Greetings. Welcome to the Rexford Industrial Realty, Inc. fourth quarter and full year 2021 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, David Lanzer. You may begin. We thank you for joining us for Rexford Industrial's fourth quarter and fiscal year 2021 earnings conference call. In addition to the press release distributed yesterday after market close, we posted a supplemental package and an investor presentation 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 address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. For more information about these risk factors, we encourage you to review our 10-K and other SEC filings. Rexford Industrial assumes no obligation to update any forward-looking statements in the future. In addition, certain financial information presented on this call represents non-GAAP financial measures. Our earnings release and supplemental package present GAAP reconciliation and an explanation of why 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, Laura Clark. 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, David, and thank you everyone for joining our Rexford Industrial fourth quarter 2021 earnings call. We hope you and your families are well. I'll provide some brief remarks, followed by Howard, who will discuss our transaction activity, and then Laura will provide an update on our financial metrics and guidance. As we look back on 2021, we are struck by the unique strength of our Rexford platform as we increased consolidated NOI by 38%, which drove a 24% increase in FFO per share for the full year. Rexford continues to differentiate itself as the nation's fastest growing and strongest performing industrial REIT, with five-year average annual FFO per share growth of 14%, average consolidated NOI growth of 31%, and five-year average dividend growth of 18%, all of which continue to lead the industrial sector. We thank every Rexford teammate for your industry leading work and dedication. To put this performance into perspective, our acquisitions team closed $1.9 billion of investment that are positioned to drive substantial cash flow growth and value creation. On the leasing front, we completed nearly 7 million sq ft of leasing volume, and our leasing team drove average leasing spreads of 43% on a GAAP basis and 29% on a cash basis for the year. Our construction and development team completed over 1 million sq ft of value add projects, generating an aggregate stabilized unlevered yield of 6.6% and creating over $165 million of incremental value creation. Rexford's operations and property management teams continued to drive superior customer satisfaction metrics with historically low downtime and ended the year with our same property portfolio at over 99% occupancy. Our infill Southern California market fundamentals are as exceptional as our operating platform. Tenant demand continues at an unprecedented level of intensity, driven by an exceptionally broad and diverse range of sectors. With the highest demand and lowest vacancy in the nation, our Southern California infill market is currently operating at over 99% occupancy. We continue to experience an incurable supply demand imbalance due to an extremely limited ability to increase net supply. Consequently, market rent and property values are growing at a substantially higher pace within infill Southern California as compared to all other major markets across the nation. It is also important to note that our infill Southern California industrial market represents the world's fourth largest market, behind only the entire countries of the United States, China, and Germany. Infill Southern California is not only the largest and most fragmented industrial market in the nation, but the value of our market is about the same as the next five largest U.S. markets combined. Consequently, as our proprietary research driven originations methods enable our unique access to this vast market, we are capitalizing upon a substantial opportunity to grow well beyond our current 2% market share. As we look forward, we've never been better positioned to grow our cash flow and value. From an internal growth perspective, we currently project over $120 million of annualized NOI growth, representing a 30% increase embedded within our in place portfolio over the next 24 months, which includes approximately $28 million of incremental NOI as our redevelopment and repositioning projects stabilize approximately $38 million of incremental NOI from recent acquisitions, and approximately $55 million of incremental NOI contributed as we roll below market rents to higher market rates. In fact, the mark to market on rental rates for our entire portfolio is now estimated at 41% on a cash basis, and 51% on a net effective basis. In addition, we have a substantial pipeline of new accretive investments with over $450 million of acquisitions under contract or accepted offer, plus an extensive originations pipeline beyond this volume. To fuel our growth, we are favorably positioned with a low leverage, best-in-class balance sheet, closing the year at 9.1% debt to enterprise value. Finally, as a reflection of the company's strong performance, we are pleased to announce that we're increasing our dividend by over 31%. With that, I'm very pleased to turn the call over to Howard. Thank you, Michael, and thank you everyone for joining us today. Southern California rental rate growth continued to substantially exceed all other major markets. Based on Rexford's internal portfolio metrics, our market rents increased by 38% over the prior year. This significant acceleration from recent quarters underscores the strength of our Southern California markets. Market-wide, according to CBRE, our target infill markets, which exclude the Inland Empire East, ended the quarter at 0.8% vacancy. The lack of availability within our supply-constrained infill markets is expected to continue and positions us well to capture strong rent spreads into the foreseeable future. The consolidated portfolio weighted average mark to market for our 4.9 million sq ft of 2022 lease expirations is now estimated at 48% on a cash basis and 58% on a net effective basis. Our same store portfolio achieved historical high average occupancy of 99% for the fourth