Updated 3/13/25
Rexford Industrial Realty has carved out a unique niche for itself. While most REITs spread their portfolios across different regions and sectors, Rexford is laser-focused on one thing: infill industrial properties in Southern California. This narrow approach might seem like a risk at first glance, but itâs actually been one of Rexfordâs greatest strengths. In an area where land is scarce and demand for industrial space remains high, Rexford has built a portfolio that consistently delivers.
Since its founding in 2001 and public debut in 2013, Rexford has grown its real estate footprint to nearly 45 million square feet. That kind of growth, in one of the most supply-constrained real estate markets in the country, is no small feat. For income investors looking for stable, long-term dividend payers, this is a REIT that deserves attention.
Recent Events
Over the past year, Rexfordâs stock hasnât had the smoothest ride. Shares are down nearly 18% while the broader market has been heading in the opposite direction. A big part of that drop can be chalked up to rising interest rates, which have affected REITs across the board. Higher borrowing costs make it harder for companies like Rexford to expand, and the market has adjusted expectations accordingly.
Despite that, the business itself remains healthy. Revenue is up over 15% year over year, and occupancy rates continue to hover near full capacity. While earnings growth slowed a bit, the company is staying profitable and generating solid cash flow. Management has started leaning more into development and redevelopment instead of chasing high-priced acquisitions, which feels like a smart move in this environment.
Key Dividend Metrics
đ Dividend Yield: 4.28%
đž Forward Dividend: $1.72 per share
đ Next Payment: April 15, 2025
âł Ex-Dividend Date: March 31, 2025
đ Five-Year Average Yield: 2.30%
đš GAAP Payout Ratio: 139.17%
đ Estimated FFO Payout Ratio: Around mid-70%
đ Latest Dividend Increase: Approximately 3%
Dividend Overview
Rexford is currently offering a 4.28% forward yield, which is meaningfully higher than what investors have seen from the company in recent years. For comparison, its five-year average yield sits at just 2.3%. So todayâs yield is not only attractive â itâs rare for this stock.
The company has maintained a consistent dividend payment, gradually increasing it each year. The most recent bump was modest, but in todayâs environment, that kind of conservatism is welcome. Itâs clear that Rexford wants to keep its dividend sustainable, even if that means dialing back on growth for now.
The payout ratio based on net income might seem high at first glance â over 139%. But for REITs, net income isnât the best measure of dividend safety. When looking at funds from operations, the ratio looks much more comfortable, somewhere in the 70% range. Thatâs right in the sweet spot for REITs, giving Rexford room to manage its cash flows while still rewarding shareholders.
Dividend Growth and Safety
Rexford has treated its dividend as a long-term commitment. Over the last five years, the companyâs dividend growth rate has been solid, running at over 8% annually until recently. The latest increase was around 3%, a sign the company is adjusting to tighter conditions without abandoning its growth mindset.
Even with slower growth, the dividend looks well-covered. Rexfordâs operating cash flow over the past year came in at nearly $479 million. Thatâs plenty of cushion to support the current dividend, especially when combined with a measured capital investment approach.
From a safety standpoint, the balance sheet looks solid. Debt-to-equity is manageable at around 38.5%, and Rexford still holds investment-grade credit ratings. The company isnât taking unnecessary risks, which helps build confidence in the dividendâs staying power.
Chart Analysis
Current Market Phase and Wyckoff Context
Rexford Industrial Realty (REXR) appears to be in the latter half of a markdown phase, with hints that it may be entering early-stage accumulation. The price action since late October shows a steep decline, followed by a rounding bottom and tighter price compression, signaling potential for a base-building process.
After a failed attempt to reclaim the 50-day moving average in early March, the stock is now drifting just under that line, indicating thereâs still overhead pressure and little confirmation of demand overpowering supply. Volume has remained moderate throughout this bottoming zoneâsuggesting institutional buyers arenât yet aggressively stepping in, but the panic selling from last fall has clearly eased.
50-Day and 200-Day Moving Averages
The 50-day moving average is sloping downward and has remained under the 200-day moving average since late Q3 of last year. That persistent divergence confirms a longer-term downtrend still has momentum, although the recent flattening of the 50-day line hints that price may be trying to stabilize. The stock has attempted to test the 50-day MA multiple times since January but continues to be rejected. Until that moving average flattens and gets reclaimed decisively, upside will likely remain capped.
