk, build a more resilient, higher-growth portfolio, while also taking advantage of premium valuations within the market, and then taking that capital and recycling it on an accretive basis — either within our internal value creation opportunities through development or repositioning, or through share repurchases, which we’ve been executing.  

And then I’d say the third area is around operational rigor: How we’re driving occupancy across the portfolio that’s going to drive higher cash flows, and how we’re driving operational efficiencies within the business.

Are these permanent changes in direction, or is this just how you’re tackling this calendar year?

I think the reformed approach to how we will allocate capital and how we make decisions is the foundation. That approach is the foundation of how we’ll drive forward.

Our value creation business model is going to continue to be focused on how we can drive higher cash flow per share that will drive higher total shareholder return over time. So that is going to be focused on allocating capital to those investments that drive the highest risk-adjusted returns — which could also include, over time, acquisitions.

Really, it’s all centered around: How do you drive outsized cash flow and total shareholder return, while mitigating risk at the same time?

You said it could include acquisitions, but Rexford was once one of the most aggressive buyers in Southern California, with years-long buying sprees. This year is very different, with almost $500 million in expected dispositions, and no acquisitions under contract for this calendar year. Can you talk more about what specifically drove that change? Is it just the market, or something in the portfolio?

Yes, it is aligned around how we’re thinking about allocating capital. 

Allocating capital to the highest risk-adjusted returns takes into account market conditions and our current cost of capital — both very important as you think about investing where you can drive shareholder value, funds from operations per share and net asset value per share growth.

Today, we have competing uses of capital that allow us to do that, and those include share repurchases, the value-add repositioning and select development. That’s our focus today.

That being said, the market opportunity over time for us to continue to grow within this market continues to be very compelling. And, so, there will come a time that where the yields meet our stringent requirements, and we’re going to approach the underwriting with rigor and a risk mindset and ensure that, when we are acquiring assets into the future, we’re going to be solving to the right risk-adjusted spreads, which allows us to capture enhanced performance through the ups and the downs of cycles.

So, while acquisitions are not a compelling use of capital today, we’re laser-focused on executing the strategic priorities that we have in place today.

You mentioned value-add, and Rexford was also known for flipping properties around Southern California into Class A facilities. Rexford decided not to continue with some redevelopments in the first quarter. Do you see value-add as a pillar to Rexford?

Absolutely. Our business is built on value creation. 

No. 1, that’s how we’re going to produce outsized cash flow per share growth, and it’s through the repositioning and development of higher-functional and higher-quality industrial real estate. That’s the core of what we do, and we will continue to do that — and we’re doing it today.

There were about six projects where, when we re-underwrote and re-evaluated those properties, they didn’t meet our yield requirements, and so that’s why we’re not moving forward with them.

We are moving forward with others — many others — that we have under construction today, and we also have a pipeline of opportunities that we’re excited to continue to move forward with. So that is paramount: Our business is built on value creation and will be into the future.

Are you worried about critics raising concerns that Rexford’s new strategy is sacrificing the rent growth that was achieved during the postpandemic years, and possibly focusing too much on occupancy preservation?

No. I think today, in the market that we’re operating — while we’re seeing some good early signs in terms of incremental demand across the market and across our portfolio — vacancy levels and availability across the market continue to be elevated.

While we are in this market where we’re still seeing softer demand and higher vacancy levels, it is very important that we continue to prioritize occupancy to drive revenue and income within the portfolio. So I do not believe that we’re sacrificing growth. I believe that there is a real cost of downtime.

Given the overall market fundamentals that are still not moving in the right direction across the market — as I mentioned, good early signs, but still some softness in those overall market fundamentals — I believe that the right strategy today is to focus on driving occupancy and preserving occupancy and income within the portfolio.

With the conflict in the Middle East, how much of that is a concern, or affecting overall market growth in Southern California?

There is a lot of volatility within the market, and we’ve seen that actually over the past couple of years, starting with tariffs last year and now moving into the global unrest and the war that we’re experiencing today.  

We have not seen an impact to this point from the current conflict in terms of an impact to overall activity. It’s still relatively early in that conflict to hit the market, but, to date, we have not seen an impact.  

We’ve been really encouraged by the early signs that we’ve seen in tenant decision-making and the level of lease execution. I would say that, if you think back to the end of last year, it was a bit slower at the end of the fourth quarter and as we kicked off the year, but, as we progressed through the quarter, we saw tenant requirements grow. 

