WUNDERLICH Update - Rexford Industrial Realty, Inc. (REXR: $22.34)

Equity REITs

Model Update Post 2Q16 Results & Preferred Offering

Estimate Changes Rating: Hold

Price Target: $20.00

Market Cap: $1,475.1

We are maintaining our Hold rating and $20 target on Rexford Industrial Realty (REXR) as we update our model for 2Q16 results and a subsequent preferred equity offering. REXR is a pure play on infill industrial real estate in Southern California, where we believe management has targeted a niche wherein consistent shareholder value can be created due to a deep understanding of the market and significant research capacities, giving REXR the ability to persistently source accretive off-market deals. While embedded occupancy upside represents accretion to NAV and earnings, in our view the shares already reflect this. Our $20 target is 111% of our $18.10 NAV estimate (5.25% cap rate) and represents an in-line 2017E FFO multiple with industrial peers trading at 20.6x.

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