quarter. While we did not have much available space to lease, our strong leasing performance continued during the quarter, with approximately 1 million sq ft of leases signed, realizing blended GAAP and cash spreads of about 34% and 22% respectively. Turning to external growth. In the fourth quarter, we completed 19 acquisitions totaling $551 million, which included 2 million sq ft of buildings on 104 acres of land, including 12.8 acres of land for near term redevelopment, with approximately 80% of the acquisition value add. These acquisitions generate an aggregate initial yield of 2.6% and an estimated 5.2% unlevered stabilized yield. For the full year, we completed 51 acquisitions for an aggregate purchase price of $1.9 billion, adding 5.7 million sq ft of buildings on 426 acres of land. This includes 123 acres of low coverage, industrial outdoor storage sites, and 53 acres of land for near term redevelopment. In aggregate, these acquisitions generate an initial yield of 3.6% and an estimated 6.1% unlevered stabilized yield. For the full year 2021, 86% of our acquisitions were acquired through off-market or lightly marketed transactions sourced through our proprietary research-driven processes and deep market relationships. On the disposition front, for the year, we sold five properties totaling $59.3 million, which generated an aggregate 26.5% unlevered IRR on investment. As in the past, we expect to continue to sell assets opportunistically to unlock value and recycle capital. Subsequent to year-end, we completed $170 million of acquisitions, which were predominantly value add opportunities with an aggregate 3.1% initial yield that are projected to generate an aggregate 4.9% stabilized unlevered yield on total investment. Looking ahead, we currently have $450 million of new investments under LOI or contract. These transactions are subject to customary due diligence with no guarantee of closing. We will keep you apprised as transactions are consummated. Turning to repositioning and redevelopment activities. For the full year, we stabilized six properties representing over $200 million of total investment at an aggregate unlevered stabilized yield on total investment of 6.6%, substantially exceeding current market cap rates that are in the mid-3% range. We currently have over 3 million sq ft of current and planned value add and redevelopment projects across our portfolio with a projected total incremental investment of approximately $380 million, and are estimated to deliver an aggregate return on total investment of about 6.6%, representing more than $1 billion in estimated value creation. With that, I'm pleased to now turn the call over to Laura. Thank you, Howard. Fourth quarter results came in ahead of projections, with same property NOI growth on a GAAP basis at 10% and 6.8% on a cash basis. Note that cash same property NOI growth was 13% when normalized for 2020 COVID-related impacts. Continued occupancy gains and exceptional leasing spreads contributed to our strong growth. Average same property occupancy in the quarter was 99%, up 40 basis points sequentially and 80 basis points over the prior year. Leasing spreads for the full year were 43% and 29% on a GAAP and cash basis, respectively. Additionally, annual embedded rent steps on our new and renewal leases continue to increase, with average steps at 3.9% on fourth quarter executed leases. For the full year, same property NOI growth exceeded expectations at 9.1% on a GAAP basis and 12.3% on a cash basis. Cash NOI growth for the full year was an impressive 10.9% even when normalized for COVID related impacts. Occupancy growth, robust leasing spreads and our remarkably stable tenant base, as measured by the fact that we had 0 bad debt expense for the full year, collectively enabled us to grow fourth quarter core FFO per share by 32% to $0.45 per share, and full year core FFO per share by 24% to $1.64 per share. Driven by this strong performance, the board declared a dividend of $0.315 per share, representing an increase of over 31%, demonstrating Rexford's commitment to delivering superior total shareholder returns. Turning now to balance sheet and capital markets activities. We continue to execute on our strategy to maintain a low leverage investment grade balance sheet that is proven through all phases of the capital cycle. At year-end, net debt to EBITDA was 3.6x. In the fourth quarter, S&P and Fitch recognized our favorable position, revising their rating outlook for Rexford to positive from stable. Capital markets transactions executed in the quarter include the sale of 4.2 million shares of common stock through the ATM on a forward basis at an average price of $70.17 per share. In December, we settled forward equity agreements associated with our September public offering and fourth quarter ATM activity, issuing approximately 8.8 million shares for net proceeds of $534 million. Subsequent to quarter end, we renewed our ATM program, which includes $750 million of capacity. At quarter end, our liquidity was approximately $880 million, including $44 million of cash, $134 million of forward equity proceeds remaining for settlement from our fourth quarter ATM sale, and full availability on our $700 million credit facility. Before we turn the call over for your questions, I'll provide an overview of our 2022 outlook. Our 2022 projected core FFO guidance range is $1.77-$1.81 per share, representing 9% earnings growth at the midpoint. As a reminder, this guidance range does not include acquisitions, dispositions, or related balance sheet activities that have not yet closed. We have provided a roll forward detailing the drivers of our guidance in our supplemental package. A few highlights include same property NOI growth on a cash basis is projected to be 6%-7%. Excluding the year-over-year impact of COVID related repayments, cash same property NOI is projected to be 6.5%-7.5%. Same property GAAP NOI growth is projected to be 3.25%-4.25%. Assumptions driving same property growth include average occupancy of 98%-98.5%. Leasing spreads of approximately 40%. Higher expenses net of recoveries are projected to offset same property growth by approximately 110 basis points. Bad debt as a percent of revenue of 35 basis points