Greetings, and welcome to the Rexford Industrial Realty, Third Quarter 2018 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Investor Relations.

We would like to thank you for joining us for Rexford Industrial's third quarter 2018 earnings conference call. In addition to the press release distributed yesterday after market closed, we have posted a quarterly supplemental package with additional details on our results in the Investor Relations section on our website at www.rexfordindustrial.com. On today's call, Management's remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identified by the use of the words such as anticipates, believes, estimates, expects, intends, may, plan, project, seeks, should, will, potential, predicts and variations of such words or similar expressions. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include those related to revenue, operating income or financial guidance. As a reminder, forward-looking statements represent Management's current estimates. Rexford Industrial assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements contained in the Company's filings with the SEC. In addition, certain of the financial information presented on this call represents non-GAAP financial measures, the Company's earnings release and supplemental information package, which were released yesterday afternoon and are available on the Company's website, present reconciliations to the appropriate GAAP measure and an explanation of why the Company believes such non-GAAP financial measures are useful to investors. Today's conference call is hosted by Rexford Industrial's Co-Chief Executive Officers, Michael Frankel; and Howard Schwimmer; together with Chief Financial Officer, Adeel Khan. They will make some prepared remarks, and then we will open the call for your questions. Now, I will turn the call over to Michael.

Thank you, and welcome to Rexford Industrial's third quarter 2018 earnings call. I will start with a summary of our operating results and some perspective on a go-forward market opportunity. Howard will then cover our recent acquisition activity, as well as an update on our repositioning project. Adeel will follow with more details on our financial results and our guidance. We will then open the call for your questions. We are pleased to report strong results that demonstrate our teams continued execution of our value driven strategy, capitalizing upon the sustained strength of the infill Southern California industrial market. Specifically, Company share core FFO grew by 44% year-over-year driven by strong 26% top line revenue growth and $504 million in acquisitions completed over the prior 12 months. On a per share basis, core FFO was $0.28, up 12% year-over-year. We generated exceptional same property NOI growth of 12.6% on a GAAP basis and 14.8% on a cash basis. After netting out the impact of repositioning, our stabilized same property NOI grew 8.7% on a GAAP basis and 11.6% on a cash basis. Stabilized same property portfolio occupancy ended the quarter at 98.4%. Our leasing spreads continue to reflect historic levels of tenant demand with 32.2% spreads on a GAAP basis and 21.1% on a cash basis. Leasing volumes also remained strong with 106 leases signed during the quarter for a total of 944,000 square feet. Our retention rate this quarter was 55%, reflecting our strategy to trade some incremental retention for substantially higher rents with little downtime. As a result on new leases we achieved GAAP leasing spreads of an impressive 47%. Market conditions within our infill Southern Californian industrial markets continue at unprecedented levels of high tenant demand and record low availability with overall market vacancy continuing at below…

Thanks Michael, and thank you everyone for joining us today. Our infill Southern California industrial market continued to differentiate themselves as the pure demand and supply fundamentals as we move through this cycle. Our target market excluding the Eastern Inland Empire ended the third quarter at 98.2% occupancy with asking rents up 4.7% on a weighted average basis over the past 12 months. Infill Southern California industrial continues to benefit from strong growth and demand combined with a shrinking supply due to an accelerating conversion of industrial property to other users. These factors have produced long-term sustainable growth. Looking forward unlike past cycles today there is virtually no land available to deliver the new supply needed to meet demand feeling further pressure on rent growth. While we are certainly a beneficiary of these sustained strong market fundamentals, Rexford does not rely solely on market tailwinds for our growth. As Michael stated we are uniquely positioned within a market with nearly 1 billion square feet of industrial space built for 1980 much of which has been passively managed and undercapitalized for decades. Core to our strategies curing functional obsolescence to unlock value as we deliver modernized space back to market. We believe our team single market focus and unique approach to sourcing and repositioning industrial property at accretive returns may allow us to produce sustained outperformance throughout market cycles continuing to position us to generate long-term value creation for our shareholders. Moving on to our recent transaction activity, since the start of the third quarter we’ve completed four acquisitions of high quality industrial products for a total of 43.8 million bringing year-to-date acquisitions to 371 million adding approximately 2.3 million square feet to our portfolio. Two-thirds of our acquisitions for the year have been off market or lightly marketed transaction. We…

