On April 10, 2019, Rexford Industrial Realty, Inc. (the “Company”), through its operating partnership, Rexford Industrial Realty, L.P., of which the Company is the sole general partner (the “Operating Partnership”), acquired from an unaffiliated seller (the “Seller”) an industrial property located at 1515 East 15th Street in Los Angeles, California, comprised of an approximately 238,015 square foot building on approximately 2.13 acres (the “Property”). In consideration for the Property, the Operating Partnership issued the Seller 593,960 newly issued 4.43937% Cumulative Redeemable Convertible Preferred Units of partnership interest in the Operating Partnership (“Series 1 CPOP Units”). The transaction was priced based upon a common stock price of $31.56, equal to the trailing 30-day average closing price of the Company’s common stock as of the letter of intent date (the “Average Value”).
The Series 1 CPOP Units are convertible (i) at the option of the holder anytime from time to time, or (ii) at the option of the Operating Partnership, at any time on or after April 10, 2024, in each case, into common units of limited partnership interests in the Operating Partnership (“Common Units”) on aone-for-one basis, subject to adjustment to eliminate fractional units or to the extent that there are any accrued and unpaid distributions on the Series 1 CPOP Units. Holders of Common Units have the right to cause the Operating Partnership to redeem any or all of their Common Units for an amount of cash per unit equal to the then current market value of one share of the Company’s common stock, or, at the Company’s election, shares of the Company’s common stock on aone-for-one basis. On the date of the filing of this Current Report on Form8-K, the closing price of the Company’s common stock on the New York Stock Exchange was $37.01.
The Series 1 CPOP Units rank senior to the Operating Partnership’s Common Units, on parity with the Operating Partnership’s 5.875% series A cumulative redeemable preferred units, the Operating Partnership’s 5.875% series B cumulative redeemable preferred units and with any future class or series of partnership interest of the Operating Partnership expressly designated as ranking on parity with the Series 1 CPOP Units, and junior to any other class or series of partnership interest of the Operating Partnership expressly designated as ranking senior to the Series 1 CPOP Units.
Holders of Series 1 CPOP Units, when and as authorized by the Company as general partner of the Operating Partnership, are entitled to cumulative cash distributions at the rate of 4.43937% per annum of the $45.50952 per unit liquidation preference (a 44.2% premium to the Average Value described above), payable quarterly in arrears on or about the last day of March, June, September and December of each year, beginning on or about June 28, 2019. The holders of Series 1 CPOP Units are entitled to receive the liquidation preference, which is $45.50952 per unit and approximately $27.0 million in the aggregate for all of the Series 1 CPOP Units, before the holders of Common Units in the event of any voluntary or involuntary liquidation, dissolution orwinding-up of the affairs of the Operating Partnership.
In connection with the acquisition of the Property, the Company and the Operating Partnership have provided the Seller and certain permitted transferees with customary indemnification in connection with certain taxable transfers of the Property.
On April 10, 2019, the Company executed the Fifth Amended and Restated Agreement of Limited Partnership (the “A&R Partnership Agreement”), among other things, creating the Series 1 CPOP Units described above. This description of certain terms of the amendment to the A&R Partnership Agreement is qualified in its entirety by reference to the amendment to the A&R Partnership Agreement, which is filed as Exhibit 10.1 to this Current Report on Form8-K and is hereby incorporated by reference into this Item 8.01.