compared to zero in 2021. Our 2021 acquisitions are projected to contribute incremental NOI in the range of $48 million-$51 million in 2022 when compared to their contribution in 2021. G&A expenses are projected to be $58 million-$59 million and includes $23 million of non-cash performance-based equity compensation, which is only realized to the extent the company achieves exceptional performance and superior shareholder returns. Finally, net interest expense is projected to be in the range of $38 million-$39 million. This completes our prepared remarks, and we now welcome your questions. Operator? At this time, we will be conducting a question- and- answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from the line of Jamie Feldman with Bank of America. Please proceed with your question. Great, thank you. I guess just to start out, I appreciate all the moving pieces you gave on guidance. You had a really strong same-store year in 2021. It's moderating in 2022. Can you just help us understand kind of the biggest moving pieces of why it's gonna be slower next year, given you have the 41% cash mark-to-market, 51% GAAP? Hi, Jamie. I'll take that one. Thanks for your question. I think it'd be helpful to walk you through the components of same property and happy to dive into any of these a little bit further once I walk through the components. Our cash same property NOI growth is projected to be 6%-7%. The components of that include about 810 basis points of growth related to base rent. Assumptions driving that include 2022 leasing spreads of 40% and then our occupancy guidance of 98%-98.5%. It does imply a decline in occupancy. We're currently sitting year end occupancy is in the same property pool at 99.1% and average occupancy in the full year was at 98.6% in 2021. Bad debt as a percent of revenue is projected to be 35 basis points, and that's offsetting the same property growth by about 50 basis points. I'll note that our tenants are certainly performing really well and but we are assuming a more normalized level of bad debt. Bad debt pre-COVID was in the 40-50 basis point area. Then finally the last component of same property guidance is around expense growth. We're estimating an expense growth of about 12%, and that offsets net expense net of recoveries offsets same-property NOI by about 110 basis points. A little bit of color there. Insurance, taxes, and overhead allocation are the most significant components of that expense growth. While the increases in insurance and taxes are passed through to our tenants and are recoverable, our increases in overhead allocation are non-recoverable. Those are the significant components that get you to the 6.5% at the midpoint of our cash same-property guidance. Okay. Thank you. That's very helpful. Then, sticking with the expense increase that you mentioned, I mean, is that projected or you pretty much feel like that's in the bag based on how much expenses have moved even into, in the fourth, you know, as recently as the fourth quarter? Yeah. Let's dive in a little bit to the net expenses net of recoveries, right? The largest driver of that is around overhead allocation. When you think about overhead allocation and the drivers there, our portfolio growth certainly in the past two years has been substantial. Our square footage of our portfolio has increased 40%. Our consolidated NOI growth over the last two years has been 70%. We're also certainly thinking about the future growth prospects, right? We've acquired $170 million to date and have another $450 million in the pipeline that's under contract or accepted offer. Yeah, this is certainly contributing to the growth in our headcount. I think one thing to think about, Jamie, is the timing of hiring can ebb and flow. There can be points in time from a hiring perspective where there's a catch up. There can also be times in hiring where we are looking ahead and thinking about, you know, the growth and the future growth of the portfolio. When you think about what's fully baked in, that growth is part of that growth is a component of hires that occurred in 2021 and more so in the back half of 2021. We're realizing the full impact of that. You know, the other component that I think is important to mention is that, you know, our team is certainly performing at exceptional levels that led to some promotions at the end of the year, and congrats to all those team members, and some increases in overall compensation. Then like many others, we are experiencing the impact of increased labor cost as well. That's those are the key components of that growth and overhead allocation. Okay, thank you for that. Then just to confirm, so you said 6.5%-7.5% is the cash growth number excluding COVID. That's kind of a clean number of just how the portfolio is acting. That's correct. Okay. Yeah, that's correct. Yeah. Just as a general reminder, COVID deferrals were granted in the second quarter. Most of our COVID deferrals were granted in the second quarter of 2020 and represented less than 1.5% of our ABR. Although the bulk of those COVID deferrals were granted in 2020 and collected about 80% in 2020, we did collect the remainder of those deferrals in 2021, which was about $1 million. Our 2022 collections of you know COVID impact is pretty insignificant. When you look at the year-over-year cash same-property growth, it's positively impacted by the decline in the COVID adjustments. That's that additional 50 basis points at the midpoint in our 6.5%-7.5% guidance on cash same-property NOI. Okay, thank you for that. Last for me, so you did $1.9 billion of acquisitions in 2021. What do you think is realistic in terms of the acquisition volume you could do this year? You know, you've got $450 million under contract now. Hi, Jamie, it's Howard. Hope you're well. I think you've asked this question before, and every time we've told you we just don't offer guidance on the acquisitions. You know, that said, you know, we are starting out the year with a robust pipeline. I would say that, you know, January, February seem to be our slower months and, we've already closed $170 million. We're excited for the year. You know, we see a strong pipeline of opportunities and, it's hard to predict obviously what closes and what else, we'll