Rexford Industrial Realty (REXR) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01Our portfolio of properties is concentrated in the industrial real estate sector, and our business would be adversely affected by an economic downturn in that sector
2. 02Our portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in Southern California infill markets, which causes us to be especially susceptible to adverse developments in those markets
3. 03The impact from governmental emergency declarations with emergency powers, may impact our ability to collect rent and could adversely impact our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations
4. 04Our properties are concentrated in certain industries that make us susceptible to adverse events with respect to those industries27% rewritten
5. 05We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth
6. 06Our acquisition activities may pose risks that could harm our business
7. 07We may be unable to source off-market or lightly marketed investment opportunities in the future
8. 08Our future acquisitions may not yield the returns we expect
9. 09We may not be able to control our operating costs or our expenses may remain constant or increase, even if our revenues do not increase, causing our results of operations to be adversely affected
10. 10Many of our costs, such as operating expenses and general and administrative expenses, interest expense and real estate acquisition and construction costs, could be adversely impacted by periods of heightened inflation and changes in U.S. trade policies33% rewritten
11. 11An increase in interest rates would increase our interest costs on variable rate debt and new debt and could adversely affect our ability to refinance existing debt, conduct repositioning, development, and acquisition activity, recycling of capital and leasing activity33% rewritten
12. 12The potential impacts of current and future climate change and governmental initiatives remain uncertain at this time but could result in increased operating costs31% rewritten
13. 13Adverse U.S. and global market, economic and political conditions, including the ongoing conflict between Ukraine and Russia, recent events in the Middle East and Venezuela and other events or circumstances beyond our control could have a material adverse effect on us66% rewritten
14. 14policies may adversely affect the economy and financial markets, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our common stockNew
15. 15We may be unable to renew leases, lease vacant space or re-lease space as leases expire, or renewing existing leases may require significant concessions, inducements and/or capital expenditures24% rewritten
16. 16We face significant competition in the leasing market, which may decrease or hinder opportunities to increase the occupancy and rental rates of our properties
17. 17A substantial majority of the leases at our properties are with tenants who have non-investment grade credit ratings, which may result in our leasing to tenants that are more likely to default in their obligations than a tenant with an investment grade credit rating43% rewritten
18. 18cash flows as less stable, which may increase our cost of capital, limit our financing options or adversely affect the trading price of our common stockNew
19. 19We may acquire properties or portfolios of properties through tax-deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets
20. 20Our real estate development and repositioning activities are subject to risks
21. 21Potential losses, including from adverse weather conditions and natural disasters, such as earthquakes, may not be covered by insurance, and we may be unable to rebuild our existing properties in the event of a substantial or comprehensive loss of such properties67% rewritten
22. 22unable to pay claims due to their financial instability. Additionally, natural disasters, including earthquakes, may cause future earthquake insurance costs to increase significantly, which may impact the operating costs and net cash flow of our propertiesNew
23. 23Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers
24. 24We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (“IT”) networks and related systems49% rewritten
25. 25non-performance by financial institutions, could adversely affect our business, financial condition or results of operations

Risks Related to Our Capital Structure

1. 26Our growth depends on external sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all
2. 27Some of our financing arrangements involve balloon payment obligations, which may adversely affect our financial condition and our ability to make distributions
3. 28Our debt level reduces cash available for distribution and may expose us to the risk of default under our debt obligations
4. 29Mortgage and other secured debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt
5. 30Failure to hedge effectively against interest rate changes may adversely affect us
6. 31Our unsecured credit facility, unsecured notes and certain of our other secured loans contain, and any other future indebtedness we incur may contain, various covenants, including business activity restrictions, and the failure to comply with those covenants could materially adversely affect us

Risks Related to Investments in Real Estate and Real Estate-Related Debt

1. 32Our performance and value are subject to risks associated with real estate assets and the real estate industry
2. 33Illiquidity of real estate investments and our ability to complete dispositions could adversely affect usNew
3. 34Declining real estate valuations and impairment charges could materially adversely affect us32% rewritten
4. 35Acquired properties may be located in new markets where we may face risks associated with investing in an unfamiliar market
5. 36We may choose not to distribute the proceeds of any sales of real estate to our stockholders, which may reduce the amount of our cash distributions to stockholders
6. 37If any of our insurance carriers becomes insolvent, we could be adversely affected
7. 38Our property taxes could increase due to property tax rate changes or reassessment, which could adversely impact our cash flows
8. 39We face certain risks in connection with Section 1031 Exchanges
9. 40We could incur significant costs related to government regulation and litigation over environmental matters
10. 41Our properties may contain lead based paint, contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediation
11. 42We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties73% rewritten
12. 43The commercial loan that we originated is subject to the risk of delinquency and foreclosure, which could result in a significant loss to us and a material adverse effect on our results of operations

Risks Related to Our Organizational Structure

1. 44Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of common units, which may impede business decisions that could benefit our stockholders59% rewritten
2. 45loyalty or any other duty that we, in our capacity as the general partner of our Operating Partnership, owe to our Operating Partnership and its partners or violate the obligation of good faith and fair dealingNew
3. 46Some of our directors and executive officers have outside business interests, including interests in real estate-related businesses, and, therefore, may have conflicts of interest with us
4. 47We could increase the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval
5. 48Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest
6. 49Stockholder activism and related public campaigns could be disruptive and may adversely affect usNew
7. 50Certain provisions in the partnership agreement of our Operating Partnership may delay or prevent unsolicited acquisition of us
8. 51Tax Matters Agreements limit our ability to sell or otherwise dispose of certain properties, even though a sale or disposition may otherwise be in our stockholders’ best interest
9. 52Tax Matters Agreements may require our Operating Partnership to maintain certain debt levels that otherwise would not be required to operate our business21% rewritten
10. 53Our board of directors may change our investment and financing policies without stockholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations
11. 54Our rights and the rights of our stockholders to take action against our directors and officers are limited
12. 55We are a holding company with no direct operations and, as such, we will rely on funds received from our Operating Partnership to pay liabilities, and the interests of our stockholders will be structurally subordinated to all liabilities and obligations of our Operating Partnership and its subsidiaries

Risks Related to Our Status as a REIT

1. 56Failure to maintain our qualification as a REIT would have significant adverse consequences to us and the per share trading price of our common stock
2. 57If our Operating Partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences30% rewritten
3. 58Our taxable REIT subsidiaries will be subject to federal income tax, and we will be required to pay a 100% penalty tax on certain income or deductions if our transactions with our taxable REIT subsidiaries are not conducted on arm’s length terms
4. 59To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions
5. 60Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
6. 61The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes
7. 62Complying with REIT requirements may affect our profitability and may force us to liquidate or forgo otherwise attractive investments
8. 63Legislative or other actions affecting REITs could have a negative effect on us