The 200-day is still pointing down, which supports the view that the broader trend remains bearish. However, if price can form a solid support floor and eventually reclaim the 50-day with growing volume, the setup could transition into Phase B of Wyckoff accumulation.
Volume Behavior
Volume during the steep decline in Q4 was pronounced, especially in late October and November, indicating heavy distribution. Since then, volume has contracted and become more balanced between red and green days. This sideways volume structure typically suggests supply is drying up, which is often the first step before a true accumulation range begins to form.
There hasnât been a standout volume spike to signal a major institutional buy-in yet, so while thereâs less selling pressure, we havenât seen clear evidence of accumulation picking up in size either.
Relative Strength Index (RSI)
The RSI has remained below the 50 level for most of the chart and is currently slipping again after approaching mid-levels in February. This behavior aligns with a stock still under distribution or early accumulationâmomentum isnât breaking out, and thereâs no decisive shift in buying strength yet. That said, RSI isnât deeply oversold either, which suggests the stock is stuck in indecision, not panic.
Last 5 Candles and Price Action
Looking at the last five trading sessions, candles have been narrow and mostly indecisive. Wicks on both the upper and lower ends indicate a tug-of-war between buyers and sellers. The most recent candle on March 12 shows a slight dip from the open to close with a long upper wick, suggesting buyers tried to push higher but ran into selling pressure near the 50-day MA.
The lack of follow-through after minor intraday rallies implies sellers are still active above $39.50. Until thereâs a break above recent highs on strong volume, the range-bound behavior will likely persist.
The lower shadows on candles from earlier in March show attempts to defend the $38.90 area, which could be forming a short-term support level. If that level breaks, a revisit to the December lows canât be ruled out.
Analyst Ratings
đ In recent weeks, Rexford Industrial Realty (REXR) has seen a handful of updates from the analyst community. The stock is currently trading around $40.07, and the sentiment surrounding it appears cautiously optimistic, with most analysts maintaining a neutral to positive stance.
đŻ The consensus 12-month price target sits at approximately $44.31, which implies a potential upside of just over 10% from current levels. Among analysts, the price targets range from a low of $40.00 to a high of $50.00, showing a relatively tight range that reflects tempered expectations amid a shifting macro backdrop.
đ Wedbush made a slight upward revision to its target, moving it from $40 to $41 while maintaining a neutral rating. That small bump indicates a modest improvement in sentiment, possibly linked to the stock finding some technical support and signs of price stabilization. However, Wedbush is still waiting for stronger catalysts before turning more bullish.
đĄ Truist, on the other hand, lowered its target from $50 to $44 but kept a buy rating in place. This move suggests that while the firm sees long-term value, itâs acknowledging the current headwindsâparticularly the pressure higher interest rates have put on REIT valuations. Even with the reduced target, Truistâs buy stance shows continued confidence in Rexfordâs fundamentals and long-term strategy.
đ§ Deutsche Bank recently began covering the stock with a hold rating and a $40 price target. Thatâs essentially in line with where the stock is currently trading, signaling that the firm expects Rexford to perform in line with the broader market. Their neutral positioning likely reflects a wait-and-see approach as the industrial REIT space navigates through a more challenging rate environment.
đŒ Overall, analyst adjustments have centered around the macro landscapeâespecially rate sensitivity in the real estate sectorâand a recognition that Rexfordâs regional focus, while usually a strength, may also create some exposure in the short term. The current outlook remains cautiously constructive, with no dramatic shifts but a clear eye on external pressures.
Earning Report Summary
Rexford Industrial finished 2024 on a strong note, delivering solid results that show the companyâs strategy continues to work well in a challenging real estate environment. The companyâs focus on high-demand industrial properties in Southern California helped it post notable gains across several key areas.
Net Income and Core FFO Growth
In the fourth quarter, Rexford reported net income of $34.8 million, or about 23 cents per share. Thatâs a big improvement compared to the same quarter last year, when earnings came in at just over $13 million. For the full year, net income reached $111.8 million, or 80 cents per shareâup from $61.3 million in 2023. That kind of jump reflects strong execution on leasing and acquisitions.
Looking at Core FFO, which is a more accurate measure of a REITâs performance, the growth was even more impressive. In the fourth quarter alone, Core FFO hit $69.6 million, up more than 60% from the prior year. On a per-share basis, thatâs 45 cents, up from 34 cents. Full-year Core FFO totaled $230.3 million, a gain of 44%, with per-share results climbing to $1.64 from $1.32. These numbers suggest Rexfordâs cash-generating ability is on solid ground.