put under contract. We're starting out with a lot of momentum and, we hope to have another banner year. Thanks for that. I guess maybe a better way to ask it is, you know, has anything changed in your? Desirability or desire to put out capital this year versus maybe this time last year, whether it's pricing or what's on the market or project, you know, potential sellers. You know, Jamie, it's Michael. Thanks so much for the question. I would say that our focus remains the same in that we're focused on acquiring transactions and buying opportunities that provide us with the level of cash flow growth that would greatly exceed even, you know, the impacts associated with an inflationary environment or even increasing interest rates. I think you see the team doing that. What we've done at Rexford, we've really doubled down on our ability to originate and execute on value add opportunities. The vast majority of what we bought last year, as you know, were through off-market and lightly marketed transactions that gave rise to mostly value add opportunities. If you look at the value add projects that we're yielding to 6.6% last year over 1 million sq ft. The near term value add projects also yielded, you know, to just under 7%, 6.6%. I mean, that's about double the market yields that are achieved by our competitors here in Southern California. You look at the in-place mark-to-market on what we're buying. That's because we're originating opportunities, by the way, that are not generally available to our competitors on the acquisition front, oftentimes with deeply embedded, you know, below market rents. That's really the focus. I think as we double down in that value creation capability, you know, we're digging deeper in the markets. Our team is better than ever, stronger than ever. That's why I think you see the quality of investments. I think that's really how we hedge against, you know, things that you're, I think you're referring to in terms of, you know, increasing costs and such in inflation and the environment in general. Okay. Thanks, Michael. Our next question comes from the line of Manny Korchman with Citi. Please proceed with your question. Hey, everyone. Howard, just going back to your comments on how quickly rental rates are growing in the market. Do you think at some point there's gonna be a bigger impact on retention than we've seen thus far? Well, we're operating at less than 1% vacancy, and as far as retention, there's nowhere for tenants to go. The market's gonna have to change dramatically in terms of the vacancy rate for there to be options for people. You know, we, you know, we've mentioned in the past, you know, a lot of times we have repositioning projects that we're planning to do, where we have a tenant that, you know, we wanna exit. Maybe it's a property that, you know, it's got some dysfunctionality to it, and they're just begging us to renew because there's nowhere to go in the marketplace. Those are, you know, some of those are even unexpected, as I mentioned, in terms of the retention side. You know, for the foreseeable future, I think we're gonna expect to be operating in a similar manner and retain retention. But you know, keep in mind, a lot of the retention, in terms of, you know, what tenants move out are really at our option so that we can get to these assets, you know, as Michael was describing, and go in and create value above and beyond what we might even be able to get from a tenant, even if they do want to renew. But you know, in some instances, tenants are so desperate for space, they're paying us rents that far exceed what we ever thought an existing building might be worth. We are retaining them, and we'll just move forward on that value creation plan a little further down the road. You know, in the past, we've always discussed the off-market nature of your acquisitions and maybe less professionally managed assets that you've been buying. Are they having the same successes, you know, with those tenants paying those higher rents? Even though market rates are where they are they happy to keep the continuity of tenancy and they're actually renewing lower? When you're buying the assets, even though leases might have just turned, cash flows aren't where they could potentially be. Right. Most of the assets we buy are not recently leased and adjusted to market rents. You know, we tend to typically target assets that have you know, below market rents in place because they've been leased for a while. In fact, if you you know, looking at our data from our fourth quarter acquisitions, in aggregate, in-place rents were about 38% below market on those assets we bought. And you know, the typical owner in our market that you know, the individuals or the smaller partnerships you know, they're shocked when somebody tells them what their property is worth. They're also surprised when they do a renewal, and they get a bit more rent than they were thinking about. A lot of times, getting more rent also requires them to modernize and make larger capital investments in their buildings, which most of the time, you know, they're not willing to do, especially since the market's so tight and they don't have to spend a penny to still retain occupancy and even get rent growth. You know, and again, that rent growth they're getting is still well below what that could be if somebody like Rexford came in and invested, you know, a little bit of capital and really just unlocked the value in those assets. Thank you. Our next question comes from the line of Connor Siversky with Berenberg. Please proceed with your question. Everybody, thanks for having me on the call. Appreciate the detail as always. A question on leasing spreads that we saw during 4Q. I think you had mentioned that the mark-to-market on the portfolio is about 41%, and that is the number baked into guidance. I'm wondering what could explain the delta between that 41% number and the 21.5% cash spread posted for 4Q 2021. Just for a little context, I'm operating under the assumption that some of the leases that would have expired during the quarter were of an older tenor and may have been even lower on the mark-to-market. Any color there would be appreciated. Sure. This is Howard, Connor. Nice to hear from you. Our