UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 7, 2016
REXFORD INDUSTRIAL REALTY, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-36008 | 46-2024407 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
| 11620 Wilshire Boulevard, Suite 1000, Los Angeles, California | 90025 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (310) 966-1680
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On June 7, 2016, Rexford Industrial Realty, Inc., through its operating partnership, Rexford Industrial Realty, L.P., completed the sale of a 153,080 rentable square foot industrial property located at 12910 Mulberry Drive, in Whittier, California (the “Property”). The Property, which was fully leased to a single tenant through May 23, 2016, was sold to an unaffiliated third party owner-user for a contract price of $15.0 million following the lease expiration.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(b) The following pro forma financial statements are filed herewith:
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2016 (unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2016 (unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2015 (unaudited)
Notes to the Pro Forma Condensed Consolidated Financial Statements
REXFORD INDUSTRIAL REALTY, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated balance sheet as of March 31, 2016 is based on Rexford Industrial Realty, Inc.’s (the “Company”) historical consolidated balance sheet and gives effect to the sale on June 7, 2016 of a 153,080 rentable square foot industrial property located at 12910 Mulberry Drive, in Whittier, California (the “Property”), for a contract price of $15.0 million as if such transaction had occurred on March 31, 2016. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2016 and the year ended December 31, 2015 have been prepared to reflect the estimated effect of the disposition of the Property as if such transaction had occurred on January 1, 2015.
The unaudited pro forma financial information is not necessarily indicative of what the Company’s results of operations or financial condition would have been assuming the disposition of the Property had occurred on the dates discussed above, nor is it indicative of the Company’s results of operations or financial condition for future periods. In management’s opinion, all adjustments necessary to reflect the effect of the disposition transaction have been made. The unaudited pro forma condensed financial statements should be read together with the Company’s historical consolidated financial statements and related notes included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2016 filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2016, and the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 24, 2016.
REXFORD INDUSTRIAL REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2016
(Unaudited and in thousands – except share and per share data)
| Rexford Industrial Realty, Inc. (A) | Property Disposition- Pro Forma Adjustments (B) | Pro Forma Rexford Industrial Realty, Inc. | |||||||||
| ASSETS | |||||||||||
| Investments in real estate, net | $ | 1,106,635 | $ | (4,871 | ) | $ | 1,101,764 | ||||
| Cash and cash equivalents | 6,402 | 13,860 | 20,262 | ||||||||
| Rents and other receivables, net | 2,939 | — | 2,939 | ||||||||
| Deferred rent receivable, net | 8,670 | (20 | ) | 8,650 | |||||||
| Deferred leasing costs, net | 6,001 | (22 | ) | 5,979 | |||||||
| Deferred loan costs, net | 1,296 | — | 1,296 | ||||||||
| Acquired lease intangible assets, net | 28,802 | — | 28,802 | ||||||||
| Acquired indefinite-lived intangible | 5,271 | — | 5,271 | ||||||||
| Other assets | 5,580 | — | 5,580 | ||||||||
| Acquisition related deposits | 400 | — | 400 | ||||||||
| Investment in unconsolidated real estate entities | 4,144 | — | 4,144 | ||||||||
| Total Assets | 1,176,140 | 8,947 | 1,185,087 | ||||||||
| LIABILITIES & EQUITY | |||||||||||
| Liabilities | |||||||||||
| Notes payable | 444,010 | — | 444,010 | ||||||||
| Interest rate swap liability | 4,949 | — | 4,949 | ||||||||
| Accounts payable, accrued expenses and other liabilities | 14,897 | (88 | ) | 14,809 | |||||||
| Dividends payable | 7,814 | — | 7,814 | ||||||||
| Acquired lease intangible liabilities, net | 3,307 | — | 3,307 | ||||||||
| Tenant security deposits | 11,995 | (72 | ) | 11,923 | |||||||
| Prepaid rents | 2,667 | — | 2,667 | ||||||||
| Total Liabilities | 489,639 | (160 | ) | 489,479 | |||||||
| Equity | |||||||||||
| Rexford Industrial Realty, Inc. stockholders’ equity | |||||||||||
| Common Stock, $0.01 par value 490,000,000 authorized and 55,657,428 outstanding as of March 31, 2016 | 554 | — | 554 | ||||||||
| Additional paid in capital | 723,074 | — | 723,074 | ||||||||
| Cumulative distributions in excess of earnings | (54,192 | ) | 8,785 | (45,407 | ) | ||||||
| Accumulated other comprehensive loss | (4,728 | ) | — | (4,728 | ) | ||||||
| Total stockholders’ equity | 664,708 | 8,785 | 673,493 | ||||||||
| Noncontrolling interests | 21,793 | 322 | 22,115 | ||||||||
| Total Equity | 686,501 | 9,107 | 695,608 | ||||||||
| Total Liabilities and Equity | $ | 1,176,140 | $ | 8,947 | $ | 1,185,087 | |||||
REXFORD INDUSTRIAL REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2016
(Unaudited and in thousands – except share and per share data)
| Rexford Industrial Realty, Inc. (AA) | Property Disposition- Pro Forma Adjustments (BB) | Pro Forma Rexford Industrial Realty, Inc. | |||||||||
| RENTAL REVENUES | |||||||||||
| Rental income | $ | 23,499 | $ | (195 | ) | $ | 23,304 | ||||
