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Key highlights from Rexford Industrial’s Q1 2026 results (leasing + early market recovery)

1) Leasing activity: record execution and clear signs of market “turn”

• Management reported a record quarter for leasing activity: 4.1 million square feet of leases executed. ¹
• The leasing volume reflected increased tenant activity and demand for Rexford’s higher-quality portfolio, per management’s remarks. ¹
• Leasing momentum accelerated through the quarter, with the majority of leases executed in the second half. ²
• Leasing activity was over 70% higher year-over-year for the Rexford portfolio in Q1. ²
• Lease activity composition: 144 deals totaling 29,000 square feet on average, with ~70% coming from renewals. ³
• Management specifically cited renewals and occupancy focus as drivers of improved performance and shorter downtime in the context of “softer market fundamentals.” ²

Signs of recovery indicators management highlighted

• Current leasing interest on vacant spaces increased to ~90%, versus ~75% last quarter and ~a year ago (75%). ²
• Management acknowledged broader macro pressure (e.g., negative net absorption and vacancy rising), but characterized the improvement as an early, incremental shift that could precede broader stabilization. ⁴⁵

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2) Renewal/retention approach: proactive engagement and occupancy focus

• Rexford emphasized prioritizing occupancy to drive leasing volume, describing the approach as proactive execution with tenant engagement and end-market responsiveness. ²³
• The company described a market dynamic where tenants have more options and may tour more; Rexford indicated it is being proactive to preempt these moves, with its results cited as evidence of improved retention mix. ⁶
• Management framed Q1 activity as partly driven by renewals/retention, with renewals making a slightly higher component of overall leasing activity in the quarter. ⁶

Example of the renewal strategy (Tire Co)

• The Tire Co renewal generated approximately a 30% negative spread, but management said it was amplified by above-market in-place rent and therefore not indicative of future leasing spreads. ⁷
• A key tactical reason was visibility to an adjacent building’s upcoming vacancy that could have enabled a low-cost relocation; Rexford chose to preserve occupancy given expected vacancy downtime and capital investment. ³
• The lease was also structured to be advantageous for the tenant and Rexford’s economics: management noted limiting the extended term to 3 years and converting to gross to capture anticipated reductions in property tax assessments. ³

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3) Leasing spreads: still pressured near-term, but expectation to reaccelerate

• For the quarter, management reported cash re-leasing spreads of negative 15.4% (and negative 1.8% excluding the Tire Co renewal), consistent with expectations. ³
• Management stated its re-leasing spread expectations did not change:
  • Net effective re-leasing spreads between 5% and 10%. ⁸
  • Cash basis: flat to negative 5%. ⁸
• Management also said it expects releasing spreads to reaccelerate to the back half of the year as it moves through 2026. ⁸

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4) Product and submarket recovery: strongest where Rexford is structurally positioned

• Management described that while market fundamentals remain under pressure, it was encouraged by early positive signs within its portfolio and the broader market. ⁴
• They highlighted infill Southern California as the key context and said the Q1 shift included increased tenant activity leading to higher leasing volumes. ²
• Demand themes management cited include construction-related uses, food and beverage, and automotive businesses, and they said there was no negative impact on demand from geopolitical conflict. ⁷
• Activity varied by size and product:
  • Demand for spaces under 50,000 square feet remained healthy and well diversified. ⁷
  • Larger spaces (>50,000 square feet) remained more submarket dependent, with Class A product in certain submarkets showing slow activity (e.g., San Fernando Valley, Orange County, San Gabriel Valley). ⁷

Examples of tenant activity / demand pocket

• Management cited stabilization and leasing of a 38,000 square foot building at 1315 Storm Parkway to an advanced manufacturer as an example of activity in the South Bay. ⁷
• They also discussed increased activity from 3PLs in Inland Empire West and demand from advanced manufacturers seeking both larger and smaller formats in specific areas. ⁷

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5) Fundamental/market framing: recovery signals vs. continued vacancy/absorption pressure

• Rexford acknowledged negative net absorption and that vacancy ticked up, with rents declining ~70 bps vs. last quarter in the infill SoCal market. ⁹
• Management’s view was that these are still “under pressure,” but early incremental improvements could be a necessary precursor to broader stabilization, potentially setting up tighter availability and lower vacancy later. ⁴
• They also referenced the cycle and timing: management expected the “bottom forming” dynamic, but emphasized it would require continued improved incremental demand for net absorption to turn positive, vacancy to move down, and rates to firm. ⁵

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Bottom line

Across Rexford’s Q1 2026 disclosures, the clearest “recovery and leasing activity” highlights are: (1) record leasing of 4.1 million square feet with Q1 leasing volume up 70% year-over-year and momentum accelerating in the second half, ¹² (2) strong leasing interest improving to ~90% on vacant space, ² and (3) a portfolio strategy focused on occupancy and renewals (including proactive tactics like the Tire Co renewal) that helped generate volume even while re-leasing spreads remained pressured near-term (negative cash spread overall). ³⁶⁸