lower spreads were mostly impacted by a couple larger renewals. That really represented 30% of the square footage, 1 million sq ft of leasing in the quarter. We had a 182,000 sq ft building in our Rancho Pacifica project in the South Bay, where we're working on a longer term lease and extend with a couple spaces a tenant occupies. We renewed 182,000 sq ft on a short term lease. It was seven months, but it met the parameters of being included in the calculations, and that only had a 3.5% cash spread. We had a 112,000 sq ft building in Poway in the San Diego market, and that had an in-place below-market option to extend at a fixed rate, and that had a 4.2% cash spread. You know, those were a huge influence on those leasing spreads. Yeah, when you look at our new leasing, and we didn't have much space to lease, so we didn't have as much new leasing in the quarter. Our new leasing spreads were still very strong. We had 46% GAAP spreads and 31.5% cash spreads. Those are more typically what you hear us talking about. At 99.1% occupancy, you know, there just isn't a lot of space in our portfolio that we're able to lease in that past quarter. Okay, just to clarify. Yeah, one thing. The 41% number, that's sort of what's being baked into 2022 guidance. Yeah. Do you want to take that, Laura? Hey, Connor. It's Laura. Yeah. I'll add a little color there and then talk about 2022 as well. I think it's important when you think about 2021, you know, to look at the full year, because certainly on a quarter to quarter basis, you know, the mix issue can certainly impact, you know, the results in an individual quarter. When you look forward to 2022, the mark to market on our 2022 expirations is 48% on a cash basis. So, you know, we're looking forward to seeing some, you know, pretty significant mark to market. Our guidance assumes around 40% at the midpoint, 40% leasing spreads on our 2022 expirations. Okay. That's helpful. By the way, I'll add. It's Michael. I'll just add one thing. You know, the spreads are one component of growth for the quarter and for the year. Q4 actually saw an acceleration in overall growth by key metrics. For instance, core FFO grew by 61.5% for the quarter, which was a much higher rate than the annualized growth of 44%. On a per share basis, we grew core FFO per share at 32%, 32.5% for the quarter. You know, much higher rate than the 24.2% for the year. You know, I think, you know, overall, Q4 was actually an acceleration in terms of, you know, cash flow growth for the company. Okay. Could you just remind us then what in-place escalators look like? Yeah, Connor. It's Laura. Yeah, go ahead, Laura. Okay. Yeah, I'll take it. Overall, the portfolio rent steps are now in place at 3.1% for the total portfolio. We've certainly seen the ability to increase those across the leases that we've signed through 2021. Those rent escalations continue to actually accelerate. If you look at the average rent steps that we signed in the fourth quarter, they were at 3.9%, and that's up from 3.6% in the third quarter. If you look at the full year, the average rent steps that we signed on all of our leasing was 3.4%. We're seeing that in place, portfolio number move up. It takes a little bit of time to move that number forward. You know, we're seeing, you know, in some markets, in some cases, the ability to capture, you know, 4.5%-5% rent bumps is becoming more common in the market. Okay, thanks for that. Then one more from me. Looking at construction activity, I mean, let's just focus on the Inland Empire specifically. I'm seeing about 30 million sq ft under construction. About 28 million of that is spec. You know, I know you have some presence in the market, but I'm just thinking out loud, is it a possibility that some of the tenants in the L.A. Basin could provide the same service to L.A. proper from the Inland Empire? I mean, is there a situation where we could see some kind of diffusion from your tenants out of L.A. into the Inland Empire, or does that seem unlikely? You know, we've always seen that, Connor. I mean, the Inland Empire has been the relief valve for the lack of supply in the infill markets. That's changed though recently because there's very limited supply availability in the Inland Empire. A lot or most of that product you see coming out of the ground lately either is pre-leased or winds up becoming leased right at completion. So it's just been an amazing amount of absorption that we've seen in that market and frankly, in all of our markets. What's also very interesting is the Inland Empire used to have substantially lower rents than some of the more closer in infill markets. You know, when we look at it today, the spread between the rents in Inland Empire and some of the more western markets is much more narrow. It's really more of a question of, you know, do you need a, you know, higher quality building or do you need a location? The other side of it also is that, you know, while the Inland Empire is, you know, only like 45 minutes or an hour plus away from some of these other markets, you know, tenants have to strategically be located in these infill markets to service their customers, and they actually can't do it a lot of times if they're in the Inland Empire. You know, you find people's needs a lot different that are able to locate in the Inland Empire than the tenants in the infill markets that really are there because their businesses have to be there. Got it. That's very helpful. I'll leave it there. Just to be clear, Connor, you know, that type of volume in terms of construction in the Eastern Inland Empire and deliveries has been pretty consistent, you know, now for, I don't know, 5-7 years. We really haven't seen that impact demand or rental rate growth in our infill markets. Just to be clear, I think that's what Howard was referring to when he said we've seen this in the past, it's been recurring. But what we don't see is the new construction deliveries in the Eastern Empire impacting demand in our infill markets, which is more, I think, more to your question. Yeah, no, I was just really curious about whether or not that 28 million sq ft of spec development would have been somewhat of a concern, but the color makes sense. Thanks. Our next question comes from