That was driven by a lot of different things — from pent-up demand to the reconciliation or consolidation of space. We have seen incremental growth as well. We’re encouraged by the fact that this activity has continued and has turned into these executions.

Describe the state of Southern California’s industrial real estate today. Is it a tenant’s market, a landlord’s market — who’s competing for who?

We are seeing a pickup in activity and a pickup in lease executions, and those are positive. But market fundamentals are still under pressure. Net absorption in the market is negative, and vacancy has picked up across the market.  

So, if you take all these dynamics into account, we do see that the bottom of the cycle does appear to be forming. It’s certainly too early to call an inflection at this point, but we are seeing good early signs.  

I think it’s important to remember, though, this is a nearly 2 billion-square-foot industrial market, and not all submarkets, nor all size ranges, nor all quality types perform the same. There are varying levels of demand and performance that we see depending on the quality of the real estate, the submarket in which it’s located, and the size.  

Just generally speaking across the market, the smaller spaces — 50,000 square feet and lower — are performing the best across the market and have been the most stable through this cycle. That bodes well for Rexford’s portfolio. Our average tenant size is 28,000 square feet. 

That product has been very challenging to deliver in the market from a supply perspective for decades, and those tenants serve the regional consumption base. That’s why, at Rexford, we focus on that product — because we’re focusing on the businesses that serve this vast consumption base.

As we look ahead, we need to see incremental demand continue to pick up so that we can see net absorption turn positive and reduce vacancy further from here.

Which tenant types and submarkets where smaller spaces — 50,000 square feet and lower — are doing particularly well in your portfolio or in the market?

Yeah, let’s drill into some of the details there. Those assets continue to see very stable and good demand across all submarkets.

We’re seeing increased demand in the South Bay, particularly around Torrance, as well the San Fernando Valley where you’re seeing an increase in advanced manufacturing, food and beverage, medical, construction-related businesses, and automobile.

We’re seeing healthy demand in parts of the San Gabriel Valley, and we’ve seen some stabilization in the Inland Empire West. We don’t focus in the Inland Empire East, but our product in the Inland Empire West, particularly from third-party logistics tenants, has continued to exhibit good demand.

Is there any opportunity for Rexford to lean more into the aerospace and defense contractor usage in Southern California, or with digital infrastructure like data centers?

Certainly, we’re seeing a pretty significant increase in incremental demand from those tenants that are in the advanced manufacturing, defense-type industry, and we’re seeing that across the market.

In terms of digital infrastructure, that’s challenging within Southern California in particular, given that those types of real estate require a significant amount of power. It’s very challenging to deliver power to data centers in this market because there is just a lack of power in our market.

I do not think that you’re going to see significant development or investment in data centers within the infill Southern California market.

What else is important for people to know?

I often get the question about what’s underappreciated about the market and about the opportunities. I think there’s something that is being missed today, probably because we’re sitting on elevated levels of vacancy and availability.

We will see demand continue to pick up and come back into this market, and that space will be absorbed over time. But I’m very optimistic, and I think what’s underappreciated is the supply dynamics of this market.

If you look over the next 10-plus years and compare that to the last 10, 20, 30 years, the supply dynamic in this market has changed significantly. Construction levels are near all-time historic lows, and they have been for the past year or two.

You add to that the recent changes and regulations around industrial development — particularly around AB 98 [which set stricter standards for larger industrial properties in California] — that have dramatically impacted the ability to add supply in our market. I think the ability to add supply into the future has changed dramatically.

We all know with real estate we work in a demand-and-supply environment. If, as we move into the future, the ability to add new supply to this market has changed drastically, I think that makes our real estate that much more valuable as we move forward.  

So, we’re going to work through the current elevated levels of availability over the near term, but the inability to add supply in the market over the medium to long term, especially relative to prior cycles, creates a really unparalleled market opportunity in infill Southern California.

Our current focus is to control what we can control in this market. We’re going to drive occupancy. We’re going to drive accretion through capital recycling.  

That positions Rexford for not only better growth today, but, I believe, builds a better Rexford for the future. We’re going to build a stronger and more durable portfolio. Cash-flow growth is more sustainable, and we’re going to continue to have embedded opportunities within the portfolio that allow us to strategically execute the value creation platform that we have in place.

Greg Cornfield can be reached at gcornfield@commercialobserver.com.