Thank you, Howard. Beginning with our operating results for the third quarter 2018, net income attributable to common stockholders was approximately $6.3 million or $0.07 of fully diluted share. This compares to $600,000 or $0.01 of fully diluted share for the third quarter of 2017. For the three months ended September 30, 2018 Company share core FFO was $26.1 million as compared to $18 million for the three months ended September 30, 2017. On a per share basis, Company share core FFO was $0.28 for fully diluted share representing a 12% increase year-over-year. Core FFO per share increased toward a strong acquisition activity completed in the past 12 months and same property portfolio growth, which was partially offset by higher diluted share count. Same property NOI was $28.8 million in the third quarter, which compares to $25.6 million for the same quarter in 2017, an increase of 12.6%. Our same property NOI was driven by 10.3% increase in total rental revenue and 3.6% increase in property operating expense. On a cash basis, same property NOI increased by 14.8% year-over-year. Stabilized same property NOI growth, net of the impact of repositioning was 8.7% in the third quarter on a GAAP basis and 11.6% on a cash basis. Turning now to our balance sheet and financing activities. We continue to diversify our capital source, optimize our cost of capital and maintain balance sheet flexibility as we grow our business over the long term. During the third quarter, we issued approximately 1.5 million shares of common stock for our ATM at a weighted average price of $31.79 per share, which resulted in net proceeds direct to Rexford of approximately $46.7 million. We utilized these funds to fund our acquisition, for working capital, and other corporate purposes. At the end of the quarter we…

[Operator Instructions] The first question comes from the line of Manny Korchman with Citi Group. Please proceed with your question.

You mentioned the $194 million near term pipeline. Over what time period do you expect or could we expect for that will close?

Yes, I had mentioned we had $194 million worth of transactions. We generally don't give guidance on what the timing is but we're pretty excited about what we have lined up and these are not typically transactions that take months and months close, that's not typically how we reported on the pipeline. So I can't tell you specifically but hopefully that info helps.

Just to add one further comment obviously the capital that we have on the books we further all this thing through how best to deploy the capital in terms of timing wise. So that also should add a little more color in terms of what Howard added just now.

And then in terms of given the tight leasing markets, I was wondering if there's been any changes in lease terms or bumps or anything else sort of in lease economic that you've been able to push tenants on given the lack of other options?

Well, I think our example of mentioning some of the updates on our repositioning projects are really the most telling about the market, and we’re pre leasing, buildings before they're done, we leased up that Nelson project 85% in only four months, in that particular project we're pushing rents in terms of the increases. We're getting 4% increases on an annualized basis. We're trying to push on a few of the other projects as well. But yes the market is still tight as a drum, there's not a lot of quality product out there and the results we're showing are really emblematic of what's happening throughout the market.

Our next question is from the line of Blaine Heck with Wells Fargo. Please proceed with your question.

Michael, I just wanted to go back to your last point in the prepared remarks which I thought was worded interestingly. You talked about capitalizing on emerging market opportunities. I think you were referring mostly to your balance sheet capacity but I wanted to focus on the emerging market opportunities. I guess are there any segments of the market that you guys think are going to be particularly strong areas of growth for you guys that maybe you guys aren't taking advantage of now and similarly any additional markets or sub-markets that you guys would look to expand into?