the line of Dave Rodgers with Baird. Please proceed with your question. Yeah, good morning out there. Just wanted to ask about the redevelopments. I think you had said $200 million completed in 2021, $380 million either planned or current. Is that the plan to start this year here in 2022? I guess maybe can you talk a little bit about the scope and how that might be changing at some of the projects. Are you generally trying to open spaces up because you see more, you know, warehouse storage? Are you cutting spaces up for more service orientation? I assume maybe the answer is a little bit everything, but just curious on your thoughts. Sure. Hi, Dave. It's Howard. So in total, we have over 3 million sq ft of projects. That's probably 28 different buildings we'll be building over the next few years. That has an incremental spend of about $350 million with about $1 billion of value creation, and stabilizing at strong yields about 6.5%. In terms of 2022, we'll have 15 projects start with an incremental spend of about $200 million. Those will stabilize anywhere from, you know, second quarter of 2023 to second quarter of 2024, also at similar stabilized return projected of 6.7% on total cost. You know, in terms of any changes to the product, you know, I think what we've seen in the market today is that people want a bit more space on site to store containers. They want higher dock counts, and we're delivering that. In some instances, we can make that work with, you know, higher coverage on the site, meaning, you know, typically around a norm of 50%. In some instances, we'll deliver sites that have excess land. Some of our repositioning, in fact, you know, we're tearing down pieces of buildings and creating, you know, what we call low coverage sites that have an extensive amount of loading and, you know, very large excess land areas for container storage. Those are becoming in more demand as well as, you know, even just yard space that we're renting, you know, these industrial outdoor storage sites that have, you know, little to no improvement on the site and are just used for storage and containers. You know, you can only do that in selective areas. Most cities are very difficult in terms of allowing for those exterior yards, but we've had a lot of success in buying sites that had by-right ability to do container storage, and we're achieving substantial returns on those sites as well. Great. Appreciate that color. Then maybe, Laura, just one follow-up for you, and I realize it's maybe apples to oranges. Your interest expense guidance is, I think, down in 2022 versus 2021, and I know the acquisitions aren't in there, but maybe it implies for us anything with respect to the preferred I think maybe you have coming due, as well as, you know, thoughts on kind of equity versus using debt in that mix to kind of change that interest expense outlook as the year progresses. Yeah. The interest expense guidance is being driven. The decline is being driven by a couple of components. Our guidance is $38 million-$39 million. We ended the year, 2021 was a little bit over $40 million. It's driven by really a couple of factors. One is higher capitalized interest. As Howard just mentioned, you know, we expect to start pretty significant amount of projects. When we look at our projected spend in 2022, it's about $180 million, and that compares to about $65 million in 2021. That's driving higher capitalized interest. Then the other, we had some one-time items in our 2021 interest expense related to termination of some interest rate swaps. Those have burned off and are not impacting 2022. There's a little bit of a comp issue. You know, to answer your question, in terms of, you know, how to think about, you know, funding and the balance sheet going forward. You know, we certainly feel very well positioned from a liquidity standpoint. We do have about $134 million of proceeds remaining from our forward issuance. We just renewed our $750 million ATM program, so we have full availability there. No, you know, as of the end of the year, no balance on our credit facility. Certainly, a number of sources of liquidity from that standpoint. You know, as we look forward into 2022, I think our funding strategy is gonna look really similar to 2021. We're gonna take an opportunistic approach to our capital raises. You know, our net debt to EBITDA is sitting at 3.6x. Our target level is in the 4x- 4.5x. I think that, you know, in 2022, you'll see us, you know, tap into the debt and equity markets, as you have in the past, you know, to fund future acquisition opportunities. Great. Thank you. You're welcome. Our next question comes from the line of Mike Mueller with JP Morgan. Please proceed with your question. Yeah. Hi, Laura. I was just wondering, what's the big difference between the cash and GAAP same-store NOI growth, you know, the difference between those two metrics? Because when I think of the GAAP number, my mind goes to, you got a mid-teens expiration. If you're assuming 40% cash spreads or GAAP spreads based on the prior comments, are probably 50%. You know, 50%-15% kind of gets you in the high single digits. There seems like- Yeah. There's an offset. Yeah. Yeah. It's a great question, Mike. The difference between our GAAP and cash spread and our guidance is about 275 basis points. Just to put that into some historical context, over the past four years, that gap between GAAP and cash has been about in the 175- 200 basis point range, if we look back over the past four years. In 2021, that gap was about 320 basis points, with COVID impact relating to about 140 basis points of that impact. If you look forward to 2022 and the 275 basis point spread, you know, relative to historical, it's about 100 basis points higher. It's really related to lower projected non-cash income. That's really split evenly between a few factors. First is COVID impacts represent about a third of that spread, that 100 basis points, that excess spread. That's down from 140 basis points, as I mentioned, in 2021. The second impact is around lower above/below market non-cash expense. That's really related to a couple of things are happening in above/below. One is we're certainly converting below market rents to higher cash rents. Then the second