Business Context and Reporting Period
Rexford Industrial Realty, Inc. filed this Form 8-K on May 22, 2017, reporting events occurring on May 24, 2017. The Company is a Maryland corporation focused on industrial real estate, with principal executive offices in Los Angeles, California.
Key Financial Metrics and Transaction Details
Acquisition: The Company acquired the Safari Business Center, an industrial park in Ontario, California, for a purchase price of $141.2 million (exclusive of closing costs).
- Asset Size: 16 buildings totaling 1,138,090 rentable square feet.
- Occupancy: 97% occupied with 75 tenants.
- Revenue: Current annualized base rent of approximately $7.8 million ($6.89 per rentable square foot).
Financing and Liquidity: The acquisition was funded through a combination of sources:
- $90.0 million drawn from the unsecured revolving credit facility.
- $39.7 million from net cash proceeds of a property sale via a Section 1031 like-kind exchange.
- Remaining balance funded by available cash on hand.
Debt Status: Following the $90.0 million draw, total borrowings outstanding under the $350.0 million Revolver increased to $138.0 million.
Material Changes
The primary material change is the expansion of the Company's portfolio in the Inland Empire West submarket through the Safari Business Center acquisition. Additionally, the Company's leverage under its revolving credit facility increased by $90.0 million to fund this transaction.
Guidance, Outlook, and Risks
This filing does not contain updated financial guidance, forward-looking outlook statements, or specific risk factors beyond the standard disclosure that the Credit Agreement description is subject to the full agreement filed previously. The transaction was executed as a tax-deferred like-kind exchange for a portion of the funding.
Investor Verification Checklist
- Verify the impact of the $141.2 million acquisition on the Company's overall leverage ratios and debt service coverage.
- Confirm the remaining availability under the $350.0 million Revolver after the $138.0 million outstanding balance.
- Review the specific terms of the Credit Agreement filed as Exhibit 10.1 to the February 15, 2017, Form 8-K for covenants and interest rates.
- Assess the quality and lease terms of the 75 tenants at the Safari Business Center to validate the $7.8 million annualized rent figure.