Generally speaking I think our focus remains consistent. We're going to stay focused on the same market that you see us investing in consistently, Greater LA, Orange County, the Ontario area, that represents well over 70% of our portfolio and probably should represent the lion share of acquisitions going forward. So it's not as if there's a specific emerging geographic opportunity within the infill market. Really more referring to the quality of our pipeline and frankly that's a testament to the research driven originations method that we've been deploying here for 15 years or so and been able to invest in those processes in an accelerated fashion since we went public about five-and-half years ago. And so today we're in a very unique position to benefit from the cumulative impact of all that research and relationships in the market, and frankly the quality of our pipeline today is far better than it was two years ago or three years ago because of all the work that we've been doing in the market place. Although literally every week we're seeing new opportunities to consider, our primary source, our largest source of new investments is through the mining of our existing pipeline of opportunities in our work flow system, which I know you guys have seen. And so really it's just a testament to the work here at Rexford. We do have a very active pipeline as Howard mentioned and - it's not as if we see an incremental opportunity that we haven't really shared with you in the past. This is the consistent strategy that we've always expressed. We're just getting better, we're digging deeper and I think we're going to see the result.

And then just looking at the reposition properties that have stabilized over the past few years, they've stabilized at a kind of 5.5% to 8% yield. Obviously there's been upward pressure and movement in land and construction costs, have you guys seen any signs that this could cause a little bit of a decrease in the yield that you guys can generate or has the growth in rents than strong enough that that we should expect a similar range on the properties that are currently under repositioning?

It’s hard to predict quarter to quarter really what those opportunities will be. If you look at our repositioning page the assets on there have been aggregate blended yield about 6.6% and new opportunities that we're looking at today. I think fit into the range you were describing earlier in that 5.5% and well north of 6/7 cap rates. Just of the timing and so forth in the markets and what we happened on earth in any one quarter but the pipeline seem fairly robust. And I think in terms of the percentages you see us quoting in the past in terms of what we buy with vast majority about half of what we buy tends to be what we call the core plus type assets. And then we kind of book in that with some core then on the other side obviously the value add transaction. The pipeline in terms of big deals under contract LOIs seems to marry those percentages

And Blaine, its Michael I’ll just add to that. Because I think an important aspect of our ability to deliver those outsides above market got better than core yields. Of course the market - when you have tailwinds that helps but I think what’s going to truly differentiate Rexford is that when those tailwinds, when those market tailwinds start to slowdown you’re going to still see us continuing to create value. And I think on average the primary determine our ability to create value is our originations efforts which Howard described the off market, lightly market transactions. Our team is disproportionally focused on seeking and developing value-add opportunities. And when we go to work to create physical value and intrinsic value in these assets, the value we’re creating is more often not dependent on market rent growth. The work that we do with the properties they built to increase the cash flow generating ability of these properties without market rent growth is really a key to our business. And I think as we move through the cycle we’re going to see that differentiate Rexford in a even greater way as we move forward.

Then Adeel looks like you got a couple of swaps expiring one late this year one early next year I think the one later this year has been extended. But can you just touch on those and how you’re thinking about those expiration?

Yes Blaine, so as of right now we have $150 million term loan that is not swapped and that puts us at about 80/20 swap or fixed to variable and I think we monitor the yield curve consistently. Yes, I think that's not a bad percentage to have in the portfolio and obviously it allows some flexibility after couple of years with $150 million term loan. So we are constantly monitoring it. I think if we like to operate in this range previously we've operated in about 92% swap fixed rent, so we’re not out of the zone. So we're looking at those numbers consistently and try to match after the yield curve and how we see that progressing and we’ll make the right decision hopefully for the company, but overall I think we’re in a really good spot in terms of where ended the quarter.

The next question is from the line of John Guinee with Stifel. Please proceed with your question.

Adeel, does Rexford remind you of your days at McGuire?

It does not whatsoever because I have a tape player that reminds me of those times and I play it every morning when I get up.

Talk about 2020 Fox 13 likely gets on the ballot split roll or that sort of thing, how does that work for you guys?