is that in 2021, we did have some one-time impacts around pro... We had some proactive move-outs where we were able to take some space back, and convert those to higher market rents, but then that does generate some larger one-time impacts in 2021 that hit above/below. That's kind of another third of that outsized spread. The last component is a decline in straight line rent assumption. There's a number of things that can impact your straight line rent assumptions and projections. You know, one of those is lower average occupancy, which I discussed. Timing of our lease expirations can be another driver, and just the overall amount of activity that we are projecting to lease as well. That was about another third of that outsized spread. Those are, you know, what's driving the lower non-cash in 2022. Got it. Okay. That's helpful. That's all I had. Thank you. Thank you, Mike. Just as a reminder, if anyone has any questions, you may press star one on your telephone keypad in order to join the question and answer queue. Our next question comes from the line of Chris Lucas with Capital One Securities. Please proceed with your question. Hi, everyone. Thanks for taking my questions. Howard, maybe I'll just start with you on a bigger picture question, which relates to your lease expiration schedule. If I look at, not just this coming year, but the next five years after that, the expirations are around the same rent levels. Is there anything in the 2022 mix that you know generates that 40%+ mark-to-market? Or can I assume that if the environment stays the same over the next six years, that the 40%, 50% kind of mark-to-market is really kind of embedded throughout the entire rest of the lease expiration schedule? Well, hey. Hi, Chris. Yeah. Maybe I'll talk just a little quickly about this year's expirations, and I'll let Laura add a little color on the latter years. You know, in terms of this year, our top 20 leases is about 1.65 million sq ft. So, you know, that's sort of what's expiring. What's interesting of that is that today no assets are moving to repositioning or they're expected to renew. So very little of it is going to be vacant. And then in terms of those lease spreads, you know, the biggest driver is probably in the largest amount of expirations this year. 26% is in our Inland Empire West portfolio, where we have 67% mark-to-market, you know, followed by Mid-Counties at 52%. You know, that's really the components of how we get to that 48% mark-to-market. You know, in terms of, you know, a look forward, none of us know, obviously, what happens in the marketplace years from now. You know, you've seen us adjust our mark-to-market pretty significantly just literally from the third quarter of last year to now, through the fourth quarter. I think we had 27% up to that, I think it's 48%? Or I might be giving the wrong number. 27%-41%, Howard. 41%, sorry. The market's moving incredibly fast. You know, it's not really dictating what happens in the future. Hard to predict. I don't know, Laura, do you have any other thoughts on the future spreads? Before we go to the future spreads, Chris, thanks again for joining us, Michael, but just a little more color on this year's contribution from the lease expirations, which is that it's a little bit back-ended, and this relates also to Jamie's earlier question because it also impacts the same property pool, NOI growth, et cetera, for the year. You have about 60% of the volume expires during the second half of the year. Also the rent spreads are not equal throughout the year. Rent spreads are materially higher during the second half of the year for those expirations as compared to the first half of the year. It's, I think, also part of your question, Chris, was is it an equal contribution sort of through the year? It's not. It's weighted towards the second half of the year. That's really helpful. I appreciate that. Laura, did you want to comment? I guess I'm just trying to understand whether or not it is mix that's sort of driving this extraordinary leasing spread expectation, or is it something that is sort of, you know, just embedded in the, in the portfolio for, you know, across the board? That's really the point of the question. Yeah, I mean, that's a good question. I mean, when you look at 2022 at that 48% and then the overall portfolio, you know, average mark-to-market's 41%. That implies, you know, a little bit lower potential mark-to-market in, you know, in the upcoming years. If we look at 2023, it's about, you know, a little bit under 40%, so about 38%. 2024 at this point is about 35%. That gives you a little bit more visibility into the cadence there from a mark-to-market perspective. Great. Thank you. That's very helpful. Laura, while I've got you, just a couple of detail follow-ups. On the non-cash comp, you mentioned, you know, you've got the $23.1 million of guide. Is there any of that that is sort of locked in based on prior grants that are vesting? Or is this a floating number? Just trying to understand how much is variable. Yeah, I mean, Chris, that's that $23 million is based on, you know, performance and is paid out over the next three years. The metrics that detail exactly what, you know, exactly how that's paid out is in our proxy and 10-K. But, you know, big picture, it's tied to absolute earnings growth as well as relative total shareholder return. Those are not realized until we hit those measurement points in each year. Okay. While it's not a big issue, currently, as you think about guide, how do you deal with or, you know, how do you, what's your assumptions as it relates to the unexercised equity forward ATM? How do you factor that into your guidance? Since you're not assuming acquisitions as part of the guidance. Just trying to understand where that filters through. Yeah. Well, Chris, if you think about year to date, we've acquired $170 million, and I have $134 million outstanding on the forward. So, you know, I think just from a forward perspective, you know, you could have, you know, there's an assumption baked in on funding that $170 million. And certainly that forward, those forward proceeds could be, you know, contributed to funding that activity year to date. Okay. Last question from me. Just you mentioned someone