Rexford Lifts 2026 Core FFO Outlook To $2.41-$2.44 A Share As Debt Falls And Buybacks Reach $708.7 Million
The Southern California industrial landlord raised its full-year outlook even as same-property income slipped in the third quarter.
Rexford Industrial Realty, which owns industrial buildings in Southern California, raised its 2026 outlook for core funds from operations, a REIT profit measure, to $2.41 to $2.44 per share from $2.38 to $2.43, the company said Thursday in its third-quarter results. Same-property income fell in the quarter, and net income dropped from a year earlier.
Profit measure flat, net income down
Core FFO came to $0.60 per diluted share, matching the year-earlier quarter. The company credited capital recycling and lower general and administrative expense, offset by weaker same-property income and lower interest income.
Net income attributable to common stockholders was $14.6 million, or $0.07 per share, against $87.1 million, or $0.37, a year ago. The quarter carried $71.8 million of impairments and $23.2 million of gains on property sales. For the first nine months the company posted a net loss of $404.4 million, or $1.80 per share, with $703.4 million of impairments.
Same-property net operating income fell 2.6% and cash net operating income fell 1.1%. Rexford pointed to rental rate compression, lower average occupancy and higher bad debt. Same-property ending occupancy was 96.9%, up 200 basis points from June 30.
Sales, buybacks and a lighter balance sheet
Rexford sold 25 properties for $1.3 billion in the quarter, including a 22-property portfolio for $1.2 billion. Year to date it has sold 37 properties for $1.5 billion, and it now guides to $1.7 billion to $2.0 billion of dispositions, up from $1.5 billion to $2.0 billion.
It repaid $485.0 million of debt, using cash on hand, and cut net debt to adjusted EBITDAre to 3.8x from 4.5x at June 30. Debt outstanding at September 30 was $2.8 billion, with no floating-rate exposure.
Buybacks are running at $708.7 million year to date as of October 22, at an average $36.90 a share, with $591.3 million left on the program. The third-quarter-plus-October purchases were 10.9 million shares for $408.7 million, including $100.0 million completed after quarter end.
Leasing and the stock
The company signed 3.7 million square feet of leases. Rents rose 7.1% on a net effective basis and fell 3.0% on a cash basis. CEO Laura Clark said market fundamentals "continue to improve, with increasing tenant demand driving our strong leasing activity in the quarter."
The release was filed in an 8-K. Shares closed at $36.28 on Thursday, down 1.41% in the regular session. Management holds a call Friday at 11:00 a.m. Eastern.
The board authorized a fourth-quarter dividend of $0.435 per common share, payable January 15, 2027.