| Tenant reimbursements | 3,558 | (9 | ) | 3,549 | |||||||
| Other income | 313 | — | 313 | ||||||||
| TOTAL RENTAL REVENUES | 27,370 | (204 | ) | 27,166 | |||||||
| Management, leasing and development services | 134 | — | 134 | ||||||||
| TOTAL REVENUES | 27,504 | (204 | ) | 27,300 | |||||||
| OPERATING EXPENSES | |||||||||||
| Property expenses | 7,543 | (52 | ) | 7,491 | |||||||
| General and administrative | 3,602 | — | 3,602 | ||||||||
| Depreciation and amortization | 11,214 | (40 | ) | 11,174 | |||||||
| TOTAL OPERATING EXPENSES | 22,359 | (92 | ) | 22,267 | |||||||
| OTHER EXPENSE | |||||||||||
| Acquisition expenses | 475 | — | 475 | ||||||||
| Interest expense | 3,254 | — | 3,254 | ||||||||
| TOTAL OTHER EXPENSE | 3,729 | — | 3,729 | ||||||||
| TOTAL EXPENSES | 26,088 | (92 | ) | 25,996 | |||||||
| Equity in income from unconsolidated real estate entities | 61 | — | 61 | ||||||||
| NET INCOME | 1,477 | (112 | ) | 1,365 | |||||||
| Less: net income attributable to noncontrolling interest | (52 | ) | 4 | (48 | ) | ||||||
| NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC. | 1,425 | (108 | ) | 1,317 | |||||||
| Less: earnings allocated to participating securities | (78 | ) | — | (78 | ) | ||||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 1,347 | $ | (108 | ) | $ | 1,239 | ||||
| Net income available to common stockholders per share - basic and diluted | $ | 0.02 | $ | 0.02 | |||||||
| Weighted average shares of common stock outstanding - basic | 55,269,598 | 55,269,598 | |||||||||
| Weighted average shares of common stock outstanding - diluted | 55,416,947 | 55,416,947 | |||||||||
REXFORD INDUSTRIAL REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2015
(Unaudited and in thousands – except share and per share data)
| Rexford Industrial Realty, Inc. (CC) | Property Disposition- Pro Forma Adjustments (DD) | Pro Forma Rexford Industrial Realty, Inc. | |||||||||
| RENTAL REVENUES | |||||||||||
| Rental revenues | $ | 81,114 | $ | (744 | ) | $ | 80,370 | ||||
| Tenant reimbursements | 10,479 | (29 | ) | 10,450 | |||||||
| Other income | 1,013 | (4 | ) | 1,009 | |||||||
| TOTAL RENTAL REVENUES | 92,606 | (777 | ) | 91,829 | |||||||
| Management, leasing and development services | 584 | — | 584 | ||||||||
| Interest income | 710 | — | 710 | ||||||||
| TOTAL REVENUES | 93,900 | (777 | ) | 93,123 | |||||||
| OPERATING EXPENSES | |||||||||||
| Property expenses | 25,000 | (240 | ) | 24,760 | |||||||
| General and administrative | 15,016 | — | 15,016 | ||||||||
| Depreciation and amortization | 41,837 | (142 | ) | 41,695 | |||||||
| TOTAL OPERATING EXPENSES | 81,853 | (382 | ) | 81,471 | |||||||
| OTHER EXPENSE | |||||||||||
| Acquisition expenses | 2,136 | — | 2,136 | ||||||||
| Interest expense | 8,453 | — | 8,453 | ||||||||
| TOTAL OTHER EXPENSE | 10,589 | — | 10,589 | ||||||||
| TOTAL EXPENSES | 92,442 | (382 | ) | 92,060 | |||||||
| Equity in income from unconsolidated real estate entities | 93 | — | 93 | ||||||||
| Gain from early repayment of note receivable | 581 | — | 581 | ||||||||
| Loss on extinguishment of debt | (182 | ) | — | (182 | ) | ||||||
| NET INCOME | 1,950 | (395 | ) | 1,555 | |||||||
| Net income attributable to noncontrolling interests | (76 | ) | 15 | (61 | ) | ||||||
| NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC. | 1,874 | (380 | ) | 1,494 | |||||||
| Less: earnings allocated to participating securities | (223 | ) | — | (223 | ) | ||||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 1,651 | $ | (380 | ) | $ | 1,271 | ||||
| Net income attributable to common stockholders per share - basic and diluted | $ | 0.03 | $ | 0.02 | |||||||
| Weighted average shares of common stock outstanding - basic and diluted | 54,024,923 | 54,024,923 | |||||||||
REXFORD INDUSTRIAL REALTY, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Balance sheet adjustments |
| (A) | Represents the unaudited historical balance sheet of the Company as of March 31, 2016. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 10, 2016. |
| (B) | Adjustments reflect the net sale proceeds received from the sale of the Property and the elimination of the related account balances as if the sale was consummated as of March 31, 2016. Cumulative distributions in excess of earnings and Noncontrolling interests have been increased to reflect the receipt of net sale proceeds and removal of assets and liabilities related to the sale, as follows (in thousands): |
| Contract sale price | $ | 15,000 | |
| Closing credits and transaction costs | (1,140 | ) | |
| Net proceeds from sale | $ | 13,860 | |
| Net book value of the Property | (4,753 | ) | |
| Gain on sale | $ | 9,107 | |
| 2. | Income statement adjustments |
(AA) Represents the unaudited historical consolidated statement of operations of the Company for the three months ended March 31, 2016. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 10, 2016.
(BB) The pro forma adjustments reflect the results of operations for the Property for the three months ended March 31, 2016.
(CC) Represents the audited historical consolidated statement of operations of the Company for the year ended December 31, 2015. See the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 24, 2016.
(DD) The pro forma adjustments reflect the results of operations for the Property for the year ended December 31, 2015.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Rexford Industrial Realty, Inc. | |
| June 13, 2016 | /s/ Adeel Khan |
Adeel Khan Chief Financial Officer and Secretary | |