LOS ANGELES - Rexford Industrial Realty, Inc. (NYSE: REXR), a real estate investment trust focusing on industrial properties in Southern California, has announced the pricing of a sizable public offering of its shares. The company has agreed to sell 17,179,318 shares of common stock at $48.95 each to a long-only investor located on the West Coast. This transaction is part of a forward sale agreement and is expected to close on March 28, 2024, subject to customary closing conditions.
The offering is facilitated by BofA Securities, serving as the sole book-running manager. Under the terms of the forward sale agreement, BofA Securities or its affiliate will borrow shares from third parties and sell them to the underwriter. If unable to borrow the shares or if borrowing costs are too high, the company will directly sell the shares to the underwriter, and the number of shares in the forward sale agreement will be reduced accordingly.
Rexford Industrial will not receive immediate proceeds from the forward sale but plans to issue and sell shares to the forward purchaser upon settlement, receiving cash proceeds equal to the forward sale price, subject to certain adjustments.
The company's operating partnership has also priced $1 billion of exchangeable senior notes due in 2027 and 2029 in a private offering to qualified institutional buyers. The notes are guaranteed by Rexford Industrial and may be increased by $150 million to cover over-allotments. The offerings of common stock and exchangeable notes are independent of one another.
Proceeds from the settlement of the forward sale agreement and the potential offering of exchangeable notes are intended for funding acquisitions, development, repositioning activities, and general corporate purposes.
The offerings are made under an effective shelf registration filed with the Securities and Exchange Commission (SEC). Details of the offering will be available on the SEC's website upon filing of the final prospectus supplement and accompanying prospectus.
InvestingPro Insights
Rexford Industrial Realty's recent move to price a public offering of shares coincides with a period where the company's financial health is under scrutiny by investors. With a market capitalization of $11.29 billion and a robust revenue growth of 26.4% in the last twelve months as of Q4 2023, Rexford appears to be on a solid trajectory. The company's gross profit margin stands impressively at 76.88%, indicating strong operational efficiency in its industrial real estate ventures.
However, an InvestingPro Tip suggests that Rexford is trading at a high earnings multiple, with a P/E ratio of 43.67 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 50.19. This indicates that the stock may be priced optimistically relative to earnings. Additionally, the Price to Book ratio as of the same period is 1.44, which may appeal to value-oriented investors looking for assets priced reasonably in relation to the company's book value.
For those interested in the company's dividend policy, an InvestingPro Tip notes that Rexford has a history of raising its dividend for 11 consecutive years, showcasing a commitment to returning value to shareholders. The dividend yield as of the most recent data stands at 3.44%, a factor that could attract income-focused investors.
Investors who wish to delve deeper into Rexford Industrial Realty's financial metrics and gain more InvestingPro Tips can explore the dedicated section at Investing.com/pro/REXR. There are 10 additional InvestingPro Tips available to help guide investment decisions. To gain full access to these insights, use coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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