There actually were enough signatures already and it’s going to be on the 2020 ballot. Obviously all the commercial landlords are going to throw a lot of weight behind feeding it. In terms of our portfolio we bought our assets very recently. Keep in mind five years ago we had 5 million fewer over 20 million feet today. So the majority of the assets were bought within the past couple of years. So the market was solid on the tax side of it isn’t that dramatic. Anyway and then you look at the lease structures we have, we could pass through literally almost 100% of the tax increases there is only a handful of leases that limit us in our ability to pass through and increases. So, what we think of in terms of the impact to Rexford is really just maybe a short-term disruption in our ability to continue pushing rents higher.

And then the next question is how do you think land on a per FAR, per billable foot is being valued in your various markets right now or is that something you guys don't look at. Is it over 50% of replacement cost yet or is it still under 50.

It’s probably gone over 50%. Land values in Central Los Angeles, South Bay even in some of the Orange County and Mid County areas, there is land count so going to start to see anything better well of $60 per square foot and so marry that the construction cost that is going to be in the say 40 to 60 plus dollar square foot range and your land based is well over 50% of the building cost.

The next question is from the line of Joshua Dennerlein with Bank of America/Merrill Lynch. Please proceed with your question.

Let me turn to the big picture, with the latest on the ground feedback from leasing brokers, are tenants getting nervous at all from tariffs being any impact to that kind of business?

Josh, its Michael, thanks for connecting with us today good question. Today we really not seen any indication from our tenants whatsoever that they are changing their view on their space needs and resulting from anything in the economy or tariffs or the potential for changing trade flows. And we have seen shifts in trade flows in the past frankly we had periods where the ports shutdown in 2002, slowdown in 2014 both due to labor-related issues. And even during those periods which are extreme in terms of the disruption of the movement of goods to the ports, we saw really no change, no hiccup in our tenant. I think the key there is again our tenants are consumption driven. They’re serving a largest zone of consumption in the nation by far and they’re literally a stone throw from the endpoints where they need to deliver goods. So the key for them is that that infill location its less so the key for them is less where the goods come from its more about their ability to deliver in a timely fashion and of course those delivery times are shortening pretty dramatically. So the space in terms of value to these businesses is pretty dramatically increasing. Despite the possibility for tariffs we just haven’t seen any indication whatsoever in tenant.

Then maybe I thought the retention ratio fell in the quarter, any thoughts on how that might be until like their ability to push rents going forward in a next few quarters?

Yes actually the story behind the retention is a great indication of our ability to push rents because for example if it weren't 112,000 square foot space in the South Bay which we could have extended the tenant was about $0.52, and instead we left the tenant go, we didn’t extend the tenant. We did a little bit of work in the space upgraded to ESFR sprinklers, did some work in the office to modernize the office space. And the work didn't take six months so it didn't go into repositioning rules or stayed in the measure pool for retention. And frankly we’re marketing an ad, we have leases in play of $0.72, it’s about 42% mark-to-market or leasing spread on that. And frankly if it weren’t for even for that just that one space, we kept that tenant retention would have been at 70% and there are few other tenants with similar example. So, the low retention is frankly a direct result of our deliberate strategy to trade a little bit of retention for NAV growth and it drives substantially higher rental rates and value. By the way the incremental investment in that space are relative to the substantial return on capital, so it’s payback in about two years. But a 42% annual return on the incremental investment. So we love that map and so I think the story behind that retention is really fundamentally are going to drive rents.

[Operator Instructions] The next question is coming from the line of Chris Lucas from Capital One. Please state with your question.

Just a quick sort of follow-up on the trade related question. Just curious if you're hearing anything about the new NAFTA agreement that would impact sort of the demand side of the markets you're in?

Again, we haven't really - it might be early yet but we really haven't heard or seen any indications from the tenants. I think the idea is to bring some more economic output back to United States frankly. So if that is a benefit to demand overall, that could be a benefit to us but we really haven't seen any indication of an impact.

At this time, I'll turn the floor back to Management, for closing remarks.

On behalf of the entire team at Rexford, we'd like to thank everybody for joining us today and we look forward to reconnecting next quarter.

Thank you. This will conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.