mentioned earlier that there were a couple of fixed renewals or unique renewals that sort of impacted that number. Just curious as to how much of the portfolio has fixed renewal options to it. Very, very little. Occasionally we buy an asset, and it may have an in-place lease that we're saddled with that somebody else made a bad decision on, which was the case with that one I mentioned in the San Diego market. You know, overall, and I don't have an exact number in front of me, but, you know, overall, I would say it's very little. Rexford never gives anybody a fixed option. Everything's at market. Okay. Thank you, Howard. Appreciate all that. I was gonna say, in 20 years of doing this, I can't remember ever providing that to, in a lease. Thanks. Thank you, Chris. Our next question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question. Great, thanks. Laura, just following up on the same-store expense growth. How should we think about this non-recoverable overhead allocation affecting same-store growth going forward past this year? I mean, I think it's clear you guys are looking to keep growing, but after these new hires and raises, do you think you're at a point at which you think your scale can kind of minimize this as a headwind in future years? Or are there any other ways to kind of mitigate it as you grow into the future? Hey, Blaine. It's a good question. While we're not gonna provide 2023 guidance today, I'm happy to provide you know a little bit more color around you know how you think about the cadence. I think as I mentioned kind of the timing of hiring and can certainly ebb and flow on a year-to-year basis. In some cases, there can be some catch up. When you think about where we were the end of 2020 and going into the beginning of 2021 very much operating in a COVID environment with a lot of uncertainty. You know, and we were still growing pretty rapidly, but I would say that, you know, maybe hiring slowed to some extent. There could be years where there is a little bit of a catch-up. In a way, you could look at 2021 and, you know, it could be, you know, that our overhead could have been understated in a way. We've certainly through the hiring that occurred in 2021 was more back-end weighted in this overhead allocation bucket. You're seeing kind of the full impact of a little bit of that catch up into 2022. Obviously as we look forward, we wanna make sure that we're staying ahead to some extent, right? Not too far ahead, but certainly staying ahead, that allows us, you know, gives us the ability to grow. You know, I think from an overall G&A perspective, you're seeing the benefits, we are seeing the benefits of our scale, right? When you look at G&A as a percent of revenue, for 2021 was 10.8%. That was down from 11.2% in 2020. We've seen that number continue to tick down every year for the past four or five years. We expect to stay on that same trend in 2022. We certainly are recognizing the synergies within, you know, within the platform. I think, you know, what we're seeing here from an overhead allocation perspective is a little bit of an impact of timing issues. Great. That makes a lot of sense. And, and- Oh. Blaine- Yeah, go ahead. Just to add to that briefly. I, you know, we talk a lot about operating leverage in the business. We've talked a lot about it since our IPO roadshow in 2013, and it's very important to us. We think it's the hallmark of a great company that we do have very strong embedded operating leverage built into the business that we do believe will be accelerating into the next, you know, call it 2- 5 years. I think if you look at the performance of the company, it's kind of all reflected in your FFO per share growth, right? At the end of the day and in our FFO growth. You know, the level of FFO and FFO per share growth and AFFO growth that we're driving, you know, is increasing pretty dramatically. Another measure in my view of operating leverage is the amount of internally generated cash that we're generating that we can use towards driving our internal growth, which is very substantial and growing, and that's very accretive, you know, for shareholders. I think, you know, we look across a range of metrics, and I think we're really well positioned, for the company to be increasing, you know, that level of margin and, you know, NOI margin and operating leverage that is embedded in the business model as we grow here. Thanks, Michael. That's helpful. Sticking with you or maybe even Howard, given the ramp up we've seen an investment into redevelopment and repositioning, and it seems like you guys are gonna continue there. I wanted to ask about the upward pressure that we've seen on construction costs and labor, and how you guys are dealing with those increasing costs or maybe even mitigating that exposure somehow. Sure. I'll take that one. Well, yeah, there's no mystery. Obviously, construction costs have been rising and doing so very rapidly. You know, what we're doing is trying to buy out some of the commodity type materials early on. You know, to give you an example, for instance, you know, the roof systems, we're buying those literally 14 months prior to when we need them to lock in those prices and to avoid the further price increases that are happening in those. Then there's steel, fire sprinkler systems, roofing materials, you know, those are all things that we can, you know, buy up early on in these projects and mitigate some of those cost increases. So, you know, we have a very thoughtful approach to it. you know, I think it's gonna show in terms of how you'll see the yields growing in our projected returns. You saw that quarter-over-quarter in most all of our assets that are under redevelopment or repositioning, where we had expanding yields. Great. Thanks, Howard. Thanks, everyone. We have reached the end of the question and answer session. I'll now turn the call over to management for closing remarks. Well, on behalf of the entire Rexford company and our board of directors, we wanna thank everybody for joining us today. Stay well, stay healthy, and we look forward to reconnecting in a few months. Thank you, everyone. This concludes today's conference, and you may disconnect your line at this time. Thank you for your participation.