Analyst John Kim of BMO Capital maintained a Hold rating on Rexford Industrial Realty (REXR – Research Report), with a price target of $41.00.
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John Kim has given his Hold rating due to a combination of factors reflecting both positive and negative aspects of Rexford Industrial Realty’s current market position. On the positive side, the company has managed to achieve a significant cash rent spread of 41.0%, and its cash same-store net operating income (SSNOI) has seen a 5.3% increase, which demonstrates a solid financial performance in certain areas. Additionally, Rexford has implemented a $300 million stock repurchase program, indicating a commitment to returning value to shareholders.
Despite these positives, John Kim’s rating reflects concerns over weaker tenant demand, as evidenced by a notable decline in leasing activity and expected occupancy rates. The company’s introduction of 2025 core FFOps guidance, which is significantly below market consensus, and the decrease in market rents have further contributed to an uncertain outlook. Moreover, the development yields on current repositioning projects have fallen, and turnover costs remain elevated compared to long-term averages, which suggests potential challenges in maintaining profitability. These mixed factors have led to a Hold rating as Rexford navigates these market dynamics.