Strong Leasing and Property Performance
The portfolioâs net operating income also showed healthy growth. Overall NOI for the fourth quarter jumped over 50% on a GAAP basis and nearly 40% on a cash basis. The same-property segment saw NOI grow about 10% in the quarter, driven by both rising rents and relatively stable expenses. For the year, NOI in the same-property portfolio was up around 9% on a GAAP basis and closer to 12% when adjusting for rent deferrals.
Rexfordâs leasing performance continues to stand out. The company signed 92 new leases in the fourth quarter, covering roughly one million square feet. These deals delivered rent increases of 34% on a GAAP basis and 21% on a cash basis. For the full year, Rexford completed nearly 500 lease deals totaling 7 million square feet, with rent spreads reaching 42% and 29%, respectively.
Occupancy remained consistently high, with the same-property portfolio sitting at 99% full. Even with properties under repositioning included, occupancy was still above 96%, showing how tight the industrial market remains in their target regions.
Acquisitions, Sales, and Balance Sheet Position
Rexford stayed active on the acquisition front during the fourth quarter, purchasing 19 properties for about $551 million. These deals are expected to generate solid long-term returns once fully stabilized. Over the course of the year, the company picked up 51 properties totaling nearly $1.9 billion in value. These include a mix of warehouses, industrial outdoor storage, and land for redevelopment. On the flip side, Rexford sold five assets for about $59 million, locking in strong gains and boosting internal returns.
Financially, the company ended the year in a good spot. Liquidity stood at roughly $878 million, with cash and a revolving credit facility providing plenty of flexibility. Rexford also has forward equity proceeds lined up and no debt maturing until 2026, which gives it a decent cushion as it plans for future growth.
Financial Health and Stability
Cash on hand isnât massive â about $64.9 million â but thatâs pretty typical for a REIT. These companies are designed to distribute earnings rather than hoard them. More importantly, Rexford has reliable, recurring cash flow and access to credit facilities if needed.
The current ratio of 0.46 might look low by conventional standards, but for a REIT, itâs not concerning. The focus should be on long-term asset value and cash flow generation, not short-term liquidity. Rexfordâs strategy of internal development means theyâre prioritizing high-return projects without straining the balance sheet.
Another point in Rexfordâs favor is how theyâve navigated the changing market. Instead of overextending with new acquisitions at todayâs higher cap rates, management is leaning into redevelopment of existing properties â a savvy approach that keeps returns healthy.
Valuation and Stock Performance
Shares are trading at just over $40, which puts the stock close to its 52-week low of $36.92 and well below the high of $52.61. Price-to-book has dropped to 1.12, which is down from the 1.6+ range it saw in recent years. This suggests the market is placing a discount on Rexfordâs premium assets, likely due to uncertainty around growth and interest rates.
When you compare that with the underlying business performance, the disconnect is hard to ignore. Revenue continues to climb, and demand for Southern California industrial real estate hasnât let up. That combination â solid fundamentals with a depressed valuation â could be appealing for income-focused investors.
The stockâs five-year beta is right at 1.00, meaning it tends to move in line with the broader market. So while itâs not a low-volatility play, itâs also not overly reactive to market swings.
Risks and Considerations
Rising rates remain the biggest headwind for Rexford. As borrowing costs increase, it becomes harder to finance new deals at attractive returns. That could slow growth and put some pressure on dividend increases in the near term.
The companyâs tight geographic focus is another consideration. Southern California is a competitive, high-cost market. While this gives Rexford an edge with limited competition, it also means thereâs less diversification if something disrupts the regional economy or logistics activity around the ports.
One other point worth noting: the GAAP payout ratio is high. While most experienced REIT investors understand this isnât cause for alarm, newer investors might misinterpret it. Itâs important to focus on FFO and cash flow metrics instead, where the dividend appears far more sustainable.
Final Thoughts
Rexford Industrial isnât trying to be everything to everyone â and thatâs exactly what makes it interesting. The company has stuck to its knitting, doubling down on a supply-constrained, high-demand region that continues to attract industrial tenants.
For dividend investors, thereâs a lot to like here. The yield is higher than itâs been in years, the balance sheet is in good shape, and the payout is supported by real, recurring cash flow. While challenges from higher interest rates and a slower growth environment are real, Rexford has shown it can adjust without putting its dividend at risk.
In a market where finding reliable income is getting harder, Rexfordâs focused strategy and disciplined management make it a name worth keeping an eye on.